Legislature(2011 - 2012)BARNES 124
03/22/2012 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Polarconsult - Hvdc Transmission | |
| HB323 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 323 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
March 22, 2012
3:08 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Lance Pruitt, Co-Chair
Representative Bob Lynn
Representative Dan Saddler
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
Representative Kurt Olson
COMMITTEE CALENDAR
PRESENTATION: POLARCONSULT - HVDC TRANSMISSION
- HEARD
HOUSE BILL NO. 323
"An Act relating to the Alaska energy efficient home grant fund;
and creating a grant program for converting homes in regions
designated as particulate matter nonattainment areas to
efficient home heating systems."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 323
SHORT TITLE: NONATTAIN AREA HOME HEATING SYSTEM GRANTS
SPONSOR(s): REPRESENTATIVE(s) T.WILSON
02/17/12 (H) READ THE FIRST TIME - REFERRALS
02/17/12 (H) ENE, FIN
03/06/12 (H) ENE AT 3:00 PM BARNES 124
03/06/12 (H) <Bill Hearing Postponed to 3/13/12>
03/13/12 (H) ENE AT 3:00 PM BARNES 124
03/13/12 (H) Heard & Held
03/13/12 (H) MINUTE(ENE)
03/22/12 (H) ENE AT 3:00 PM BARNES 124
WITNESS REGISTER
JOEL GROVES, P.E.
Civil Engineer
Polarconsult Alaska, Inc.
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "Low Power HVDC System for Rural Alaska Applications,"
dated 3/22/12.
REPRESENTATIVE TAMMIE WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as the sponsor, presented further
information on HB 323 and answered questions.
JOHN ANDERSON, Program Officer
Weatherization
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
323.
ROSIE RICKETTS, Program Manager
Home Energy Rebate Program
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered a question during the hearing on
HB 323.
ACTION NARRATIVE
3:08:09 PM
CO-CHAIR LANCE PRUITT called the House Special Committee on
Energy meeting to order at 3:08 p.m. Representatives Pruitt,
Petersen, Saddler, and Tuck were present at the call to order.
Representatives Lynn and Foster arrived as the meeting was in
progress.
^PRESENTATION: POLARCONSULT - HVDC TRANSMISSION
PRESENTATION: POLARCONSULT - HVDC TRANSMISSION
3:08:49 PM
CO-CHAIR PRUITT announced that the first order of business would
be a presentation by Polarconsult Alaska, Inc. ("polarconsult"),
on high-voltage direct current (HVDC) electrical transmission.
3:08:58 PM
JOEL GROVES, P.E., Civil Engineer, polarconsult, informed the
committee he is the project manager for a research and
development program to develop a low-power, HVDC transmission
system for rural Alaska applications. Mr. Groves gave brief
background information on polarconsult, saying his company is an
Anchorage-based engineering consulting firm that has been in
business since 1978 and has served over 200 municipal, private,
and public sector clients statewide. Polarconsult specializes
in affordable engineering and energy solutions for rural Alaska
including all phases of the design, construction, and operation
of small hydroelectric projects. He provided a brief history
of HVDC. The first commercial power station in the world was a
direct current generating and transmission system, however, in
the 1880s, direct current was not a commercially viable
technology, and alternating current became the system used to
transmit electricity. In the 1950s, HVDC was used commercially
in Europe, and today there are about 30 HVDC converter stations
throughout North America, and over 100 in service worldwide.
Mr. Groves advised that HVDC is a proven and affordable
technology in its niche market, which is typically as a
transmission system that can move a lot of power over long
distances.
3:12:48 PM
CO-CHAIR PRUITT observed many of the existing HVDC transmission
lines are underwater.
MR. GROVES said HVDC is well-suited to long-distance submarine
cable applications.
REPRESENTATIVE PETERSEN asked how much power is lost when
converting HVDC power back to alternating current (AC) after
long distance transmission.
MR. GROVES responded that the loss associated with power
converters is estimated to be 1 percent to 2 percent for a very
large converter station. On small scale converters, there is a
3 percent to 4 percent per terminal loss, which must be factored
into the overall economics of the power intertie.
3:14:29 PM
REPRESENTATIVE TUCK asked whether there is also line loss
associated with direct current (DC) power.
