Legislature(2015 - 2016)CAPITOL 17

01/27/2015 10:15 AM House ENERGY

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10:19:27 AM Start
10:19:46 AM Presentation: Ahfc Weatherization Program
11:27:42 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
- Weatherization Program
- Alaska Housing Finance Corporation
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                        January 27, 2015                                                                                        
                           10:19 a.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Jim Colver, Co-Chair                                                                                             
Representative Liz Vazquez, Co-Chair                                                                                            
Representative Benjamin Nageak                                                                                                  
Representative David Talerico                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Matt Claman                                                                                                      
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
PRESENTATION:  AHFC WEATHERIZATION PROGRAM                                                                                      
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
JOHN ANDERSON, Director                                                                                                         
Department of Research and Rural Development (R2D2)                                                                             
Alaska Housing Finance Corporation (AHFC)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Responded to questions, during the overview                                                              
of the Alaska housing weatherization program.                                                                                   
JIMMY ORD, Program Information Manager                                                                                          
Department of Research and Rural Development (R2D2)                                                                             
Alaska Housing Finance Corporation (AHFC)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented the overview of the Alaskan                                                                    
housing weatherization program.                                                                                                 
ACTION NARRATIVE                                                                                                              
10:19:27 AM                                                                                                                   
CO-CHAIR JIM COLVER called the  House Special Committee on Energy                                                             
meeting to order at 10:00 a.m.  Present at the call to order were                                                               
Representatives   Nageak,   Talerico,    Vazquez,   and   Colver.                                                               
Representatives Wool,  Tilton, and Claman arrived  as the meeting                                                               
was in progress.                                                                                                                
^PRESENTATION:  AHFC WEATHERIZATION PROGRAM                                                                                     
           PRESENTATION:  AHFC WEATHERIZATION PROGRAM                                                                       
10:19:46 AM                                                                                                                   
CO-CHAIR COLVER announced  that the only order  of business would                                                               
be an  overview of the  housing weatherization program,  from the                                                               
Alaskan Housing Finance  Corporation (AHFC).  He  opined that the                                                               
energy  efficiency  program  is  perhaps one  of  the  most  cost                                                               
effective programs offered by the state.                                                                                        
10:21:25 AM                                                                                                                   
JOHN  ANDERSON,  Director,  Department   of  Research  and  Rural                                                               
Development  (R2D2), Alaska  Housing Finance  Corporation (AHFC),                                                               
said  the presentation  would provide  an  up-dated and  in-depth                                                               
view of the program.                                                                                                            
10:21:48 AM                                                                                                                   
JIMMY ORD,  Program Information  Manager, Department  of Research                                                               
and Rural Development (R2D2),  Alaska Housing Finance Corporation                                                               
(AHFC), indicated his  intention to provide a  broad overview, as                                                               
well as details on how the various programs work.                                                                               
10:22:19 AM                                                                                                                   
MR. ORD said that Alaska  Housing Finance Corporation (AHFC) is a                                                               
public  corporation that  provides  housing,  finance and  energy                                                               
programs statewide.   Established in  1971, AHFC's mission  is to                                                               
provide  Alaskans access  to safe,  quality, affordable  housing.                                                               
In order  to fulfill  that mission, AHFC  focuses on  several key                                                               
areas,  which  include:   issuing  bonds;  providing  residential                                                               
loans; managing  competitive grants  to developers  of affordable                                                               
housing and  special needs populations; operating  public housing                                                               
in Alaska  by utilizing  U.S. Housing  & Urban  Development (HUD)                                                               
funds;  and managing  federal and  state-funded energy-efficiency                                                               
programs.   He distinguished AHFC  as being primarily  focused on                                                               
the demand side  of energy, whereas, other agencies,  such as the                                                               
Alaska Energy Authority, is focused on the supply side.                                                                         
10:23:18 AM                                                                                                                   
MR. ORD established the intent of  the overview, to wit:  outline                                                               
the framework and  tools used to maintain  the infrastructure and                                                               
programs;  share  information  regarding the  specific  programs;                                                               
address  the   tools  offered  to  homeowners;   acknowledge  the                                                               
partnerships  in place  with local  organizations that  assist in                                                               
running the states  program; and explore why  an efficiency first                                                               
