Legislature(2009 - 2010)BARNES 124

04/09/2009 03:00 PM ENERGY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 191 NUCLEAR POWER PRODUCTION/WASTE TRANSPORT. TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
*+ HB 148 ENERGY EFFICIENCY PLAN AND GRANT FUND TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= HB 163 ALASKA NATURAL GAS DEVELOPMENT AUTHORITY TELECONFERENCED
Moved Out of Committee
+= HB 182 RAILBELT ENERGY & TRANSMISSION CORP. TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                         April 9, 2009                                                                                          
                           3:06 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bryce Edgmon, Co-Chair                                                                                           
Representative Nancy Dahlstrom                                                                                                  
Representative Kyle Johansen                                                                                                    
Representative Jay Ramras                                                                                                       
Representative Pete Petersen                                                                                                    
Representative Chris Tuck                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Charisse Millett, Co-Chair                                                                                       
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Berta Gardner                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
HOUSE BILL NO. 163                                                                                                              
"An  Act  clarifying  the  purpose  of  the  Alaska  Natural  Gas                                                               
Development  Authority; and  relating to  definitions of  certain                                                               
terms in AS 41.41."                                                                                                             
                                                                                                                                
     - MOVED HB 163 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 182                                                                                                              
"An   Act   establishing   the  Greater   Railbelt   Energy   and                                                               
Transmission  Corporation   and  relating  to   the  corporation;                                                               
relating   to   transition,   financial   plan,   and   reporting                                                               
requirements   regarding  planning   for  the   initial  business                                                               
operations  of  the  Greater  Railbelt  Energy  and  Transmission                                                               
Corporation; relating  to a report  on legislation  regarding the                                                               
Regulatory Commission  of Alaska and the  Greater Railbelt Energy                                                               
and  Transmission  Corporation;  authorizing  the  Alaska  Energy                                                               
Authority to  convey the Bradley  Lake Hydroelectric  Project and                                                               
the  Alaska   Intertie  to  the   Greater  Railbelt   Energy  and                                                               
Transmission Corporation; and providing for an effective date."                                                                 
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 191                                                                                                              
"An Act relating to nuclear  energy production and transportation                                                               
of  nuclear waste  material; amending  the  definition of  'power                                                               
project'  or  'project' as  it  relates  to rural  and  statewide                                                               
energy programs and the Alaska  Energy Authority; relating to the                                                               
alternative  energy   revolving  loan   fund  and   amending  the                                                               
definition of 'alternative  energy system' as it  relates to that                                                               
fund  and  to  the  conservation of  energy  and  materials;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 148                                                                                                              
"An Act relating to a state  energy use reduction plan and energy                                                               
efficiency improvement  contracts and to energy  audits of public                                                               
buildings  conducted  by  the Department  of  Transportation  and                                                               
Public Facilities;  relating to  agency capital  budget requests;                                                               
establishing  an  energy  efficiency  grant fund  in  the  Alaska                                                               
Housing  Finance  Corporation;  and providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 163                                                                                                                  
SHORT TITLE: ALASKA NATURAL GAS DEVELOPMENT AUTHORITY                                                                           
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/02/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/02/09       (H)       ENE, RES, FIN                                                                                          
03/28/09       (H)       ENE AT 10:00 AM BARNES 124                                                                             
03/28/09       (H)       Heard & Held                                                                                           
03/28/09       (H)       MINUTE(ENE)                                                                                            
04/09/09       (H)       ENE AT 3:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 182                                                                                                                  
SHORT TITLE: RAILBELT ENERGY & TRANSMISSION CORP.                                                                               
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/12/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/12/09       (H)       ENE, L&C, FIN                                                                                          
03/26/09       (H)       ENE AT 3:00 PM BARNES 124                                                                              
03/26/09       (H)       Heard & Held                                                                                           
03/26/09       (H)       MINUTE(ENE)                                                                                            
04/09/09       (H)       ENE AT 3:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 191                                                                                                                  
SHORT TITLE: NUCLEAR POWER PRODUCTION/WASTE TRANSPORT.                                                                          
SPONSOR(s): REPRESENTATIVE(s) JOHNSON                                                                                           
                                                                                                                                
03/18/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/18/09       (H)       ENE, RES                                                                                               
04/09/09       (H)       ENE AT 3:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 148                                                                                                                  
SHORT TITLE: ENERGY EFFICIENCY PLAN AND GRANT FUND                                                                              
SPONSOR(s): REPRESENTATIVE(s) GARA                                                                                              
                                                                                                                                
02/23/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/23/09       (H)       ENE, STA, FIN                                                                                          
04/09/09       (H)       ENE AT 3:00 PM BARNES 124                                                                              
                                                                                                                                
JOE BALASH, Special Staff Assistant                                                                                             
Office of the Governor                                                                                                          
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the hearing on HB 163 and                                                               
HB 182.                                                                                                                         
                                                                                                                                
BOB FAVRETTO, Member                                                                                                            
Alaska Natural Gas Development Authority (ANGDA)                                                                                
Board of Directors                                                                                                              
Department of Revenue (DOR)                                                                                                     
Kenai, Alaska                                                                                                                   
POSITION STATEMENT:  Testified on HB 163.                                                                                     
                                                                                                                                
HAROLD HEINZE, Chief Executive Officer                                                                                          
Alaska Natural Gas Development Authority (ANGDA)                                                                                
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided testimony and answered questions                                                                
on HB 163.                                                                                                                      
                                                                                                                                
TOM LAKOSH                                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 163.                                                                                     
                                                                                                                                
PAUL D. KENDALL                                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 163.                                                                                     
                                                                                                                                
PAUL FUHS                                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 163.                                                                                     
                                                                                                                                
JEANNE OSTNES, Staff                                                                                                            
Representative Craig Johnson                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Presented HB  191 on  behalf of  the prime                                                             
sponsor of HB 191.                                                                                                              
                                                                                                                                
DONALD ANDERSON, Ph.D.                                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 191.                                                                                     
                                                                                                                                
MARVIN YODER                                                                                                                    
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on HB 191.                                                                                     
                                                                                                                                
REPRESENTATIVE LES GARA                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as the prime sponsor of HB 148.                                                                
                                                                                                                                
JOEL ST. AUBIN, Engineer                                                                                                        
Chief                                                                                                                           
Statewide Facilities                                                                                                            
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities (DOT/PF                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  during the hearing on HB
148.                                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
3:06:56 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  BRYCE  EDGMON called  the  House  Special Committee  on                                                             
Energy meeting to order at  3:06 p.m.  Representatives Dahlstrom,                                                               
Petersen, Tuck,  Ramras, and Edgmon  were present at the  call to                                                               
order.   Representative Johansen  arrived as  the meeting  was in                                                               
progress.  Also present was Representative Gardner.                                                                             
                                                                                                                                
HB 163-ALASKA NATURAL GAS DEVELOPMENT AUTHORITY                                                                               
                                                                                                                                
CO-CHAIR EDGMON announced that the  first order of business would                                                               
be HOUSE  BILL NO.  163, "An  Act clarifying  the purpose  of the                                                               
Alaska  Natural  Gas  Development   Authority;  and  relating  to                                                               
definitions of certain terms in AS 41.41."                                                                                      
                                                                                                                                
