Legislature(2009 - 2010)HAINES

09/16/2009 01:30 PM House ENERGY

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02:04:58 PM Start
02:05:39 PM HB218|| HB219
04:17:58 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Location: Haines High School Gym
698 Old Haines Highway
Joint with Senate Special Committee on
Heard & Held
Heard & Held
+ Public Testimony on a Statewide Energy TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
               SENATE SPECIAL COMMITTEE ON ENERGY                                                                             
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         Haines, Alaska                                                                                         
                       September 16, 2009                                                                                       
                           2:04 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
HOUSE SPECIAL COMMITTEE ON ENERGY                                                                                               
 Representative Bryce Edgmon, Co-Chair                                                                                          
 Representative Charisse Millett, Co-Chair                                                                                      
 Representative Nancy Dahlstrom                                                                                                 
 Representative Kyle Johansen                                                                                                   
 Representative Jay Ramras                                                                                                      
 Representative Chris Tuck (via teleconference)                                                                                 
SENATE SPECIAL COMMITTEE ON ENERGY                                                                                              
 Senator Lesil McGuire, Chair                                                                                                   
 Senator Albert Kookesh                                                                                                         
 Senator Bert Stedman                                                                                                           
 Senator Bill Wielechowski                                                                                                      
SENATE RESOURCES                                                                                                                
Senator Lesil McGuire, Co-Chair                                                                                                 
Senator Bill Wielechowski, Co-Chair                                                                                             
Senator Hollis French                                                                                                           
Senator Bert Stedman                                                                                                            
MEMBERS ABSENT                                                                                                                
HOUSE SPECIAL COMMITTEE ON ENERGY                                                                                               
 Representative Pete Petersen                                                                                                   
SENATE SPECIAL COMMITTEE ON ENERGY                                                                                              
 Senator Lyman Hoffman                                                                                                          
SENATE RESOURCES                                                                                                                
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Gary Stevens                                                                                                            
Senator Thomas Wagoner                                                                                                          
OTHER LEGISLATORS PRESENT                                                                                                     
Representative John Harris                                                                                                      
Representative Cathy Munoz                                                                                                      
Representative Bill Thomas                                                                                                      
Representative Peggy Wilson                                                                                                     
Senator Dennis Egan                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 218                                                                                                              
"An Act  establishing and  relating to  the Department  of Energy                                                               
and to  the board  of directors of  the Alaska  Energy Authority;                                                               
transferring the  Alaska Energy Authority and  the Alaska Natural                                                               
Gas Authority to  the Department of Energy;  and transferring the                                                               
home  energy  and weatherization  program  to  the Department  of                                                               
     -HEARD & HELD                                                                                                              
HOUSE BILL NO. 219                                                                                                              
"An Act relating to the renewable energy grant fund."                                                                           
     -HEARD & HELD                                                                                                              
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 218                                                                                                                  
SHORT TITLE: CREATING DEPT OF ENERGY/AEA BD                                                                                     
SPONSOR(s): ENERGY                                                                                                              
04/06/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/06/09       (H)       ENE, FIN                                                                                               
05/29/09       (H)       ENE AT 1:00 PM Bethel                                                                                  
05/29/09       (H)       Heard & Held                                                                                           
05/29/09       (H)       MINUTE(ENE)                                                                                            
06/17/09       (H)       ENE AT 5:00 PM Fairbanks                                                                               
06/17/09       (H)       Heard & Held                                                                                           
06/17/09       (H)       MINUTE(ENE)                                                                                            
08/07/09       (H)       ENE AT 2:00 PM Kenai                                                                                   
08/07/09       (H)       Heard & Held                                                                                           
08/07/09       (H)       MINUTE(ENE)                                                                                            
08/26/09       (H)       ENE AT 5:00 PM Dutch Harbor                                                                            
08/26/09       (H)       Heard & Held                                                                                           
08/26/09       (H)       MINUTE(ENE)                                                                                            
09/16/09       (H)       ENE AT 1:30 PM HAINES                                                                                  
BILL: HB 219                                                                                                                  
SHORT TITLE: RENEWABLE ENERGY GRANT REQUIREMENTS                                                                                
SPONSOR(s): ENERGY                                                                                                              
04/06/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/06/09       (H)       ENE, RES, FIN                                                                                          
05/29/09       (H)       ENE AT 1:00 PM Bethel                                                                                  
05/29/09       (H)       Heard & Held                                                                                           
05/29/09       (H)       MINUTE(ENE)                                                                                            
06/17/09       (H)       ENE AT 5:00 PM Fairbanks                                                                               
06/17/09       (H)       Heard & Held                                                                                           
06/17/09       (H)       MINUTE(ENE)                                                                                            
08/07/09       (H)       ENE AT 2:00 PM Kenai                                                                                   
08/07/09       (H)       Heard & Held                                                                                           
08/07/09       (H)       MINUTE(ENE)                                                                                            
08/26/09       (H)       ENE AT 5:00 PM Dutch Harbor                                                                            
08/26/09       (H)       Heard & Held                                                                                           
08/26/09       (H)       MINUTE(ENE)                                                                                            
09/16/09       (H)       ENE AT 1:30 PM HAINES                                                                                  
WITNESS REGISTER                                                                                                              
JAN HILL, Mayor                                                                                                                 
Haines Borough                                                                                                                  
Haines, Alaska                                                                                                                  
POSITION STATEMENT:  During hearing of HB 218 and HB 219,                                                                     
related efforts to address energy in the Haines area.                                                                           
ROBERT VENABLES, Energy Coordinator                                                                                             
Southeast Conference                                                                                                            
Haines, Alaska                                                                                                                  
POSITION STATEMENT:  During hearing of HB 218 and HB 219,                                                                     
discussed Southeast Conference's efforts with regard to energy.                                                                 
JIM STRANDBERG, Project Manager                                                                                                 
Alaska Energy Authority (AEA)                                                                                                   
Department of Commerce, Community, & Economic Development                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During hearing of HB 218 and HB 219,                                                                     
discussed AEA's efforts in Southeast Alaska and reviewed some of                                                                
the major projects.                                                                                                             
ALBERT HOWARD, Mayor                                                                                                            
City of Angoon                                                                                                                  
Angoon, Alaska                                                                                                                  
POSITION  STATEMENT:   During  hearing  of  HB  218 and  HB  219,                                                             
discussed the impact of energy costs in Angoon.                                                                                 
AL DWYER, Mayor                                                                                                                 
City of Petersburg                                                                                                              
Petersburg, Alaska                                                                                                              
POSITION  STATEMENT:   During  hearing  of  HB  218 and  HB  219,                                                             
related  that Petersburg  wants  to have  an  electrical grid  in                                                               
Southeast and have cost controls.                                                                                               
HENRICH KADAKE, SR., Mayor                                                                                                      
City of Kake                                                                                                                    
Kake, Alaska                                                                                                                    
POSITION STATEMENT:   During HB 218 and HB 219,  related the dire                                                             
situation in Kake.                                                                                                              
SUE LIBENSON                                                                                                                    
Haines, Alaska                                                                                                                  
POSITION  STATEMENT:   During  hearing  of  HB  218 and  HB  219,                                                             
expressed the need to review  all the alternative energy options,                                                               
particularly those that don't impact salmon.                                                                                    
KATHLEEN MENKE                                                                                                                  
Haines, Alaska                                                                                                                  
POSITION STATEMENT:   During hearing of HB 218 and  HB 219, urged                                                             
the  committees  not  to provide  blind  support  and  open-ended                                                               
funding to any  and all projects in the name  of renewable energy                                                               
without consideration of Alaska's wild fish stocks.                                                                             
SALLY McGUIRE                                                                                                                   
Lutak, Alaska                                                                                                                   
POSITION  STATEMENT:   During  hearing  of  HB  218 and  HB  219,                                                             
expressed her opposition to the proposed Chilkoot dam.                                                                          
TIM JUNE                                                                                                                        
Haines, Alaska                                                                                                                  
POSITION STATEMENT:   During the  hearing of  HB 218 and  HB 219,                                                             
encouraged  the development  of a  comprehensive energy  plan and                                                               
offered suggestions.                                                                                                            
LISA LANG, Member/Spokesperson                                                                                                  
Reynolds Creek Hydroelectric Project                                                                                            