approach is best.                                                                                                               
10:23:43 AM                                                                                                                   
MR.  ORD   explained  how,  in  1992,   legislation  was  enacted                                                               
establishing the Building Energy  Efficiency Standard (BEES), for                                                               
new  homes  receiving AHFC  financing.    The agencies  framework                                                               
starts with BEES; created to  promote the construction of energy-                                                               
efficient buildings to set standards  for thermal resistance, air                                                               
leakage, moisture protection, and ventilation.   He said that all                                                               
residential homes  constructed after January 1,  1992, using AHFC                                                               
funds,  are   BEES  compliant.    The   current  building  energy                                                               
efficiency  standard  is  comprised  of  the  2012  International                                                               
Energy  Conservation  Code,  the  American  Society  of  Heating,                                                               
Refrigerating    and    Air-Conditioning    Engineers    (ASHRAE)                                                               
ventilation  standards, and  the  Alaska  specific amendments  to                                                               
both documents.  The updated  BEES became effective July 1, 2013,                                                               
requiring homes be  built to a rating  standard commonly referred                                                               
to as 5 Star energy rated.                                                                                                      
10:24:49 AM                                                                                                                   
MR. ORD described  the infrastructure factors used  to assess and                                                               
oversee compliance with BEES.   To accomplish this task, the Home                                                               
Energy rating  System (HERS)  is used,  which includes  all steps                                                               
necessary to  evaluate and score  home energy performance.   This                                                               
includes establishing a rating score  from 1-6 Stars, cultivating                                                               
a network of trained energy  raters, and building and maintaining                                                               
a  comprehensive  energy  modeling   software  program  known  as                                                               
AkWarm.   He  explained that  AkWarm was  first created  in 1996,                                                               
specifically  for Alaska.   It  uses  a wide  range of  statewide                                                               
weather  data, and  is continuously  updated to  account for  the                                                               
variability of associated  energy costs.  AkWarm is  free and the                                                               
preferred energy  modeling software for the  state, offering easy                                                               
onscreen inputs  for accurate, accessible  data.  He  pointed out                                                               
that, although only  authorized raters are qualified  to issue an                                                               
official energy rating  certificate, anyone is able  to visit the                                                               
website and download  the software for personal use.   One of the                                                               
biggest benefits of  the HERS, to AHFC and the  state, is that it                                                               
has  created a  recognizable,  standardized rating  system.   The                                                               
universal  understanding of  what a  5  or 6  Star rating  means,                                                               
avoids confusion  and provides useable  data.  MR.  ORD described                                                               
how, behind the scenes, the  database Alaska Retrofit Information                                                               
System  (ARIS) is  used to  collect valuable  housing information                                                               
from across the  state; every time an energy  rating is completed                                                               
it is  entered into this system.   The ARIS system  contains more                                                               
than 75,000 unique records.   One in every three occupied housing                                                               
units in  the state  is listed in  this database.   Informational                                                               
data points include:   number of bedrooms, square  footage of the                                                               
home, heating system efficiency, tightness  of the home, and many                                                               
more.  The  valuable information collected provides  answers to a                                                               
variety of questions not only  about the housing characteristics,                                                               
but energy  end use and  program effectiveness.  The  largest and                                                               
most in-depth study  produced from ARIS data is  the 2014 Housing                                                               
Needs Assessment, released in the spring [of 2014].                                                                             
10:29:03 AM                                                                                                                   
REPRESENTATIVE CLAMAN  said he  has not  reviewed the  1,200 page                                                               
report  and asked  for a  brief explanation  of any  identifiable                                                               
MR.  ORD  offered a  couple  of  the  outcomes from  the  report:                                                               
75,000 homes are  cost burdened; 15,000 are  overcrowded; and one                                                               
in  three households  are  overspending  the federally  suggested                                                               
maximum  of  30  percent  of   total  income  on  housing  costs.                                                               
Programs and services are in place  that may have a direct effect                                                               
on some of these outcomes.                                                                                                      
10:30:15 AM                                                                                                                   
CO-CHAIR  COLVER  inquired  whether   the  reason  that  so  many                                                               
households spend  over 30 percent  total income on  housing costs                                                               
could be attributable to low incomes or high energy costs.                                                                      
MR.  ANDERSON opined  that  it represents  a  combination of  low                                                               
income  and  rising  energy  costs.    He  pointed  out  that  an                                                               
