Legislature(2009 - 2010)BARNES 124
01/26/2010 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB305|| HB306 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 305 | TELECONFERENCED | |
| *+ | HB 306 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
January 26, 2010
3:05 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Charisse Millett, Co-Chair
Representative Kyle Johansen
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
Representative Nancy Dahlstrom
Representative Jay Ramras
COMMITTEE CALENDAR
HOUSE BILL NO. 305
"An Act relating to energy; relating to the board of directors
of the Alaska Energy Authority; amending the size and
composition of the board of directors of the Alaska Energy
Authority by removing the members of the Alaska Industrial
Development and Export Authority as directors of the Alaska
Energy Authority and providing for designation or appointment of
other members; amending the quorum requirement for the board of
directors of the Alaska Energy Authority; and relating to
nuclear waste material."
- HEARD AND HELD
HOUSE BILL NO. 306
"An Act declaring a state energy policy."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
No previous action to report
WITNESS REGISTER
CHRIS ROSE, Executive Director
Renewable Energy Alaska Project (REAP)
Anchorage, Alaska
POSITION STATEMENT: Participated in the presentation of a
report titled, "Energy Policy for Alaska."
BILL POPP, President & CEO
Anchorage Economic Development Corporation (AEDC)
Anchorage, Alaska
POSITION STATEMENT: Participated in the presentation of a
report titled, "Energy Policy for Alaska."
JEFF TURNER, Staff
Representative Charisse Millett
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 305 on behalf of the House
Special Committee on Energy.
ADAM BERG, Staff
Representative Bryce Edgmon
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis of HB 306
on behalf of the House Special Committee on Energy.
ACTION NARRATIVE
3:05:44 PM
CO-CHAIR BRYCE EDGMON called the House Special Committee on
Energy meeting to order at 3:05 p.m. Present at the call to
order were Representatives Johansen, Tuck, Millett, and Edgmon.
Representative Petersen arrived as the meeting was in progress.
3:06:08 PM
HB 305-OMNIBUS ENERGY BILL
HB 306-STATE ENERGY POLICY
3:06:12 PM
CO-CHAIR EDGMON announced that the only order of business would
be the introduction of HOUSE BILL NO. 305, "An Act relating to
energy; relating to the board of directors of the Alaska Energy
Authority; amending the size and composition of the board of
directors of the Alaska Energy Authority by removing the members
of the Alaska Industrial Development and Export Authority as
directors of the Alaska Energy Authority and providing for
designation or appointment of other members; amending the quorum
requirement for the board of directors of the Alaska Energy
Authority; and relating to nuclear waste material," and HOUSE
BILL NO. 306, "An Act declaring a state energy policy."
3:06:13 PM
CO-CHAIR MILLETT informed the committee that the purpose of the
first bill heard today, HB 306, is to codify a state energy
policy. Alaska is one of the few states that currently does not
have a stated policy, or guidelines for developing energy
strategies for energy independence. The bill was primarily
written by the House Energy Stakeholders Group with
participation by committee members, staff, and other
legislators. She said, "It's a really great, great piece of
work that they did," and anticipated the passage of the bill.
House Bill 305, the omnibus bill, includes provisions from the
best of nine bills proposed last session, plus additional
language regarding public education and public facilities.
3:08:29 PM
CO-CHAIR MILLETT recalled the time the committee spent last
year, and during the interim, travelling to 13 communities to
hear from Alaskans. In fact, the committee held the first-ever
legislative hearing during the Alaska Federation of Natives
(AFN) annual meeting, and also held a hearing with the Alaska
Municipal League (AML).
3:09:42 PM
CO-CHAIR EDGMON invited testimony pertaining to HB 306, the
proposed state energy policy legislation.
3:10:30 PM
CHRIS ROSE, Executive Director, Renewable Energy Alaska Project
(REAP), said he participated in the energy stakeholders group.