3:08:23 PM                                                                                                                    
                                                                                                                                
JOE  BALASH, Special  Staff Assistant,  Office  of the  Governor,                                                               
informed the committee the governor  introduced HB 163 to broaden                                                               
the  authority of  the Alaska  Natural Gas  Development Authority                                                               
(ANGDA).   The  authority originally  was created  with statutory                                                               
authority  to  take  North  Slope gas  to  tidewater.    Previous                                                               
changes  to the  statutes  in 2004  were made  in  order to  also                                                               
review  Cook Inlet  in  addition  to Prince  William  Sound as  a                                                               
tidewater destination.   This bill would allow  ANGDA to consider                                                               
gas  supplies other  than  the North  Slope  for destinations  in                                                               
Southcentral Alaska.                                                                                                            
                                                                                                                                
The committee took an at-ease from 3:10 p.m. to 3:11 p.m.                                                                       
                                                                                                                                
3:11:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  EDGMON asked  Representative  Ramras  to introduce  his                                                               
amendment.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  RAMRAS made  a motion  to adopt  Amendment 1,  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Page 1, line 1, following "Authority;":                                                                                  
          Insert "relating to prior approval by the                                                                           
       governor or the commissioner of revenue before the                                                                     
      exercise of certain powers of the Alaska Natural Gas                                                                    
     Development Authority;"                                                                                                  
                                                                                                                                
     Page 2, following line 7:                                                                                                  
     Insert new bill sections to read:                                                                                          
        "* Sec. 3. AS 41.41.200 is amended to read:                                                                         
          Sec. 41.41.200. Powers of the authority. In                                                                         
     furtherance of its corporate purposes, in addition to                                                                      
      its other powers, and subject to the approval by the                                                                  
     governor under AS 41.41.210, the authority may                                                                         
               (1)  sue and be sued;                                                                                            
               (2)  adopt a seal;                                                                                               
               (3)  adopt, amend, and repeal bylaws and                                                                         
     regulations;                                                                                                               
               (4)  make and execute contracts and other                                                                        
     instruments;                                                                                                               
               (5)  in its own name acquire property,                                                                           
       lease, rent, convey, or acquire real and personal                                                                        
     property; a project site or part of a project site may                                                                     
     be acquired by eminent domain;                                                                                             
               (6)  acquire natural gas supplies;                                                                               
               (7)  issue bonds and otherwise incur                                                                             
     indebtedness   in   accordance  with   AS 41.41.300   -                                                                    
     41.41.410 in order to pay the cost of a project;                                                                           
               (8)  accept gifts, grants, or loans from and                                                                     
     enter  into contracts  or other  transactions regarding                                                                    
     gifts, grants,  or loans  with a  federal agency  or an                                                                    
     agency   or    instrumentality   of   the    state,   a                                                                    
     municipality, private organization, or other source;                                                                       
               (9)  enter into contracts or agreements with                                                                     
     a  federal agency,  agency  or  instrumentality of  the                                                                    
     state,  municipality, or  public or  private individual                                                                    
     or entity, with respect to the exercise of its powers;                                                                     
               (10)  charge fees or other forms of                                                                              
     remuneration for  the use  of authority  properties and                                                                    
     facilities;                                                                                                                
               (11)  defend and indemnify a current or                                                                          
     former member of  the board or an employee  or agent of                                                                    
     the authority  against the costs,  expenses, judgments,                                                                    
     and liabilities  as a result  of actions taken  in good                                                                    
     faith on behalf of the authority; and                                                                                      
               (12)  purchase insurance to protect its                                                                          
     assets,  services,  and employees  against  liabilities                                                                    
     that   may   arise   from  authority   operations   and                                                                    
     activities.                                                                                                                
        *  Sec.  4. AS 41.41  is  amended  by adding  a  new                                                                  
     section to article 2 to read:                                                                                              
          Sec. 41.41.210. Required approval. (a) The                                                                          
     authority    may   not    exercise    the   power    in                                                                    
     AS 41.41.200(5),  (6), (7),  (8),  or  (9) without  the                                                                    
     prior  written  approval  of  the  governor  after  the                                                                    
     governor  finds  that  the project  proposed  or  being                                                                    
     developed by the  authority is in the  best interest of                                                                    
     the state.  The governor  shall give written  notice to                                                                    
     the authority of the approval or denial of approval.                                                                       
          (b)  The authority may not exercise the power in                                                                      
     AS 41.41.200(4) without  the prior written  approval of                                                                    
     the commissioner  of revenue after the  commissioner of                                                                    
     revenue  finds that  the execution  of the  contract or                                                                    
     other instrument is in the  best interest of the state.                                                                    
     The commissioner  of revenue shall give  written notice                                                                    
     to  the   authority  of  the  approval   or  denial  of                                                                    
     approval.                                                                                                                  
          (c)  The written approval or denial of approval                                                                       
     in   (a)  or   (b)   of  this   section   is  a   final                                                                    
     administrative  action for  purposes of  appeal to  the                                                                    
     superior court."                                                                                                           
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
CO-CHAIR EDGMON objected for the purpose of discussion.                                                                         
                                                                                                                                
3:11:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS  expressed  increasing  alarm  at  ANGDA's                                                               
recklessness  and  inability to  "play  well  with others."    He                                                               
offered his support for Governor  Palin's efforts for an in-state                                                               
bullet line.   He opined the  state faces a unique  situation, in                                                               
which the governor's  project manager, Harry Noah,  and the chief                                                               
executive officer of ANGDA, Harold  Heinz, seem to disagree since                                                               
Harold  Heinze  seems to  want  to  "pull  the state  in  another                                                               
direction."   He explained that  HB 163 clarifies the  purpose of                                                               
ANGDA, but  also expands its  authority.  He referred  members to                                                               
proposed section 4 of Amendment 1, and read:                                                                                    
                                                                                                                                
     The  authority  may  not  exercise   the  power  in  AS                                                                    
     41.41.200(5),(6),(7),(8),  or  (9)  without  the  prior                                                                    
     written  approval of  the governor  after the  governor                                                                    
     finds that  the project proposed or  being developed by                                                                    
     the authority  is in  the best  interest of  the state.                                                                    
     The  governor   shall  give   written  notice   to  the                                                                    
     authority of the approval or denial of approval.                                                                           
                                                                                                                                
REPRESENTATIVE RAMRAS  described ANGDA as a  dysfunctional group,                                                               
and one that is not following  the instructions of the state.  He                                                               
opined  ANGDA  has a  spotty  record  of following  its  specific                                                               
instructions  in the  past six  months.   He suggested  that this                                                               
amendment would give more control  to the governor and represents                                                               
good public policy.  With  respect to other sections of Amendment                                                               
1,  section  3  would  address  the  Beluga  to  Fairbanks  (B2F)                                                               
project.  He recalled hearing  pipeline safety staff's concern at                                                               
a  recent  energy convention  over  proposed  black plastic  pipe                                                               
being buried in the ground from  Glenallen to Beluga.  Thus, this                                                               
amendment will  prevent the state from  taking responsibility for                                                               
that project.   He reiterated that proposed section  4 will place                                                               
ANGDA under the governor, at least  during a period of time until                                                               
the  state has  more  clarity of  how ANGDA  will  function as  a                                                               
productive quasi-entity within the state.                                                                                       
                                                                                                                                
