Legislature(2009 - 2010)Anch LIO Rm 220
07/27/2009 11:30 AM House ENERGY
| Audio | Topic |
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| Start | |
| Overview(s)|| Status of Federal Stimulus Energy Funds | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
JOINT MEETING
HOUSE SPECIAL COMMITTEE ON ENERGY
SENATE SPECIAL COMMITTEE ON ENERGY
Anchorage, Alaska
July 27, 2009
11:36 a.m.
MEMBERS PRESENT
HOUSE SPECIAL COMMITTEE ON ENERGY
Representative Bryce Edgmon, Co-Chair
Representative Charisse Millett, Co-Chair
Representative Nancy Dahlstrom
Representative Kyle Johansen (via teleconference)
Representative Jay Ramras
Representative Pete Petersen
Representative Chris Tuck
SENATE SPECIAL COMMITTEE ON ENERGY
Senator Lesil McGuire, Chair
Senator Lyman Hoffman
Senator Albert Kookesh (via teleconference)
Senator Bert Stedman (via teleconference)
Senator Bill Wielechowski
MEMBERS ABSENT
HOUSE SPECIAL COMMITTEE ON ENERGY
All members present
SENATE SPECIAL COMMITTEE ON ENERGY
All members present
OTHER LEGISLATORS PRESENT
Representative Paul Seaton (via teleconference)
Representative Carl Gatto
Representative Bob Buch
Representative Kurt Olson (via teleconference)
Representative Peggy Wilson (via teleconference)
Representative Mike Hawker
Representative Bill Stoltze
Representative Anna Fairclough
Senator Charlie Huggins
COMMITTEE CALENDAR
OVERVIEW(S): PRESENTATION REGARDING STATUS OF FEDERAL STIMULUS
ENERGY FUNDS
HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
LARRY PERSILY
Staff to Representative Hawker
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Delineated stimulus funding issues.
DAN FAUSKE, CEO
Alaska Housing Finance Corporation (AHFC)
Department of Revenue
POSITION STATEMENT: Commented on how AHFC would use and report
on stimulus funding.
BRIAN BUTCHER, Director
Public Affairs
Alaska Housing Finance Corporation (AHFC)
Department of Revenue
POSITION STATEMENT: Explained current Energy Rebate Program
policies and how stimulus funds would affect it.
JOSEPH BALASH
Office of the Governor
Juneau, AK
POSITION STATEMENT: Commented on how the new governor would view
a veto override or concurrent resolution regarding receiving
stimulus funds.
SARAH FISHER-GOAD
Alaska Energy Authority (AEA)
POSITION STATEMENT: Commented on AEA's uses for funding and the
how the stimulus funds would affect them.
ACTION NARRATIVE
11:36:12 AM
CO-CHAIR CHARISSE MILLETT called the joint meeting of the House
and Senate Special Committees on Energy to order at 11:36 a.m.
Present at the call to order from the House Special Committee on
Energy were Representatives Millett, Edgmon, Dahlstrom, and
Johansen (via teleconference); Representatives Ramras, Petersen,
and Tuck arrived as the meeting was in progress. Present at the
call to order from the Senate Special Committee on Energy was
Senator Wielechowski; Senators McGuire, Hoffman, Kookesh (via
teleconference), and Stedman (via teleconference) arrived as the
meeting was in progress. Representatives Seaton (via
teleconference), Hawker, Olson (via teleconference), Fairclough,
Wilson (via teleconference), Gatto, Stoltze, and Buch, and
Senator Huggins were also in attendance.
^Overview(s)
^Status of Federal Stimulus Energy Funds
11:36:35 AM
CO-CHAIR MILLETT announced that the only order of business would
be the presentation regarding the status of the $28.6 million in
federal stimulus energy funds that the State of Alaska received.
11:36:49 AM
LARRY PERSILY, Staff, Representative Hawker, Alaska State
Legislature, Juneau, Alaska, said that he would review the
stimulus funding that is related to energy efficiency
improvements in Alaska to clear up what pots of money the state
has accepted and what is left in dispute. He explained that the
governor approved, in the budget, and the legislature has
appropriated stimulus funds for a couple of energy efficiency
programs: $18 million has been channeled into the home
weatherization program, which the Alaska Housing Finance
Corporation (AHFC) has successfully run for years, another $9.6
million came to the state for energy efficiency and conservation
block grants, which can be utilized for retrofits of commercial,
public, and residential structures as well as for heating
systems, energy efficiency audits, lighting upgrades, and most
anything that is intended to reduce energy costs. Of that $9.6
million, the state can spent 40 percent while 60 percent must be
distributed to communities that didn't receive a direct federal
allocation. Additionally, the top 10 cities and top 10 boroughs,
by population, received direct federal allocations that totaled
$4.5 million.