Haida Corporation                                                                                                               
Hydaburg, Alaska                                                                                                                
POSITION STATEMENT:   During the  hearing of  HB 218 and  HB 219,                                                             
discussed the Reynolds Creek Hydroelectric Project.                                                                             
WARREN EDGLEY, Member                                                                                                           
City Council                                                                                                                    
City & Borough of Wrangell                                                                                                      
Wrangell Alaska                                                                                                                 
POSITION  STATEMENT:   During  hearing  of  HB  218 and  HB  219,                                                             
discussed  the relationship  between the  Alaska Canada  Intertie                                                               
and the Southeast Intertie.                                                                                                     
ERNIE CHRISTIAN, Vice Mayor                                                                                                     
City & Borough of Wrangell;                                                                                                     
Chair, Energy Committee                                                                                                         
Wrangell, Alaska                                                                                                                
POSITION  STATEMENT:   During  hearing  of  HB  218 and  HB  219,                                                             
discussed the Alaska Canada Energy Coalition.                                                                                   
ROB GOLDBERG                                                                                                                    
Haines, Alaska                                                                                                                  
POSITION  STATEMENT:   During  hearing  of  HB  218 and  HB  219,                                                             
discussed  Shubee Lake  as the  site  of a  possible hydro  power                                                               
DUFF MITCHELL, Director                                                                                                         
Cascade Creek, LLC                                                                                                              
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   During  hearing  of  HB  218 and  HB  219,                                                             
discussed the need to pursue the AK-BC Intertie.                                                                                
STEPHANIE  SCOTT,   Haines  Borough  Energy   and  Sustainability                                                               
Haines Borough Energy and Sustainability Commission                                                                             
City & Borough of Haines                                                                                                        
Haines, Alaska                                                                                                                  
POSITION  STATEMENT:   During  hearing  of  HB  218 and  HB  219,                                                             
discussed the commission's efforts.                                                                                             
ACTION NARRATIVE                                                                                                              
2:04:58 PM                                                                                                                    
CO-CHAIR  BRYCE EDGMON  called  the joint  meeting  of the  House                                                             
Special Committee on  Energy and the Senate  Special Committee on                                                               
Energy and  the Senate Resources  Standing Committee to  order at                                                               
2:04 p.m.  Representatives  Edgmon, Millett, Dahlstrom, Johansen,                                                               
Ramras,  and  Tuck  (via teleconference)  and  Senators  McGuire,                                                               
Wielechowski, French,  Stedman, and  Kookesh were present  at the                                                               
call to order.   Also in attendance  were Representatives Harris,                                                               
Munoz, Thomas, and Wilson and Senator Egan.                                                                                     
HB 218-CREATING DEPT OF ENERGY/AEA BD                                                                                         
HB 219-RENEWABLE ENERGY GRANT REQUIREMENTS                                                                                    
CO-CHAIR EDGMON announced  that the only order  of business would                                                               
be HOUSE BILL  NO. 218, "An Act establishing and  relating to the                                                               
Department of Energy and to the  board of directors of the Alaska                                                               
Energy Authority;  transferring the  Alaska Energy  Authority and                                                               
the Alaska  Natural Gas  Authority to  the Department  of Energy;                                                               
and transferring  the home energy  and weatherization  program to                                                               
the  Department of  Energy."  and  HOUSE BILL  NO.  219, "An  Act                                                               
relating to the renewable energy grant fund."                                                                                   
2:05:39 PM                                                                                                                    
SENATOR KOOKESH  welcomed everyone  to Haines, the  district that                                                               
he  and Representative  Thomas serve.    Senator Kookesh  related                                                               
that  he and  Representative Thomas  believe that  the future  in                                                               
rural  Alaska  is  low  cost  energy.    The  aforementioned  has                                                               
resulted in  much work in  the area  of hydro projects,  of which                                                               
there  are eight  in  Southeast  Alaska.   The  hydro project  in                                                               
Metlakatla is  over 100 years old,  he mentioned, and yet  it has                                                               
enough power  to offer power  for Ketchikan over the  next couple                                                               
of years.                                                                                                                       
2:08:02 PM                                                                                                                    
CO-CHAIR McGUIRE,  speaking on behalf  of the  Senate committees,                                                               
thanked  everyone  for  attending  today's  hearing.    She  then                                                               
introduced her Senate colleagues.                                                                                               
2:09:24 PM                                                                                                                    
CO-CHAIR EDGMON then had  the attending Representatives introduce                                                               
themselves.  He  extended thanks to the  Southeast Conference and                                                               
the legislators from the area for scheduling this meeting.                                                                      
2:13:48 PM                                                                                                                    
CO-CHAIR MILLET  informed everyone that before  the committee are                                                               
two pieces  of legislation,  HB 218  and HB  219.   She explained                                                               
that after  hearing that the  state's energy agencies  are spread                                                               
throughout various  state departments,  HB 218 was  introduced to                                                               
create  a Department  of Energy.    A Department  of Energy  will                                                               
consolidate  resources and  provide  a one-stop  shop for  energy                                                               
needs.   The other  legislation, HB  219, is  cleanup legislation                                                               
that implements recommendations  from a recent report  on HB 152,                                                               
sponsored  by Representative  Harris,  such  that when  renewable                                                               
energy  projects  are funded,  they  actually  come to  fruition,                                                               
reduce energy costs,  and displace diesel.   Co-Chair Millet then                                                               
informed everyone that  there is also draft  legislation that has                                                               
been developed by a stakeholders'  group.  This draft legislation                                                               
is  the beginning  of an  energy policy  that will  be introduced                                                               
next session.   She requested feedback on  all the aforementioned                                                               
2:16:51 PM                                                                                                                    
REPRESENTATIVE  HARRIS  noted that  he  worked  closely with  co-                                                               
sponsor Representative Thomas on HB 152.                                                                                        
2:17:47 PM                                                                                                                    
JAN  HILL,  Mayor, Haines  Borough,  related  that energy  is  an                                                               
important topic  in the  Haines Borough.   She noted  that Haines                                                               
and  Skagway  recently celebrated  the  opening  of the  Kasidaya                                                               
Creek Hydro  Project.  She then  told the committees that  a year                                                               
ago,  Haines created  an  Energy  and Sustainability  Commission,                                                               
which made  the community more  aware of energy uses,  how energy                                                               
could be  used more wisely, and  how the cost of  energy could be                                                               
reduced.  The  Haines Borough Assembly was pleased  with the work                                                               
of the  commission and decided to  extend it for a  few months to                                                               
continue its  work.  Mayor  Hill related that the  public process                                                               
for  the possible  Connelly Lake  Hydro Project  will take  place                                                               
soon.    She expressed  the  desire  to  review the  options  and                                                               
determine which  option will  serve the needs  of the  Upper Lynn                                                               
Canal the best in terms of cost and impact to the environment.                                                                  
2:21:23 PM                                                                                                                    
ROBERT  VENABLES,   Energy  Coordinator,   Southeast  Conference,                                                               
paraphrased  from  the   following  written  testimony  [original                                                               
punctuation provided]:                                                                                                          
     Southeast Conference is the  State of Alaska's Regional                                                                    
     Development Organization (ARDOR),  the Federal Economic                                                                    
     Development  District  (EDD)   and  the  USDA  Resource                                                                    
     Conservation   and  Development   (RC&D)  Council   for                                                                    
     Southeast  Alaska.  Our  mission  is  to  help  develop                                                                    
     strong  economies, healthy  communities  and a  quality                                                                    
     environment in Southeast Alaska.                                                                                           
     Southeast Conference  was formed  over 50 years  ago in                                                                    
     response   to   the    region's   need   for   improved                                                                    
     transportation and  an advocate  for the  ferry system.                                                                    
     Since then, our member  communities have worked through                                                                    
     Southeast   Conference    on   issues    ranging   from                                                                    
     transportation,    economic     development,    timber,                                                                    
     fisheries,  mining, environment,  health care,  tourism                                                                    
     and  energy. Our  energy  committee  first gathered  in                                                                    
     1997 as  the Intertie Committee and  produced the study                                                                    
     in   1998  called   the  Southeast   Alaska  Electrical                                                                    
     Intertie System  Plan. That study has  been the guiding                                                                    
     document   for    the   concept   of    a   region-wide                                                                    
     interconnected  intertie   system  that  would   (in  a                                                                    
     perfect world)  provide energy security  and electrical                                                                    
     redundancy for the communities of Southeast.                                                                               
     However,  as construction  costs  continue to  escalate                                                                    
     and  time  passes,  our  focus  is  turned  toward  the                                                                    
     resources  at  hand and  the  extreme  need that  still                                                                    
     exists in  many communities  such as: Kake,  Angoon and                                                                    
     Hoonah. Many  of our more urban  communities are facing                                                                    
     shortages  in the  near and  foreseeable future  as the                                                                    
     demand  for  energy  exceeds the  capacity  of  current                                                                    
     renewable resources.                                                                                                       
     But,  Southeast   Alaska  has  a  plan.   Each  of  our                                                                    
     communities  has  short-term and  long-term  objectives                                                                    