3:15:47 PM                                                                                                                    
                                                                                                                                
MR. BALASH  reviewed the amendment.   He cautioned that  he would                                                               
not speak for the administration  or the governor on Amendment 1.                                                               
He pointed  out that rarely does  the governor make a  finding in                                                               
statute,  that   those  are  typically   duties  assigned   to  a                                                               
commissioner with expertise in the matters at hand.                                                                             
                                                                                                                                
3:16:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  stressed that  in this  instance it  is in                                                               
the best  interest of  the state  for the  governor to  have more                                                               
authority in this  regard.  He recalled a news  report that ANGDA                                                               
failed to  recognize the  direction the state  is headed  on this                                                               
issue.  He feared that ANGDA  was trying to set energy policy for                                                               
the state.   He preferred the governor provide  leadership on the                                                               
issue of an in-state gas pipeline and not a committee.                                                                          
                                                                                                                                
3:17:45 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON pointed  out that HB 163 has  two more committees                                                               
of referral.  He stated  that he allowed Representative Ramras to                                                               
introduce   Amendment  1   as   a  concept.      He  then   asked                                                               
Representative Ramras to withdraw the amendment.                                                                                
                                                                                                                                
3:18:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS withdrew Amendment 1.                                                                                     
                                                                                                                                
CO-CHAIR EDGMON withdrew his objection.                                                                                         
                                                                                                                                
3:18:38 PM                                                                                                                    
                                                                                                                                
BOB FAVRETTO,  Member, Alaska  Natural Gas  Development Authority                                                               
(ANGDA) Board of Directors, Department  of Revenue (DOR), related                                                               
that  he   felt  somewhat  disturbed  by   Representative  Ramras                                                               
comments.  He  stressed the importance of recent  dialogue at the                                                               
ANGDA board meetings.  He  wished Representative Ramras had heard                                                               
dialogue  the   ANGDA  board  had   at  those   recent  meetings.                                                               
Additionally he suggested that Mr.  Heinze could echo comments to                                                               
the board.                                                                                                                      
                                                                                                                                
3:19:38 PM                                                                                                                    
                                                                                                                                
MR.  FAVRETTO, in  response  to  Representative Ramras,  answered                                                               
that  the statutes  clearly state  that ANGDA  has the  authority                                                               
over the  proposed in-state  natural gas  pipeline and  not Harry                                                               
Noah,  who is  a representative  appointed by  the governor.   He                                                               
explained that it was somewhat  unclear initially at the meetings                                                               
as to the authority,  but by the end of the  meeting it was clear                                                               
that moving  the pipeline forward  is a  shared goal of  both Mr.                                                               
Heinze and Mr. Noah.                                                                                                            
                                                                                                                                
3:20:32 PM                                                                                                                    
                                                                                                                                
HAROLD  HEINZE,  Chief  Executive  Officer,  Alaska  Natural  Gas                                                               
Development  Authority  (ANGDA),  Department  of  Revenue  (DOR),                                                               
stated that he has  not seen Amendment 1.  He  said that he takes                                                               
exception to  the characterization by Representative  Ramras with                                                               
respect to ANGDA.   He offered that the past  several months have                                                               
been  difficult due  to  a  number of  restrictions  made by  the                                                               
administration.  He  explained that ANGDA has  evolved from 2003,                                                               
and  especially  last  year  with  the  governor's  challenge  to                                                               
provide  energy relief  to communities  in the  Interior.   Thus,                                                               
ANGDA's efforts to  modify the spur line to  Fairbanks using Cook                                                               
Inlet natural  gas.  Additionally, ANGDA  revisited its long-term                                                               
plan  with  respect  to  propane,  in an  effort  to  develop  an                                                               
opportunity to transport  North Slope gas in the  form of propane                                                               
from the  Beaufort Sea to  western Alaska, and along  the highway                                                               
system to Fairbanks.   Additionally, ANGDA's main  focus has been                                                               
to continue to  work with Denali and TransCanada  on the proposed                                                               
gas  pipeline.    He  expressed ANGDA's  focus  and  emphasis  on                                                               
capturing the  benefits of  the intrastate  commerce and  for the                                                               
state  achieve the  best consumer  terms for  intrastate commerce                                                               
requires the ANGDA  participate in the open season.   Further, he                                                               
opined that the routes under  consideration for natural gas would                                                               
require  intermediate   steps  to   bridge  the  gap   until  the                                                               
availability  of  North  Slope  gas.   He  characterized  ANGDA's                                                               
efforts as being on target with  the governor's program.  He said                                                               
he  found  it   difficult  to  understand  how   ANGDA  could  be                                                               
considered unresponsive to the needs of the governor.                                                                           
                                                                                                                                
3:24:33 PM                                                                                                                    
                                                                                                                                
MR. HEINZE  stated the purpose  of HB  163 is to  clarify ANGDA's                                                               
long-term  broad  authority.    He  specified  that  many  people                                                               
believe  ANGDA's  purpose  is  to  build  a  project.    However,                                                               
although it  has that  ability, ANGDA's emphasis  is to  move the                                                               
project forward in the early  stages, reduce risk for the private                                                               
sector,  and  provide opportunities  for  financing  so that  the                                                               
ultimate consumer receives the benefit.                                                                                         
                                                                                                                                
3:25:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS   asked  Mr.  Heinze  to   define  ANGDA's                                                               
relationship  with the  governor's in-state  gas pipeline  chief,                                                               
Harry Noah.                                                                                                                     
                                                                                                                                
MR. HEINZE answered  that Mr. Noah has been charged  to work on a                                                               
project for the  governor that links the North  Slope directly to                                                               
areas  inside the  state without  any  dependence on  gas from  a                                                               
large pipeline.   He underscored ANGDA's  cooperation and support                                                               
for the in-state gas pipeline chief.                                                                                            
                                                                                                                                
3:26:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS  refined  his  question  and  specifically                                                               
asked  whether he  was  "working  with Mr.  Noah"  or  if he  was                                                               
"deferential  to  Mr. Noah  and  the  governor" with  respect  to                                                               
building the proposed in-state gas bullet line.                                                                                 
                                                                                                                                
MR. HEINZE answered  that ANGDA has not been working  on a bullet                                                               
line or  a line directly to  the North Slope, but  ANGDA supports                                                               
that effort.   He offered that the bullet line  is one of several                                                               
important options  for the state.   At the same time,  ANGDA will                                                               
pursue on  a parallel track other  efforts it has begun,  such as                                                               
to pursue  the spur  line, which  would tap into  a main  line to                                                               
Canada  to bring  some  of  the North  Slope  gas  to markets  in                                                               
Southcentral  Alaska.   He  conceded  that a  spur  line may  not                                                               
benefit  communities such  as Fairbanks  but  will benefit  other                                                               
communities  in   the  Cook  Inlet  area   providing  significant                                                               
advantages  over  a   bullet  line.    In   further  response  to                                                               
Representative Ramras, Mr. Heinze said  it seems that AS 41.41 is                                                               
clear on authority.   He referred to a memorandum  dated April 7,                                                               
2009 from Lisa  Weissler and Larry Ostrovsky,  Department of Law,                                                               
that clarifies  the actions ANGDA  has taken are well  within the                                                               
statutory  authority.     He  said  he  was  not   aware  of  any                                                               
instructions from  the governor that  are counter to  anything in                                                               
the statutes.                                                                                                                   
                                                                                                                                