He related that he has been told that AHFC and the Alaska Energy
Authority (AEA) are working to develop criteria for grants and
the selection process for the 60 percent that will be going out
to communities. An additional $12 million of energy efficiency
and conservation block grants went directly to 241 tribal
governments in Alaska, which is separate from the state's
appropriation process.
MR. PERSILY explained that when the legislature goes into
th
special session August 10, the State Energy Program is at stake
in the amount of $28 million. It isn't a new program, but it is
the extension of the existing program that began in 1976. The
state has received funds in the past. In fact, in fiscal year
(FY) 2007, the state received $392,000 while in FY 2008 it
received $258,000. Therefore, the program has been small in
past years.
He explained that the State Energy Program funds go to the
officially designated state energy office in each state, which
in the case of Alaska is AHFC. A 1996 memorandum of
understanding (MOU) between AHFC and AEA was amended in 2001 to
share State Energy Program funds fifty-fifty.
The U.S. Department of Energy's (DOE) objectives for the
stimulus funds are to increase energy efficiency and reduce
costs for consumers, businesses and government; to reduce
reliance on imported energy; to improve the reliability of
energy sources; and to reduce the effects of energy production
and use on the environment. The funds can be spent on almost
anything that will be used to create energy efficiency -
retrofits, weatherization's, loans or grants for energy
efficiency projects. It can be distributed to municipalities or
used for promotion and public education of energy efficiency
standards, street lighting upgrades, but it cannot go to land
purchases or pure research.
In the past the State Energy Program had a 20 percent local
match, which was waived for the $28 million in stimulus funds.
He said the legislature appropriated the $28 million in HB 199
and Governor Palin vetoed that item. If the legislature does not
override the veto, the money would revert to the U.S. Treasury;
it does not go to other states. The application deadline for the
State Energy Program funds was May 12, and AHFC did meet the
deadline by turning in an application on May 12, but the
Governor did not provide the required certification, the
assurances that are required under the program to complete the
application. However, that can be amended.
The DOE said it knew Alaska had the deadline coming up and the
legislature had already adjourned. So, they gave the state more
time to resolve the issue, but said it couldn't have until
January 2010, which then forced the issue of a special session.
Alaska was given a deadline of September 30 to provide the
required assurances to complete the application for the $28
million.
One thing they need to understand is they can override the veto,
but they can't direct the funding. Overriding the veto would
allow the line item appropriation of $28 million for state
energy programs to AHFC to go through, but then the executive
branch would then have to implement it.
11:44:12 AM
MR. PERSILY explained that in keeping with the MOU, the AHFC and
AEA submitted proposals to the Governor's Office of Management
and Budget (OMB) as to how they would spend their respective 50
percent shares in March. The Governor's Office never adopted
those proposals or presented them to the legislature, because
back then the Governor was arguing against accepting the money.
But to give them an idea, he said AHFC proposed spending $4.5
million on community-building weatherization, $2 million for
weatherization and rebate support that would expand the energy
audit program, $4 million for a home-based renewable energy
program, $1.8 million for consumer education, and $2 million to
write and promote statewide energy efficiency standards. The AEA
proposed adding $7 million to its renewable energy fund,
assigning $2.5 to research and development of renewable energy,
$3.9 million for energy efficient equipment rebates and
incentives, $.75 million for energy efficiency training and
education, and $100,000 for commercial facility energy audits.
The DOE would accept an amended application if the legislature
overrides the veto, he said, and the executive branch wants to
amend the spending plan for the $28 million.
11:45:50 AM
REPRESENTATIVE HAWKER offered his understanding of Mr. Persily's
last discussion that the spending pattern proposed by AHFC and
AEA is not how the funding must be spent, and now that a new
governor is in office, he would review and decide how he would
choose to allocate the money.
MR. PERSILY responded that his discussions with the director of
OMB and the new Governor's Office are such that if the
legislature would override the veto, they would be reviewing
this and probably be coming up with a new spending plan for the
$28 million.
An email from Gill Sperling, Program Manager, Weatherization and
Intergovernmental Programs, Office of Energy Efficiency and
Renewable Energy, Department of Energy, in Washington, D.C. the
DOE indicates that each governor is required to certify that the
state will promote and encourage improved energy efficiency for
residential and commercial buildings, but is not required to
establish a statewide energy efficiency building code. The DOE
is merely looking for those cities with building code authority
to work toward adopting, promoting, and encouraging higher
energy efficiency standards for new and renovated buildings with
the state's assistance and encouragement as appropriate under
state law. He said he would provide that email for the
committee.