     that,  if  constructed,  will meet  the  needs  of  our                                                                    
     region. We have had  significant achievements this past                                                                    
     year  due,   in  large  part,   to  the  work   of  the                                                                    
     Legislature  and  the  guidance of  the  Alaska  Energy                                                                    
     Authority.  The Southeast  Conference Energy  Committee                                                                    
     will be  meeting directly after this  hearing, and will                                                                    
     have  more in-depth  reports to  share  on the  current                                                                    
     status and projected plans for each utility.                                                                               
     The  most significant  achievement in  the region  this                                                                    
     year is  the completion of [the  Southeast Alaska Power                                                                    
     Agency] SEAPA's Swan-Tyee Intertie.  You will hear more                                                                    
     on this  from Mr.  Dave Carlson,  but this  project has                                                                    
     been long  advocated by  Southeast Conference.  What we                                                                    
     are  seeing  emerge is  a  stable  supply of  renewable                                                                    
     resources   and  a   network  that   can  extend   from                                                                    
     Metlakatla,  where  there   is  already  surplus  power                                                                    
     generated and  additional resources along  the intertie                                                                    
     route,  to the  community of  Kake where  there are  no                                                                    
     significant  renewable   resources  to  develop   in  a                                                                    
     community  that is  economically devastated.  Southeast                                                                    
     Conference is working with  SEAPA, IPEC [Inside Passage                                                                    
     Electric  Corporation] and  the  local governments  and                                                                    
     making  significant  progress  on  the  Kake-Petersburg                                                                    
     Intertie that  will allow Kake to  displace its diesel-                                                                    
     generated  power and  enable  Kake  to be  revitalized,                                                                    
     both socially and economically.                                                                                            
2:26:12 PM                                                                                                                    
     Other  significant milestones  for the  region are  the                                                                    
     completion of  3 new hydroelectric  facilities. [Alaska                                                                    
     Electric Light  & Power] AEL&P's Lake  Dorothy Hydro in                                                                    
     Juneau,  AP&T's  Kasidaya  Creek Hydro  in  Upper  Lynn                                                                    
     Canal and  the Falls  Creek Hydro Electric  facility in                                                                    
     We   are   particularly   grateful  for   the   state's                                                                    
     investment of nearly $17  million into renewable energy                                                                    
     projects in  Southeast Alaska. This will  allow many of                                                                    
     the most  critically needed  projects to  advance, such                                                                    
     as   the  interties   from  Petersburg   to  Kake   and                                                                    
     Metlakatla to  Ketchikan (construction funds  are still                                                                    
     needed) and  the intertie to  Coffman Cove  and Naukati                                                                    
     (which  should be  completed next  season), as  well as                                                                    
     generation projects  such as the Reynolds  Creek Hydro,                                                                    
     Whitman  Lake Hydro  and a  feasibility  study for  the                                                                    
     Takatz Lake Hydro.                                                                                                         
     We are  also appreciative of the  important legislation                                                                    
     that has passed  (HJR 25, especially HB  152) and those                                                                    
     still under  consideration such as SB  132 (S.E. Energy                                                                    
     Fund),   SB  31   (renewable   energy  production   tax                                                                    
     credits),  and  HB  218  and HB  219  which  are  being                                                                    
     discussed today.                                                                                                           
     Southeast  Conference  is  extremely grateful  for  the                                                                    
     support  and  guidance  given   by  the  Alaska  Energy                                                                    
     Authority.  Their expertise  has helped  the region  to                                                                    
     make   more  informed   decisions   and  build   better                                                                    
     projects.  We are  currently working  with AEA  and our                                                                    
     local  municipalities and  utilities  to update  energy                                                                    
     plans that  have been in  existence for many  years and                                                                    
     have, in some cases,  become obsolete. Having a current                                                                    
     up-to-date  Integrated Resource  Plan (IRP)  is key  to                                                                    
     understanding   which  projects   truly   need  to   be                                                                    
     constructed and brought  on line first. This  will be a                                                                    
     top  priority as  we  develop an  energy  plan for  the                                                                    
     region and state.                                                                                                          
2:29:42 PM                                                                                                                    
     Another important project  needing immediate funding is                                                                    
     the  development of  a  comprehensive  energy plan  for                                                                    
     Hoonah and Chichagof Island. Each  of the 4 communities                                                                    
     on the island have  energy projects underway to address                                                                    
     short-term needs.  Southeast Conference  facilitated an                                                                    
     island-wide joint  meeting in  Hoonah this  summer that                                                                    
     discussed the untapped potential  that may exist around                                                                    
     the  communities of  Hoonah,  Pelican, Tenakee  Springs                                                                    
     and Elfin Cove.                                                                                                            
     One  of  the  obsolete   energy  plans  that  has  been                                                                    
     abandoned is the intertie from  Juneau to Hoonah. While                                                                    
     technically   feasible,  a   recent  analysis   of  the                                                                    
     proposed   intertie  showed   the  construction   costs                                                                    
     ranging between  $40-50 million. This coupled  with the                                                                    
     future costs  for operations, maintenance  and eventual                                                                    
     line  replacement made  constructing this  intertie (in                                                                    
     one of the world's deepest channels) uneconomical.                                                                         
     As  you can  see  by  the attached  FY  2010 Work  Plan                                                                    
     established   by   the  Southeast   Conference   Energy                                                                    
     Committee,  there is  much  work yet  to  be done.  But                                                                    
     progress  is being  made  and we  hope  that with  your                                                                    
     support  we  can  continue  to  work  toward  continued                                                                    
     success in  implementing our  shared vision  to utilize                                                                    
     Southeast's   plentiful  hydroelectric   potential  and                                                                    
     reduce,  to the  maximum  extent possible,  the use  of                                                                    
     diesel as a  primary fuel source for  the generation of                                                                    
MR. VENABLES then directed attention to the slide entitled                                                                      
"Southeast's Hydros = Bullet Line," which highlights the                                                                        
plentiful resources available in Southeast Alaska.                                                                              
2:32:20 PM                                                                                                                    
JIM STRANDBERG, Project Manager, Alaska Energy Authority (AEA),                                                                 
Department of Commerce, Community, & Economic Development                                                                       
(DCCED),  said  that today  he  would  discuss AEA's  efforts  in                                                               
Southeast Alaska  and review  the major  appropriations projects.                                                               
He noted  that he  and Representative Wilson  have had  some good                                                               
dialogue  about   the  Alaska-British  Columbia   (AK-BC)  Export                                                               
Intertie.  Furthermore,  the Canadian government has  put forth a                                                               
press release  saying it will  fund a backbone  transmission line                                                               
that would  bring the  robust transmission  connect to  within 60                                                               
miles of  the Alaska border.   This is likely to  be a three-year                                                               
project,  on the  Canadian  side.   There  has been  considerable                                                               
discussion in  Southeast Alaska regarding whether  to connect via                                                               
an export  intertie to  export excess  hydropower.   The backbone                                                               
transmission connection is one more  step from the Canadians that                                                               
could result  in the  eventual interconnection.   He  opined that                                                               
interconnection makes  for a  more robust  network and  under the                                                               
right  circumstances would  allow  export/import of  power.   The                                                               
state's energy future, he remarked,  is unknown.  Furthermore, in                                                               
the  near  term the  electric  systems  in Southeast  Alaska  are                                                               
coming under stress  as more and more people  connect to electric                                                               
heat, and thus  draw more current from the  wires than originally                                                               
conceived to be needed.                                                                                                         
2:35:52 PM                                                                                                                    
MR. STRANDBERG  then turned attention  to the Petersburg  to Kake                                                               
Intertie  Project.   He explained  that AEA  has over  $4 million                                                               
from  several sources,  one  of which  was  a reappropriation  of                                                               
funds  into  the  intertie  project.   Also,  IPEC  filed  for  a                                                               
renewable grant from  which it received an  additional $2 million                                                               
for  the  project.    He  noted that  AEA  is  working  with  the                                                               
Department  of Transportation  &  Public  Facilities (DOT&PF)  on                                                               
this  project due  to the  proposed road  between Petersburg  and                                                               
Kake   and  the   congressional  easement.     If   the  agencies                                                               
cooperated,  the  road  and the  intertie  could  be  constructed                                                               
within the same corridor and save  money.  He related that AEA is                                                               
working on finding a way to  permit an intertie to Kake, which is                                                               
in severe  economic distress.  The  desire is to move  as quickly                                                               
as  possible  and arrange  for  an  electrical intertie  that  is                                                               
coordinated with road development.                                                                                              
MR.  STRANDBERG then  informed  the committee  that  AEA was  the                                                               
grant conduit for the last  segment of funding for the Swann-Tyee                                                               
Intertie, in  the amount  of $46.2  million.   Over the  last two                                                               
years  AEA has  worked with  SEAPA.   The  Swann-Tyee project  is                                                               
essentially  complete  and the  hope  is  for interconnection  in                                                               
2:38:34 PM                                                                                                                    
MR. STRANDBERG highlighted  the power projects AEA  is working on                                                               
in Angoon and  Hoonah.  On the energy planning  side, he recalled                                                               