Alaska does not have an energy policy that looks at "how
Alaskans are going to get their energy." The bill is a holistic
vision of how the state will develop energy resources for
residential, commercial, and industrial uses, including the need
for electricity, heating, and transportation. Mr. Rose said the
bill contains the guiding principles that are needed to set
goals, but not the actual goals or plans, for the implementation
of projects. He noted the stakeholder group was diverse and
included: Representatives Bryce Edgmon and Charisse Millett,
House Special Committee on Energy Co-Chairs; Adam Berg, Jeff
Turner, and Larry Persily, legislative staff; Gwen Holdmann,
Alaska Center for Energy and Power; Robert Venables, Southeast
Conference; Scott Goldsmith, Institute for Social and Economic
Research; Jason Brune, Resource Development Council for Alaska,
Inc.; John Davies, Alaska Cold Climate Housing Research Center;
Ralph Andersen, Bristol Bay Native Association; Bill Popp,
Anchorage Economic Development Corporation; Bob Pawlowski and
Denali Daniels, Denali Commission; Caitlin Higgins, Alaska
Conservation Alliance; Stacy Schubert, Municipality of
Anchorage; Marilyn Leland, Alaska Power Association; Meera
Kohler, Alaska Village Electric Cooperative; Ron Miller, energy
consultant; Chris Rose, REAP; and Kathy Wasserman, AML.
3:12:36 PM
BILL POPP, President & CEO, Anchorage Economic Development
Corporation, said he was honored to be a part of the
stakeholders group. The purpose and focus of this effort was to
develop an energy policy as a foundation from which to establish
goals, and also to design strategic initiatives from a policy,
legislative, and spending point of view. He advised that
adoption of this policy will align the efforts of state
government and its political subdivisions with the efforts to
spend and invest in the energy future of the state. The policy
will also lead to the development of a comprehensive energy plan
to achieve the strategic goals.
3:14:12 PM
MR. ROSE noted that the Railbelt Regional Integrated Resource
Plan (RIRP) was used by the stakeholders group as an example.
He acknowledged that the plan will need to recognize the
geographical diversity of Alaska; at first, there may be
regional plans from which will be developed programs and
projects that will reach the set goals.
3:14:58 PM
MR. POPP continued to explain that the principles guiding the
process accept that the future success of Alaska's economy is
tied to available, reliable, and affordable energy for
residential, commercial, and industrial users. Also, the
worldwide supply and demand for fossil fuels, and concerns about
climate change, will affect the price of fossil fuel in the
future. Because of these factors, Alaska must become more
diversified.
3:15:59 PM
MR. ROSE advised that the state must anticipate what is
happening in the worldwide economy, and consider that the supply
and demand of fossil fuels will drive prices up; therefore,
energy efficiency is "super important." The stakeholders group
was unanimous on the need to highlight energy efficiency in the
legislation. Beyond that, the group wanted to encourage
economic development by the promotion of renewable and non-
renewable energy resources under a sustainable fiscal regime.
The stakeholders group also included language in the bill to
identify and assist with workforce development, technical
assistance, and research and development for new energy sources.
Finally, the last aspect in the bill is coordinating
governmental functions to ensure that regulatory processes are
streamlined and available to all residents and federal agencies.
3:18:18 PM
MR. POPP explained the starting point of the policy was the Tri-
Borough Commission Energy Policy. This policy was initiated in
October, 2007, by the Matanuska-Susitna Borough, the
Municipality of Anchorage, and the Kenai Peninsula Borough, and
was written by a task force of members representing utilities,
renewable energy, industrial and commercial users, and the
University of Alaska (UA). Through a consensus process, the
task force adopted a document that was used by the energy
stakeholders group as a starting point; in fact, 16 of its goals
are incorporated in the proposed energy policy legislation.
Although the Tri-Borough Commission Energy Policy is specific to
the Southcentral region, the stakeholders group agreed that many
of the principles in this policy could be applied statewide.
3:20:04 PM
MR. ROSE then described the process that led to the work done by
the stakeholders group. The group met monthly beginning in
July, 2009, through December, 2009. At one point, the document
ballooned up to seven or eight pages of "pet goals"; however,
the group decided to stick to the original purpose and write a
set of guiding principles. Nevertheless, the following
legislative intent remains in the bill: a 15 percent increase in
energy efficiency on a per capita basis between 2010 and 2025;
50 percent electrical energy generation by renewable energy by
2025; work to ensure a reliable in-state gas supply; and using
the power project loan fund as the main source of state
assistance for energy projects.