executive summary,  to the voluminous  report, may  prove helpful                                                               
in understanding these outcomes, and  agreed to provide copies to                                                               
the committee.                                                                                                                  
10:31:51 AM                                                                                                                   
REPRESENTATIVE  CLAMAN asked  about  the progress  being made  in                                                               
creating  energy  efficient homes,  since  the  inception of  the                                                               
MR. ANDERSON answered that, to  date, over 40,000 retro-fits have                                                               
been   accomplished  through   both  programs,   reducing  energy                                                               
consumption on an average of 30 percent per unit.                                                                               
MR.  ORD offered  an  example  of the  housing  stock in  Juneau,                                                               
stating that houses built pre-1940  are considered 1-Star status.                                                               
All homes built post 2005  are constructed at a 4-Star efficiency                                                               
level and  is indicative  of the  increase in  building standards                                                               
throughout the state.                                                                                                           
10:33:14 AM                                                                                                                   
MR. ORD introduced another energy  saving measurement tool, under                                                               
development  by  AHFC,  known as  the  Building  Monitory  System                                                               
(BMS).   It  is  designed  primarily for  use  in commercial  and                                                               
public buildings.  The goal  this system is to provide up-to-the-                                                               
minute, real time  data of energy use, as well  as other details,                                                               
to the facility managers.   Efficient operations is the goal, and                                                               
he provided  an anecdote to  illustrate how the device  was used,                                                               
at the  Glacierview Apartment complex, in  Seward, and ultimately                                                               
resolved an energy use issue.   He added that one of the simplest                                                               
benefits of  a BMS is  that the public housing  maintenance staff                                                               
can remotely  monitor how a  building is functioning  rather than                                                               
physically  visiting  each  complex.    Reliable  information  is                                                               
received at monitored  via an office computer,  or other internet                                                               
connected device.   The  software has  also been  expanded beyond                                                               
AHFC use and  made available to other organizations.   The Alaska                                                               
Native  Tribal Health  Consortium  (ANTHC),  looking to  maximize                                                               
building  efficiency,  is  utilizing   the  system  in  buildings                                                               
throughout the state.                                                                                                           
10:34:48 AM                                                                                                                   
CO-CHAIR  COLVER asked  whether the  system  can be  used by  any                                                               
rental manager who has access to the internet.                                                                                  
10:35:19 AM                                                                                                                   
MR. ANDERSON  answered that  it is  internet accessible  and AHFC                                                               
expects to make the program  fully available; a step currently in                                                               
the  legal  process.    To  a follow-up  question,  he  said  the                                                               
monitored  information  can  be  accessed  via  any  device  with                                                               
internet capabilities.                                                                                                          
MR. ORD  added that home  use monitoring units are  available for                                                               
10:36:51 AM                                                                                                                   
CO-CHAIR VAZQUEZ  inquired whether a  BMS is used, or  planned to                                                               
be used, in state buildings.                                                                                                    
MR.  ANDERSON  reported  that  roughly   15  AHFC  and  17  ANHTC                                                               
buildings,  are  now on  the  system.    It  can also  be  custom                                                               
tailored, as  was done  for the ANHTC  to include  specific water                                                               
usage data.   This feature  makes it a  very useful tool,  and he                                                               
opined that it is on track to become an industry model program.                                                                 
10:37:55 AM                                                                                                                   
MR.  ORD moved  on  to  the home  programs  being offered,  which                                                               
provide   weatherization  and   rebate   opportunities.     These                                                               
successful programs  are increasing  home efficiency  and comfort                                                               
levels, as  well as  stimulating local economies.   He  said that                                                               
the low income  weatherization program was placed  under AHFC, at                                                               
about  the same  time  BEES  was established,  in  a cost  saving                                                               
consolidation effort  regarding housing and  energy conservation.                                                               
Since  that time,  the  program has  been  providing free  energy                                                               
efficiency  improvements to  income  qualified  applicants.   The                                                               
funding comes from  state and federal sources,  but primarily the                                                               
state.   He reported that AHFC  does not directly install  any of                                                               
the  improvements  or handle  day  to  day customer  interaction.                                                               
Rather the work  is performed by 17  organizations throughout the                                                               
state:   4 service providers  and 14 housing authorities  who act                                                               