mention of  integrated resource planning.   There are  two levels                                                               
of planning,  one of which  is the  higher level of  energy plans                                                               
that are being conducted by  Mr. Haagenson, executive director of                                                               
AEA.   The  other level  of planning  is the  integrated resource                                                               
plan in which  AEA works with regions; the hope  is to perform an                                                               
island wide integrated  plan with the serving  utility, AP&T, for                                                               
Prince of Wales  Island.  He noted that AEA  is also engaged with                                                               
the Southeast  Conference on Chichagof Island.   Furthermore, AEA                                                               
is  working  with  SEAPA,  which  is  instituting  an  integrated                                                               
resource  plan  for  its  region;  the hope  is  that  work  with                                                               
Metlakatla and Kake can be integrated in the SEAPA plan.                                                                        
2:40:08 PM                                                                                                                    
MR.  STRANDBERG returned  to the  issue of  people converting  to                                                               
electric heat due  to the high cost of heating  fuel and relative                                                               
inexpensive  electric  costs.    The  aforementioned  is  placing                                                               
stress on  the electric  systems in  the communities.   Moreover,                                                               
this  trend is  likely  representing a  change  condition on  the                                                               
actual  energy planning  for  the  availability of  hydroelectric                                                               
power.  Mr. Strandberg proposed  that everyone remain vigilant on                                                               
this emerging issue and that  AEA report further as the situation                                                               
develops.  He  noted that there was a substantive  meeting on the                                                               
Kake to  Petersburg Intertie, which  Senators Thomas  and Stedman                                                               
attended.   Mr. Strandberg thanked  both senators for  helping to                                                               
move the project forward.                                                                                                       
MR.  STRANDBERG  then  turned   to  the  renewable  energy  grant                                                               
program,  for  which  there  have  been  recent  awards  for  the                                                               
Metlakatla  Intertie  project.     For  the  aforementioned,  Mr.                                                               
Strandberg tipped  his hat to  Representative Thomas.   There was                                                               
also an award  for the Petersburg Kake Intertie  and the Reynolds                                                               
Creek project on  Prince of Wales Island.  He  noted that Whitman                                                               
Lake was  awarded for Ketchikan  Public Utilities and  funds were                                                               
put forth for the Takatz  Lake Hydroelectric Power project, which                                                               
is located in Sitka.                                                                                                            
2:42:33 PM                                                                                                                    
REPRESENTATIVE RAMRAS  asked for a  show of hands of  those folks                                                               
who  heat  with the  following  forms  of energy:    electricity,                                                               
diesel, natural gas, wood, and coal.                                                                                            
2:44:04 PM                                                                                                                    
REPRESENTATIVE JOHANSEN, referring to  the press release from the                                                               
Canadian  Premier  that  guarantees   about  one-quarter  of  the                                                               
funding  for the  proposed project,  inquired as  to when  AEA is                                                               
going to have information for the legislature to analyze.                                                                       
MR.  STRANDBERG related  his  plan to  contact  his colleague  in                                                               
British  Columbia  with  Transmission  Corporation,  who  is  the                                                               
business  development  director.     He  offered  to  report  his                                                               
findings to the committee.                                                                                                      
2:46:19 PM                                                                                                                    
ALBERT  HOWARD, Mayor,  City of  Angoon, began  by informing  the                                                               
committee that  the unemployment  rate in  Angoon is  87 percent.                                                               
Last  winter residents  paid  $.62 per  kilowatt  hour (kWh)  for                                                               
electricity  and over  $6 a  gallon for  diesel fuel.   At  times                                                               
Angoon residents face the choice  of heating their home or having                                                               
electricity.   He noted that  the subsistence lifestyle  of those                                                               
in Angoon  helps them  manage through the  winter.   Mayor Howard                                                               
stressed  that  [Angoon]  sits  in the  middle  of  an  available                                                               
resource, but  the city  doesn't have the  funds to  utilize that                                                               
resource.  He  recalled hearing that the project  could be funded                                                               
if  the  power  cost  equalization (PCE)  funds  were  taken  for                                                               
20 years.   He lauded the City  Council of Angoon as  well as the                                                               
city's staff,  which are  aggressively working  to make  Angoon a                                                               
better  place  for  the  children  and  grandchildren  such  that                                                               
there's more  energy security.   He opined  that everyone  in the                                                               
region wants more  energy security.  Mayor Howard  opined that by                                                               
working together much can be accomplished.                                                                                      
2:49:43 PM                                                                                                                    
MAYOR HOWARD,  in response to  Representative Munoz,  related his                                                               
understanding that  the Native corporation  would comment  on the                                                               
Bear Creek project during its testimony.                                                                                        
2:50:09 PM                                                                                                                    
AL  DWYER, Mayor,  City of  Petersburg, remarked  that Petersburg                                                               
would be lost  without hydro power.  He noted  his agreement with                                                               
earlier comments relating  the need for Southeast  Alaska to take                                                               
care  of its  own  residents before  exporting  any hydro  power.                                                               
Mayor Dwyer related  that Petersburg wants to  have an electrical                                                               
grid in Southeast  and have cost controls.   Currently, wholesale                                                               
costs  total about  $.06 per  kWh.   The  average homeowner  pays                                                               
about $.11  per kWh,  which he  attributed to  the fact  that the                                                               
hydro power is  publicly owned by SEAPA.  The  City of Petersburg                                                               
wants to  have control  over the wholesale  power rate  and wants                                                               
the public to  own the hydro power.   He noted that  at least one                                                               
developer   has  some   good  ideas   that  are   environmentally                                                               
acceptable.   That  corporation, however,  is looking  to make  a                                                               
dollar.  Energy  is so important to Southeast  Alaska, he opined.                                                               
Mayor  Dwyer  expressed the  need  to  have  a reserve  fund  for                                                               
maintenance and to  have the lowest energy costs  to consumers in                                                               
Southeast  Alaska.   In closing,  he mentioned  the need  to help                                                               
Kake get power.                                                                                                                 
2:54:33 PM                                                                                                                    
The committee took an at-ease from 2:54 p.m. to 2:59 p.m.                                                                       
3:00:31 PM                                                                                                                    
HENRICH KADAKE, SR.,  Mayor, City of Kake, began  by thanking the                                                               
legislators for thinking of Kake  and Petersburg when legislation                                                               
moves  through  the   process.    He  commented   that  the  Kake                                                               
Petersburg Intertie is moving along,  albeit a bit slower than he                                                               
would like.   Mayor Kadake  emphasized that  the City of  Kake is                                                               
very distressed and  every day of the year a  family moves out of                                                               
the  community because  they can't  afford to  stay.   He related                                                               
that he has lived in Kake for 65  years.  Although the last 40 of                                                               
those years  the community has  been working on  renewable energy                                                               
options to  no avail, the  City of Kake  has gone further  in the                                                               
last few  years with the  help of  the legislature.   He stressed                                                               
that he  has worked hard  for Kake,  Hoonah, and Tenakee,  all of                                                               
which  are  dependent upon  diesel.    He highlighted  that  many                                                               
residents  don't have  heat.   He then  noted his  agreement with                                                               
Mayor  Dwyer regarding  the fact  that  without subsistence  many                                                               
wouldn't [make  it].  Mayor  Kadake expressed the desire  to fund                                                               
the Kake Petersburg  Intertie in the next couple  of years before                                                               
everyone has left.   In conclusion, Mayor  Kadake emphasized that                                                               
addressing  the situation  in Kake  is  the top  priority of  the                                                               
Southeast Conference.                                                                                                           
3:04:20 PM                                                                                                                    
CO-CHAIR EDGMON announced that there  will be a committee hearing                                                               
at the annual Alaska Federation  of Natives (AFN) convention.  He                                                               
then turned the gavel over to Co-Chair McGuire.                                                                                 
3:05:12 PM                                                                                                                    
CO-CHAIR  McGUIRE  announced that  at  this  time the  committees                                                               
would now take public testimony.                                                                                                
3:06:03 PM                                                                                                                    
SUE LIBENSON  related that although  she is currently  a customer                                                               
of Alaska Power Telephone (AP&T),  for many years prior she lived                                                               
off the  grid with  various alternative sources  of energy.   She                                                               
explained that  she decided to  pay to have the  electrical lines                                                               
come to  her house, which she  felt good about since  at the time                                                               
AP&T  was using  hydro power  from a  source that  had no  salmon                                                               
issues.  However,  now expanding hydro power  for the communities                                                               
is being considered.   The aforementioned provides  an example of                                                               
reviewing  potential conflicts  with  other  users and  community                                                               
involvement.  After  living in Haines for 15  years, Ms. Libenson                                                               
said she realizes  that Haines "floats" on  salmon.  Furthermore,                                                               
Haines is  experiencing an influx  of retirees due to  the area's                                                               
long salmon season.  The good news  is there are a lot of options                                                               
in  Southeast Alaska,  particularly near  Haines.   However, with                                                               
hydro power one has to consider  the salmon and even how that may                                                               
impact  other Southeast  Alaska communities.   Noting  that there                                                               
are  some  alternative options  that  don't  have conflicts  with                                                               
salmon,  she  expressed  hope  that  AP&T  will  review  all  the                                                               
alternatives  and  take  caution  to   stay  out  of  the  salmon                                                               
3:09:36 PM                                                                                                                    