3:28:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  repeated his  question, and  asked whether                                                               
Mr. Heinze is deferential to Mr. Noah.                                                                                          
                                                                                                                                
3:29:33 PM                                                                                                                    
                                                                                                                                
MR.  HEINZE,  in  further   response  to  Representative  Ramras,                                                               
explained  he personally  reports to  the Board  of Directors  of                                                               
ANGDA.   He highlighted that the  board has been very  clear that                                                               
ANGDA is  to work in  full cooperation with the  governor's chief                                                               
of  the  in-state   pipeline.    He  understood   that  Mr.  Noah                                                               
represents  the project  to go  to the  North Slope  directly for                                                               
gas.  At the same time, the  board has not accepted that Mr. Noah                                                               
has authority  over matters  that are  prescribed in  statute for                                                               
ANGDA's  authority.   He  offered  his belief  that  AS 41.41  is                                                               
clear,  that  he also  submitted  a  memorandum (memo)  from  the                                                               
attorney general  that ascertains  that ANGDA actions  are within                                                               
its authority.                                                                                                                  
                                                                                                                                
3:30:24 PM                                                                                                                    
                                                                                                                                
MR.  HEINZE  then  drew attention  to  the  previously  mentioned                                                               
memorandum from  the assistant attorneys  general dated  April 7,                                                               
2009.   He offered his belief  that the memo makes  it clear that                                                               
ANGDA  has  operated  within its  statutory  authority  and  will                                                               
continue to do  so.  He said  in the long run that  the bill will                                                               
be helpful with  respect to the bonding  and banking instruments.                                                               
He asked members to consider passing HB 163.                                                                                    
                                                                                                                                
3:31:41 PM                                                                                                                    
                                                                                                                                
TOM LAKOSH  began his  testimony by first  qualifying that  he is                                                               
representing himself and is not  an attorney.  He understood that                                                               
ANGDA  has determined  it is  an undue  burden for  ratepayers in                                                               
Southcentral Alaska to  build a bullet line.   He also understood                                                               
that Representative  Ramras is  interested in  a subsidy  for his                                                               
constituents prior to building the  main gas pipeline.  He opined                                                               
that the  public interest and  ratepayers would be  better served                                                               
to stop the export of natural  gas and developing the rest of the                                                               
gas from Cook Inlet and  still provide free propane to Fairbanks.                                                               
He  suggested  state exploration  and  production  in Cook  Inlet                                                               
would be  much cheaper  than a spur  line or a  bullet line.   He                                                               
further  suggested  exploring  other options  for  Fairbanks  for                                                               
heating and gas supply.                                                                                                         
                                                                                                                                
3:35:23 PM                                                                                                                    
                                                                                                                                
PAUL D.  KENDALL commented that  all Alaskans seem to  talk about                                                               
is  natural gas.    He  said he  thinks  that  Anchorage and  the                                                               
Matanuska-Susitna area  could be  converted to electric  by using                                                               
water  and wind  technology.   He offered  that if  the state  is                                                               
going to  propose a gas  pipeline that he  would like to  see the                                                               
specific  proposal.     He  stated  he  would  like   to  see  an                                                               
itemization of the name of each  user, the amount of the use, and                                                               
certify the  use, such  as a  list of schools  and the  amount of                                                               
usage.  This would show the public  who is using the gas and then                                                               
the entities  can pay for  it.  If  school districts want  to use                                                               
fossil fuels,  then he should  not have to  pay for their  use of                                                               
outdated technology, he opined.   Additionally, he further stated                                                               
he would like to see  the total revenue and itemized expenditures                                                               
for the costs  of securing natural or piped gas.   In closing, he                                                               
said  he thinks  the  overall  problem stems  from  not having  a                                                               
defined energy policy.   He recommended a four to  five day forum                                                               
to  assess wind,  electric, and  solar energy.   He  stressed the                                                               
importance of  an open  process and not  to allow  proprietary or                                                               
secret information.                                                                                                             
                                                                                                                                
3:40:39 PM                                                                                                                    
                                                                                                                                
PAUL FUHS stated  that he is representing himself,  as a consumer                                                               
of gas  in Southcentral.   He presented written  information from                                                               
the Western  Alaska Energy Corridor,  which was presented  as the                                                               
reason  for the  drafting of  HB  163.   He related  that he  had                                                               
discussed an  idea with some  people at  the Donlin Creek  LLC, a                                                               
Barrick NovaGold company  with respect to running a  spur line to                                                               
pick up  the big mines.   [The Donlin Creek LLC  proposes to work                                                               
with the residents of the Yukon  Kuskokwim to develop a gold mine                                                               
13 miles north  of the Middle Kuskokwim River  village of Crooked                                                               
Creek.]  He expanded by explaining  this was a potential means of                                                               
supplying  villages in  Western Alaska  with energy.   He  opined                                                               
that ANGDA's authority was limited  geographically.  Thus, HB 163                                                               
was  drafted to  remedy that  issue.   He stated  that this  bill                                                               
would allow ANGDA to work in  other parts of the state outside of                                                               
the  main pipeline  corridor.   He opined  that another  instance                                                               
might be  if a gas  pipeline goes  through Canada that  a smaller                                                               
pipeline  could be  built to  Haines or  down the  Taku River  to                                                               
Southeast Alaska.   He noted  that the statutes provide  that the                                                               
board is appointed  by the governor.  He also  offered his belief                                                               
that  a problem  of cooperation  between ANGDA  and the  in-state                                                               
pipeline does not exist.                                                                                                        
                                                                                                                                
3:42:44 PM                                                                                                                    
                                                                                                                                
MR.  FUHS,  in response  to  Representative  Johansen, stated  he                                                               
supports HB  163 to  allow ANGDA  to work in  other areas  of the                                                               
state.   He  pointed  out that  the  letter on  the  back of  his                                                               
handout is  from Senator  Lyman Hoffman  asking ANGDA  to analyze                                                               
this proposal  and perform a  baseline analysis  for feasibility.                                                               
He stated that  the Department of Law answered  that the statutes                                                               
do not allow ANGDA to operate outside the pipeline corridor.                                                                    
                                                                                                                                
3:43:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  stated he  thought Mr. Fuhs  should have                                                               
provided the  information sooner to  allow members to  digest new                                                               
information.                                                                                                                    
                                                                                                                                
MR FUHS apologized.                                                                                                             
                                                                                                                                
3:44:02 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON,  after first determining  no one else  wished to                                                               
testify, closed public testimony on HB 163.                                                                                     
                                                                                                                                
3:44:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  commented that he  did not hear  an answer                                                               
from  Mr. Heinze.    He  stated that  it  was  unclear how  ANGDA                                                               
operates, but the  bill expands the authority of ANGDA.   He said                                                               
that he would not support HB 163.   He opined that the bill gives                                                               
more   authority  to   ANGDA,  when   ANGDA  has   not  currently                                                               
demonstrated it can move responsibly with the administration.                                                                   
                                                                                                                                
3:45:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DAHLSTROM moved  to  report HB  163, Version  26-                                                               
GH1057\A  out of  committee with  individual recommendations  and                                                               
the accompanying fiscal notes.                                                                                                  
                                                                                                                                
3:46:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS objected.                                                                                                 
                                                                                                                                