3:22:24 PM
MR. POPP re-stated that the first step is to establish an
overarching energy policy that brings into alignment all aspects
of state government and its political subdivisions. The second
step is to develop the strategic goals that flow from the
policy. The third and final step is to adopt the plans to
achieve the goals and implement programs and projects to ensure
overall success for a secure energy future in Alaska.
3:24:01 PM
REPRESENTATIVE TUCK thanked the participants for their service
and hard work.
3:24:30 PM
CO-CHAIR EDGMON stated that public testimony on HB 305 would
begin at the next meeting on 1/28/10.
3:25:12 PM
JEFF TURNER, staff to Representative Charisse Millett, Alaska
State Legislature, advised that HB 305 is the result of a year-
long effort to determine how to meet the current and future
energy needs of Alaskans. The committee held hearings in nine
communities statewide and, on 10/23/09, held a first-ever
hearing at an Alaska Federation of Natives (AFN) annual
convention. The results of those hearings are HB 306, State
Energy Policy, and HB 305, Omnibus Energy Bill. The following
bills were incorporated into the omnibus energy bill: HB 148,
Energy Efficiency Standards for Public Buildings, sponsored by
Representative Les Gara; HB 191, Nuclear Power Production,
sponsored by Representative Craig Johnson; HB 196, Alternative
Energy Revolving Loan Fund; HB 218, State Department of Energy,
and HB 219, Renewable Energy Grant Requirements, sponsored by
the House Special Committee on Energy; SB 31, sponsored by
Senator Lesil McGuire; SB 71, Alternative Energy Systems for
Public Works, sponsored by Senator Gene Therriault; SB 121,
Energy Efficiency Standards for Public Buildings, sponsored by
the Senate Resources Standing Committee; and SB 150, Emerging
Energy Technology Fund, sponsored by Senator Lesil McGuire.
3:27:26 PM
MR. TURNER continued to explain that HB 305 is the framework of
the omnibus energy bill that will be refined during the
legislative session.
3:27:47 PM
ADAM BERG, staff to Representative Bryce Edgmon, Alaska State
Legislature, presented the sectional analysis of HB 305.
Section 1, a provision provided by the House Special Committee
on Energy, requires the Department of Education and Early
Development (EED) to assure energy efficiency in public and
private schools that would meet or exceed requirements of the
2009 International Energy Conservation Code. Section 2, also
provided by the committee, requires EED to review plans for
construction of new schools to ensure energy efficiency, and to
look at existing power sources in a community when determining
new school sites. Section 3, a provision from HB 191, adds the
term "facility" regarding permitting for nuclear materials. Mr.
Berg noted the goal of this provision is to remove the express
prohibitions related to the consideration of nuclear energy that
are currently in state statute. Section 4 requires the
legislature to act in the interest of regulating the economics
of nuclear energy when locating a nuclear facility, and removes
the requirement for approval from the governor. Sections 5 and
6 are conforming amendments related to HB 218, the department of
energy bill. Section 7, a provision from HB 148, requires the
Alaska Supreme Court to comply with the state energy use
reduction plan. Section 8, a provision from SB 71, tasks the
Department of Transportation & Public Facilities (DOT&PF) to
review the option of using alternative energy when adopting
plans and specifications for public works. Section 9, a
provision from HB 148, requires an agency requesting an
appropriation of over $1,000,000 for capital improvements to
submit an energy audit report, a proposal for energy efficiency
improvements, and a cost-savings analysis. Section 10, a
provision from HB 218, adds the board of directors of the Alaska
Energy Authority (AEA) to the state's official list of boards or
commissions. Section 11 moves the Alaska Natural Gas
Development Authority (ANGDA) to the new department of energy
from the Department of Revenue (DOR); Section 12 relates to the
methodology used by AEA to weigh project proposals, and Section
13 requires AEA to hire an economist or analyst with experience
in renewable energy to prepare written evaluations of each grant
proposal. Mr. Berg advised that AEA will be available to the
committee for an update on these requirements. Section 14, a
provision of SB 150, creates the emerging energy technology fund
that will be used to make grants or loans for research,
development, or demonstration projects designed to test new
energy technologies, or methods of conserving energy to improve
existing technologies, or to applied research projects that
employ emerging technologies that are not commercially viable.