as  regional  contacts  for  program  participants.    There  are                                                               
several reasons  the program excels  beyond just  energy savings,                                                               
he  opined, beginning  with education.    An example  is how  the                                                               
interior   weatherization   service   provider,   in   Fairbanks,                                                               
establishes  a  working  relationship  with  each  client  via  a                                                               
requirement to attend  an agency sponsored class.   The applicant                                                               
gains an  understanding of what  changes may occur in  their home                                                               
and what  they can expect  from the program.   He cited  a health                                                               
and safety factor  included in the program,  as the participating                                                               
homes  are fitted  with smoke  and carbon  dioxide detectors,  as                                                               
well  as receiving  verification that  any combustion  appliance,                                                               
such  as  a  furnace  or  gas  stove,  is  operating  safely  and                                                               
efficiently.   Mr.  Ord noted  that since  2008, the  program has                                                               
helped  in excess  of 15,000  homeowners and  renters across  the                                                               
state to  improve the  energy efficiency, as  well as  health and                                                               
safety  standards of  their  homes.   He  pointed  out that  AHFC                                                               
distributes a monthly legislative  program update, which includes                                                               
statistics on  unit completions, savings, and  other valuable, up                                                               
to date  information regarding the  current status of  the energy                                                               
programs.   He assured that  all new legislators have  been added                                                               
to  the contact  list and  will be  receiving the  report at  the                                                               
beginning of every month.                                                                                                       
10:40:45 AM                                                                                                                   
REPRESENTATIVE  CLAMAN  asked  for  a breakdown  of  the  federal                                                               
versus state funding receipts.                                                                                                  
MR.  ANDERSON responded  that the  federal support  is a  formula                                                               
based  on  state  population.   Alaska  receives  roughly  $1-1.5                                                               
million per year.  The  state contribution has been approximately                                                               
$350 million, annually.                                                                                                         
REPRESENTATIVE CLAMAN concluded that  the federal funding equates                                                               
to one  percent of the funding  and the state covers  99 percent.                                                               
He  also  established  that RurAL  CAP  (Rural  Alaska  Community                                                               
Action Program, Inc.) is the  service provider of this program in                                                               
the western region of the state.                                                                                                
10:42:13 AM                                                                                                                   
MR. ORD  provided a state  map locating the 185  communities that                                                               
have  benefited  from  the weatherization  program.    Especially                                                               
notable  are   the  rural  communities,   he  said,   which  pose                                                               
logistical challenges.   The  benefits that  are brought  to each                                                               
community include  local training  and hiring  of employees.   He                                                               
reported that the average energy  savings of program participants                                                               
statewide is about $60.8 million  BTUs per year, which equates to                                                               
about 28 percent.  To put  a million BTUs in perspective, he said                                                               
the average home  in Juneau, that was built in  the 1970's has an                                                               
energy rating  of 2  Star Plus  and uses  187 million  BTUs every                                                               
year.   The most energy efficient  home that AHFC has  on record,                                                               
is  a 6  Star unit  with an  annual energy  use of  just over  11                                                               
million BTUs per year.                                                                                                          
10:43:18 AM                                                                                                                   
MR. ORD  turned to the AHFC  energy rebate program to  state that                                                               
it  applies  to  existing  homes  and  is  open  to  all  Alaskan                                                               
homeowners regardless of income.   The current program is modeled                                                               
after one that was introduced in  the 1990's.  Today's program is                                                               
widely  successful  and  offers  up   to  a  $10,000  rebate  for                                                               
qualified  energy  efficient  improvements.    He  explained  the                                                               
various  steps   of  the  program  beginning   with  the  on-line                                                               
application.   An approved  energy rater  is then  selected, AHFC                                                               
approves eligibility based on the  information that the homeowner                                                               
provides  and  dispatches  the project.    Once  dispatched,  the                                                               
homeowner schedules an  as-is energy rating.   The rater conducts                                                               
a  home  evaluation, issues  a  home  energy rating  certificate,                                                               
enters  information into  the state  database,  and provides  the                                                               
owner with an improvement options  report.  The homeowner chooses                                                               
the items  to upgrade, and is  allowed 18 months to  complete the                                                               
work.    A post  energy  rating  is  conducted.   The  difference                                                               
between the as-is and post  ratings is the determining factor for                                                               