A  roll call  vote was  taken.   Representatives Johansen,  Tuck,                                                               
Dahlstrom, and Edgmon voted in  favor of HB 163.  Representatives                                                               
Ramras  and Petersen  voted against  it.   Therefore, HB  163 was                                                               
reported out of  the House Special Committee on Energy  by a vote                                                               
of 4-2.                                                                                                                         
                                                                                                                                
3:47:19 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:46 p.m. to 3:48 p.m.                                                                       
HB 182-RAILBELT ENERGY & TRANSMISSION CORP.                                                                                   
                                                                                                                                
3:48:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON called the meeting back to order.                                                                               
                                                                                                                                
CO-CHAIR EDGMON announced  that the next order  of business would                                                               
be HOUSE BILL NO. 182,  "An Act establishing the Greater Railbelt                                                               
Energy  and   Transmission  Corporation   and  relating   to  the                                                               
corporation;   relating  to   transition,  financial   plan,  and                                                               
reporting  requirements   regarding  planning  for   the  initial                                                               
business   operations  of   the  Greater   Railbelt  Energy   and                                                               
Transmission  Corporation; relating  to a  report on  legislation                                                               
regarding  the Regulatory  Commission of  Alaska and  the Greater                                                               
Railbelt  Energy and  Transmission  Corporation; authorizing  the                                                               
Alaska Energy Authority to convey  the Bradley Lake Hydroelectric                                                               
Project and  the Alaska Intertie  to the Greater  Railbelt Energy                                                               
and  Transmission Corporation;  and  providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
3:48:47 PM                                                                                                                    
                                                                                                                                
MR. BALASH  presented HB 182.   He explained  that HB 182  is the                                                               
result  of a  joint effort  by the  governor, the  utilities, and                                                               
Alaska   Energy  Authority   (AEA)  to   bring  joint   planning,                                                               
operation, and  investment for  the Railbelt  electric grid.   He                                                               
offered that  this effort has  spanned the  past year and  a half                                                               
with  ongoing discussions  being  held with  the  utilities.   He                                                               
explained  the proposed  bill creates  a  two-step process,  such                                                               
that  the corporate  governance structure  would continue  during                                                               
the  legislative interim,  while an  integrated resource  plan is                                                               
being undertaken by the AEA.   He highlighted that the utilities'                                                               
corporate board would develop a  transition plan and finance plan                                                               
for the next  legislative session.  He stated the  purpose of the                                                               
bill is to move the Railbelt  forward to the next generation.  He                                                               
remarked that the  boards of all six utilities met  last week and                                                               
decided they  wanted to participate in  developing the governance                                                               
structure,  as well  as the  outcome of  the integrated  resource                                                               
plan (IRP).   Thus, the boards  request to have HB  182 set aside                                                               
this year,  to form a  task force, and put  together a plan.   He                                                               
anticipated  the  board  would  hold several  meetings  and  make                                                               
recommendations on the corporate  governance structure by October                                                               
1.  This  timeline would allow the administration  to continue to                                                               
work on the  IRP and to work on the  transition and finance plan,                                                               
culminating  in a  single step  plan next  January.   He said  he                                                               
hoped  to furnish  a  letter  signed by  the  chairs  of all  six                                                               
Railbelt utility boards soon supporting  this change.  He offered                                                               
to provide it to the committee co-chairs.                                                                                       
                                                                                                                                
3:52:16 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON announced HB 182 would be held over.                                                                            
                                                                                                                                
HB 191-NUCLEAR POWER PRODUCTION/WASTE TRANSPORT.                                                                              
3:53:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON announced  that the next order  of business would                                                               
be  HOUSE  BILL NO.  191,  "An  Act  relating to  nuclear  energy                                                               
production   and  transportation   of  nuclear   waste  material;                                                               
amending the  definition of  'power project'  or 'project'  as it                                                               
relates to  rural and  statewide energy  programs and  the Alaska                                                               
Energy Authority;  relating to  the alternative  energy revolving                                                               
loan  fund and  amending  the definition  of 'alternative  energy                                                               
system' as  it relates to  that fund  and to the  conservation of                                                               
energy and materials; and providing for an effective date."                                                                     
                                                                                                                                
3:53:22 PM                                                                                                                    
                                                                                                                                
JEANNE  OSTNES, Staff,  to Representative  Craig Johnson,  Alaska                                                               
State Legislature,  Presented HB 191 on  behalf of Representative                                                               
Craig Johnson,  prime sponsor of HB  191.  She explained  that HB
191 would  update statutes  and level the  playing field  for all                                                               
types of energy,  including nuclear energy.  She  stated that the                                                               
Alaska statutes  and regulations do not  address alternative fuel                                                               
sources.     She  referred  to   the  dictionary   definition  of                                                               
alternative   fuel,  which   includes  energy   types  that   are                                                               
unconventional and  non-traditional such as nuclear  energy.  She                                                               
noted items  in members' packets,  including reports  prepared by                                                               
Donald Anderson,  Ph.D., and information  related to  the current                                                               
statutes,  as  well  as  comparisons between  the  bill  and  the                                                               
proposed committee  substitute.  She explained  that the Division                                                               
of Investments  indicates that Alternative Energy  loans range up                                                               
to 15  percent for those  loans.  Thus, the  rate is capped  at 8                                                               
percent, similar  to HB  196.   Additionally, she  indicated that                                                               
the sweep has been removed.                                                                                                     
                                                                                                                                
3:55:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN moved  to adopt  the proposed  committee                                                               
substitute (CS)  for HB 191, Version  25-LS0185\E, Kane, 4/07/09,                                                               
as  the work  draft.   There being  no objection,  Version E  was                                                               
before the committee.                                                                                                           
                                                                                                                                
3:55:59 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON objected for the purpose of discussion.                                                                         
                                                                                                                                
3:56:08 PM                                                                                                                    
                                                                                                                                
MS.  OSTNES stated  that the  energy  guide prepared  by the  AEA                                                               
lists nuclear energy as one of  the technologies that is good for                                                               
the state, with  Galena listed as a community that  is closest to                                                               
having  a "suitcase"  nuclear reactor  for energy.   She  further                                                               
stated   that  Dittman   Research  Association   of  Alaska,   in                                                               
Anchorage,  conducted a  poll in  March 2009,  and reported  that                                                               
respondents indicated  a preference for nuclear  energy over oil,                                                               
coal,  and tidal  power.   She mentioned  that nuclear  energy is                                                               
also becoming  safer.  She  opined that Galena is  targeting 2015                                                               
as  the   earliest  date  for   completing  the   Nuclear  Energy                                                               
Regulatory Committee process.   She reiterated that  HB 191 would                                                               
amend the statute so nuclear energy can be considered.                                                                          
                                                                                                                                
3:57:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN asked if  nuclear energy is considered an                                                               
alternative form of  energy, whether Galena or  other areas would                                                               
be able to apply for state loans and grants.                                                                                    
                                                                                                                                
3:58:14 PM                                                                                                                    
                                                                                                                                
MS. OSTNES answered yes.                                                                                                        
                                                                                                                                
3:58:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  asked what  size is  the plant  and cost                                                               
under consideration in Galena.                                                                                                  
                                                                                                                                
MS. OSTNES  answered that  the plant would  be 10  megawatts, but                                                               
she was not certain of the cost.                                                                                                
                                                                                                                                
DONALD ANDERSON, Ph.D., read a prepared statement:                                                                              
                                                                                                                                