11:48:23 AM
He said the DOE realized that not all states impose statewide
energy efficiency building codes, but those states that have
taken over that authority should be treated differently than
states that have not taken on that responsibility, and Alaska is
one of those states. The state is allowing state law to be the
controlling factor and would provide information for
municipalities that want to improve energy efficiency standards.
11:49:45 AM
CO-CHAIR EDGMON said he hoped AHFC would be able to join them to
talk about building codes, but it was his understanding that in
rural Alaska a lot of homes are built by housing and urban
development - homes that go through USDA and the Denali
Commission or some other housing program that has building code
requirements built into the loan package; maybe a conventional
lender like Wells Fargo would already have some of those codes
in place. He asked whether Mr. Persily had researched that
issue.
MR. PERSILY surmised that if one is seeking AHFC financing, one
has to meet standards which meet or exceed what the DOE is
looking for. His research has shown that no one would finance
building of a commercial structure that leaks energy and is
going to have high operating costs. Therefore, if one is already
seeking financing through the AHFC, then one is already meeting
those standards.
11:51:31 AM
REPRESENTATIVE HAWKER asked whether the target of meeting energy
efficiency standards by 90 percent in the original stimulus bill
applies to new and remodeled construction under 2009 standards
rather than nebulous 2017 standards, and that the 90 percent is
applied on an aggregate statewide basis to both residential and
commercial properties. Realistically they are looking at
commercial construction only because it would presumably meet
the full 90 percent.
MR. PERSILY replied that a literal reading of the section for
the state energy program funds was interpreted by many to mean
that states have to show and be able to prove that 90 percent of
the total square footage of new and renovated construction
between 2009 and 2017 met energy-efficiency standards. That
worried several states besides Alaska. The DOE realized that no
one was going out with tape measurers for the next eight years
and measure new and renovated buildings and keep track of it,
and explained it instead as a compliance goal. It is simply a
worthy goal that many states will reach by virtue of commercial
structures.
They have issued a contract to something called the Pacific
Northwest National Laboratory, which is developing voluntary
guidelines for states that want to track their improvements
between 2009 and 2017. For instance, each state could select a
random sampling of 44 residential buildings and 44 commercial
buildings and track upgrades to them over the years.
11:55:27 AM
SENATOR WIELECHOWSKI offered his understanding that Alaska is
already close to the 90 percent already taking into
consideration local codes and the fact that structures built in
the villages typically are built with energy efficiency codes.
MR. PERSILY replied his understanding is that the Denina Center,
for instance, exceeds these standards, and Alaska will come
pretty close by the year 2017 in terms of having total square
footage that is new or remodeled. This doesn't require anybody
to do anything to their property, he said. The intent of
Congress and the DOE is for states to use the money to reduce
energy costs and energy consumption. It was simply setting a
goal and having voluntary ways to measure it (that are being
developed by the Pacific Northwest Lab).
CO-CHAIR MILLETT asked if there are any ramifications if the
state doesn't meet the goal by 2017. Would the state have to
reimburse the money to the federal government?
11:57:41 AM
MR. PERSILY answered no; there is no penalty or payback
provision. DOE officials bluntly say by 2017 they will be gone;
the energy secretary, congress and the president will all be
new. This is not to say that the federal government never
follows through on its word; it does, but not on this one.
SENATOR WIELECHOWSKI said they have heard over and over again
that strings are attached to this money. Has he been able to
find any strings attached?
MR. PERSILY offered that the stimulus funds have reporting
requirements - more so than for other federal grants. The
federal government wants to know what is being done with the
stimulus funds. They want to know how many jobs are created with
it, for instance. Specific to the state energy programs, they
want assurances from each governor that they will work with the
legislature and communities toward the goal of improved energy
efficiency. Different states respond to that in different ways.
Some say they will ask the legislature to consider improved
energy efficiency standards; others say they will work hard to
convince the legislature to pass them. Alaska is the only state
that has not provided the certification to receive the state
energy program funds. He thought they might want to consider the
Missouri case that doesn't have a statewide building code
enforcement authority either. Missouri's letter says:
The state is committed to working with communities to
create model energy efficiency standards that if local
units of government choose to implement, should reduce
energy costs for Missourians. I and my staff will also
work with the Missouri General Assembly to provide
incentives to assist communities in promoting energy
efficiency consistent with the goals of the stimulus
act.
The DOE accepted that wording as a certification, he said. One
state, Wyoming, was initially rejected because the governor's
letter was somewhat hostile toward federal authority. But then
the authors of the letter had further discussions with their
supervisors and had a change of heart. Wyoming, then, revised
its letter and was ultimately accepted by the DOE.