MR. GROVES said yes; however, the line loss is typically lower
than with an AC line. One of the reasons DC is well-suited for
rural Alaska applications is by the use of a single-wire, earth-
return circuit, which has an insulated cable or overhead line
operating at high voltage, and the electrical circuit is
completed through ground electrodes. This type of circuit is
more efficient than a two-wire circuit because the net
resistance of the ground is less than that of the second wire.
Mr. Groves, in further response to Representative Tuck, said
there is no concern with phases because it is a completely
asynchronous intertie.
REPRESENTATIVE TUCK observed most power generation is AC. He
asked if DC is used just for main transmission, or for
distribution as well.
MR. GROVES advised that all DC applications are transmission.
The majority of existing commercial DC applications are point-
to-point power transmission, although there is currently
industry research into multi-terminal DC networks.
REPRESENTATIVE TUCK then asked how large a facility is needed
for power conversion from 50 kilovolts down to "distribution."
3:17:36 PM
MR. GROVES said a one megawatt power converter will fit inside a
12 foot x 20 foot enclosure. Returning to the presentation, he
stated existing HVDC applications are for the large scale
transfer of large amounts of power over long distances. In
fact, the commercial range of existing HVDC converters goes from
about 50 megawatts (MW) to 5,000 MW; in comparison, the peak
load in the Railbelt is about 800 MW. One example of a HVDC
application is the system from Three Gorges Dam, which is the
world's largest hydroelectric facility and which moves thousands
of MW of power hundreds of miles to China's coastal cities. In
the U.S., there is the Pacific DC Intertie, which is a 3,100 MW
intertie between the Columbia River and Southern California. In
rural Alaska, however, loads are between hundreds of kilowatts
(kW) and tens of MW, and existing commercial DC technologies are
too large to be economic. Mr. Groves said, "That's where this
project comes in, is where developing a much smaller - what we
call a low-power one MW - DC technology to try and capitalize on
a lot of the benefits of HVDC and bring those benefits to rural
Alaska markets and energy needs."
MR. GROVES pointed out that an HVDC intertie would cost less per
mile than an AC line in rural Alaska, because an AC intertie
requires three or four wires, and a DC earth-return circuit only
needs a single or two-wire line. Fewer overhead wires require
fewer structures, saving 20 percent to 30 percent on the cost of
the power line. Furthermore, construction standards for
overhead lines and support poles were developed in the Midwest,
and do not work very well in rural Alaska because of shipping
costs and geotechnical conditions such as permafrost and frozen
slump. Steel piles must often be used to support power poles,
also adding expense. Thus, the higher costs of the technical
requirements of a DC intertie can become economic, because the
installation cost is cut in half. Other benefits are the use of
long-distance submarine cables and the use of fewer overhead
wires, which is a benefit to migratory birds. Furthermore, HVDC
systems have lower line losses and an asynchronous connection
for the transfer of power. Some of the disadvantages of HVDC
are: the converter stations are more expensive than AC
transformers by a factor of ten; HVDC is strictly for
transmission; converters have higher power losses than AC
transformers; and HVDC one MW technology is a developing
technology that lacks a performance record, has limited
suppliers, and garners reluctance on the part of the utilities.
3:25:21 PM
MR. GROVES displayed slide 5, entitled, "Rural Alaska HVDC
Economics (Cap. Cost)," that indicated generic cost estimates
applicable to a challenging setting in the Bush for the
construction of an AC intertie, a HVDC intertie of standard
Rural Utilities Service (RUS), U.S. Department of Agriculture
(USDA) construction, and a HVDC intertie of Alaska-specific
design. The breakeven point for the overhead HVDC interties was
between six and twenty-two miles. He advised that interties of
lengths shorter than that are not good candidates for HVDC, but
longer interties can be built with greater savings. Slide 6,
entitled, "Rural Alaska HVDC Economics (Life Cycle)," indicated
life cycle costs, taking into consideration that HVDC power
converters have higher line losses and are very sophisticated,
thus have higher operation and maintenance (O&M) and repair
costs. Mr. Groves said on a life cycle basis, the breakeven
point moves out between twelve and thirty-one miles.
3:28:32 PM
REPRESENTATIVE SADDLER asked why Alaska-specific construction is
less costly.