KATHLEEN  MENKE,  speaking as  a  resident  of Haines  and  small                                                               
business owner, provided the following testimony:                                                                               
     I understand the legislature  is considering setting up                                                                    
     new energy authorities and  funding mechanisms in order                                                                    
     to support and provide  incentives for renewable energy                                                                    
     in   Alaska.      Fifty  years   ago,   when   Alaska's                                                                    
     constitution  was  written  and   we  became  a  state,                                                                    
     Alaska's  leaders had  the  vision  and sensibility  to                                                                    
     provide to  the people of Alaska  ownership of Alaska's                                                                    
     resources.   At  that  time, and  today,  one of  these                                                                    
     primary  resources  was  and   is  Alaska's  wild  fish                                                                    
     stocks.   So, my  request to you  today is  to remember                                                                    
     the people of  Alaska and Alaska's wild  fish stocks as                                                                    
     you  further   deliberate  actions  within   the  state                                                                    
     regarding  the siting  of and  funding support  for new                                                                    
     hydroelectric projects  in Alaska.   I urge you  not to                                                                    
     provide  blind support  and open-ended  funding to  any                                                                    
     and all projects,  bad or good, cost  effective or not,                                                                    
     in the  name of renewable energy  without consideration                                                                    
     of Alaska's wild  fish stocks.  Politics  should not be                                                                    
     used to  force unhealthy decisions on  Alaska's economy                                                                    
     and resources.                                                                                                             
     In  the Upper  Lynn Canal  and in  Southeast Alaska  we                                                                    
     have  abundant  choices for  hydro  power  sites.   The                                                                    
     current  site  for  which   funding  is  being  heavily                                                                    
     lobbied by  certain politicians and  by Alaska  Power &                                                                    
     Telephone  is  for  the  Connlley  Lake  Hydro  Project                                                                    
     located  in the  sensitive salmon  spawning grounds  of                                                                    
     the  Upper  Chilkoot  watershed  above  Chilkoot  Lake.                                                                    
     Many people in our community  are strongly opposed to a                                                                    
     hydro project in this location.   AP&T's application to                                                                    
     [Federal  Energy Regulatory  Commission] FERC  for this                                                                    
     project  in  June   received  opposition  filings  from                                                                    
     numerous    organizations,    including   the    Alaska                                                                    
     Department  of  Fish &  Game  and  the National  Marine                                                                    
     Fisheries  Service.    Recent   studies  by  AP&T  have                                                                    
     indicated  that a  more cost  effective option  for the                                                                    
     next  hydro  project in  the  Upper  Lynn Canal  to  be                                                                    
     Shubee Lake near Skagway.   Here no roads and dams have                                                                    
     to be built;  here there is not the issue  of impact to                                                                    
     salmon.   Therefore, I  urge you  to proceed  with care                                                                    
     and  caution,  delegating  authority  for  funding  and                                                                    
     decision making regarding  renewable energy projects in                                                                    
     Alaska.  We really need your leadership on this.                                                                           
3:12:51 PM                                                                                                                    
SALLY McGUIRE related  that she lives on the  Chilkoot [near] the                                                               
site of the proposed dam.   She encouraged the committee to drive                                                               
through the area,  which she characterized as an  area where it's                                                               
difficult  to believe  anyone would  want  to perform  industrial                                                               
development.   Furthermore, the area  is the basis of  tourism in                                                               
Haines, which is  extremely important.  She opined  that any road                                                               
in that  valley to  some such  development would  be detrimental,                                                               
particularly to  the bears that  depend upon the  salmon fishery.                                                               
Furthermore, she  questioned how  a road  could be  built through                                                               
all the salmon  spawning beds in that area  without impacting the                                                               
salmon.  She  then related her understanding that  there are many                                                               
smaller  scale hydro  options in  Haines that  would fulfill  its                                                               
needs, which she  understood to be about 2 megawatts  a day.  The                                                               
Connelly Hydro Project  is supposed to provide five  to six times                                                               
the current needs of Haines.   At the same time, smaller towns in                                                               
Southeast Alaska are  desperate for help.   Ms. McGuire explained                                                               
that AP&T  is proposing  to build  a huge  dam on  the side  of a                                                               
mountain, with the entire economy  beneath.  Furthermore, the dam                                                               
is in  an earthquake zone as  it sits above a  complex of faults.                                                               
She urged the [legislature] not  to allow the construction of the                                                               
3:15:37 PM                                                                                                                    
TIM  JUNE   related  that  he   has  followed   renewable  energy                                                               
technology  and installation  for the  last 25  years.   He noted                                                               
that he will provide the  committee with copies of his testimony,                                                               
which  includes a  "comprehensive  energy plan."   He  encouraged                                                               
everyone  to think  big  as  an energy  plan  is being  developed                                                               
because it's probably the most  important matter before the state                                                               
in  the next  5-10  years.   Although the  state,  he opined,  is                                                               
currently  benefitting from  billions of  dollars of  new revenue                                                               
from increased oil  taxes and the oil industry  is reaping record                                                               
profits,  many  Alaskans are  struggling  with  fuel heating  and                                                               
electricity costs.   Alaska's energy strategy  must first include                                                               
a  strong  commitment to  creating  and  using profits  from  the                                                               
state's   nonrenewable  resources   in  order   to  establish   a                                                               
sustainable, multi-faceted, renewable  energy infrastructure that                                                               
will  last for  the next  100 years.   While  the state  recently                                                               
adopted energy programs such as  the home weatherization program,                                                               
a  comprehensive statewide  strategy that  will coordinate  long-                                                               
and short-term solutions  still hasn't been developed.   Mr. June                                                               
emphasized that since energy switching  usually takes 20-30 years                                                               
to  accomplish,   it's  in  Alaska's   best  interest   to  begin                                                               
immediately.   He  noted that  currently,  Oregon and  Washington                                                               
already  have  900 megawatts  of  wind  power online.    Although                                                               
Alaska has the  highest wind resource in the  nation, Alaska only                                                               
has 1 megawatt of wind power online.                                                                                            
3:19:10 PM                                                                                                                    
MR. JUNE then turned to solar  power, noting that he and his wife                                                               
have obtained  about 80 percent  of their electricity  from solar                                                               
power for 20 years in Southeast  Alaska.  He related that Germany                                                               
is the leader  in solar power production; 8  percent of Germany's                                                               
power is from  solar.  Germany accomplishes this  and it receives                                                               
less sunshine  than Juneau.   Mr. June stressed that  because the                                                               
cost of  energy is so high  in Alaska, not much  sun is necessary                                                               
to offset  the price.   He told  the committee that  Oregon State                                                               
University   has  an   energy  team   that  has   developed  wave                                                               
generators.   The team  has calculated that  every three  feet of                                                               
coast line in Oregon can produce  enough wave energy, 50 kW,  for                                                               
10 homes.   Alaska has  44,000 miles of coastline,  and therefore                                                               
he opined that Alaska has tremendous potential with wave energy.                                                                
3:20:50 PM                                                                                                                    
MR.  JUNE, referring  to his  comprehensive  energy plan,  opined                                                               
that energy solutions have to be  funded.  In order to accomplish                                                               
the  aforementioned,  maximum  return   on  the  state's  natural                                                               
resources has to  be obtained to fund the  state's next renewable                                                               
industry.  For  example, Norway has taken the same  amount of oil                                                               
out  of  the  ground  in  the same  amount  of  time  as  Alaska.                                                               
However, Norway's  permanent fund totals  about 10 times  that of                                                               
Alaska's permanent fund.   Norway taxes its oil at  89 percent of                                                               
the gross.   Alaska, on the  other hand, spent two  years arguing                                                               
whether  to  charge 20  or  21  percent of  the  net.   Mr.  June                                                               
encouraged the legislators  to be bold and think  big because the                                                               
funds are necessary to produce  renewable systems for the future.                                                               
He  then  turned to  public  transportation,  and predicted  that                                                               
electric cars will  come online shortly.   Therefore, as capacity                                                               
is  created, that  capacity has  to include  the switch  from gas                                                               
fueled cars to electric cars.                                                                                                   
MR. JUNE expressed his pleasure  with the introduction of HB 218,                                                               
and suggested that  Alaska look to Washington  and Oregon, states                                                               
who  have   had  such   departments  for   a  number   of  years.                                                               
Furthermore, there should be  an important cabinet-level position                                                               
for the  Department of Energy.   He encouraged the  committees to                                                               
expand  the   weatherization  and  energy  programs   to  include                                                               
schools, municipalities,  and businesses.   Energy  efficiency is                                                               
the  biggest bang  for the  buck  and beats  hydro, solar,  wind,                                                               
coal,  and  oil power.    He  complimented the  [legislature]  in                                                               
getting the energy  funds to Alaskans.  However,  Mr. June opined                                                               
that  a  golden  opportunity  is   being  missed  with  renewable                                                               
systems,  for which  he suggested  creating a  30 percent  rebate                                                               
program.  He explained that  currently, the federal government is                                                               
allowing  individuals  to  have  a   30  percent  tax  credit  on                                                               
investments in  renewable energy systems  for their homes.   Most                                                               
states match that  grant.  By Alaska not matching  the grant, the                                                               
state is  passing on millions  of dollars  of federal funds.   In                                                               
Oregon, a  $25,000 home solar  system costs the  homeowner $6,000                                                               