12:00:46 PM
REPRESENTATIVE HAWKER remarked that it's important for the
legislature to realize that "the strings" attached to this money
are really accountability and reporting requirements.
Recognizing that and being concerned about the accountability,
two full time positions in the Department of Administration that
would last only as long as the accountability requirements were
unmet to do that were put into the bill. Those positions were
also vetoed by the Governor in addition to the $28 million in
energy funding. The legislature needs to make certain the state
meets the compliance requirements.
12:03:05 PM
MR. PERSILY relayed that he had asked the DOE if the legislature
chose to override the veto and the Governor decided not to
provide the required certification, would the DOE accept a
legislative resolution in lieu of the gubernatorial
certification. The letter he received Friday from the DOE did
confirm that they would accept a resolution in lieu of the
assurance from the Governor. Discussions he has had with
Governor Parnell's office indicate that if the legislature
overrides the veto, the Governor would be inclined to provide
the least-restrictive assurances that he could get away with and
still meet the requirements to get the $28 million. So, they
don't need a resolution at this time.
SENATOR WIELECHOWSKI asked if he recommended a concur resolution
at the special session to make sure they are in compliance with
the DOE requirements.
MR. PERSILY said he was a little hesitant to speak for the new
governor, but indications were if the legislature overrode the
veto, he would work with lawmakers to obtain the funds. The new
governor would be looking for the least-restrictive assurances
that the DOE would accept. He would take them at their word
rather than putting a resolution on the special session agenda.
12:05:54 PM
CHAIR MCGUIRE questioned whether he had recommendations for the
legislature in going forward post-September 30 to work with the
new administration to implement the money. If they don't do a
resolution, she thought the state should preserve all of its
choices and a resolution would bind them to their word. Another
part of her was concerned that having a resolution would be a
recipe for 30-40 more days of debate and she didn't know if
people were up to that right now. But there needs to be some
path to look at those dollars and to interface with AHFC and
AEA, particularly for the rebate program. She asked Mr. Persily
to comment on what kind of path the legislature could take.
12:07:23 PM
MR. PERSILY offered his belief that it would be advisable to
take the governor's staff at their word that a resolution isn't
needed to meet DOE certification. In terms of how the $28
million gets spent, maybe members could put that in the form of
a joint letter, like a letter of intent, from presiding officers
to the administration. He sensed the administration is open to
how the $28 million should be spent, but that it should be spent
on quantifiable things so the public can see where the long term
savings are from spending that much money on energy efficiency.
Someone suggested a weatherization fund for public buildings and
to concentrate it on a smaller number of programs rather than
disbursing it out to many. They had not had that discussion yet.
SENATOR HOFFMAN noted that as early as last week Governor
Parnell said he felt there were strings attached and he
suggested that the committee should ask the Governor if he still
supported not overriding the governor's veto at this point.
12:10:00 PM
MR. PERSILY replied that he sent copies of what he gave them
today to Karen Rehfeld, director of OMB, John Katz, the director
of the Governor's Washington, D.C. office, and Jerry Gallagher,
the Governor's legislative director.
SENATOR HOFFMAN said this committee could make that suggestion
to him.
CO-CHAIR MILLETT said they would absolutely do that. Also,
Representative Gatto asked if the funds would be reappropriated
to another state if they didn't override the veto or would they
be used to reduce the tax burden.
12:10:53 PM
MR. PERSILY replied that they would not be put in a pool to be
given to other states. The law actually says if one state
doesn't take the money, it gets prorated to other states. For
example, transportation money would just go back to the U.S.
Treasury. "If you're an optimist you would say it would reduce
the federal deficit. If you're a pessimist, you would say
Congress would then find something else to reappropriate it to
of equal or lesser value."
CO-CHAIR MILLETT said earlier that Representative Hawker was
talking about the two positions they had appropriated in HB 199
for reporting requirements and asked whether the home
weatherization stimulus and energy efficiency monies had the
same requirements.
MR. PERSILY explained that strict reporting requirements apply
to all stimulus funds. State agencies are going to be required
to post to a federal website the number of full-time equivalent
jobs that are created with stimulus money on a quarterly basis.
CO-CHAIR MILLETT asked if AHFC was doing this reporting
requirement at this time.
MR. PERSILY said he didn't know if that had started yet.
SENATOR WIELECHOWSKI expressed a preference for doing a
concurrent resolution, because it only requires a 50-plus-1
percent vote whereas a veto override requires 75 percent.
MR. PERSILY said that although he's had conversations with the
Governor's staff about whether a resolution is needed, it might
make sense for legislative leaders to pose the questions
directly to him in advance so they know whether they need one or
not. It would not be appropriate for a staff member to contact
the Governor about it.