MR. GROVES explained that Alaska-specific design allows for
greater distances between poles, and the use of lighter poles,
guy-wires, and unique foundations.
MR. GROVES displayed slide 7, entitled "Comparative Economics
Low-Power HVDC vs. AC Interties," that indicated 30 percent
savings over the cost of an AC intertie on a 25-mile, one MW
overhead HVDC intertie, and 40 percent savings on a 60-mile, one
MW overhead HVDC intertie. Furthermore, case studies have
revealed 50 percent savings over the cost of an AC intertie on a
25-mile, two MW submarine HVDC intertie, and 30 percent savings
on a 60-mile, five MW overhead HVDC intertie. He said this
technology has profound cost savings for rural Alaska interties.
3:33:49 PM
REPRESENTATIVE TUCK asked for a comparison of the insulation
qualities of AC and DC cable.
MR. GROVES explained that the nominal voltage of a DC line is
its stated voltage, so a 50 kV DC line must be insulated
approximately to the equivalent of a 34.5 kV AC line. In
further response to Representative Tuck, he said the equivalent
is about 40 percent less. There is an issue on overhead
applications with exposed insulators, because a DC conductor has
a static electric field that attracts contamination by dust and
salt spray. Again to Representative Tuck, he said he was unsure
whether birds land on a DC line, and offered to find out.
3:35:19 PM
MR. GROVES turned attention to a case study of a submarine cable
from Green's Creek Mine to Hoonah. The estimated cost for a
five MW DC cable and two MW power converters to serve Hoonah's
existing load - with room for growth - was approximately $23
million, which is about one-half of the cost of an AC cable. In
response to Co-Chair Pruitt, he said the project was discussed
to a limited extent with the general manager of Hoonah's
utility, Inside Passage Electric Cooperative (IPEC), however,
polarconsult conducted the analysis as an independent conceptual
cost estimate of pre-commercial technology in order to determine
if the continued development of this technology is justified.
He said the results of the case study are "significant, to say
the least." Another site-specific conceptual case study was on
a line from the known geothermal resource at Pilgrim Hot Springs
to Nome. If there were an economically feasible five MW
resource developed at Pilgrim Hot Springs, a conventional AC
overhead intertie to transmit the power to the market in Nome
would cost about $37 million. A bi-polar overhead HVDC system
would cost about $26 million, which is approximately a 30
percent savings. At this time there is no estimate on the cost
of developing the geothermal plant, so there is no overall
economic analysis of the power supply, and this is simply a
comparison of the power intertie. Returning to the Hoonah
system, he said if IPEC could buy electricity at six cents per
kilowatt hour from Alaska Electric Light and Power (AEL&P), and
displace diesel-generated power, the estimated cost-benefit
ratio for the Hoonah project is approximately 0.6, and with an
increased load the cost-benefit ratio would approach 1.
3:41:22 PM
MR. GROVES continued to discuss how less expensive interties
help rural Alaska. For example, interconnecting power between
villages would create the economies of scale that are necessary
to reduce energy costs. In addition, interties allow for the
consolidation of bulk fuel storage and the elimination of
duplicate power plants. Larger plants serving larger loads
through mini-grids would result in more efficient diesel
generation, and combined loads allow for the cost-effective
development of local energy resources. He described the
possible cost savings from building larger hydroelectric
resources because the cost of permitting is the same, and
design, transmission, and access costs are similar, but the
larger load will serve two to three villages instead of one.
REPRESENTATIVE SADDLER observed that polarconsult estimated AC
interties cost $400,000 per mile to construct.
MR. GROVES said yes, this data was compiled from rural power
lines that have been built in the last 10 years. Although not
precise, those costs ranged from $200,000 to $600,000 per mile
to build. In further response to Representative Saddler, he
said the costs are high because of logistics and transportation
problems that arise from working in permafrost and tundra
regions where heavy equipment to build the line can only be used
in the winter, but the equipment has to be barged up the summer
before. So, expensive equipment is mobilized for one full year
in order to complete a two-month construction project. Also,
the cost of shipping is high.