the rebate amount.  MR. ORD  said that a sister rebate program is                                                               
offered  by AHFC,  which applies  to new  construction.   The New                                                               
Home Rebate offers $10,000 for 6  Star and $7,000 for 5 Star Plus                                                               
rated homes.  The rebate is  available for homeowners who are the                                                               
original owner of a newly constructed  home that is not more than                                                               
one  year  old.    All  participants  must  meet  AHFC  financing                                                               
requirements, such as applicable building inspections and BEES.                                                                 
10:45:15 AM                                                                                                                   
MR. ANDERSON, responding to a  question posed by Co-Chair Colver,                                                               
stated that the  fiscal note does not  distinguish the components                                                               
for  existing home  versus new  construction programs.   However,                                                               
new  construction units  have numbered  about  2,700 since  2008.                                                               
Upon  application  approval, AHFC  encumbers  the  money for  the                                                               
expected rebate.   To  a follow-up  question, he  said this  is a                                                               
popular  program  with  approximately   $190  million  spent,  an                                                               
obligation of encumbered  funds for $33 million,  and a remaining                                                               
balance in the fund of  roughly $28-29 million; pending review of                                                               
the wait list.                                                                                                                  
10:46:59 AM                                                                                                                   
CO-CHAIR COLVER asked to whom is this program available.                                                                        
MR. ANDERSON  answered that  units up to  the four-plex  size are                                                               
eligible if one of the units is owner occupied.                                                                                 
CO-CHAIR  COLVER asked  about the  mechanics of  how the  fund is                                                               
accessed by  contractors, building  an energy efficient  home for                                                               
the housing market.                                                                                                             
MR. ANDERSON clarified how a  contractor built, speculation home,                                                               
can be qualified;  usually via the application  of the purchaser.                                                               
To  a follow-up  question, he  said  that, based  on the  current                                                               
building trends,  the program  funds are  projected to  last into                                                               
the next fiscal year.                                                                                                           
10:49:38 AM                                                                                                                   
MR. ORD continued,  stating that the rebate  program for existing                                                               
homes requires  both state and  homeowner investment.   Directing                                                               
attention  to  the slide,  titled  "Home  Energy Rebate  Program;                                                               
Program  Snapshot,"   contained  in  the  committee   packet,  he                                                               
explained  the  monetary  breakdown:     $11,681  represents  the                                                               
overall  average investment  in  improvements,  less the  average                                                               
rebate of  $6,389, and figuring the  reimbursement amount allowed                                                               
for  the   as-is,  $325.00,  and  post,   $175.00,  ratings,  the                                                               
homeowner's  investment would  be $4,792.00.   Considering  these                                                               
calculations,  he  said, the  average  homeowner  will realize  a                                                               
simple payback  period of 3.3  years.   The payback time  will be                                                               
reduced, depending on  location; Fairbanks averages 2  years.  He                                                               
then  provided  figures  to   illustrate  the  economic  stimulus                                                               
provided by  the program.   Based  on 22,447  rebated homeowners,                                                               
multiplied   by  the   average  combined   state  and   homeowner                                                               
contribution  of  $11,681,  the   result  for  the  total  energy                                                               
efficiency improvement economic boost  is $262 million, which, he                                                               
stressed,  represents  a conservative  figure.    Summing up  the                                                               
savings,  represented  by  the   program,  he  said  the  average                                                               
homeowner saves 34 percent, or about 100 million BTUs, annually.                                                                
10:51:35 AM                                                                                                                   
CO-CHAIR  VAZQUEZ   asked  for  specific   information  regarding                                                               
waitlists  for each  rebate program  to include  the number,  the                                                               
estimated length  of time  for service,  and the  geographic area                                                               
for  those waiting.   She  asked if  priority is  being given  to                                                               
particular geographic areas that  experience weather extremes and                                                               
high energy costs.                                                                                                              
MR. ORD  responded that the  home energy rebate program  does not                                                               
recognize  location  preference  or priority.    However,  policy                                                               
allows AHFC to  sponsor an energy rater to any  community that is                                                               
lacking one,  if a minimum  of three homeowners  request service.                                                               
Regarding the waitlist, he said  dispatches range from 80-100 per                                                               
week, which  currently keeps  pace with  the number  of requests.                                                               
Responding to  a follow-up question regarding  the weatherization                                                               
program waitlist, he said, he would provide further information.                                                                
