02/23/2010 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HJR45 | |
| HB296 | |
| HB303 | |
| HB31 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 31 | TELECONFERENCED | |
| *+ | HB 303 | TELECONFERENCED | |
| += | HB 296 | TELECONFERENCED | |
| *+ | HJR 45 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 23, 2010
3:09 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Charisse Millett, Co-Chair
Representative Nancy Dahlstrom
Representative Kyle Johansen
Representative Jay Ramras
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 45
Urging the United States Congress not to enact Cap and Trade
legislation.
- MOVED CSHJR 45(ENE) OUT OF COMMITTEE
HOUSE BILL NO. 296
"An Act authorizing and relating to the issuance of bonds by the
Alaska Housing Finance Corporation; establishing the Alaska
energy efficiency revolving loan fund and relating to the fund;
authorizing municipalities and the State of Alaska to borrow
money from the Alaska Housing Finance Corporation for the
purposes of the Alaska energy efficiency revolving loan fund;
and providing for an effective date."
- MOVED CSHB 296(ENE) OUT OF COMMITTEE
HOUSE BILL NO. 303
"An Act establishing the Alaska energy efficient small business
grant fund and program."
- HEARD & HELD
HOUSE BILL NO. 31
"An Act relating to net energy metering for retail electricity
suppliers and customers; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HJR 45
SHORT TITLE: OPPOSE FEDERAL CAP AND TRADE LEGISLATION
SPONSOR(s): REPRESENTATIVE(s) STOLTZE
02/17/10 (H) READ THE FIRST TIME - REFERRALS
02/17/10 (H) ENE, FIN
02/23/10 (H) ENE AT 3:00 PM BARNES 124
BILL: HB 296
SHORT TITLE: ENERGY EFFICIENCY BONDS; LOANS; FUND
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/19/10 (H) READ THE FIRST TIME - REFERRALS
01/19/10 (H) ENE, FIN
02/09/10 (H) ENE AT 3:00 PM BARNES 124
02/09/10 (H) Heard & Held
02/09/10 (H) MINUTE(ENE)
02/23/10 (H) ENE AT 3:00 PM BARNES 124
BILL: HB 303
SHORT TITLE: SMALL BUSINESS ENERGY EFFICIENCY GRANTS
SPONSOR(s): OLSON
01/19/10 (H) READ THE FIRST TIME - REFERRALS
01/19/10 (H) ENE, L&C, FIN
02/16/10 (H) ENE AT 3:00 PM BARNES 124
02/16/10 (H) -- MEETING CANCELED --
02/23/10 (H) ENE AT 3:00 PM BARNES 124
BILL: HB 31
SHORT TITLE: NET ENERGY METERING
SPONSOR(s): OLSON
01/20/09 (H) PREFILE RELEASED 1/9/09
01/20/09 (H) READ THE FIRST TIME - REFERRALS
01/20/09 (H) ENE, L&C
03/24/09 (H) ENE AT 3:00 PM BARNES 124
03/24/09 (H) Heard & Held
03/24/09 (H) MINUTE(ENE)
02/16/10 (H) ENE AT 3:00 PM BARNES 124
02/16/10 (H) -- MEETING CANCELED --
02/23/10 (H) ENE AT 3:00 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE BILL STOLTZ
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HJR 45 as the prime sponsor.
MIKE MILLER, Vice Chairman
Northern Region
National Federation of Independent Business (NFIB)
North Pole, Alaska
POSITION STATEMENT: Testified in support of HJR 45.
MEERA KOHLER, President and CEO
Alaska Village Electric Cooperative (AVEC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HJR 45.
BRYAN BUTCHER, Director
Governmental Affairs & Public Relations
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Presented a review of HB 296 and answered
questions during the hearing on HB 296; answered questions
during the hearing on HB 303.
JOHN ANDERSON, Weatherization Program Manager
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
296.
JACK KREINHEDER, Chief Policy Analyst
Office of Management & Budget
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Answered a question during the hearing on
HB 296.
REPRESENTATIVE KURT OLSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as the prime sponsor of HB 303;
testified as the sponsor of HB 31.
JENNIFER SENETTE, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 303 on behalf of
Representative Olson, prime sponsor; reviewed HB 31 and
presented the sectional analysis on Amendment 1 to HB 31, on
behalf of Representative Olson, prime sponsor.
SARA FISHERGOAD, Deputy Director
Operations
Alaska Industrial Development & Export Authority (AIDEA) and
Alaska Energy Authority (AEA)
Department of Commerce, Community, & Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered a question during the hearing on
HB 303.
RICH GAZAWAY, Advisory Section Manager
Alaska Regulatory Commission (RCA)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
31.
JIM STIMPFLE
Nome, Alaska
POSITION STATEMENT: Testified during the hearing on HB 31.
MIKE O'MEARA, Homer Spokesman
Homer Electric Association Member's Forum
Kachemak Bay, Alaska
POSITION STATEMENT: Testified during the hearing on HB 31.
PETER McKAY
Kenai, Alaska
POSITION STATEMENT: Testified during the hearing on HB 31.
MARILYN LELAND, Executive Director
Alaska Power Association (APA)
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 31.
DEAN THOMPSON, Attorney
Alaska Power Association (APA)
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 31.
ACTION NARRATIVE
3:09:05 PM
CO-CHAIR CHARISSE MILLETT called the House Special Committee on
Energy meeting to order at 3:09 p.m. Present at the call to
order were Representatives Millett, Petersen, Tuck, Edgmon, and
Dahlstrom. Representatives Johansen and Ramras arrived after
the meeting was in progress.