     I  am  testifying  today as  a  citizen  interested  in                                                                    
     energy  production,  but  with  no  fiduciary  interest                                                                    
     beyond that  of the regular  household consumer.   I am                                                                    
     not a nuclear engineer,  although my education included                                                                    
     some coursework in that area.   I am here to ask you to                                                                    
     support  HB 191.   I  consider this  bill a  cleanup of                                                                    
     state statutes, and it is  designed to level the energy                                                                    
     production  playing  field.   We  badly  need to  allow                                                                    
     Alaskans  to choose  their generating  technology based                                                                    
     on economic, safety,  health, and reliability criteria.                                                                    
     Under current  law what may  be the best  technology in                                                                    
     some cases is not under active consideration.                                                                              
                                                                                                                                
     Specifically, use of nuclear  energy as the heat source                                                                    
     to   drive  generating   turbines  has   some  specific                                                                    
     advantages for  locations where fuel  transportation is                                                                    
     costly  or  sporadic.    It  also  provides  a  steady,                                                                    
     reliable  source of  baseload  power,  unlike wind,  or                                                                    
     tides, or the  sun.  Nuclear power plants  cost a great                                                                    
     deal, but fuel costs are  very low.  The energy density                                                                    
     of the fuel is 2.7 million  times as much as coal.  The                                                                    
     resulting  overall costs  are about  the same  as coal.                                                                    
     The resulting overall costs are  about the same as coal                                                                    
     fired  power,  and  much  lower  than  liquid  fuel  or                                                                    
     natural gas, although these are location dependent.                                                                        
                                                                                                                                
     At present  the smallest reactor design  being prepared                                                                    
     for  licensing is  the 10  megawatt  unit proposed  for                                                                    
     Galena.  This is far  larger than needed by the smaller                                                                    
     Alaskan  villages,   but  these  small  units   may  be                                                                    
     appropriate  in many  locations around  the state  such                                                                    
     as:   Bethel  or  Copper  Valley, Cordova,  Dillingham,                                                                    
     Galena,   Kodiak,   Kotzebue,    Naknek,   Nome,   Tok,                                                                    
     Unalakleet, Unalaska, and Yakatat.                                                                                         
                                                                                                                                
     Jeanne Ostnes  has been kind  enough to  duplicate some                                                                    
     material I  have written,  so it  could be  included in                                                                    
     your packets.   Although I doubt you have  time to read                                                                    
     much before  the end  of the session,  you might  put a                                                                    
     check mark  on the  paper I prepared  for the  board of                                                                    
     Chugach Electric giving some  history and background on                                                                    
     nuclear power  and a paper  I prepared on  the disposal                                                                    
     of high-level nuclear waste.                                                                                               
                                                                                                                                
     I  hope you  will promptly  move HB  191 forward.   The                                                                    
     lack of a full range  of energy options means plans may                                                                    
     be delayed, unnecessarily expensive,  or less safe than                                                                    
     they otherwise  would be.   Thanks for  your attention.                                                                    
     I'll answer any questions to the extent I can do so.                                                                       
                                                                                                                                
4:02:21 PM                                                                                                                    
                                                                                                                                
MARVIN  YODER, stated  that he  previously lived  in Galena,  and                                                               
requested  the bill  in  order to  add options  for  Alaska.   He                                                               
characterized Alaska  as a  diverse state  and noted  that Galena                                                               
looked at  options, but cannot  use wind or  hydroelectric power.                                                               
He explained that the U.S.  Department of Energy prepared a study                                                               
that  evaluated options  and suggested  nuclear power  as a  cost                                                               
effective  measure for  Galena.   He related  the purpose  of the                                                               
bill is to level the playing  field and make sure all options are                                                               
available.  He  clarified that other options may  be available to                                                               
other  communities.    He  provided   details,  such  that  three                                                               
companies offer  small nuclear  reactors.   He compared  the main                                                               
nuclear  plants  being built  in  the  U.S.  which are  about  15                                                               
megawatts,  with   the  current   Railbelt  needs  at   only  800                                                               
megawatts.   He offered  that Galena is  not considering  a large                                                               
scale  nuclear project  but rather  the projects  would be  small                                                               
regional ones that may connect some  villages to small grids.  He                                                               
reiterated  the  purpose  is  to reduce  energy  costs  to  small                                                               
villages and as an alternative.                                                                                                 
                                                                                                                                
4:04:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM  asked for clarification that  this bill                                                               
was at his request.                                                                                                             
                                                                                                                                
MR. YODER answered  that last year he reviewed  the statutes that                                                               
pertained  to  nuclear  energy.    He  discovered  Representative                                                               
Johnson introduced  a bill  and joined  his efforts  in progress.                                                               
In  further  response  to  Representative  Dahlstrom,  Mr.  Yoder                                                               
explained that Mr. Don Anderson and he had worked on this issue.                                                                
                                                                                                                                
4:05:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  EDGMON  asked for  capital  costs  for smaller  nuclear                                                               
facilities that range approximately 10 megawatts.                                                                               
                                                                                                                                
4:05:38 PM                                                                                                                    
                                                                                                                                
MR.  YODER  answered  that Toshiba  is  currently  revising  cost                                                               
estimates,  but he  recalled  some  years ago  that  a  10 or  50                                                               
megawatt facility would be amortized over  30 years for a cost of                                                               
6  or 7  cents a  kilowatt.   He  projected  the costs  for a  10                                                               
megawatt  facility would  be about  three times  that due  to the                                                               
economies of  scale.  He  advised he  requested an update  on the                                                               
two  year   old  figures,  but  estimated   that  amortizing  the                                                               
operating and capital  costs over 30 years would be  20 cents and                                                               
the 50 megawatt under 10 cents per kilowatt hour (Kwh).                                                                         
                                                                                                                                
4:06:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON further  asked for the bricks  and mortar capital                                                               
costs associated with the 10 megawatt facility.                                                                                 
                                                                                                                                
4:06:55 PM                                                                                                                    
                                                                                                                                
MR. YODER  answered the original  estimate came in at  $2,500 per                                                               
kilowatt  for the  50 megawatt  unit, calculated  as part  of the                                                               
whole  project.   In  further response  to  Co-Chair Edgmon,  Mr.                                                               
Yoder clarified  that a 50  megawatt unit at $2,500  per kilowatt                                                               
would cost $125  million.  He speculated the  overall costs would                                                               
probably range from $150 to $200 million by project completion.                                                                 
                                                                                                                                
4:07:24 PM                                                                                                                    
                                                                                                                                
MS. OSTNES offered that Galena  currently pays about 70 cents per                                                               
Kwh.   She  explained  that  the federal  stimulus  funds may  be                                                               
available  for alternative  energy, and  Alaska could  qualify if                                                               
nuclear is identified as an alternative  fuel.  She referred to a                                                               
letter  of support  in  members' packets  from  the Alaska  Power                                                               
Association (APA),  which is the statewide  trade association for                                                               
the  electric utilities  that supply  power to  many communities.                                                               
She  mentioned that  APA outlined  that the  statutes need  to be                                                               
updated or  "contemporized," and  it recognizes  that communities                                                               
need to have flexibility to choose what works best for them.                                                                    
                                                                                                                                
4:08:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN asked  what the  plan is  for the  spent                                                               
nuclear waste or rods.                                                                                                          
                                                                                                                                