3:44:15 PM
MR. GROVES displayed slide 11, "Where do Economies of Scale
Begin?," explaining that this is an analysis of the power cost
equalization (PCE) database. Participating villages were
organized by their amount of annual generation, with annual
demand for 2007, 2008, and 2009, identified on the graph. He
pointed out the graph shows that very small villages have
extremely expensive electricity, and about 70 percent of the
villages that participate in PCE generate between 40 kilowatts
(kW) and 300 kW annually, and as the amount of generation
increased, the residential price lowers by about 10 cents. In
the section of the graph showing the largest communities - those
that generate over 300 kW - there are no extreme high prices.
He concluded that moving villages into "half a megawatt, one
megawatt, two megawatt class[es], that's where you can expect to
see some significant economies of scale."
3:49:14 PM
REPRESENTATIVE SADDLER surmised linking communities will lead to
cost savings.
REPRESENTATIVE TUCK noted some villages have been able to lower
their costs over the three reported years.
MR. GROVES advised the point of slide 11 is to look for general
statewide trends.
There was discussion on the vagaries of the chart.
CO-CHAIR PRUITT pointed out the trend indicated was that costs
in communities are going up.
3:52:02 PM
MR. GROVES acknowledged that some of the increases in costs in
2009 were a reflection of the increase in the global price of
oil. Also, in some small villages, utilities have "postage
stamp rates" which can skew the data, as can poor reporting. He
returned attention to the HVDC project overview: Develop a low-
power HVDC transmission system suitable for use in rural Alaska
applications. From 2005 to 2007, polarconsult conducted an
internal technology review to determine whether this type of
technology could be developed and - in 2007 - received funding
from the Denali Commission to pursue preliminary design and
feasibility analysis. This phase of the project was managed by
Alaska Village Electric Cooperative Inc. (AVEC), and consisted
of working with Princeton Power Systems Inc., to develop a
prototype of the converter. From 2009 to 2011, Phase 11
prototyping and testing were funded by the Denali Commission and
managed by the Alaska Center for Energy and Power (ACEP),
University of Alaska Fairbanks (UAF). Phase 11 consisted of the
successful construction, specification, testing, and design of a
full-scale one MW prototype converter with two 500 kW modules.
This phase proved the efficiency, functionality, and cost of the
unit. On the intertie side, polarconsult found innovative
overhead system designs and has determined that the system is
technically viable, economically robust, and promises profound
savings for rural Alaska interties. Therefore, polarconsult has
applied for a grant from the Denali Commission emerging energy
technology grant (EETG) program for Phase 111 of the project,
which will consist of additional development on the converters,
the definition of technical compliance standards, and safety
testing. The converters will then be tested at ACEP in
Fairbanks and following that, will be operated as a DC link on a
utility system to prove the units under Alaska conditions.
Sometime between 2015 and 2016, the technology will be mature,
validated, and ready for commercial deployment.
3:59:20 PM
REPRESENTATIVE TUCK asked where the prototype was manufactured.
MR. GROVES said the hardware is in Princeton, New Jersey. In
further response to Representative Tuck, he said the prototype
is solid-state power electronics and the overall efficiency of
the prototype converter is 96 percent to 97 percent, thus the 3
percent to 4 percent loss is heat that must be dissipated. To
accomplish this, the 500 kW converter is housed in a low-voltage
cabinet that is air-cooled, and in a high-voltage transformer
tank that is cooled by passive convection.
4:01:43 PM
MR. GROVES further explained the one MW system consists of two
500 kW powertrains operating in parallel, and two low-voltage
cabinets so, if there is a single point of failure, one unit
will continue to transmit up to 500 kW of power over the
intertie. If needed, repairs are not made on site, but bad
units can be unplugged, airlifted out, and replaced.
4:04:06 PM
CO-CHAIR FOSTER asked what size village would be served by a one
MW converter.
MR. GROVES said he was unsure, however, the peak load in Nome is
10 MW and the average load is 2 MW to 4 MW.
CO-CHAIR FOSTER advised that the population of Nome is 3,500
people and the average load is 3.5 MW.
MR. GROVES said a one MW converter system will serve 70 percent
to 80 percent of all of the villages in the state. In fact, a
500 kW system will serve about 50 percent of the villages in the
state.
REPRESENTATIVE TUCK asked whether the DC converter can also
convert DC to AC.
MR. GROVES said this is a bidirectional system and the same
equipment functions on either end of the system. The power flow
on an intertie can be automatically or manually reversed. He
displayed several slides showing the prototype unit.