Mr. Berg pointed out that HB 305 differs from SB 150 in the
administration of the fund. Section 15 amends the definition of
"power project" or "project" to allow nuclear energy production
as it applies to projects in AS 42.45 covering rural and
statewide energy programs. Section 16, a provision of SB 31,
adds the renewable energy production tax credit as an exception
to a tax credit limitation set for corporations. Section 17,
also a provision from SB 31, establishes a renewable energy
production tax credit as part of the Alaska Net Income Tax Act.
He pointed out that "renewable energy" is defined on page 13,
lines 8-9, of the bill. Section 18, a provision from HB 218,
adds the department of energy to the list of state government
offices and departments. Section 19, also from HB 218,
establishes the department of energy, and within that
department, creates the home energy conservation and
weatherization program. Section 20, a provision from SB 121,
tasks DOT&PF with updating the energy use index database and
conducting energy audits of public facilities that are
determined to have substantial energy inefficiency. Section 21,
a provision from SB 121, requires DOT&PF to submit a report to
the legislature summarizing the energy audits. Section 22 tasks
DOT&PF with preparing and adopting a state energy use reduction
plan, and entering into performance energy contracts.
3:36:11 PM
MR. BERG continued to explain that Section 23, a provision from
HB 218, transfers AEA to the department of energy from the
Department of Commerce, Community, & Economic Development
(DCCED). Section 24 reconstitutes the membership of the AEA
board of directors and removes the Alaska Industrial Development
and Export Authority (AIDEA) members. As a result, the AEA
board will include the commissioners of energy and revenue, and
a commissioner and four public members appointed by the
governor. Section 25 is a conforming statute for Section 24.
Section 26, a provision from SB 121, directs AEA to establish an
energy use index for public facilities that would measure
baseline energy consumption data for all state-owned or
controlled facilities. Section 27 adds "nuclear energy
production" to the definition of "power project" or "project" as
it applies to projects subject to the AEA. Section 28, a
provision from HB 196, amends the alternative energy revolving
loan fund by adding potential funding sources for the fund.
Section 29 assures that loans from the alternative energy
revolving loan fund may only be made for projects located in
Alaska. Section 30, a provision from HB 196, amends the loan
terms of the alternative energy revolving loan fund. Section 31
amends the term "alternative energy system" to allow high
efficiency wood pellet stoves. He directed attention to page
19, line 22, and the deletion of the word "wood." Section 32
amends the definition of "alternative energy system" in AS 46.11
by deleting the reference to "nuclear fuel" that is related to
the financing of energy efficient homes and buildings. Section
33 is a repealer section, and Mr. Berg indicated copies of this
section are provided in the committee packet. He explained the
repealed provisions are related to the transportation of high
level nuclear waste, the AHFC statute governing home energy
conservation and weatherization, a sweep provision in the
alternative energy revolving loan fund, previous alternative
energy revolving loan fund interest rates, and the transfer or
sale of mortgages and/or notes.
3:39:56 PM
MR. BERG stated that Section 34 repeals the renewable energy
production tax credit on 1/1/25. Section 35 assures that any
unused tax credits may not be carried forward on taxes after
12/31/25. Section 36 gives AEA six months from the effective
date of this act to establish the energy use index database.
Section 37 requires DOT&PF submit an energy performance report
to the legislature no later than [1/31/11]. Section 38 set up
the initial appointment of directors to the reconstituted AEA
board. Mr. Berg closed by pointing out that the bill does not
include any funding recommendations for programs or projects;
however, the co-chairs intend "to work with the finance chairman
on those recommendations when the time comes."
3:41:54 PM
CO-CHAIR EDGMON advised an omnibus bill often incorporates "all
of the above;" however, there are many weighty energy-related
topics, such as the Greater Railbelt Energy and Transmission
Corporation (GRETC) bill, and several gas pipeline bills, that
are not included. On the other hand, a variety of AHFC programs
are appropriate and may be added to the legislation as it
progresses through the committee process.
3:43:31 PM
CO-CHAIR MILLETT elaborated on two outstanding issues that are
not addressed: GRETC and the in-state gas pipeline. She
recalled that during the interim, the committee was in contact
with six utilities in the Railbelt that were meeting to reach
agreement on the GRETC bill. The utilities will be submitting
their suggestions to the committee and, if acceptable, a CS will
be offered. Co-Chair Millett reminded the committee that GRETC
is a large, "stand-alone" piece of legislation that will not be
incorporated into HB 305. Regarding the construction of an in-
state natural gas pipeline and natural gas storage, she said tax
credits for gas storage will fit into HB 305 after removing some
limitations to the tax credits. She acknowledged that there are
many projects underway for the Railbelt and expressed the co-
chairs' intent to complete a comparative analysis, project by
project, on the gas pipeline, the Chakachamna and Susitna hydro
projects, the [Fire Island] wind farm, Mt. Spurr, Healy Clean
Coal, and coal gasification. This analysis of the cost of power
to residents, timelines, required investment by the state, and
regulatory hurdles, will take place during a round table
discussion.
3:47:17 PM
REPRESENTATIVE TUCK asked whether provisions from other bills
will be added to HB 305 by amendments.
3:47:47 PM
CO-CHAIR EDGMON indicated yes. Some subjects are deserving of
separate legislation, although the home energy rebate program,
for example, could work well in the omnibus bill. He
anticipated that there will be many hearings to undertake
provisions from other bills and to learn from their sponsors and
staff. In further response to Representative Tuck, he said the
senate, the governor's office, and respective staff will
continue to be heard, as they were during the past summer and
fall.
3:50:16 PM
REPRESENTATIVE TUCK asked whether nuclear fuel was deleted as a
definition for alternative energy.
3:50:48 PM
MR. BERG confirmed that the definition applies to AS 46.11,
which is dealing with the conservation of energy and materials.
Again, the intention is to continue to review HB 191, and take
out the spots where [nuclear energy] is expressly prohibited.
In further response to Representative Tuck, he explained that in
Alaska statutes, there are several areas where the option of
nuclear energy is prohibited.
3:52:24 PM
REPRESENTATIVE TUCK asked whether there was a contradiction
between the bill and the statutes.
3:53:20 PM
MR. BERG further explained that removing the language will allow
nuclear energy to be considered as an alternative system.
3:53:45 PM
REPRESENTATIVE JOHANSEN praised the leadership of the co-chairs
and the work of the committee staff for "the best process I've
ever been through to get ... a piece of legislation on the
table." He said he had no questions because discussion about
the bill has gone on for months.
3:55:15 PM
REPRESENTATIVE PETERSEN agreed with Representative Johansen and
added that everyone's opinions were heard. Obviously, HB 305
covers a wide area of topics and he expressed his hope that the
remaining questions will be answered, and it will move, before
time runs out.
3:56:42 PM
CO-CHAIR MILLETT thanked the committee for their participation
in the interim road show. She stressed the importance of
listening to Alaskans: not only did legislators gain knowledge,
but also respect for the diversity of the state and its
different regional energy issues.
3:58:31 PM
CO-CHAIR EDGMON reminded members of the public that the
expectation is to return to the bills at the next meeting. As a
rural legislator, he is pleased to see long- and short-term
energy issues become a dominant theme throughout this session.
Co-Chair Edgmon announced that public testimony will be taken on
1/28/10.
[HB 305 and HB 306 were heard and held.]
4:00:50 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 4:00 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB305 Sectional.pdf |
HENE 1/26/2010 3:00:00 PM |
HB 305 |
| Affected Statutes - HB305.pdf |
HENE 1/26/2010 3:00:00 PM |
HB 305 |
| HB 306 Sponsor Statement.pdf |
HENE 1/26/2010 3:00:00 PM HENE 1/28/2010 3:00:00 PM |
HB 306 |
| Energy Policy for Alaska Presentation 01 26 10.pdf |
HENE 1/26/2010 3:00:00 PM HENE 1/28/2010 3:00:00 PM |
HB 306 |
| HB 305 Sponsor Statement.pdf |
HENE 1/26/2010 3:00:00 PM |
HB 305 |