He noted that he had discussions with Faith Lambert, the DOE
official who is head of the state energy program office, and she
pointed out that in addition to the DOE wanting each state to
work with municipalities if they haven't already taken over
building enforcement for structures, that it wants from each
state - not at the time of application, but later on - a general
plan spelling out the outreach, the education efforts, and what
they are doing among home owners, commercial property owners,
builders, lenders, others in the industry, municipalities to
promote energy efficiency and savings. He would not characterize
that as a string, but as something the state is already involved
in.
He said the question has come up several times of a national
standard rule of thumb on returns for every dollar spent
upgrading a home, but he couldn't find one. It depends on
climate, how old the house is, how poor it was before, how good
of a job was done afterwards, the size of the house, and
building costs. He did find several pieces of information - a
study in Austin, Texas, some work in Florida, a home energy
saving calculator put out by the DOE Department of Housing and
Urban Development, work done in Phoenix, and work done by Puget
Sound Energy - to anecdotally give them some ideas of the cost
benefit of doing energy efficiency, but he is unable to predict
savings with any certainty.
12:15:44 PM
CO-CHAIR EDGMON asked if spending this money has a timeline
attached.
MR. PERSILY said it has to be spent generally by December 2011.
REPRESENTATIVE PETERSON asked if money would just be added to
the current state weatherization program, to a different program
or a combination of the two.
12:17:05 PM
MR. PERSILY replied that it could be all or none of the above;
it cannot be used to purchase land or for pure research, but
those decisions would be an executive branch function.
CO-CHAIR MILLETT said Representative Fairclough wanted to know
whether the DOE can refuse the state's outreach to them - in
reference to Mr. Persily's bullet 3.
MR. PERSILY said he doesn't believe so, but he acknowledged that
if a state were to put together a poor plan, someone from the
DOE could call up and say it's not acceptable, but given the
work that AHFC and AEA have done on this in the past, he thought
their plans would be welcomed. No other states have been
rejected.
12:18:52 PM
DAN FAUSKE, CEO, Alaska Housing Finance Corporation (AHFC),
Department of Revenue, explained that AHFC has always had
reporting requirements, but it has been for smaller amounts of
money. Their history has been to go fifty/fifty with AEA as per
an MOU. Demand side items are AHFC functions and supply side
items are AEA's; this has worked well in the past. He surmised
that the same philosophy would probably hold with the $28
million. He stressed that they already have stringent reporting
requirements. The best way to look at the "strings" issue is
simply that DOE has to approve whatever they do now anyhow.
MR. FAUSKE said that other states are just trying to catch up
with Alaska in terms of energy efficiency plans. A bill is
moving forward in Congress now that has realtors scared because
some want to require that all houses being sold in the future to
be retrofitted to certain energy standards. Realtors feel it's
tough to go back in time, because people simply can't afford to
do improvements whatever the intent is.
He said they are still working on the guidelines for reporting.
They have not yet heard an update from the federal government,
but will get one soon and then adhere to that.
MR. FAUSKE said that the issue of calculating a return for
energy efficiency expenditures comes down to how long it takes
to recoup the investment. For instance, many times people want
to replace their windows, but the payback on them, unless its
extreme, doesn't match what one would get by adding more
insulation in the attic, caulking windows, or putting in new
weather stripping on doors. He likes the rebate program, because
the homeowner gets to decide what to do based on the payback,
and tools are available to help calculate it.
12:23:48 PM
CO-CHAIR EDGMON offered his understanding that $160 million was
appropriated to the weatherization program and asked if that
money is all spent or encumbered and whether AHFC internally
might argue that the whole $26 million should go towards some
type of weatherization program.
MR. FAUSKE answered, "At the danger of appearing greedy with
$360 million, I would hate to come in and say I need another $28
[million] and leave my friends at AEA out in the cold."
He said the current program is going very well, and they will
start regularly emailing reports that show its status. Over
14,000 ratings have been done at the rate of about 300-400 per
week. The weatherization program is getting out more to rural
areas and the feedback is excellent in terms of what is getting
done and how many people it's putting to work. However, they are
thinking that the 18-months is too long.
MR. FAUSKE said Alaska has lead the way for many years in
building efficient houses, but they have to be affordable, too.
Some federal "green ideas" are good, but it hasn't reached the
point that the average homeowner will make use of them because
of their cost.
12:27:12 PM
BRIAN BUTCHER, Director, Public Affairs, Alaska Housing Finance
Corporation (AHFC), Department of Revenue, explained in terms of
the Home Energy Rebate Program, they obligate the maximum amount
a person could get, so it is available for the full 18 months.