after   the   federal,   state,  and   power   company   rebates.                                                               
Furthermore,  a  $25,000 solar  system  installed  in a  business                                                               
costs the  business owner  $4,000 after  energy and  tax credits.                                                               
He pointed out  that these are systems that will  be in place for                                                               
the next 50 years.  If that  path is chosen and the federal funds                                                               
leveraged, the state will move ahead.                                                                                           
3:24:12 PM                                                                                                                    
MR. JUNE  then turned to  small scale  systems.  He  related that                                                               
North Carolina  has made  500 wind  anemometers to  record yearly                                                               
data of wind availability.   These wind anemometers are leased to                                                               
individuals for  $100 deposit.   He suggested that such  a system                                                               
be set  up with the  schools in the state  in order to  compile a                                                               
database of micro wind maps.   For an upfront investment of about                                                               
$300 for a  recording wind anemometer, the state  could be mapped                                                               
within five years to determine where to set up wind turbines.                                                                   
MR.  JUNE then  pointed  out that  BP  Exploration (Alaska)  Inc.                                                               
builds  solar panels.    He  suggested that  the  state take  its                                                               
royalty  share and  trade  the oil  for BP's  solar  panels at  a                                                               
greatly reduced rate.   The solar panels could  be made available                                                               
to Alaskans at a much reduced  cost.  The aforementioned would be                                                               
very helpful to the state's  residents and businesses, he opined.                                                               
Furthermore,  partnering  with  the state's  Native  corporations                                                               
would be helpful  in terms of utilizing their  ability to attract                                                               
and qualify  for federal dollars for  renewable energy solutions.                                                               
Mr.  June  then  expressed  the  need  to  invest  in  developing                                                               
renewable energy curriculum  for K-12 because it's  the future of                                                               
those  students.    He  also  expressed the  need  to  invest  in                                                               
research and  development through  the university.   Green power,                                                               
education, and  jobs need to  be fostered through  the University                                                               
of Alaska,  which could be a  leader in the country.   The state,                                                               
he opined,  has so much to  gain.  Furthermore, Alaska  is likely                                                               
the only state  in the country that has the  funds to immediately                                                               
address renewable energy  in a big way.  In  conclusion, Mr. June                                                               
said:  "We all  know when the oil runs out  the oil companies are                                                               
going to leave.   We're going to be left with  a flashlight and a                                                               
match; I just want us to have the best flashlight on the block."                                                                
CO-CHAIR McGUIRE,  referring to  Mr. June's  suggestion for  a 30                                                               
percent rebate, said  that Alaska's challenge is  that it doesn't                                                               
have a  state income tax.   She  informed everyone that  there is                                                               
legislation pending in committee for  a production tax credit for                                                               
renewable  energy investments.    With regard  to electric  cars,                                                               
there is also legislation pertaining to them.                                                                                   
3:27:39 PM                                                                                                                    
REPRESENTATIVE  RAMRAS said  that  he  applauded the  initiatives                                                               
discussed, particularly investment in  the university, but opined                                                               
that Mr.  June's suggestions cherry  pick data points to  paint a                                                               
utopian society  that's not affordable  for a state  that already                                                               
has a  difficult time  sustaining its budget.   For  instance, in                                                               
Germany there's  a feed-in  rate that  generally attributes  to a                                                               
rising cost  of all kilowatts.   He expressed hope  that everyone                                                               
recognizes  that different  regions of  the state  are trying  to                                                               
solve different  problems and that  solutions with price  tags in                                                               
the hundreds  of millions of  dollars aren't feasible in  a state                                                               
with an  already strained budget.   Moreover, the through  put in                                                               
the Trans-Alaska Pipeline System (TAPS)  is declining by at least                                                               
6  percent   due  to   Alaska's  aggressive   taxation  policies.                                                               
Norway's 89 percent tax rate  is entirely different than Alaska's                                                               
net profits tax.                                                                                                                
3:29:46 PM                                                                                                                    
MR.  JUNE   responded  that   he  is   simply  trying   to  offer                                                               
possibilities  and  that  the state  is  behind  [with  renewable                                                               
energy  solutions].   With regard  to where  the funds  will come                                                               
from, Mr.  June reminded the committee  that just a year  ago the                                                               
state  had an  energy  rebate that  totaled  about $780  million.                                                               
Although  that  was nice  for  the  residents  of the  state,  he                                                               
suggested that  were those funds used  to seed an energy  fund to                                                               
develop the  proposals he mentioned,  the state would  be further                                                               
along the road to energy  independence.  "We're pinching pennies,                                                               
but at the  same time we have to be  creative and responsible for                                                               
future generations," he remarked.                                                                                               
REPRESENTATIVE  HARRIS  thanked  Mr.   June  for  his  ideas  and                                                               
suggested  that  he speak  with  Mr.  Haagenson.   Representative                                                               
Harris  then disagreed  with the  comments that  the state  isn't                                                               
doing  anything comprehensive,  adding that  the legislature  has                                                               
reviewed  various possibilities  over the  past few  years.   The                                                               
legislature's  review led  to the  direction  of Mr.  Haagenson's                                                               
position.   He  said that  there is  knowledge about  the various                                                               
renewable energy  sources in the  state, but he pointed  out that                                                               
any  system/plan has  to  be economic  and  beneficial to  people                                                               
throughout the state for many years.                                                                                            
MR. JUNE  acknowledged that the  legislature has  made tremendous                                                               
gains in the area of renewable  energy.  Still, it's necessary to                                                               
think outside of the box, he remarked.                                                                                          
3:33:57 PM                                                                                                                    
LISA  LANG,  Member/Spokesperson,  Reynolds  Creek  Hydroelectric                                                               
Project,  Haida  Corporation,  informed the  committee  that  the                                                               
Reynolds   Creek   project   is  being   directed   under   Haida                                                               
Corporation,  which   recently  partnered   with  AP&T.     Haida                                                               
Corporation  has  invested  private   funds  totaling  nearly  $4                                                               
million  in this  project.   The project  totals $17  million, of                                                               
which there  is some  state and  federal funds.   With  regard to                                                               
hydro  power,  she  suggested  that  everyone  should  know  what                                                               
they're  talking  about  because  it's a  sophisticated  sort  of                                                               
project.  She noted that  Haida Corporation went through the FERC                                                               
permitting process  and is ready  to go.   She then  related that                                                               
she is  a fisherman who has  a deep respect for  the environment.                                                               
However, she  said that  she's also a  realist.   After reviewing                                                               
AEA's process  last year, she went  to the island to  discuss how                                                               
to move forward.   The area needs plans and  financing for the 11                                                               
organizations on  Prince of Wales  Island.  She related  that the                                                               
community,  the  village,  the corporation,  and  the  city  have                                                               
gotten the Reynolds Creek project to its current status.                                                                        
3:36:36 PM                                                                                                                    
MS. LANG reminded committee members  that hydro power is excluded                                                               
from  the   renewable  energy  legislation  as   it's  no  longer                                                               
considered a  renewable energy  source.   Ms. Lang  requested, on                                                               
behalf of Haida Corporation and  Prince of Wales Island, that the                                                               
Reynolds Creek Hydroelectric Project  be included specifically in                                                               
the renewable  energy legislation.   She expressed the  desire to                                                               
have federal funding for the project  and a match from the state,                                                               
especially after  the federal government  told her to go  home to                                                               
the state  for funding.  She  alluded to the logistics  and costs                                                               
that face those living on Prince of Wales Island.                                                                               
MS.  LANG  reiterated  her  respect   for  the  environment,  but                                                               
emphasized  the  need  for economic  development  in  communities                                                               
which  requires  energy.   She  characterized  the  situation  as                                                               
critical  because  no  matter  how low  the  rates  are,  without                                                               
economic  development  communities  [won't survive].    She  then                                                               
noted that  she has received  support from the  Alaska Federation                                                               
of Natives (AFN),  U.S. Congressman Don Young,  U.S. Senator Lisa                                                               
Murkowski, and various  other organizations.  Ms.  Lang urged the                                                               
committees to  take the message  forward and  provide communities                                                               
with the  ability to plan for  their future.  She  also urged the                                                               
committees to  continue to support  HB 152, the funds  from which                                                               
have been put to good use.                                                                                                      
3:40:37 PM                                                                                                                    
CO-CHAIR  McGUIRE  reminded  everyone that  the  legislature  has                                                               
unanimously  supported a  resolution  to  Congress requesting  to                                                               
include hydro power in the definition of renewable energy.                                                                      
3:40:54 PM                                                                                                                    
WARREN EDGLEY, Member, City Council,  City & Borough of Wrangell,                                                               
relayed  to  the  committees  that the  Minister  of  Energy  for                                                               
British  Columbia  has announced  that  it  has accumulated  $404                                                               
million  and will  proceed with  the Northern  Transmission Line.                                                               
The  aforementioned,  he  opined,  is good  news.    Without  the                                                               
Northern Transmission Line there is  no opportunity for an Alaska                                                               
Canada Intertie.   Without an  Alaska Canada Intertie,  one can't                                                               
rationally  build  a Southeast  Intertie.    Without a  Southeast                                                               