MR.  YODER  answered  that  according  to  Toshiba,  the  nuclear                                                               
component  and sodium  coolant would  be sealed  in a  container.                                                               
Thus,  the plan  would be  to send  the sealed  container outside                                                               
Alaska at the end of 30 years.                                                                                                  
                                                                                                                                
4:09:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN pointed out that  he was not aware of any                                                               
location currently for  disposal of nuclear waste.   He expressed                                                               
concern that if the  facility was built and at the  end of the 30                                                               
year period  no disposal site  was identified, that  Alaska would                                                               
have to dispose of the nuclear waste in-state.                                                                                  
                                                                                                                                
4:10:14 PM                                                                                                                    
                                                                                                                                
MR.  YODER agreed.   He  understood that  nuclear waste  disposal                                                               
presents a  problem.   He further understood  that a  program has                                                               
been initiated to  recycle nuclear waste, which he  supports.  He                                                               
opined  that  such   a  program  would  reduce   the  volume  and                                                               
radioactivity by  90 percent.   He pointed out that  the proposed                                                               
nuclear  facility  would  have  the  capacity  to  burn  recycled                                                               
nuclear fuel.   He offered  his belief that some  other countries                                                               
currently are successfully reducing  waste.  He acknowledged that                                                               
the United States  has a problem, but the U.S.  has been charging                                                               
each nuclear plant  "backend" fees so the  federal government has                                                               
$5 billion to  sort out the issue of nuclear  waste disposal, but                                                               
has not done so due to political reasons.                                                                                       
                                                                                                                                
4:11:10 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  EDGMON held  over HB  191 for  further discussion.   He                                                               
reiterated that  he previously removed  his objection and  the CS                                                               
Version 25-LS0185\E, Kane, 4/07/09, is before the committee.                                                                    
                                                                                                                                
HB 148-ENERGY EFFICIENCY PLAN AND GRANT FUND                                                                                  
4:12:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON announced that the  final order of business would                                                               
be  HOUSE  BILL NO. 148, "An  Act relating to a  state energy use                                                               
reduction plan  and energy  efficiency improvement  contracts and                                                               
to energy audits of public  buildings conducted by the Department                                                               
of  Transportation  and  Public Facilities;  relating  to  agency                                                               
capital budget requests; establishing  an energy efficiency grant                                                               
fund  in the  Alaska Housing  Finance Corporation;  and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
4:12:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   LES  GARA,   Alaska  State   Legislature,  prime                                                               
sponsor,  introduced HB  148.   He explained  that he  has worked                                                               
with Representative  Thomas to put together  an energy efficiency                                                               
bill.   He pointed out that  most states have a  statewide energy                                                               
plan, but Alaska does not.  He  pointed out an energy plan is not                                                               
just  a piece  of paper.    He recalled  that alternative  energy                                                               
includes solar,  wind, and nuclear power,  which are alternatives                                                               
to fossil  fuels.  However, the  best way to reduce  emissions is                                                               
to  reduce  overall   energy  usage.    He   stated  that  energy                                                               
efficiency is  considered the fifth fuel,  is termed "negawatts,"                                                               
and  saves  money.   He  pointed  out  that  a pilot  project  in                                                               
Anchorage  estimates it  will save  $1 million  per year  through                                                               
energy use  by changing  its lighting.   He pointed  out changing                                                               
lighting is the fastest way to reduce energy costs.                                                                             
                                                                                                                                
REPRESENTATIVE  GARA   explained  that   HB  148  has   two  main                                                               
components.   One  is  to create  a grant  fund,  similar to  the                                                               
Renewable  Energy  Fund,  to  fund  construction  and  renovation                                                               
projects  for non-state  entities, such  as municipalities.   The                                                               
grant fund would be targeted  to those projects that will provide                                                               
the greatest  benefit per dollar  spent.  He also  recognized the                                                               
legislature would  need to decide  the appropriate  funding level                                                               
for  the grant  fund.   Additionally, another  component requires                                                               
the  state  to prepare  and  adopt  an  energy  plan.   The  bill                                                               
requires  departments to  focus  on projects  that  will pay  for                                                               
themselves  within  15  years, and  requires  the  Department  of                                                               
Transportation  & Public  Facilities  (DOT/PF)  to manage  public                                                               
facilities using standards.   He pointed out  that one applicable                                                               
standard is  the International  Energy Conservation  Code (IECC).                                                               
He  offered  that the  bill  encourages  the use  of  performance                                                               
contracting, which  is a way  for state agencies to  realize cost                                                               
savings without having to pay for  them in advance.  He explained                                                               
performance contracting such that the  state would hire a private                                                               
contractor,  who  is then  paid  from  a  portion of  the  energy                                                               
savings.   He provided  an example,  such as has  been done  in a                                                               
pilot program  at the Dimond  Courthouse, as well as  three other                                                               
locations in the state.                                                                                                         
                                                                                                                                
REPRESENTATIVE GARA  opined that  committee members are  aware of                                                               
the need  for a  plan, and  that other side  benefits exist.   He                                                               
highlighted  that  the  construction industry  is  moving  toward                                                               
using the  IECC; AHFC has  adopted the IECC code  for residential                                                               
properties,  although he  admitted this  bill does  not apply  to                                                               
residential properties.   He offered other support  for the IECC,                                                               
such as  the Alaska Homebuilders Association's  support, that the                                                               
Alaska Housing Finance Corporation (AHFC)  is also using the IECC                                                               
on construction it finances.   He reiterated the components:  the                                                               
grant  fund and  the  energy plan  to  require energy  efficiency                                                               
construction and retrofits.   He opined that in the  long run the                                                               
bill's fiscal  note is a  negative.  However, these  changes will                                                               
not happen  without requirements  in statute.   He  suggested the                                                               
legislature's focus  is on the  current cost, while this  bill is                                                               
geared  to look  at the  state's  cost in  10  or 15  years.   He                                                               
remarked  that he  worked closely  with DOT&PF  on the  bill, but                                                               
that he  is unsure who will  administer the grant fund  since the                                                               
state does  not currently have an  energy agency.  He  noted that                                                               
the Alaska Energy Authority (AEA) has  held a limited role but it                                                               
has been expanding  its role, and that AHFC  has performed energy                                                               
efficiencies  in   residences,  but   does  not   perform  energy                                                               
efficiencies in  commercial buildings.   He offered  that several                                                               
knowledgeable agencies have  experts, such as the  DOT/PF, but at                                                               
this time  the key  agency has  not identified.   He  offered his                                                               
view that HB 148 would force the  state to plan and it would save                                                               
money.                                                                                                                          
                                                                                                                                
4:20:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  asked how the  pilot program  is functioning                                                               
for the Dimond Courthouse.                                                                                                      
                                                                                                                                
REPRESENTATIVE  GARA deferred  to  DOT/PF to  address the  Dimond                                                               
Courthouse.   However,  he explained  that part  of the  proposed                                                               
energy plan will ask the  state to use performance contracting if                                                               
cost-effective.                                                                                                                 
                                                                                                                                
4:21:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS inquired as  to whether Representative Gara                                                               
is also working with co-chairs  of the House Special Committee on                                                               
Energy.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  GARA  answered  that  he has  been  working  with                                                               
Representative Thomas and with Senator Wielechowski's office.                                                                   
                                                                                                                                