HJR 45-OPPOSE FEDERAL CAP AND TRADE LEGISLATION
3:10:27 PM
CO-CHAIR MILLETT announced that the first order of business
would be HOUSE JOINT RESOLUTION NO. 45, Urging the United States
Congress not to enact Cap and Trade legislation.
3:10:36 PM
REPRESENTATIVE BILL STOLTZ, Alaska State Legislature, informed
the committee that a legislative resolution is a formal letter
to Congress expressing concerns about issues outside of the
legislature's political boundaries. He opined Congressional
leaders and the White House are supporting a policy of cap and
trade legislation which, if enacted, would have deleterious
impacts on all levels of the national economy. Representative
Stoltze, and the co-sponsors of HJR 45, respectively disagree
with the supporters of cap and trade legislation and the
resolution points out their concerns. He noted that Congressman
Don Young and Senator Lisa Murkowski helped formulate the
resolution. In the interest of efficiency, he said he would
support the amendment to be offered by Representative Tuck.
Representative Stoltze stressed that cap and trade legislation
adds to the living expenses of the average American family and
of individuals, and prevents opportunities in an inexhaustible
list of industries. He urged the committee to bring forward the
resolution.
3:15:34 PM
REPRESENTATIVE JOHANSEN observed producer and user states differ
on this issue. He offered his support.
3:15:57 PM
REPRESENTATIVE STOLTZ advised that user states are unaware of
how affected they are.
3:16:16 PM
CO-CHAIR MILLETT opened public testimony.
3:16:29 PM
MIKE MILLER, Vice Chairman, Northern Region, National Federation
of Independent Business (NFIB), said his organization is in
strong support of the resolution. As a business owner with
businesses in North Pole and Ketchikan, he stated that 3,600
jobs in Alaska may be lost if cap and trade legislation is
enacted. This would happen because when small businesses cut
budgets, they cannot cut items like taxes, but must cut wages.
As a result, jobs have been lost in the visitor and gift
industries during the past two years. Furthermore, according to
the Heritage Foundation, federal cap and trade legislation will
increase the price of gasoline by $1.20 per gallon. Especially
in the visitor industry, the more a visitor's cost of
transportation to Alaska is raised, the less he or she has to
spend. In addition, all of Alaska's residents are affected by
the cost of transportation for goods. In fact, there was a 20
percent fuel surcharge added on to a recent shipment to one of
his businesses. Mr. Miller concluded that for every dollar
taken out of the economy by the loss of jobs, the economy is
negatively affected. He re-stated his support for HJR 45.
3:21:07 PM
MEERA KOHLER, President and CEO, Alaska Village Electric
Cooperative (AVEC), informed the committee AVEC serves 53 small
villages throughout the state. Ms. Kohler recalled that the
issue of cap and trade and carbon taxes is not new. She agreed
with the resolution's sponsor that potential carbon taxes would
affect those who can least afford it. For example, in rural
areas residents do not have opportunities to use renewable
sources of energy that do not come from fossil fuels and they
will "be hit very, very hard." She noted that a ton of carbon
on the market for $50 equates to a cost of $0.04 per kWh in the
villages, and to a 40 percent increase in rates for Anchorage
Municipal Light and Power (ML&P). Ms. Kohler urged that Alaska
send a message as quickly as possible that this is an unfair
tax.
3:22:59 PM
CO-CHAIR MILLETT closed public testimony.
3:23:09 PM
REPRESENTATIVE TUCK moved to adopt Conceptual Amendment 1.
REPRESENTATIVE JOHANSEN objected.
3:23:34 PM
REPRESENTATIVE TUCK advised that on page 1, line 8, of the
resolution, the conceptual amendment deletes "that has been
backed by a partisan", and inserts "and is before Congress".
3:24:38 PM
REPRESENTATIVE STOLTZ said this is a constructive amendment.
REPRESENTATIVE EDGMON supported Conceptual Amendment 1.
3:25:11 PM
REPRESENTATIVE JOHANSEN withdrew his objection.
CO-CHAIR MILLETT announced Conceptual Amendment 1 was adopted.
3:25:29 PM
REPRESENTATIVE EDGMON moved to report HJR 45, [as amended] out
of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHJR
45(ENE) was reported from the House Special Committee on Energy.
3:25:43 PM
The committee took an at-ease from 3:25 p.m. to 3:27 p.m.
HB 296-ENERGY EFFICIENCY BONDS; LOANS; FUND
3:27:58 PM
CO-CHAIR MILLETT announced the next order of business would be
HOUSE BILL NO. 296, "An Act authorizing and relating to the
issuance of bonds by the Alaska Housing Finance Corporation;
establishing the Alaska energy efficiency revolving loan fund
and relating to the fund; authorizing municipalities and the
State of Alaska to borrow money from the Alaska Housing Finance
Corporation for the purposes of the Alaska energy efficiency
revolving loan fund; and providing for an effective date."
3:28:15 PM
BRYAN BUTCHER, Director, Governmental Affairs & Public
Relations, Alaska Housing Finance Corporation (AHFC), Department
of Revenue (DOR), reminded the committee that HB 296 would take
$18 million AHFC received from the energy program stimulus funds
to leverage up to $250 million in bonds which would be used for
energy improvements to public and municipal facilities, such as
schools. The proposal would work as a revolving loan fund by
the hire of a energy performance contractor who estimates the
savings from, and cost of, energy efficiency improvements.
Subsequently, a loan would be issued by AHFC and, after the work
was done, the savings realized from the work would be used to
pay back the loan. Mr. Butcher assured the committee that the
contractor must compensate for any savings that are less than
his or her estimate, thus in all cases, the corporation is
repaid and the program continues to revolve.