MR. ANDERSON  added that AHFC  relies heavily on  the partnership                                                               
agencies  to  maintain  the  waitlists   and  work  plans.    The                                                               
partnership and  outreach organizations are vital  to the success                                                               
of the  programs, considering the  300 communities  being served.                                                               
To a  follow-up from Representative  Claman, he said that  at one                                                               
time  the  waitlist  was  a   lengthy  two  months,  with  10,000                                                               
applicants on the docket, but the  last couple of years have seen                                                               
a leveling out.                                                                                                                 
10:55:37 AM                                                                                                                   
MR. ORD  turned to  the Alaska  Energy Efficiency  Revolving Loan                                                               
Program  (AEERLP), and  said it  was placed  in statute  in 2010.                                                               
This  AHFC  program  provides   financing  for  permanent  energy                                                               
efficient   improvements   to   buildings   owned   by   Regional                                                               
Educational Attendance  Areas (REAAs),  the University  of Alaska                                                               
(UA), the  state, or  state municipalities.   He noted  that AHFC                                                               
was given  the ability to loan  up to $250 million.   The funding                                                               
source  is the  AHFC's bond  authority, not  state appropriation.                                                               
Describing  how the  program works,  he explained  that borrowers                                                               
obtain an investment grade audit,  and energy efficiency measures                                                               
are identified and  listed.  The borrower selects  from the list,                                                               
prioritizes improvements,  and AHFC finances programs  that prove                                                               
an  energy saving  result.   A  365 day  completion is  required.                                                               
Currently, the  AHFC board  has approved  two projects,  both are                                                               
pending developer commitment, and  a third project application is                                                               
under  review.   Outreach is  ongoing  by AHFC,  to promote  this                                                               
program  and general  energy  efficiency  improvements of  public                                                               
10:57:02 AM                                                                                                                   
CO-CHAIR COLVER asked  what the fund utilization  has been, since                                                               
the bonding  authority was adopted,  and he asked for  the number                                                               
of energy upgrades to public buildings.                                                                                         
MR. ANDERSON emphasized that the  AEERLP program is restricted to                                                               
public   facilities,   excluding    non-profit   and   for-profit                                                               
organizations and businesses.   To date there  is no utilization,                                                               
only the  two loans awaiting  borrower commitment.   He indicated                                                               
that at  least twelve projects  have been undertaken,  using AHFC                                                               
energy information but other funding sources.                                                                                   
CO-CHAIR COLVER asked for the interest  rate and what it is based                                                               
MR.  ANDERSON responded  that the  $3.79 million  loan, currently                                                               
approved  by  the AHFC  board,  has  an  interest rate  of  3.625                                                               
percent.  He pointed  out that this rate is based  on the cost of                                                               
doing business, as there is no intent for profit.                                                                               
CO-CHAIR  COLVER  inquired  whether   it  is  difficult  to  find                                                               
employees to do the energy ratings.                                                                                             
MR.  ANDERSON indicated  that Commercial  Energy Auditors  (CEAs)                                                               
were  scarce  in 2010,  when  the  program began;  however,  that                                                               
number has  increased to  60-70 throughout the  state.   The CEAs                                                               
are accredited through the Association of Energy Engineers.                                                                     
CO-CHAIR COLVER  questioned the lack  of program  utilization and                                                               
asked if that is due to the current process.                                                                                    
MR.  ANDERSON  responded  yes,   there  is  a  direct  connection                                                               
primarily  because the  service  providers are  geared for  large                                                               
projects.   He explained  that the process  is being  modified to                                                               
provide  development  service   companies  that  address  smaller                                                               
projects, which should encourage more participation.                                                                            
CO-CHAIR COLVER  posed the  possibility of  including non-profits                                                               
and the commercial  sector, as a means to  improve utilization of                                                               
the program, and benefit from the energy use expertise of AHFC.                                                                 
MR.  ANDERSON  said  AHFC  would  be  interested  in  having  the                                                               
discussion and then deferred.                                                                                                   
CO-CHAIR COLVER said the discussion  will continue as the goal of                                                               
this committee is to provide energy conservation opportunities.                                                                 
MR.  ANDERSON  agreed  to  provide  further  information  on  new                                                               
11:04:12 AM                                                                                                                   
REPRESENTATIVE CLAMAN  noted the  underutilization of  the funds,                                                               
and  asked whether  it  may  be attributable  to  the  lack of  a                                                               
competitive interest rate, or the newness of the program.                                                                       