4:21:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  referred to  page 3,  lines 4-5,  of the                                                               
bill  which  would  give  a   priority  to  projects  that  serve                                                               
municipalities  or unincorporated  communities with  a population                                                               
of  less than  15,000.   He  asked whether  greater cost  savings                                                               
could be had in larger communities.                                                                                             
                                                                                                                                
REPRESENTATIVE GARA offered  that the grants would  be awarded by                                                               
considering three factors:  the  highest level of energy savings,                                                               
priority  to  small  communities  since the  cost  of  energy  is                                                               
generally much  higher than in  large communities,  and encourage                                                               
communities to  seek funding from  other sources.   He elaborated                                                               
that larger communities  also have larger tax  bases than smaller                                                               
communities.                                                                                                                    
                                                                                                                                
4:24:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN referred  to page 2, lines  27-28, and to                                                               
page 4,  line 18, of  the bill which  lists standards.   He asked                                                               
for clarification on the various standards in HB 148.                                                                           
                                                                                                                                
REPRESENTATIVE GARA referred  to the first option on  page 2, for                                                               
new construction projects to qualify  lists an option to the IECC                                                               
or to  the Leadership in  Energy and Environmental  Design (LEED)                                                               
standards.  He explained that  both building standards are listed                                                               
because some agencies, such as  the university, or municipalities                                                               
currently use  one or the  other standard.   He opined  that both                                                               
standards are highly regarded energy  efficiency standards and if                                                               
a local government  has already adopted one, that  the bill would                                                               
recognize that standard  can be used.  However, the  IECC is only                                                               
mentioned in proposed section 44.42.067  which is the energy plan                                                               
portion of  the bill.   Thus, if the  state will undergo  a large                                                               
construction project, it  must pick one or the other.   He opined                                                               
that the IECC is the more widely accepted.                                                                                      
                                                                                                                                
4:25:59 PM                                                                                                                    
                                                                                                                                
JOEL   ST.   AUBIN,   Engineer,  Chief,   Statewide   Facilities,                                                               
Department of Transportation &  Public Facilities (DOT/PF, stated                                                               
he was available for questions.                                                                                                 
                                                                                                                                
4:26:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS  asked how  much  more  it would  cost  to                                                               
construct  a  building using  LEED  standards  and if  this  bill                                                               
requires the LEED standard be used to retrofit a building.                                                                      
                                                                                                                                
MR. ST. AUBIN  answered that he would need to  look at a specific                                                               
project to  determine the  cost estimate.   However, to  meet the                                                               
LEED certification  on a current  project in Bethel,  Alaska will                                                               
cost the DOT&PF an additional $250,000.   He stated that the cost                                                               
is less than a 1 percent increase.                                                                                              
                                                                                                                                
4:27:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  EDGMON  asked for  the  size  of  the building  in  the                                                               
specified project.                                                                                                              
                                                                                                                                
MR. ST. AUBIN  responded that it the project is  roughly a 20,000                                                               
square foot building, with a budget of $16 million.                                                                             
                                                                                                                                
REPRESENTATIVE GARA  reiterated that the  bill does not  apply to                                                               
private  buildings.   He  added that  unless  a municipality  has                                                               
preferred the LEED  over the IECC standard that it  can choose to                                                               
follow LEED.   He  added that  it would be  a local  decision and                                                               
that retrofitting is  not covered under HB 148,  except for state                                                               
buildings  that  estimate  cost  savings  over  15  years  garner                                                               
savings more than the cost of the retrofit.                                                                                     
                                                                                                                                
4:28:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  asked for the  average pay back  time if                                                               
standards are increased to LEED standards.                                                                                      
                                                                                                                                
REPRESENTATIVE GARA  stated he  was unsure  of the  average cost.                                                               
He opined that  often LEED considers insulation  such as windows.                                                               
However, he  remarked that the  lighting efficiency  is generally                                                               
about two  years.  Thus, the  bill is important just  in terms of                                                               
lighting.                                                                                                                       
                                                                                                                                
4:30:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA,  in response  to Co-Chair  Edgmon, suggested                                                               
that during an expanded hearing that  it would be useful to bring                                                               
in cold  climate experts  for future testimony.   He  offered his                                                               
belief that they  do support IECC standards.   However, he agreed                                                               
some minor elements  of the codes do not make  sense, such as the                                                               
preference for  white, which is  more energy efficient  in warmer                                                               
climates, but it does not make  sense.  He remarked that the bill                                                               
addresses aspects of the code that do not make sense.                                                                           
                                                                                                                                
4:30:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA concluded  that the bill represents  a lot of                                                               
work, but is comprehensive.   He encouraged committee to at least                                                               
consider working on the lighting aspect.                                                                                        
                                                                                                                                
4:32:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON requested further information and any back-up.                                                                  
                                                                                                                                
REPRESENTATIVE  TUCK  related that  he  serves  on the  Anchorage                                                               
School District School Board, which  had six schools in its pilot                                                               
program.   He  offered  the  results were  amazing  savings.   He                                                               
commented that if  the state can make it easier  for schools that                                                               
it could free up some money for other educational purposes.                                                                     
                                                                                                                                
CO-CHAIR  EDGMON announced  that HB  148 would  be held  over for                                                               
further consideration.                                                                                                          
4:33:59 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 4:33 p.m.                                                                  

Document Name Date/Time Subjects
CSHB182(ENE) Legal Memo.pdf HENE 4/9/2009 3:00:00 PM
HB 182
Changes from HB191 to CS.pdf HENE 4/9/2009 3:00:00 PM
HB 191
CSHB182(ENE).pdf HENE 4/9/2009 3:00:00 PM
HB 182
HB148 Leg Reseaarch Dec 2008.pdf HENE 4/9/2009 3:00:00 PM
HB 148
HB148 Leg Research Feb 2009.pdf HENE 4/9/2009 3:00:00 PM
HB 148
HB148 Sectional.pdf HENE 4/9/2009 3:00:00 PM
HB 148
HB148 Sponsor Statement.pdf HENE 4/9/2009 3:00:00 PM
HB 148
HB148 Fiscal Note.pdf HENE 4/9/2009 3:00:00 PM
HB 148
HB163 Fiscal Note 1.pdf HENE 4/9/2009 3:00:00 PM
HB 163
HB163 Fiscal Note 2.pdf HENE 4/9/2009 3:00:00 PM
HB 163
HB148 Fiscal Note2.pdf HENE 4/9/2009 3:00:00 PM
HB 148
HB191 Anchorage.pdf HENE 4/9/2009 3:00:00 PM
HB 191
HB191 CS.pdf HENE 4/9/2009 3:00:00 PM
HB 191
HB191 Fiscal Note.pdf HENE 4/9/2009 3:00:00 PM
HB 191
HB191 Fiscal Note2.pdf HENE 4/9/2009 3:00:00 PM
HB 191
Hb191 Generation Reactors.pdf HENE 4/9/2009 3:00:00 PM
HB 191
Hb191 Licensing.pdf HENE 4/9/2009 3:00:00 PM
HB 191
HB191 Power Point.pdf HENE 4/9/2009 3:00:00 PM
HB 191
HB191 Nuclear Waste.pdf HENE 4/9/2009 3:00:00 PM
HB 191
HB191 Sponsor Statement.pdf HENE 4/9/2009 3:00:00 PM
HB 191