4:10:54 PM
REPRESENTATIVE SADDLER asked for the life cycle of the system
compared to that of AC lines.
MR. GROVES said the power electronics are designed for 50 years
- which is comparable to an electrical intertie - with routine
preventative maintenance. The control interface is expected to
be replaced in five years, circuit boards are good for twenty-
five years, and basic hardware has a fifty-year life.
MR. GROVES displayed slide 19 that was a photograph of the
installation of micro-thermopiles at a foundation test site in
Fairbanks. The micro-thermopiles are 1.5 inch in diameter and
25 feet long, and are a smaller version of those used on the
overhead portions of the Trans-Alaska Pipeline System (TAPS),
which freeze the ground and keep the foundation stronger in
permafrost areas during summer. In response to Representative
Saddler, he confirmed that the micro-thermopiles are thermal and
structural, because they have a guy-wire structure. Slide 21
was a photograph of the first fiberglass power pole installed in
Alaska. It was also the first spliced pole; spliced pole
technology will allow for the use of taller poles shipped in
sections of standard 40-foot and 20-foot lengths.
4:17:21 PM
REPRESENTATIVE TUCK asked whether the thermopiles are drilled in
the ground.
MR. GROVES explained a hole was drilled and backfilled with a
sand and water slurry. At some point it may be possible to
airlift all the equipment to the job site, which would allow for
summer installation and save money. In further response to
Representative Tuck, he described several methods to utilize
poles depending on the type of circuit installed.
4:23:08 PM
MR. GROVES closed, saying polarconsult formed a Phase 11
stakeholders advisory group comprised of electric utilities and
entities associated with the electric industry from across the
state. Furthermore, some of the key team members on the project
were experts from international, national, and local sources.
CO-CHAIR PRUITT asked whether the utilities are ready to accept
this technology.
MR. GROVES advised that AVEC is supportive of the technology,
but conservative in its implementation.
4:27:29 PM
The committee took an at-ease from 4:27 p.m. to 4:29 p.m.
HB 323-NONATTAIN AREA HOME HEATING SYSTEM GRANTS
4:29:27 PM
CO-CHAIR PRUITT announced that the next order of business would
be HOUSE BILL NO. 323, "An Act relating to the Alaska energy
efficient home grant fund; and creating a grant program for
converting homes in regions designated as particulate matter
nonattainment areas to efficient home heating systems."
4:29:39 PM
REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, informed
the committee Fairbanks North Star Borough (FNSB) contains the
only U.S. Environmental Protection Agency (EPA) particulate
matter (PM-2.5) nonattainment area in the state, since Juneau
avoided this status by banning the burning of wood on certain
days. She provided a map of the Fairbanks area that outlined
the boundary of the nonattainment area - where the majority of
people in the borough live - noting that Eielson Air Force Base
is out of the area, but Fort Wainwright Army Base is within the
area. Representative T. Wilson then responded to questions
raised at a previous hearing, saying that other states have
received EPA grants; in fact, Libby, Montana is a nonattainment
area that received an EPA grant for a change-out program to
convert wood stoves. Spokane, Washington has a state-funded
program to convert non-EPA certified wood stoves. To answer the
question as to whether an energy rater may be liable if his or
her estimate was lower than the final cost of the conversion,
she said someone can always be sued. The purpose of the program
is to bring an energy rater in, not only to look at the oil-
fired furnace and non-EPA certified wood stove, but also to
discuss issues specific to the home such as the proper size of
the wood stove or oil furnace. The rater will also identify
other problems such as gaps in windows, insulation, and
inefficient light bulbs, in a similar way to the Golden Valley
Electric Association (GVEA) program. Representative T. Wilson
stressed that this program is specifically designed to help
those in the middle class who cannot qualify for, or have not
participated in, the Alaska Housing Finance Corporation (AHFC),
Department of Revenue (DOR), weatherization or energy rebate
programs.
4:33:29 PM
REPRESENTATIVE TUCK understood that for a rebate program the
homeowner pays for the work up-front and gets reimbursed after
an inspection. He asked whether HB 323 provides for the vendor
to perform the work and then turn in vouchers to AHFC for
payment, up to $10,000.