Intertie   there   won't   be   any   significant   hydroelectric                                                               
development  because  that intertie  and  the  connection to  the                                                               
North American  power grid  provides a market  for all  the power                                                               
that can  be generated.   He told the  committee that the  City &                                                               
Borough  of Wrangell  joined  the Highway  37  Coalition and  has                                                               
discussed  the development  that  will  occur between  Wrangell's                                                               
border and  Highway 37 in  Canada.  Currently, the  Canadians are                                                               
focused  on  building the  Northern  Transmission  Line with  the                                                               
knowledge that  there will be  taps on that  line that go  to the                                                               
West, which he  opined is where the Alaska  Canada Intertie comes                                                               
into play.  Mr. Edgley related  his belief that the Alaska Canada                                                               
Intertie  is  just  part  of the  Southeast  Intertie,  which  he                                                               
recalled has  to be a regional  transmission organization modeled                                                               
after BCTC or Bonneville.   The responsibility of the intertie is                                                               
to  dispatch,  purchase,  and  market  power.    The  desire,  he                                                               
explained,  is  to  form  an organization  like  the  Highway  37                                                               
Coalition  in Alaska,  a subject  which has  been discussed  with                                                               
Alaska's Congressional delegation.                                                                                              
CO-CHAIR McGUIRE related [the  legislature's] willingness to work                                                               
with  the  City   &  Borough  of  Wrangell  in   setting  up  the                                                               
aforementioned organization.                                                                                                    
3:45:16 PM                                                                                                                    
ERNIE CHRISTIAN, Vice  Mayor, City & Borough  of Wrangell; Chair,                                                               
Energy Committee, explained  that the City &  Borough of Wrangell                                                               
is  in  the  preliminary  stage   of  the  Alaska  Canada  Energy                                                               
Coalition,  which   is  being  modeled   after  the   Highway  37                                                               
Coalition.     He  provided  the   committee  with   a  brochure,                                                               
presentation,  press release,  and  contact  information for  the                                                               
coalition.   There are  three goals of  the Alaska  Canada Energy                                                               
Coalition.  Firstly,  it would provide affordable  energy for all                                                               
of Southeast  and would  be a catalyst  to justify  the Southeast                                                               
Intertie.    He  pointed  out  that without  a  market,  a  30-70                                                               
megawatt facility won't  be built.  With regard  to the Southeast                                                               
Intertie,  Mr.  Christian  related  that  the  Thomas  Bay  Power                                                               
Project has the  possibility of producing 130  megawatts of power                                                               
between  three different  hydro  projects.   For perspective,  he                                                               
told the committees that  Snettisham Hydroelectric produces about                                                               
78 megawatts  of power.   Therefore, the Thomas Bay  Project will                                                               
produce more megawatts  than most of Southeast will use.   If the                                                               
Thomas Bay  Project is  going to be  constructed and  funded, one                                                               
must  review the  cost benefit  ratio.   He noted  that it  would                                                               
likely  take  two to  three  years  to  connect the  [Thomas  Bay                                                               
Project] to the Northwest Transmission Line.                                                                                    
MR.  CHRISTIAN reminded  the committees  that back  in 2006  $3.2                                                               
million was appropriated  by the legislature and  was approved by                                                               
Governor  Murkowski.   Those funds  were to  study, develop,  and                                                               
permit   the  line.     However,   some  of   those  funds   were                                                               
reappropriated later on.   Although some may say  this project is                                                               
premature, Mr.  Christian opined that  if work doesn't  begin, it                                                               
will never happen.  He pointed  out that the Lake Dorothy Project                                                               
took  11 years  to  bear  fruit.   Therefore,  the Alaska  Canada                                                               
Energy Coalition  sent out over  200 e-mails to  various entities                                                               
from which over 40 responded and wanted to join.                                                                                
MR. CHRISTIAN  continued with the  other two goals of  the Alaska                                                               
Canada  Energy Coalition.    He related  that  the project  would                                                               
bring short-term and long-term well  paying jobs to Southeast and                                                               
would promote  economic develop in Southeast.   Furthermore, this                                                               
project  would provide  up to  3,000  megawatts of  power to  the                                                               
green  North American  grid.   [The Southeast  Intertie] has  the                                                               
capability  of producing  up to  3,000  megawatts of  developable                                                               
power.  He  noted that there is a report  available regarding the                                                               
energy  that's   available  in  Southeast   Alaska,  particularly                                                               
hydroelectric  energy.   The  report  doesn't  address the  other                                                               
forms of  nonrenewable energy that  could be produced.   He noted                                                               
that within Wrangell  there are six potential  hydro projects and                                                               
possible geothermal  projects that could  be developed.   At this                                                               
point there's  no incentive to  develop the  aforementioned hydro                                                               
power because  there's no market  for it.  Therefore,  the Alaska                                                               
Canada  Energy Coalition,  with a  tiered membership,  is a  step                                                               
forward,  he remarked.   He  expressed  hope that  by January  or                                                               
February, the coalition will come before the legislature.                                                                       
3:50:07 PM                                                                                                                    
ROB GOLDBERG  related his belief  that establishing  a Department                                                               
of Energy is  critical for Alaska's future.   Statewide renewable                                                               
energy should  be used  as much  as possible.   He  mentioned his                                                               
excitement  with regard  to the  Chakachamna Lake  Project, which                                                               
seems to  be a  project that  could provide  power from  Homer to                                                               
Fairbanks.   He indicated  his support of  the state  helping [to                                                               
fund] the Chakachamna  Lake Project.  With regard to  HB 219 that                                                               
addresses  the criteria  for funding  renewable energy  projects,                                                               
Mr. Goldberg  opined that  one must consider  not only  the power                                                               
produced  by the  projects  but also  the  habitat and  community                                                               
MR.  GOLDBERG told  the committee  that  he has  been a  planning                                                               
commissioner in Haines  for the past seven years.   As a planning                                                               
commissioner, he  is charged with  finding creative  solutions to                                                               
the  problems facing  the community.    Ideally, those  solutions                                                               
should promote  harmony and the  best long-term interests  of the                                                               
community, he opined.   Recently, the communities  of Skagway and                                                               
Haines have faced  a problem in the winter months  when folks use                                                               
electric heaters to  augment their heat during  very cold spells.                                                               
However, in  such situations  the Goat  Lake Hydro  Project isn't                                                               
capable of  providing the  power for  both communities,  and thus                                                               
AP&T has  to use its diesel  generators to carry that  load.  The                                                               
aforementioned has  caused AP&T to review  an alternative storage                                                               
hydro project to  run in the winter months in  order to avoid the                                                               
use of  diesel.  Since 1981,  the Connelly Lake Hydro  Project in                                                               
the Upper  Chilkoot has been  considered.  Due to  the opposition                                                               
to  this project,  Mr.  Goldberg  related that  he  took it  upon                                                               
himself to find  a creative solution and  avoid another community                                                               
battle in  Haines.  None  of the  sites he reviewed  had anywhere                                                               
near the  power potential  of Connelly Lake  until he  received a                                                               
newer USGS  map which  showed a mile-long  300 feet  lake, Shubee                                                               
Lake,  that wasn't  noted on  an older  map.   He estimated  that                                                               
Shubee Lake  has 78,000  acre-feet of water  in it,  which offers                                                               
tremendous hydro potential.                                                                                                     
3:54:22 PM                                                                                                                    
MR.   GOLDBERG  informed   the   committee  that   he  ran   some                                                               
calculations  and provided  his findings  to AP&T.   He  told the                                                               
committee that  he has  been working with  the local  manager [of                                                               
AP&T] regarding ways  to develop the Shubee Lake  hydro site most                                                               
efficiently.   Although  AP&T is  still considering  the Connelly                                                               
Lake  site  strongly, Mr.  Goldberg  expressed  concern with  the                                                               
Connelly  Lake  site because  the  salmon  habitat in  the  Upper                                                               
Chilkoot  is some  of the  most  productive in  all of  Southeast                                                               
Alaska.   The  proposal for  Connelly Lake  includes 10  miles of                                                               
road and  a 575 foot long  dam, which would require  about 60,000                                                               
cubic yards  of material to be  brought in or extracted  on site.                                                               
"I  don't  see   how  these  facilities  can   be  built  without                                                               
disturbing the  salmon habitat,"  he opined.   He  explained that                                                               
there have been  studies that show turbidity in  a sockeye salmon                                                               
lake causes the  zooplankton levels to decrease,  such a decrease                                                               
means that there's  less for the young salmon to  feed on and the                                                               
salmon  run is  lost.   He  related that  years ago  there was  a                                                               
disturbance in  the Chilkoot when a  road was put in  and a clear                                                               
cut was  done.  Some  years later, there was  a big crash  in the                                                               
Chilkoot  salmon run.    Since  then, the  road  has mostly  been                                                               
consumed by the Chilkoot and the  salmon runs are returning.  Mr.                                                               
Goldberg  expressed his  excitement to  discover the  Shubee Lake                                                               
site, which he didn't believe  had any habitat issues and doesn't                                                               
require a road  or dam to be  built.  The Shubee  Lake site would                                                               
be a  siphon project,  much like  AP&T's Goat  Lake Project.   He                                                               
expressed  hope that  AP&T would  put forth  effort in  trying to                                                               
develop  the Shubee  Lake site.    Mr. Goldberg,  turning to  the                                                               
legislation before  the committees, stated his  hope that habitat                                                               
and  community issues  will be  considered along  with the  power                                                               
potential  of  proposed  sites.     He  offered  to  provide  his                                                               
comparative analysis of the Connelly Lake and Shubee Lake sites.                                                                
3:57:31 PM                                                                                                                    
DUFF   MITCHELL,  Director,   Cascade   Creek,   LLC,  began   by                                                               
highlighting  that  the  state  has  a  wide  variety  of  energy                                                               
sources, terrain, and needs.   He suggested that Southeast Alaska                                                               
has the most diversity between the  haves and the have nots.  For                                                               
instance, there are urban communities  that received subsidies in                                                               
the past that now have $.06  wholesale hydro power rates while 40                                                               
miles  away a  Native village  is  using expensive  diesel.   Mr.                                                               
Mitchell thanked the legislature for  its support for hydro power                                                               
as the  legislative resolutions sent  a loud message  to Congress                                                               
that Alaska is serious about  renewable energy.  The state's goal                                                               
of  50 percent  renewable energy  by 2025  is an  aggressive goal                                                               
that he likes.                                                                                                                  
4:00:08 PM                                                                                                                    
MR. MITCHELL,  in response to Representative  Johansen, explained                                                               
that Cascade  Creek, LLC, is  a member of the  Alaska Independent                                                               
Power  Producers  Association,  which consists  of  nine  Alaskan                                                               
companies  developing  power,  primarily  renewable  power.    He                                                               
clarified that he is only  testifying on behalf of Cascade Creek,                                                               
LLC,  not  the association.    Returning  to his  testimony,  Mr.                                                               
Mitchell  informed the  committee  that Cascade  Creek is  energy                                                               
agnostic, although  it's in  the renewable  side.   Cascade Creek                                                               
recognizes  Alaska's diversity  and that  the bullet  pipeline is                                                               
essential  for  the  Railbelt.    He  submitted  that  the  AK-BC                                                               
Intertie is the  bullet line for Southeast Alaska.   Mr. Mitchell                                                               
said  that  although  he  appreciates  what's  happening  in  the                                                               
villages and the  need to take care of Alaskans  first, he opined                                                               
that building small  hydro power plants with a  cost of $.30-$.40                                                               
[per kWh]  doesn't make  sense when  other communities  pay $.06-                                                               
$.08 per  kWh.  In  order to  achieve economies of  scale, larger                                                               
hydro power resources need to  be developed in an environmentally                                                               
sound  manner.   The AK-BC  Intertie provides  a market  for full                                                               
utilization  of  its  hydro power  resources  and  allows  excess                                                               
kilowatts  to  be  put  in   the  North  American  market.    The                                                               
aforementioned could provide a small  help to America and sending                                                               
the  energy   through  the  AK-BC   Intertie  would   spread  the                                                               
maintenance and  overhead costs over  a larger amount  of energy.                                                               
Therefore, the AK-BC Intertie would  economically manage the risk                                                               
for the Southeast  Alaska Intertie.  Furthermore,  many years ago                                                               
Public Law  106.511 authorizing $384  million, with a  20 percent                                                               
state match, for  the Southeast Alaska Intertie was  passed.  Mr.                                                               
Mitchell submitted  that there  has never been  a better  time to                                                               
approach  Congress  for  infrastructure funds  that  would  allow                                                               
residents of Southeast Alaska to  have cheap energy.  The legacy,                                                               
he opined,  is valuable,  particularly considering  the longevity                                                               
of  hydro power  plants.   Mr. Mitchell  then suggested  that the                                                               
state use the windfall it received  when oil was $140 a barrel to                                                               
construct   renewable  energy   systems  on   the  infrastructure                                                               
[provided by the  aforementioned funds].  The  U.S. Department of                                                               
Energy predicts that  by 2015 oil will be $112  per barrel, which                                                               
he opined is a conservative estimate.                                                                                           
4:04:37 PM                                                                                                                    
MR. MITCHELL reminded  the committees that Juneau was  one of the                                                               
first communities to  use hydro power.   He highlighted Treadwell                                                               
mine's heated swimming  pool and the 18-mile  electrical line run                                                               
from  Douglas  to Mendenhall  Glacier  in  1914 to  build  Nugget                                                               
Creek.  Mr.  Mitchell said that [Southeast] Alaska  is blessed in                                                               
the  state's  natural resource  to  create  an industry,  perhaps                                                               
green collar  jobs, and  other industries.   He then  returned to                                                               
the AK-BC Intertie, which is only  65 miles from Wrangell at this                                                               
point.  In the  middle of those 65 miles is  a hydro power plant,                                                               
and therefore  only about 26.8 miles  to the border and  35 miles                                                               
to  this other  hydro  power  plant.   In  closing, Mr.  Mitchell                                                               
thanked  the committees  for listening  and  expressed hope  that                                                               
they come back with  a plan.  He noted that Alaska  is one of the                                                               
last  states not  doing  net metering,  which  he recognized  has                                                               
positives and negatives.   Alaska is also one of  the last states                                                               
with a  renewable portfolio  standard.  He  opined that  a fourth                                                               
renewable portfolio  standard isn't necessary and  the 50 percent                                                               
target by 2025 is good.  He said  he looked to the leaders of the                                                               
state to lay down the foundation for energy.                                                                                    
4:09:13 PM                                                                                                                    
REPRESENTATIVE DAHLSTROM inquired as to who owns Cascade Creek.                                                                 
MR. MITCHELL  answered that  Cascade Creek  is a  private company                                                               
that's owned by Kake Tribal, Tollhouse  Energy - a company out of                                                               
Bellingham  that owns  about 80  percent, an  anesthesiologist in                                                               
Anchorage, as  well as  an assortment of  smaller investors.   He                                                               
noted that  the majority  of the directors  of Cascade  Creek are                                                               
4:10:13 PM                                                                                                                    
STEPHANIE  SCOTT,   Haines  Borough  Energy   and  Sustainability                                                               
Coordinator,   Haines    Borough   Energy    and   Sustainability                                                               
Commission, City &  Borough of Haines, explained  that the Haines                                                               
Borough  Energy and  Sustainability Commission  is a  nine-member                                                               
commission  that was  authorized by  the Haines  Borough Assembly                                                               
about  a year  ago.   The notion  was that  the commission  would                                                               
promote  energy  conservation  and  efficiency.   "We  take  very                                                               
seriously the  idea that  the least expensive  unit of  energy is                                                               
the one  that you don't use,"  she related.  The  commission, she                                                               
further  explained, is  a  cooperation  of tribal  organizations,                                                               
local  utilities, the  Haines Borough's  planning commission,  an                                                               
assembly member, and members at  large.  The commission has taken                                                               
on the  task of helping the  City & Borough of  Haines reduce its                                                               
energy consumption  by 5-7 percent.   One of the things  that AEA                                                               
promotes  is  that  conservation  is the  first  fuel,  which  is                                                               
something that everyone can do  now.  She provided the committees                                                               
with a  compilation of  the commission's  achievements, including                                                               
the  fact  that   Haines  led  the  region  in   terms  of  those                                                               
participating in the Home Energy  Rebate Program.  She noted that                                                               
the commission has implemented a  weekly radio show, Energy Talk,                                                               
during  which  there  is  discussion about  things  that  can  be                                                               
utilized in one's own home.   She pointed out that the unnumbered                                                               
work  draft  discusses initiating  and  supporting  a program  to                                                               
educate  state   residents  regarding  the  benefits   of  energy                                                               
efficiency and conservation.  The  aforementioned is so important                                                               
and must be an ongoing effort, she opined.                                                                                      
4:15:32 PM                                                                                                                    
REPRESENTATIVE  RAMRAS  inquired  as   whether  Ms.  Scott  would                                                               
support  energy  conservation  being a  mandatory  curriculum  in                                                               
Alaska's schools.                                                                                                               
MS.  SCOTT replied  yes.   She then  highlighted that  Haines has                                                               
looked  into  replacing  its  street   lights  with  LED  lights.                                                               
However, it  was discovered that  90 percent of  Haines' 250-watt                                                               
street lights are on state-owned  and maintained roads and DOT&PF                                                               
won't  allow  the installation  of  LED  street lights  on  those                                                               
state-owned and  maintained roads.   The  DOT&PF says  LED lights                                                               
aren't  allowed because  they don't  meet a  certain standard  of                                                               
illumination.   She explained that  LED lights can't  be measured                                                               
by the  same standards as  incandescent or  high-pressured sodium                                                               
lights,   and  therefore   there's  a   disconnect  between   the                                                               
measurement standards and  LED lights.  She pointed  out that she                                                               
found it curious, though, that  the [city and borough] can remove                                                               
lights from  state-owned and  maintained roads.   In  response to                                                               
Representative  Dahlstrom,  Ms.  Scott   agreed  to  provide  the                                                               
committees  with the  information she  has on  the matter  of LED                                                               
street lights.                                                                                                                  
4:17:34 PM                                                                                                                    
CO-CHAIR McGUIRE remarked  that she would work with  Ms. Scott on                                                               
[LED lights] as Anchorage is  reviewing that possibility as well.                                                               
Co-Chair  McGuire  thanked  everyone for  their  hospitality  and                                                               
announced that  those who  have not  yet testified  should submit                                                               
their testimony in writing as the committees must adjourn.                                                                      
[HB 218 and HB 219 were held over.]                                                                                           
4:17:58 PM                                                                                                                    
There being no  further business before the  committee, the joint                                                               
meeting of the House and  Senate Special Committees on Energy and                                                               
Senate Resources Standing Committee was adjourned at 4:18 p.m.                                                                  

Document Name Date/Time Subjects
Draft_Energy_Policy_Bill[1].pdf HENE 8/26/2009 5:00:00 PM
HENE 9/16/2009 1:30:00 PM
Haines Agenda.pdf HENE 9/16/2009 1:30:00 PM
HB0218A.PDF HENE 6/17/2009 5:00:00 PM
HENE 8/26/2009 5:00:00 PM
HENE 9/16/2009 1:30:00 PM
HB 218
HB0219A.PDF HENE 6/17/2009 5:00:00 PM
HENE 8/24/2009 1:00:00 PM
HENE 8/26/2009 5:00:00 PM
HENE 9/16/2009 1:30:00 PM
HB 219
HB218 - Sectional on Letterhead.pdf HENE 9/16/2009 1:30:00 PM
HB 218
HB219 - Sectional on Letterhead.pdf HENE 9/16/2009 1:30:00 PM
HB 219
Legislative Presentation to the Joint Committees 2009 Haines.ppt HENE 9/16/2009 1:30:00 PM