MR.  ANDERSON offered  that commercial  banks may  provide better                                                               
rates  or loan  funding  structures; however,  it is  anticipated                                                               
that the AHFC program will  become more popular through continued                                                               
11:05:15 AM                                                                                                                   
CO-CHAIR   VAZQUEZ    expressed   concern   for    the   reported                                                               
underutilization and  asked for clarity  on the inception  of the                                                               
program, who  the manager  is, and noted  that only  $3.7 million                                                               
has been thus far approved.                                                                                                     
MR. ANDERSON  responded that the  program was initiated  in 2010,                                                               
under SB220, that he is  the director/manager, and concurred with                                                               
the members understanding  of the amount of  funding committed to                                                               
date.    He said  the  approved  projects  are a  combination  of                                                               
airport equipment and building modifications.                                                                                   
CO-CHAIR  VAZQUEZ asked  to have  a  plan of  action to  increase                                                               
participation of the program and  suggested that a starting point                                                               
could be a survey sent to  department heads, with a follow-up and                                                               
coordination via the  governor's office.  It is  important to get                                                               
this ball rolling,  she stressed, and requested a  report be made                                                               
to the  committee addressing these  concerns, to be  submitted in                                                               
three weeks.                                                                                                                    
MR. ANDERSON agreed to provide the report.                                                                                      
11:08:00 AM                                                                                                                   
MR. ORD moving on, said that  when the AEERLF was created, little                                                               
was  known  collectively  about  energy  use  in  Alaskan  public                                                               
facilities.    Stimulus  money was  received  from  the  American                                                               
Recovery and Reinvestment Act (ARRA)  [2009], and used by AHFC to                                                               
benchmark  more than  1,200 public  buildings  across the  state.                                                               
Benchmarked documents  of a building  include:   ownership, uses,                                                               
size,  year  built, and  type  of  energy  used.   Of  the  1,200                                                               
buildings, AHFC  selected 327 candidates for  an investment grade                                                               
audit.   At the time of  the report [2012], the  estimated energy                                                               
cost to  the public totaled approximately  $641,245,000 per year.                                                               
The projected  savings was $25,000  per building per year,  for a                                                               
potential savings of $125 million.   The benchmark audit resulted                                                               
in about 50 energy  efficiency measure recommendations, including                                                               
the  adoption and  enforcement of  energy codes;  tracking energy                                                               
use;  and  establishing  a level  of  accountability  for  better                                                               
energy use control.                                                                                                             
11:09:52 AM                                                                                                                   
MR.  ORD   returned  to  the   residential  sector   to  describe                                                               
additional  programs available  through AHFC  to benefit  savings                                                               
from energy  efficiency improvements.   The corporation  offers a                                                               
low  interest, home  loan incentive  that can  be applied  to the                                                               
first  $200,000 with  a  blended interest  rate  on the  balance.                                                               
Another  tool AHFC  offers homeowners  is a  second mortgage  for                                                               
energy  conservation.   The  loan  is up  to  $30,000 for  energy                                                               
efficiency improvements.  Borrowers  apply through the Alaska USA                                                               
Federal Credit Union.  The  program works in conjunction with the                                                               
home  energy  rebate  program, with  the  rebate  going  directly                                                               
towards  paying down  the loan  balance.   The upfront  financing                                                               
allows  homeowners  a  larger  investment  in  energy  efficiency                                                               
improvements and  realize better savings.   He continued, stating                                                               
that  one of  the largest  AHFC components  is for  education for                                                               
consumers, professional,  and children.  The  Alaska Energy Smart                                                               
curriculum teaches  children how energy  is all around  them, why                                                               
energy  is needed,  and  how  it can  be  used wisely;  providing                                                               
students with valuable insights to  share with their family.  The                                                               
lessons  are  aligned  to the  Alaska  Grade  Level  Expectations                                                               
[Department of Education and Early  Development].  For consumers,                                                               
classes  are offered  several times  a week  in Fairbanks,  South                                                               
Central,  and other  parts of  the state  on topics  ranging from                                                               
basic  building science  of  doors and  windows  to lighting  and                                                               
appliances.  Participants  of the classes, in line  with the home                                                               
energy rebate  program, have been  shown to have a  higher energy                                                               
savings, 9  percent, versus those  who did not attend.   Finally,                                                               
AHFC  offers   classes  for  professionals,  such   as  realtors,                                                               
lenders, architects, and engineers.                                                                                             
11:12:43 AM                                                                                                                   
MR.  ORD stressed  the importance  of the  partnerships that  are                                                               
integral to the success of the  program, and pointed out the list                                                               
included in the committee packet.                                                                                               
MR.   ANDERSON   underscored   the  critical   need   for   these                                                               
11:13:45 AM                                                                                                                   
MR. ORD summed up by  providing some key statistics to illustrate                                                               
what can be  accomplished by an investment  in energy efficiency.                                                               
He said  there are  more than  40,000 homes  in Alaska  that have                                                               
improved  their energy  efficiency resulting  in substantial  use                                                               
reductions.   Not only  does an  investment in  energy efficiency                                                               
increase savings,  it provides jobs  and a boost to  the economy.                                                               
More than  5,000 jobs have  been created  due to the  home energy                                                               
rebate programs,  over the  last seven years.   The  3.2 trillion                                                               
BTU's  saved  is a  rather  hard  number  to comprehend,  and  he                                                               
equated it to  the image of every household in  Anchorage and the                                                               
Matanuska-Susitna valley driving to Key  Largo for vacation every                                                               
11:14:42 AM                                                                                                                   
REPRESENTATIVE CLAMAN  asked for  dollar figures for  the savings                                                               
that the program provides per household on average.                                                                             
MR. ANDERSON said a 20 percent savings should be realized.                                                                      
REPRESENTATIVE CLAMAN  indicated that  his constituents  would be                                                               
better informed by numbers that relate to individuals.                                                                          
MR.  ORD offered  that  detailed statistics  are  available.   On                                                               
average,  he  estimated,  homeowners  can expect  to  save  about                                                               
$1,400 by participating in the  rebate program and roughly $1,300                                                               
through the weatherization program.                                                                                             
11:16:44 AM                                                                                                                   
CO-CHAIR VAZQUEZ  reviewed the information requested,  during the                                                               
presentation, and  echoed the  concerns of  Representative Claman                                                               
for relatable savings figures.                                                                                                  
11:18:20 AM                                                                                                                   
REPRESENTATIVE  CLAMAN  asked to  have  a  report submitted  that                                                               
provides  per household  averages  for:   annual savings,  actual                                                               
investment for  new and existing  programs, and the  timeline for                                                               
realizing the investment return.                                                                                                
11:19:34 AM                                                                                                                   
CO-CHAIR COLVER  referred to the  governor's State of  the Budget                                                               
speech,  that money  would be  included  for weatherization,  and                                                               
asked if that includes the AHFC programs.                                                                                       
MR. ANDERSON  responded that  the governor's  resubmitted capital                                                               
budget  includes  $3  million  for the  energy  rebate  and  $6.6                                                               
million  for   weatherization  programs   and  he   detailed  the                                                               
allocation timelines.                                                                                                           
11:20:58 AM                                                                                                                   
CO-CHAIR   COLVER   called   attention   to   the   technological                                                               
improvements  being  made,  particularly   by  the  Cold  Climate                                                               
Housing  Research Center,  and inquired  how the  legislature can                                                               
better work with  HUD to incorporate these  breakthroughs for use                                                               
in the federal building projects.                                                                                               
MR. ANDERSON assured  the committee that AHFC  works closely with                                                               
HUD  and  the energy  standards  are  being  met by  the  federal                                                               
11:24:30 AM                                                                                                                   
CO-CHAIR  VAZQUEZ  requested  further information  to  include  a                                                               
breakdown  of grant  details and  what measures  are in  place to                                                               
ensure quality assurance.                                                                                                       
MR.  ANDERSON said  quality assurance  is  conducted on-site  via                                                               
physical  monitoring  as  well  as  desk  audit  reviews  of  new                                                               
building  projects.   Desk  reviews are  conducted  on all  three                                                               
11:26:27 AM                                                                                                                   
CO-CHAIR COLVER  thanked the participants and  announced the next                                                               
committee meeting.                                                                                                              
11:27:42 AM                                                                                                                   
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 11:27 a.m.                                                                 

Document Name Date/Time Subjects
2015-01-27 - HENE - AHFC Presentation Final.pdf HENE 1/27/2015 10:15:00 AM
2015-01-27 - HENE - Agenda.pdf HENE 1/27/2015 10:15:00 AM