4:34:09 PM
REPRESENTATIVE T. WILSON said correct. The intent of the bill
is to help those without the up-front cash. She expressed her
belief that the air quality in FNSB will improve, but EPA has
forced this issue to be resolved by 2014. On 3/15/12, control
measures for the nonattainment area were issued for public
comment, and FNSB must submit a state implementation plan (SIP).
The control package includes the expansion of existing programs
which are: the use of dry wood, wood stove change-outs, AHFC
programs, and outdoor boiler retrofits. These programs are
helping reduce emissions, but FNSB will not meet its goal
without the change-out program or something similar "to help us
out a little further." Most worrisome is that on high
particulate matter days - that are also low-temperature days -
wood burning would be banned in the borough.
4:37:04 PM
REPRESENTATIVE SADDLER asked for an explanation of the emission
standards.
REPRESENTATIVE T. WILSON explained the relevant issue is that
the wood stove change-out control program has reduced
particulate matter 2.1 percent thus far. In further response to
Representative Saddler, she acknowledged there was an increase
in sulfur dioxide of 0.96 percent, which illustrated her
frustration that taking care of one problem may increase another
problem. Again to Representative Saddler, she said the control
measures have reduced emissions by a cumulative total of 22.04
percent, which is a reduction of between 6.8 and 8.7 in
micrograms per cubic meter. The goal is for a reduction of 11
micrograms per cubic meter.
REPRESENTATIVE T. WILSON continued, saying the 2/9/12 draft
proposed rules are out for public hearings, demonstrating that
FNSB is going down the right road by educating residents on
proper burning procedures. In addition, EPA will tighten
emission standards on new wood stoves, wood pellet stoves,
hydronic heaters, new camp stoves, and new cook stoves.
Representative T. Wilson concluded that HB 323 was drafted to
address nonattainment areas because other statewide programs may
not help FNSB residents, and because these expensive upgrades
may only be in effect for five or six years until gas is
available.
4:42:30 PM
CO-CHAIR PRUITT acknowledged that it is unknown as to the future
of power generation in the Interior due to changes in state
policy. He asked, "What would be expected [in five years] by
the ... people of Fairbanks, where would they be?"
REPRESENTATIVE T. WILSON related that EPA has set a number
without providing modeling or guidelines for attainment. The
Department of Environmental Conservation (DEC) and FNSB are
trying to figure out what is needed to reach that number. She
said there are no guarantees that the control measures will be
sufficient to comply with EPA standards. Representative T.
Wilson opined the best solution is for the state to ask EPA to
wait for gas to come to the downtown area of Fairbanks, but that
is not the administration's chosen option, due to the importance
of federal transportation funding to the northern region. In
response to Representative Saddler, she explained that if
compliance is not met, EPA can recall millions of dollars of
transportation funding. Therefore, FNSB must show a good faith
effort, averaged over 2012, 2013, and 2014.
4:46:37 PM
REPRESENTATIVE SADDLER asked why EPA is resistant to providing
funding for compliance, as it has in other states.
REPRESENTATIVE T. WILSON said the money for that program is
gone.
CO-CHAIR PRUITT, returning attention to facets of the bill,
asked why it was written to allow for grants, instead of loans,
for portions of homeowners' costs.
REPRESENTATIVE T. WILSON said the intent was to follow the
guidelines of the rebate program, and to focus on replacing the
appliance that would make the most difference.
REPRESENTATIVE PETERSEN asked whether residents have been
encouraged to buy propane heating devices, which are more easily
converted to natural gas.
REPRESENTATIVE T. WILSON observed propane costs more than oil.
CO-CHAIR PRUITT asked what impact Fort Wainwright Army Base has
on the situation.
4:49:10 PM
REPRESENTATIVE T. WILSON advised that all projects and
expansions in Fairbanks now require special permitting to verify
that construction and such would not negatively impact air
quality. In response to Co-Chair Pruitt, she said the borough
changed from number two heating fuel to number one heating fuel,
but there was no substantial change in air quality. Within the
city, there is district heat, gas, wood fuel, and oil fuel.
Because of inversion, pollution from the power plants and
commercial buildings is higher in the clouds. Residential wood
smoke from shorter chimneys is lower and is more often
registered by the EPA monitors. In addition, as more certified
wood stoves are being used, on very cold days wood smoke levels
stay high. She compared the problem to that of air pollution
which was improved by auto emission controls. Fairbanks is a
bowl with very little wind, and the pollution settles on the
town.