Approximately $124 million of the $160 million has been
encumbered; the average rebate has been $6,100. So, in trying to
figure out how long the funds will last the big variable is what
percent of applicants are actually going to take advantage of
the program, and this November will be the end of the 18-month
period for the first month worth of people who got ratings once
the program started. They estimate it will be under 50 percent.
Once the rebate paperwork has been submitted a person can't
amend it; so there is no incentive to rush.
12:29:42 PM
CO-CHAIR EDGMON asked where the energy raters are in terms of
catching up with the money.
MR. BUTCHER replied that new raters are being trained as needed,
but the problem right now isn't having enough. The raters in the
urban areas are caught up, so getting them out to some of the
smaller communities that couldn't afford a rater is their
priority now.
MR. FAUSKE said they have 120 raters at this time. In areas of
the state that have building codes most buildings meet a four
star-plus energy standard. Outside lenders are held to building
codes, but not to the state energy plan. This leads to
situations where outside lenders lend money, that money leaves
the state, then the person who borrowed that money applies to
the rebate program to weatherize their house. "I think that is a
poor way to run a parade."
If anything is done on the energy code, the playing field should
be level, because he thought further more stringent directives
would come from the federal government sooner or later. It's
important to keep business at home, and now the program is
subsidizing outside lenders. AHFC uses its arbitrage earnings
from the interest rate reduction for energy efficiency, and that
is a limited resource. He hoped to get the IRS to somehow
recognize energy efficiency.
12:33:21 PM
CO-CHAIR MILLETT asked how he anticipates the $28 million would
be split.
MR. FAUSKE answered that they have had preliminary discussions
with AEA, but nothing has been etched in stone.
MR. BUTCHER added that they were asked to put the draft plan
together, but it will certainly look different than the existing
one. As an example AHFC and AEA have always split it 50/50, but
that has been for small amounts like $250,000. They need funds
to work on the code and the reporting. The new governor has said
he supported Governor Palin's veto; however he also said should
the legislature override it, he respected its power and would
apply for the funds in the least restrictive way possible.
MR. FAUSKE offered his interpretation that the aforementioned
DOE letter means adopting an energy code is no longer a
requirement as long as they are working in that direction. They
are getting a great deal of comments from the commercial side to
see monies made available for commercial enterprises.
SENATOR MCGUIRE said she hoped they considered keeping the $1.5
million for consumer educational opportunities - workshops for
consumers, auditors, contractors and other housing professionals
in energy efficiency education.
12:38:17 PM
MR. BUTCHER added that from a policy standpoint part of the
letter, letters from each state include language stating the
governor will say he will promote energy efficiency and he
imagined consumer education would be included.
12:38:59 PM
MR. FAUSKE added that word of mouth from people who have used
the program works best for promoting use of it.
MR. BUTCHER said they plan on doing that with the energy rebate
program. They will be able to tell which communities have taken
the most advantage of it and they will "get out there" to
encourage people to take more advantage of the program. A lot of
that won't cost money; it will be radio shows and community
meetings.
12:41:19 PM
REPRESENTATIVE DAHLSTROM asked if the energy rating classes are
on line.
MR. FAUSKE indicated yes.
12:41:48 PM
REPRESENTATIVE RAMRAS expressed his hoped that energy funds
could be used for public buildings, so municipalities could
benefit. He said he was troubled that Alaska was distinguishing
itself not only through the former governor but potentially
through the current one in "wanting to go a different route"
than the 49 other states.
12:43:41 PM
MR. FAUSKE said he had a great meeting with Governor Parnell and
it was very obvious that he had great concern with the Alaskan
projects.
SENATOR WIELECHOWSKI asked if AHFC receives any other federal
funds.
MR. FAUSKE replied yes.
MR. BUTCHER added that the weatherization program receives
approximately $2 - $2.5 million per year from the federal
government that they administer along with the state's funds.
12:45:03 PM
SENATOR WIELECHOWSKI said he was getting to the "strings"
question and asked if that $2.5 million is treated any
differently than the $28.6 million the state will get.
MR. BUTCHER replied that because they hadn't received the funds
yet and gone through the process, he couldn't speak directly to
the difference. He knew that Congress was concerned about
misappropriation of funds because of the focus on getting it out
as quickly as possible. He would get back to him with more
information.
MR. FAUSKE said that they audit themselves internally on tax
credit programs on a regular basis, so they have a system set up
to catch compliance issues.
SENATOR WIELECHOWSKI asked if they received other federal funds
outside of energy.
MR. BUTCHER replied that they receive tens of millions of
dollars a year from the federal government, most of it in public
housing. They also received stimulus funds in five or six
different programs that were all approved in the first
appropriation bill.
SENATOR WIELECHOWSKI asked if strings were attached to any
federal funding they got.
MR. BUTCHER replied that they instruct what needs to happen with
the funds, but there hasn't been anything like the SEP where
they say one must be at a certain percent by a certain year in
order to qualify for the funds. He said they all believed that
significant strings were attached because of the way the law was
written, but then the DOE realized that states needed more
flexibility.
SENATOR MCGUIRE said the idea behind an energy authority concept
is to streamline all the places that state government already
has to deal with energy along with the stimulus dollars. She
asked that they discuss compliance issues if the governor
decides to go with AHFC and AEA receiving stimulus money. She
felt that promoting energy efficiency is good and felt comforted
that the latitude exists to work with the government, but those
understandings should have a written record behind them. AHFC
and AEA should also have a method by which they both comply and
report back to the federal government that is consistent.
12:50:50 PM
MR. FAUSKE repeated that strings are attached to everything and
they already do this all the time. His concern is that changes
could occur. For example Hurricane Katrina had stringent
guidelines, but as they got into the process with their
governors and representatives, they learned that some things had
to be done differently. He said the state has 3 years to spend
the money, but 8 years to comply and he didn't know how that
would work, but he vowed to stay focused on compliance. That is
why it's critical to get a good plan going in. He said Alaska is
one of 50 states and the federal government will be inundated.
12:54:05 PM
JOSEPH BALASH, Office of the Governor, offered his understanding
that the new governor respected the previous governor's veto of
the funds, but in recognizing the co-equal and separate branches
of government he would develop the application and submit the
state energy plan and certifications to the DOE should the
legislature override the veto.
REPRESENTATIVE DAHLSTROM asked Mr. Balash whether he would be
willing to relay information to the governor on this issue.
MR. BALASH indicated that he would do so.
12:56:30 PM
SENATOR WIELECHOWSKI said that the legislature had already
adopted a resolution in support of accepting all the stimulus
funding. DOE said it would accept a concurrent resolution or
equivalent action from the legislature providing assurances
required under Section 410 in its July 24 letter. "Isn't that
enough of a voice from the legislature to you? I think the vote
was 55 to 4 or something like that."
MR. BALASH indicated that it is not and some form of separate
action that will occur at the upcoming special session will be
necessary. In terms of the resolution that was passed, the
question really is what is good enough for DOE. They will be
submitting a SEP and the necessary assurances, but there is no
guarantee that they will be accepted. There might be some sort
of back and forth to make the words in the resolution accomplish
what it is the DOE is looking for.
SENATOR WIELECHOWSKI said the legislature has spoken very
clearly, and it has already voted on the budgetary issue. He
didn't understand why the governor didn't just send a letter
saying he'll comply with the requirements of the stimulus fund,
and to tell him why he still wants them to override the veto.
MR. BALASH replied that he thought it was the Governor's
commitment to and the respect for the separate branches of
government. The executive branch vetoed the specific funds
identified and if the legislature acts within its constitutional
powers to override that veto, he would fully comply with that
action and administer and execute the policy direction expressed
by the legislature.
1:01:33 PM
REPRESENTATIVE RAMRAS said it was very constructive that he is
here and it's refreshing to hear him talk about the coequal
branches of government. Yesterday the Governor in his inaugural
speech wanted to extend the eight-cent gas tax holiday, which he
will vote against because it his belief that "it was raked off
by refineries and jobbers and the retailers" and very little of
it found its way into the pockets of Alaskan consumers. However,
he looked forward to having a more conciliatory relationship.
REPRESENTATIVE HAWKER explained that the $28 million was vetoed
by a previous governor and this governor does not have the
authority to revoke that veto. To move the ball forward, they
must override the veto. He has been assured by the Governor and
believes him that he will do what is necessary to secure these
funds.
MR. BALASH concurred with that assessment.
SENATOR MCGUIRE mentioned that what Senator Wielechowski pointed
out is interesting. When you read the specific July 24 letter,
it says, "If funds are provided to any state and are not
accepted by the governor, then acceptance by the state
legislature by means of adopting a concurrent resolution shall
be sufficient to provide that funding." Politically, she
understands the new governor's desire to have the legislature
weigh in to override that veto, but in terms of accomplishing
the goal of accepting the energy money, the legislature has
spoken in its resolution. It could speak again in the form of a
concurrent resolution. But should the legislature fail to
override the veto either because there aren't enough members
present or if the members present don't equal the two-thirds
requirement, would this governor accept the fact that the
legislature has spoken by virtue of a resolution already passed
or would a new concurrent resolution be required?
MR. BALASH said he is not sure how the Governor would view that,
but surmised that much like the appropriations process the
legislature goes through, there is a vote on passing the budget
and then a vote on the individual amendments brought up either
in committee or on the floor, and how one votes on the entire
budget does not necessarily reflect the wishes of one or any or
all of the legislators on a specific line item. The resolution
that was adopted earlier this year in much the same way was very
broad and the question about these specific programmatic dollars
has not been addressed directly by the legislature to date. So
what sort of gradations or distinctions there might be between
passage or adoption of a concurrent resolution versus a veto
override is one he was willing to relay to the Governor and
provide some feedback to members.
1:08:30 PM
CO-CHAIR MILLETT stated that the resolution did not include the
$28.6 million language, but rather it referred to all stimulus
monies. They wanted to accept it all.
MR. BALASH remarked that the question is, "Who is going to hold
the hot potato?"
REPRESENTATIVE STOLTZE offered his opinion that Representative
Hawker had pretty well outlined the procedure, and that the
Governor would support a veto override because he said so. If he
didn't follow through, that would also send a clear message to
the legislature.
1:10:47 PM
CO-CHAIR MILLETT noted that she received a phone call from
Governor Parnell and he was open to discussing energy issues; so
she doesn't see an adversarial relationship forming at all.
1:12:03 PM
SENATOR MCGUIRE said that Governor Parnell has a particular
interest in energy and nothing about this conversation is meant
to be confrontational, but it is important for the legislature
to interpret things clearly. This letter is the first formal
communication they have had about what steps could be deemed by
the federal government to meet the letter of the law of
compliance. So, her question was really more of now that they
have received the letter from the Governor, would he also deem
that a concurrent resolution would meet the guidelines under
Section 410. She is merely asking if the new governor is
interpreting that letter in a similar fashion.
1:13:35 PM
MR. BALASH said he didn't talk about the specific scenario of a
concurrent resolution and no override. So he can't commit the
Governor to a particular course of action, but he would be able
to provide an indication before action on August 10.
1:14:04 PM
SENATOR HOFFMAN noted that he didn't plan on having a
confrontation with the Governor. He already met with him and has
an excellent working relationship with him. Last week he made
statements that he supported the governor's position because of
the strings that are attached, but Mr. Persily has indicated
that there are no strings attached. The people of Alaska are
really interested in receiving those funds. His question to the
committee is in light of this new information that no strings
are attached and the fact that Alaska is the coldest state in
the country and the only state that did not accept those funds,
will the Governor review that information and support an
override so that Alaskans can become more energy efficient.
1:15:38 PM
MR. BALASH surmised that the new governor will be investigating
that issue further very soon.
CO-CHAIR MILLETT said both energy committees would be willing to
talk to Governor Parnell about some of the things Mr. Persily
has talked about.
REPRESENTATIVE HAWKER indicated that Mr. Persily would be
available in Juneau should the governor need to talk to him at
any time.
1:17:23 PM
SARAH FISHER-GOAD, Alaska Energy Authority (AEA), said if the
funding is accepted, then AEA would have a discussion with the
new governor regarding priorities and allowable uses - uses such
as end use efficiency programs for commercial and industrial
use, renewable energy efforts through the Renewable Energy Fund
Program, emerging energy efficiency technologies, and energy
efficient equipment rebates and incentives. AHFC is the
residential expert and AEA is on the commercial and public
facilities and the renewable energy program side.
1:19:16 PM
CO-CHAIR EDGMON questioned whether the playing field had shifted
based in terms of where AEA might allocate the funding.
MS. GOAD offered that their cornerstone has been the energy
efficiency program and it supports the program policy
recommendations done by Cold Climate Research Center for AHFC,
but they might need some adjustments. Those will be open to
discussion and debate.
1:21:39 PM
CO-CHAIR MILLETT thanked everyone for their comments and wished
Representative Buch a happy birthday. Finding no further
business before the committee, she adjourned the meeting between
the House Special Committee on Energy and the Senate Special
Committee on Energy at 1:21 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AARP Letter FSEF.pdf |
HENE 7/27/2009 11:30:00 AM |
|
| AHFC Energy document.pdf |
HENE 7/27/2009 11:30:00 AM |
|
| Energy Committee July 27 meeting agenda.doc |
HENE 7/27/2009 11:30:00 AM |
|
| Commonwealth North Energy Efficiency Funding Resolution.pdf |
HENE 7/27/2009 11:30:00 AM |
|
| Persily testimony July 27.doc |
HENE 7/27/2009 11:30:00 AM |
|
| Draft AEA Projects List.xlsx |
HENE 7/27/2009 11:30:00 AM |