3:29:48 PM
CO-CHAIR EDGMON inquired as to whether any problems are foreseen
regarding issuing $250 million in bonds.
MR. BUTCHER advised that the bonds are backed by AHFC, and would
not be issued all at once. In fact, there are only four energy
performance contractors in the state at this time.
3:31:01 PM
REPRESENTATIVE TUCK referred to page 2, line 7, and asked
whether loans may be made to the University of Alaska (UA)
system.
3:31:29 PM
MR. BUTCHER said he was unsure.
3:32:01 PM
JOHN ANDERSON, Weatherization Program Manager, Alaska Housing
Finance Corporation (AHFC), Department of Revenue (DOR), opined
the intention was to include [the UA system].
MR. BUTCHER advised that this question and another would be
addressed as the bill progresses.
3:33:14 PM
CO-CHAIR MILLETT closed public testimony after ascertaining that
no one else wished to testify.
3:33:57 PM
REPRESENTATIVE PETERSEN moved to adopt Amendment 1, labeled 26-
GH2903\A.1, Cook, 2/5/10, which read:
Page 1, line 3:
Delete "municipalities"
Insert "regional educational attendance areas,
municipalities,"
Page 2, line 7, following "to":
Insert "regional educational attendance areas,"
Page 2, line 9:
Delete "the state or by municipalities in"
Insert "the regional educational attendance
areas, municipalities or their subdivisions, or"
Page 2, line 15, following "Before":
Insert "a regional educational attendance area,
a"
Page 2, line 16, following "section, the":
Insert "regional educational attendance area"
Page 2, line 24, following "All":
Insert "regional educational attendance areas
and"
Page 2, line 25, following "section.":
Insert "The corporation shall set out the terms
of a loan to a regional educational attendance area in
a loan agreement or similar document."
Page 3, line 5, following "to":
Insert "a regional educational attendance area or
to"
Page 3, line 7, following "that the":
Insert "regional educational attendance area or"
Page 3, line 9, following "and":
Insert "a regional educational attendance area
or"
Page 3, line 10, following "from that":
Insert "regional educational attendance area or"
Page 3, line 19, following "state.":
Insert "The superintendent of a regional
educational attendance area, at the direction of the
regional educational attendance school board, may
borrow from the corporation under this section for
buildings owned by the regional educational area."
Page 3, line 23, following "A":
Insert "regional educational attendance area or"
Page 4, lines 15 - 16:
Delete "for energy efficiency improvements to
state and municipal buildings in the state"
Page 4, line 16, following "finance the":
Delete "other"
3:34:46 PM
CO-CHAIR MILLETT objected for the purpose of discussion.
REPRESENTATIVE PETERSEN explained that the purpose of the
amendment was to include more buildings that might qualify for
the loan program by adding "regional educational attendance
area" where applicable.
MR. BUTCHER, in response to Co-Chair Millett, confirmed that the
intent of the bill was to include regional educational
attendance areas (REAs).
3:35:22 PM
CO-CHAIR MILLETT removed her objection. There being no further
objection, Amendment 1 was adopted.
3:35:30 PM
REPRESENTATIVE PETERSEN moved to adopt Amendment 2, labeled 26-
GH2903\A.2, Cook, 2/8/10, which read:
Page 1, line 3:
Delete "municipalities"
Insert "Native organizations, municipalities,"
Page 2, line 7, following "to":
Insert "Native organizations,"
Page 2, line 9:
Delete "state or by municipalities in"
Insert "Native organizations, municipalities or
their subdivisions, or"
Page 2, line 15, following "Before":
Insert "a Native organization,"
Page 2, line 16, following the second occurrence of
"the":
Insert "Native organization or"
Page 2, line 24, following "All":
Insert "Native organizations and"
Page 2, line 25, following "section.":
Insert "The corporation shall set out the terms
of a loan to a Native organization in a loan agreement
or similar document."
Page 3, line 5, following "to":
Insert "a Native organization or to"
Page 3, line 7, following the first occurrence of
"the":
Insert "Native organization or"
Page 3, line 9, following "and":
Insert "a Native organization or"
Page 3, line 10, following the second occurrence of
"that":
Insert "Native organization or"
Page 3, line 19, following "state.":
Insert "The board of directors or council of a
Native organization may borrow from the corporation
under this section for buildings owned by the Native
organization."
Page 3, line 23, following "A":
Insert "Native organization or"
Page 3, line 27, following "section,":
Insert "(1)"
Page 3, line 28:
Delete "(1)"
Insert "(A)"
Page 3, line 30:
Delete "(2)"
Insert "(B)"
Page 4, line 1:
Delete "(3)"
Insert "(C)"
Page 4, line 2:
Delete "(4)"
Insert "(D)"
Page 4, line 5:
Delete "(5)"
Insert "(E)"
Page 4, lines 4 - 5:
Delete "(1) - (4) of this subsection."
Insert "(A) - (D) of this paragraph;
(2) "council" or "Native council" means a
council organized under federal law to represent an
Alaska Native community or Indian reserve in the
state;
(3) "Native organization" means a Native
council or nonprofit corporation organized by a Native
council."
Page 4, lines 15 - 16:
Delete "for energy efficiency improvements to
state and municipal buildings in the state"
REPRESENTATIVE PETERSEN explained that Amendment 2 adds to the
loan program Native organizations that in some rural areas serve
as the only organization in the community.
3:36:09 PM
CO-CHAIR MILLETT objected. She asked Mr. Butcher to define
"Native organizations" under statute.
3:36:22 PM
MR. BUTCHER said although AHFC supports getting energy
efficiency done in as many areas as possible, its concern is
that this "goes in a different direction than the legislation
has been drafted for." Because the proposed bill was approved
by the U.S. Department of Energy (DOE) specifically for public
buildings, he cautioned that the amendment could bring some
issues that would require further approval from DOE.
CO-CHAIR EDGMON understood the purpose of the amendment;
however, he said he does not know of any Native organizations
that own a public building. He agreed with Mr. Butcher and
opposed the amendment.
3:38:20 PM
CO-CHAIR MILLETT maintained her objection to Amendment 2.
3:38:25 PM
REPRESENTATIVE PETERSEN withdrew Amendment 2.
MR. BUTCHER assured the committee that AHFC is very good at
working with small communities and will ensure that every
community can participate in the program.
CO-CHAIR EDGMON asked whether this program would create housing
authorities.
3:40:01 PM
MR. ANDERSON stated AHFC's position that stock owned by regional
housing authorities would not be able to qualify in this
program. However, regional housing authorities have the
potential to do the work in many communities.
CO-CHAIR EDGMON asked whether there are sufficient other funding
streams for housing authorities.
MR. ANDERSON observed that the weatherization program and
federal Housing and Urban Development (HUD) programs provide "a
vast amount of money that is going to the regional housing
authorities right now." He re-stated that AHFC will do whatever
it can to encourage the housing authorities to get trained so
they can participate in the work. In fact, much of the building
stock in rural Alaska is built on a residential system, and with
minimal training most regional housing authorities will be able
to participate.
3:41:55 PM
CO-CHAIR EDGMON noted the definition of public facilities in
other bills may need to be re-visited.
3:42:13 PM
REPRESENTATIVE TUCK asked to confirm that the intent is to
include the UA system.
3:42:32 PM
MR. BUTCHER said yes. He offered to contact the committee after
AHFC conducts discussions with the Office of Management and
Budget (OMB). He further explained that after AHFC figured out
how to leverage this program to $250 million, it began to
include more participation by different areas of government, and
there was some confusion about what was included. Now, with the
revolving aspect of this program, AHFC will be able to include
every building that it wants to do, including the UA. In
further response to Representative Tuck, Mr. Butcher said, "A
qualified yes."
REPRESENTATIVE TUCK asked for reasons UA would not be included.
MR. BUTCHER offered no reasons.
3:44:17 PM
CO-CHAIR MILLETT suggested the committee send a letter of intent
to the finance committee with the bill.
3:44:35 PM
REPRESENTATIVE TUCK agreed.
3:45:21 PM
JACK KREINHEDER, Chief Policy Analyst, Office of Management &
Budget, Office of the Governor, informed the committee that the
administration supports the inclusion of the UA. However, the
UA may have its own program and he suggested contacting the
university to assess its interest.
REPRESENTATIVE TUCK asked whether the UA was excluded as the
bill is now written.
3:47:12 PM
MR. KREINHEDER advised that he is not a lawyer, but opined that
UA facilities are state facilities and would be included.
3:47:29 PM
REPRESENTATIVE TUCK stated he was comfortable sending a letter
to the finance committee.
MR. KREINHEDER provided written information that was previously
requested by the committee.
3:48:28 PM
CO-CHAIR EDGMON moved to report HB 296, amended, out of
committee with individual recommendations, zero fiscal notes,
and the accompanying letter of intent. There being no
objection, CSHB 296(ENE) was reported from the House Special
Committee on Energy.
3:48:58 PM
The committee took an at-ease from 3:48 p.m. to 3:54 p.m.
HB 303-SMALL BUSINESS ENERGY EFFICIENCY GRANTS
3:54:17 PM
CO-CHAIR MILLETT announced that the next order of business would
be HOUSE BILL NO. 303, "An Act establishing the Alaska energy
efficient small business grant fund and program."
3:54:25 PM
REPRESENTATIVE KURT OLSON, Alaska State Legislature, thanked the
committee for its work and introduced his aide.
3:55:20 PM
JENNIFER SENETTE, Staff, Representative Kurt Olson, Alaska State
Legislature, introduced HB 303 on behalf of Representative
Olson, prime sponsor. Ms. Senette referred to Alaska Housing
Finance Corporation's (AHFC) successful home energy rebate
program and said that this legislation was intended to open that
program to small businesses. HB 303 would allow small business
owners wishing to ameliorate the energy efficiency of their
buildings to receive a rebate for some of the expenditures. As
with the homeowner program, HB 303 would require an energy
efficiency rater evaluate the business structure to be
retrofitted before and after the improvements. The amount of
the rebate would be determined by the amount of energy
efficiency gained by making the improvements, and by receipts
for the completed work and materials. The bill sets three
guidelines for the businesses to meet in order to qualify for
the program. Firstly, the assessed value of the structure to be
retrofitted cannot exceed $1 million. Secondly, the structure
must be owned by a person or persons licensed by the state and
with no outstanding liabilities to the state. Thirdly, the
structure must meet criteria adopted by AHFC. Ms. Senette
anticipated questions and noted that representatives from AHFC
and the Alaska Energy Authority (AEA) were available to testify.
3:58:09 PM
REPRESENTATIVE DAHLSTROM observed that a small business may be
operated out of a home or garage. She surmised that type of
small business would not qualify.
MS. SENETTE suggested the bill sponsor would be willing to work
on that point.
3:59:05 PM
REPRESENTATIVE DAHLSTROM stated her belief in the sponsor's
intent to include businesses, such as sub-contractors and day
care owners, who may work at home.
CO-CHAIR EDGMON asked whether a non-resident small business
owner would qualify.
3:59:50 PM
MS. SENETTE responded that there is no language in the bill that
requires residency.
CO-CHAIR EDGMON asked whether the rater concept is the same as
the residential users.
4:00:43 PM
MS. SENETTE said yes. HB 303 is intended to "mirror" the home
energy rebate program. She suggested more details could be
provided by AHFC.
4:01:06 PM
CO-CHAIR EDGMON expressed his concern about the bill because of
the limited amount of funds available for residential users of
the home energy rebate program. Since only 10 percent of the
state has participated, a vast number of homes in the state have
yet to participate. Co-Chair Edgmon understood the benefits of
helping small businesses; however, he cautioned against
diverting money and preventing residential users from getting
rebates on their homes.
4:02:28 PM
REPRESENTATIVE OLSON recalled there were problems in drafting
the bill during the interim because the amount of surplus funds
was unknown, and the success of the new AHFC program was also
unknown. He surmised that there is a fair amount of surplus and
said, "But again, that's probably something that will be dealt
with by the finance committee."
REPRESENTATIVE TUCK referred to page 2, line 7, of the bill, and
asked whether a business owner who leased property for the
business would qualify.
4:04:05 PM
MS. SENETTE said the bill is intended for the owner of the
business.
4:04:14 PM
REPRESENTATIVE TUCK gave an example of a business owner who
wanted to install new windows in a space he or she leased.
MS. SENETTE said she will have to get back to the committee in
this regard.
4:04:57 PM
REPRESENTATIVE DAHLSTROM asked whether the sponsor objected to
the addition of a residency requirement.
REPRESENTATIVE OLSON indicated no.
REPRESENTATIVE DAHLSTROM said a residency requirement is
essential.
4:05:35 PM
REPRESENTATIVE PETERSEN noted that many small business owners
who operate from a leased space pay for utilities and may not be
able to talk the building owner into making energy improvements.
He asked whether the sponsor knows how to help an owner in that
situation.
4:06:57 PM
REPRESENTATIVE OLSON voiced the sponsors' intent to start small,
get the program up and running, and let it develop and grow.
4:07:22 PM
CO-CHAIR MILLETT observed that although she understood the
concern for businesses located in malls, the intent was truly
for small business.
BRYAN BUTCHER, Director, Governmental Affairs & Public
Relations, Alaska Housing Finance Corporation (AHFC), Department
of Revenue (DOR), in response to Co-Chair Edgmon, explained that
AHFC does not have a definition of a small business. He
deferred to the bill sponsor.
4:08:51 PM
CO-CHAIR EDGMON relayed his support of the concept of HB 303,
but perhaps not the mechanism. He suggested a loan program may
be better. He then asked for AHFC's position on the impact HB
303 would have on the residential homeowner energy rebate
program.
4:10:20 PM
MR. BUTCHER acknowledged that home energy rebate program funds
are fully encumbered, although funds will become available from
those who do not complete the program. Furthermore, the
weatherization funds will be spent in FY 2011. It is certain
that the passage of HB 303 will require additional funding. He
said the possibilities for a loan program may include a
revolving loan fund with energy performance contracting. In
response to an earlier question as to how the energy audits
would work for this, he explained that the AKwarm software that
is used for the ratings on the residential program is being
expanded for use on commercial buildings.
4:11:57 PM
CO-CHAIR EDGMON expressed his sense of discomfort with the bill
as it currently stands, and gave the example of a $10,000 rebate
approved for a $1 million building. He suggested that the bill
sponsor consider a separate program that the legislature would
put more money into. In that case, he would also support more
money for the current residential and weatherization programs.
Co-Chair Edgmon said further conversations about helping small
businesses, residential users, and housing authorities with
weatherization money should take place in the House Finance
Committee. He said, "I am saying that I do have a level of
discomfort with the bill as it's presently structured because I
think there are some fundamental issues that need to be
addressed somewhere along the line."
4:14:00 PM
REPRESENTATIVE JOHANSEN referred to page 2, line 4, of the bill,
and asked whether AHFC provided loans for small businesses for
new structures.
MR. BUTCHER answered that AHFC is strictly residential and does
not have relationships with small businesses. He opined this
language is probably fashioned on the home energy rebate program
in that owners can qualify for a rebate if they build a new, 5
Star Plus home.
4:15:04 PM
REPRESENTATIVE EDGMON asked whether the AKwarm software has to
be updated for use on businesses.
MR. BUTCHER said yes, but that is something AHFC is already
doing as part of negotiations with the Department of Energy
(DOE) and for requirements in other legislation.
CO-CHAIR EDGMON asked whether another mechanism might
incorporate this concept.
MR. BUTCHER acknowledged that this could be discussed.
4:16:37 PM
CO-CHAIR MILLETT relayed that the sponsor offered the bill as an
amendment to the energy omnibus bill, so that option remains
available to the committee.
4:17:13 PM
REPRESENTATIVE TUCK referred to page 2, line 14, of the bill,
and asked whether a business owner with several properties would
qualify for improvements to only one property.
MR. BUTCHER imagined it would be a situation where only one
address could be used one time, although this would be discussed
as the program is set up.
[Co-Chair Millett turned the gavel over to Co-Chair Edgmon.]
4:18:47 PM
REPRESENTATIVE TUCK gave several examples of business ownership.
MR. BUTCHER confirmed that AHFC would talk to the Department of
Commerce, Community, & Economic Development (DCCED) and the
Alaska Energy Authority (AEA) in this regard.
4:20:02 PM
REPRESENTATIVE RAMRAS also called attention to page 2, line 14,
of the bill. He pointed out the difficulty in establishing the
value of a commercial building in rural areas, and unorganized
boroughs, where there is no tax assessment by a municipality.
Representative Ramras questioned AHFC's ability to establish
parity between commercial buildings in Dillingham, Ekwok,
Fairbanks, and Anchorage.
[Co-Chair Edgmon returned the gavel to Co-Chair Millett.]
4:21:38 PM
MR. BUTCHER deferred the question to AEA as AHFC does not have
this expertise.
4:22:09 PM
REPRESENTATIVE RAMRAS re-stated his question as to the
methodology to assess the value of a building, especially in
rural areas or an unorganized borough, in order to ascertain the
dollar value and observe the guidelines and procedures referred
to in the bill.
4:22:35 PM
SARA FISHERGOAD, Deputy Director, Operations, Alaska Industrial
Development & Export Authority (AIDEA) and Alaska Energy
Authority (AEA), Department of Commerce, Community, & Economic
Development, stated she would talk to other experts for
guidance.
4:23:12 PM
REPRESENTATIVE RAMRAS said this is a significant hurdle. He
suggested the solution of making any structure in rural Alaska
eligible for the credit. Other suggestions were to use the
population density in the community or the number of employees
as the method for determining eligibility.
4:24:41 PM
REPRESENTATIVE PETERSEN pointed out the need for a definition of
"small business." He recalled that the federal definition of
small business is one with 100 employees or less; however, in
most of Alaska, a business with 99 employees is not considered
small. This definition may vary in different areas of the
country.
4:25:56 PM
CO-CHAIR MILLETT noted several questions on the bill. She said
she and Co-Chair Edgmon intend to hold the bill but continue the
discussion.
4:26:17 PM
REPRESENTATIVE OLSON informed the committee that one of the
concepts was to establish value on a square footage basis, which
would get around the regional issue.
REPRESENTATIVE TUCK also supported the square footage concept.
4:27:47 PM
REPRESENTATIVE RAMRAS assured members he is a small businessman,
even though he has 250 employees, when compared to the giants
that he is competing against. For example, Silver Bay Seafoods
in Sitka moves 31 million pounds of seafood, but is small when
compared to Ocean Beauty and Trident Seafood. He urged that
the numeric values of employees should not be used to determine
what is a small business.
4:29:23 PM
CO-CHAIR EDGMON observed that the intertie between energy and
economics is very real. He expressed his support of efforts by
the legislature to help small businesses, such as commercial
fishermen, through loan programs or in other ways.
4:30:15 PM
CO-CHAIR MILLETT announced that HB 303 was held pending
forthcoming amendments.
HB 31-NET ENERGY METERING
4:30:29 PM
CO-CHAIR MILLETT announced that the next order of business would
be HOUSE BILL NO. 31, "An Act relating to net energy metering
for retail electricity suppliers and customers; and providing
for an effective date."
4:30:46 PM
REPRESENTATIVE KURT OLSON, Alaska State Legislature, informed
the committee that the proposed amendment to HB 31 would be
presented by his aide, Jennifer Senette.
4:31:11 PM
JENNIFER SENETTE, Staff, Representative Kurt Olson, Alaska State
Legislature, began by reviewing HB 31 for the committee. She
noted that the Regulatory Commission of Alaska (RCA) has been
working on a net metering docket for over one year and closed
the docket in October. Representative Olson, sponsor of HB 31,
has incorporated the regulations adopted by the RCA into an
amendment to the bill because the regulations are a good
compromise for all of the interests involved: customers who net
meter, customers who do not net meter, and the utilities that
serve them.
4:33:09 PM
The committee took an at-ease from 4:33 p.m. to 4:34 p.m.
4:34:07 PM
REPRESENTATIVE RAMRAS moved to adopt Amendment 1, A.1, Kane,
1/27/10.
CO-CHAIR MILLETT objected for purposes of discussion.
4:34:26 PM
REPRESENTATIVE RAMRAS advised that the regulations recommended
by the RCA were put in amendment form. He referred to a
document that embeds the recommendations made by Mr. Pickett,
RCA chairman.
4:35:04 PM
CO-CHAIR MILLET requested copies of the document for the
committee. She then asked Ms. Senette to review the sectional
analysis on Amendment 1.
4:35:46 PM
MS. SENETTE emphasized that Amendment 1 codifies Chairman
Pickett's testimony word-for-word. Subsections (a), (b), and
(d) address the applicability and the waiver opportunity of the
net metering requirement. Generally speaking, the net metering
requirement applies to all utilities subject to economic
regulation by the RCA with the two exceptions set out on page 2,
lines 8-13: (1) utilities that are 100 percent supplied by
renewable sources; (2) independent systems with retail sales of
less than five million kilowatt hours during the previous fiscal
year. For example, the Alaska Power & Telephone Company (AP&T)
serves twenty-one communities, five of which sold over five
million kilowatt hours during FY 2007. Thus, the only portion
of AP&T that would be required to provide net metering would be
in those five communities that have sold over five million
kilowatt hours. Ms. Senette called attention to page 2, line
13, and pointed out that if a utility demonstrates that limiting
net metering installations is necessary due to operational
constraints or liability issues, the utility would not be
required to provide net metering.
4:37:59 PM
REPRESENTATIVE RAMRAS recognized the value of renewable energy
sources, but because they are intermittent sources, they can
only be a portion of the utility's portfolio. He opined that
this provision of the amendment must be perceived as something
that protects the ratepayer base of a small utility, because a
smaller utility cannot absorb the net metering kilowatts in the
way large producers can.
MS. SENETTE agreed. She continued with her sectional analysis
and said subsections (e)-(i) set an overall capacity limit on
net metering. Subsection (f) allows a utility to opt out if its
overall nameplate capacity of all net metering systems
interconnected with the utility exceeds 1.5 percent of the
utility's average annual retail demand. Furthermore on page 3,
line 9, subsection (i), she noted a utility can actually request
an increase to that 1.5 percent capacity. Continuing to
subsection (g), Ms. Senette explained that this subsection
precludes a utility from disconnecting existing net metering
customers should the cumulative nameplate capacity of the net
metering systems interconnected with the utility exceed the cap
as a result of average demand going down.
4:40:44 PM
MS. SENETTE continued to page 3, subsection (h), that requires a
utility to annually publish in its tariff the number of kilowatt
hours that are equivalent to that 1.5 percent of average retail
demand. Subsection (l) specifies the eligibility criteria for
the consumer generation facilities, including a generation
capacity limit of 25 kilowatts. Subsection (m) describes net
metering and that the utility must measure the energy
consumption and generation of a net metering consumer to
determine net consumption, and to determine bill credits. Page
5, [paragraph] (2), indicates that compensation is based on the
utility's non-firm purchase power rate-typically on an avoided
cost basis-and that credits can be carried forward and do not
expire. She emphasized that if a renewable energy generation
facility is built and it contributes more power than it
consumes, credits are issued instead of a payment, but the
credits never expire. Subsection (n) allows the utilities to
charge a net metering consumer for non-generation related
consumer charges if those charges are authorized in the
utility's tariff. Subsection (p) allows the utility to request
a change to its rate design to incorporate a net metering
customer class; however, the utility must demonstrate an adverse
material rate impact on those who do not net meter.
4:43:16 PM
MS. SENETTE then advised that the remainder of Amendment 1 is
definitions. She introduced expert witnesses.
4:44:01 PM
CO-CHAIR MILLETT asked whether the RCA supports codifying its
recommendations in statute, or if it wishes to keep the
recommendations under regulations.
MS. SENETTE said she did not know. However, there are
advantages to moving the recommendations into statute because
statute trumps regulations and is not subject to a change in
leadership.
4:45:06 PM
CO-CHAIR EDGMON understood that the RCA chairman preferred the
recommendations not be put into statute, and he expressed his
interest in hearing whether the RCA supports the [amendment].
REPRESENTATIVE TUCK agreed. He pointed out that the amendment
codifies language, but questioned the purpose of also giving the
commission allowances to make changes.
4:46:45 PM
RICH GAZAWAY, Advisory Section Manager, Alaska Regulatory
Commission (RCA), Department of Commerce, Community, & Economic
Development (DCCED), advised the committee that he was the
administrative law judge who conducted the hearings and process
for net metering regulations.
CO-CHAIR MILLETT asked whether there is a benefit to the RCA to
not have these regulations in statute.
4:47:39 PM
MR. GAZAWAY confirmed that having the recommendations in
regulations provides the RCA with a greater level of flexibility
to amend standards. However, as a staff member, he could not
speak to what position the five commissioners would take.
4:48:26 PM
REPRESENTATIVE TUCK observed that the amendment allows the RCA
to make changes in Section 1. Therefore, he asked whether there
are limitations to the RCA's flexibility to make changes.
4:49:01 PM
MR. GAZAWAY explained that the waiver provision allows the
commission to exercise its discretion. He concluded that the
language would provide some flexibility, and is modeled on RCA
regulatory language.
4:49:38 PM
REPRESENTATIVE RAMRAS defended the language in Amendment 1,
saying it codifies the legislature's intent for net metering.
Because net metering in Alaska is brand new, he cautioned
against the use of rigid language. In fact, the use of the word
"may" provides sufficient direction to the RCA from the
legislature, and sufficient latitude for the RCA to interpret
what works for the utilities across the state.
4:51:24 PM
REPRESENTATIVE TUCK clarified that he was not suggesting the use
of the word "shall." He re-stated his inquiry as to the effect
of the amendment and why it was necessary to codify decisions
that the RCA is authorized to make.
4:52:09 PM
CO-CHAIR MILLETT withdrew her objection to Amendment 1. There
being no further objection, Amendment 1 was adopted, and HB 31,
as amended, was before the committee. She opened public
testimony.
4:52:58 PM
JIM STIMPFLE said he could not tell from the bill or the
amendment whether this is a two meter or a one meter system. In
a one meter system, one meter reads the power going in and if
consumers are using their own renewables, the meter runs
backwards.
CO-CHAIR MILLETT opined the legislation does not address how net
metering takes place because that is a "utility to consumer"
issue.
4:54:02 PM
MR. STIMPFLE referred to Amendment 1, page 4, line 15, and
recommended the addition of a provision to allow a small
business owner, in a rural area, an offsite grid connection as a
way to "credit back" the power usage at another site. He then
asked whether the Alaska Village Electrical Cooperative (AVEC)
produces less than five million kilowatts and has a waiver
against compliance with net metering.
4:54:56 PM
CO-CHAIR MILLETT said she believed that to be the case.
4:55:08 PM
MIKE O'MEARA, Homer Spokesman, Homer Electric Association
Member's Forum, informed the committee the Homer Electric
Association Member's Forum is a ratepayers' group. He said his
organization questions the need to codify the RCA net metering
regulations into law; however, HEA Member's Forum participants
would be supportive of the bill, as amended, if it goes forward.
Consensus among the participants is that the RCA did a pretty
good job of balancing the demands from various interests. The
organization remains interested in seeing that nothing is done
to diminish the regulations, and he urged that changes not be
made to affect what the RCA has regulated. Also, his
organization discourages any language that would limit the
ability of ratepayer groups' participation in future RCA
deliberations on this issue.
4:58:04 PM
CO-CHAIR MILLETT clarified that the amendment was adopted and is
now part of the bill.
4:58:21 PM
PETER McKAY informed the committee he has participated with the
RCA proceedings on net metering since 10/06. He stated he was
comfortable with Appendix A to RCA Order 09-1, Order Number 3;
however, there are differences between the order and Amendment 1
offered by Representative Ramras in the language and in the
structure. Mr. McKay said he could not be comfortable that the
issues worked out by the regulatory commission are intact in the
amendment, and he stated his desire for a line-by-line
comparison, or a cross reference that identifies identical
language, different language with the same intent, and
differences and omissions when compared to RCA Appendix A,
Article 3, Section 900, of the Alaska Administrative Code. He
urged that the committee make this comparison prior to the bill
moving forward.
5:00:32 PM
CO-CHAIR MILLETT asked Mr. McKay to send his concerns in
writing.
5:01:13 PM
MARILYN LELAND, Executive Director, Alaska Power Association
(APA), informed the committee her organization is the statewide
trade association representing electric utilities that supply
power to 500,000 Alaskans. Ms. Leland provided a history of net
metering regulation in Alaska from 2006. She stated that her
organization believes that the RCA process that is now completed
was a success. Public participation in the workshops and
opportunities for public testimony were well attended; in fact,
during the workshops RCA staff, utility representatives, and
members of the public came to agreements that "all who
participated could live with."
5:03:40 PM
CO-CHAIR MILLETT asked whether APA supports this legislation.
MS. LELAND responded that the bill and amendment have not gone
to the membership; however, APA issued a resolution that
supported leaving net metering to the RCA regulatory process.
5:04:37 PM
DEAN THOMPSON, Attorney, Alaska Power Association (APA), began
his testimony by saying that APA actively participated in the
RCA process and does not oppose the substance of the
regulations; however, APA has administrative concerns about
codifying RCA regulations in statute. The main concern is that
it may create inconsistencies between statute and regulation.
The regulations adopted by the RCA are not legally effective or
final, and will not be until reviewed by the Department of Law
(DOL) and certified by the lieutenant governor. Furthermore,
the review could result in substantive changes that require the
RCA to re-notice the regulations. In either case, codifying the
most recent RCA regulations in statute may create
inconsistencies. Secondly, the risk increases if the DOL
suggests changes to the regulations. Mr. Thompson warned that
those are the problems that could result in codifying
regulations that are not yet final. Regarding the waiver
language in Section 1, subsection (b) of Amendment 1, he pointed
out that the standard for the waiver is that "no legitimate
public interest would be served by enforcing the requirement."
He opined the commission is given some flexibility, but not
complete flexibility or discretion.
5:09:26 PM
MR. THOMPSON assured the committee that APA worked hard with the
RCA and other stakeholders on the regulatory process and,
although members are not completely pleased with the
regulations, they determined the regulations were good enough
and worked well enough for everyone to move ahead. He commended
the parties in this regard.
5:10:45 PM
CO-CHAIR MILLETT ascertained that no one else wished to testify,
but left public testimony open for further comments. HB 31 was
held in committee.
5:11:06 PM
CO-CHAIR EDGMON recognized three students from Dillingham High
School who were attending the hearing: Tiana Peterson, Billy
Noonkesser, Kelly Evans, and their teacher, Peter Johnson.
5:11:33 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 5:11 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 31 sectional summary.PDF |
HENE 3/24/2009 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 31 |
| HB0031A.pdf |
HENE 2/23/2010 3:00:00 PM |
HB 31 |
| HB 31 Amendment Sectional Summary.PDF |
HENE 2/16/2010 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 31 |
| HB 31 sponsor statement.PDF |
HENE 3/24/2009 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 31 |
| HB 31 net metering map.PDF |
HENE 3/24/2009 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 31 |
| HB 31 NHA Waterpower.PDF |
HENE 2/23/2010 3:00:00 PM |
HB 31 |
| HB 296 SEP bonds Sponsor Statement.pdf |
HENE 2/9/2010 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 296 |
| HB0296-1-1-011910-REV-N.pdf |
HENE 2/9/2010 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 296 |
| HB0296-2-1-011910-DOT-N.pdf |
HENE 2/9/2010 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 296 |
| HB 296 Amendment 1.PDF |
HENE 2/23/2010 3:00:00 PM |
HB 296 |
| AM#2 HB296.pdf |
HENE 2/9/2010 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 296 |
| HB0296A.pdf |
HENE 2/23/2010 3:00:00 PM |
HB 296 |
| HB 303 Sponsor Statement.PDF |
HENE 2/16/2010 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 303 |
| HB 303 Sectional Summary.PDF |
HENE 2/16/2010 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 303 |
| HB303-REV-AHFC-2-14-10 AFHC Small Business Energy Loans.pdf |
HENE 2/16/2010 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 303 |
| HB0303A.pdf |
HENE 2/16/2010 3:00:00 PM HENE 2/23/2010 3:00:00 PM |
HB 303 |
| HJR045A.pdf |
HENE 2/23/2010 3:00:00 PM |
|
| Gov Cap and Trade.pdf |
HENE 2/23/2010 3:00:00 PM |
|
| Energy Committee Agenda 02232010.pdf |
HENE 2/23/2010 3:00:00 PM |
|
| HB 303 NFIB Support.pdf |
HENE 2/23/2010 3:00:00 PM |
HB 303 |
| HB 303 Amendment 1 Petersen.PDF |
HENE 2/23/2010 3:00:00 PM |
HB 303 |
| HJR 45 fiscal note.pdf |
HENE 2/23/2010 3:00:00 PM |