REPRESENTATIVE PETERSEN recalled other legislation for the home
energy rebate program that tried to create a voucher system but
the contractors would have to wait 45 days to 60 days to get
reimbursed. He asked whether the bill would have similar
problems.
REPRESENTATIVE T. WILSON this is a simpler program - one item,
the appliance - one check. If vendors say no, no money will be
spent.
4:56:34 PM
JOHN ANDERSON, Program Officer, Weatherization, AHFC, advised
that the previous voucher idea created an unmanageable process
due to the volume of suppliers in the state, however, because
this program addresses specific mechanical appliances, it would
be more manageable.
REPRESENTATIVE SADDLER asked for the balance of the home energy
efficiency grant fund.
4:57:35 PM
ROSIE RICKETTS, Program Manager, Home Energy Rebate Program,
AHFC, said the balance is approximately $64 million.
REPRESENTATIVE SADDLER asked what the cost would be to provide
$10,000 grants for enough new stoves to reduce pollution
sufficiently so that Fairbanks can reach attainment.
MR. ANDERSON estimated 10,000 units at $10,000 each would be
equivalent to $100 million.
REPRESENTATIVE T. WILSON pointed out the program would only have
whatever funding is allocated by the legislature. Furthermore,
the grants are for an amount up to $10,000, and most wood stoves
cost much less than that, ranging in price from $2,500 to
$3,500. In fact, only oil furnaces older than 1990 would
qualify for a replacement cost of $10,000. She stressed that
the program would be "first come, first served," and urged for
the initial funding of the program to be $1 million. In further
response to Representative Saddler, she said it is hard to know
what investment would be necessary to reduce emissions to reach
the standard, because the modeling is not done, but more
information should be available from DEC by this summer.
REPRESENTATIVE PETERSEN questioned whether $1 million allocated
to replace 100 stoves would result in enough of a reduction to
attain the goal of the bill.
REPRESENTATIVE T. WILSON said the number of old oil furnaces in
use is unknown, and replacing them may cost $10,000 each.
However, replacing wood stoves will cost from $3,000 to $3,500
each because the grant will only replace the appliance and not
the chimney and other parts.
5:02:20 PM
REPRESENTATIVE SADDLER was interested in a way for the state to
recover some of the cost, perhaps by a lien that is paid when
the home is sold.
REPRESENTATIVE T. WILSON pointed out that the weatherization
program to upgrade homes does not require repayment, nor does
the rebate program. The benefit to the state is that it will
not lose its federal transportation funding. She acknowledged
there are other programs, but oil furnaces have not been
addressed. Fairbanks tests the air every day and will know if
the program is working in a specific area, and the test results
are provided to EPA. The program is limited by close parameters
in order to target the dirtiest sources of pollution. Although
the income qualifications for other assistance programs seem
high, the average cost of heat and electricity in the Interior
is from $700 to $1,000, and many residents don't have the extra
cash for improvements because of the cost of energy.
5:05:40 PM
CO-CHAIR FOSTER agreed with funding the program for $1 million
the first year. He suggested there should be a priority for the
dirtiest appliances.
REPRESENTATIVE TUCK clarified that the intent of the previous
voucher energy rebate program was to pay the homeowner, not
individual vendors, which was objected to by AHFC.
5:07:03 PM
CO-CHAIR PRUITT held over HB 323.
5:07:22 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 5:07 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| A - Presentation Polar Consult Inc. HVDC.pdf |
HENE 3/22/2012 3:00:00 PM |
Polar Consult Inc HVDC Presentation |
| B- HB 323 Presentation.pdf |
HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 1 HB 323 version M).pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 2 HB 323 sponsor statement.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 3 HB 323 - Fiscal Note AHFC.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 4HB 323-DOR-AHFC-03-01-12.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 5 HB 323 - State Implementation Plan (SIP).pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 6 HB 323 standards.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 7 HB 323 - EPA Wood Stove Certification.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 8 HB 323 annual savings.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 9 HB 323 Supporting Map.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 10 HB 323 - Support Letter Fairbanks.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 11 HB 323 - Air Quality Highway Sanctions.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 12 HB 323 - Support Letter FNSB.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |
| 13 HB 323 - Support Letter North Pole.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |