Legislature(2011 - 2012)BARNES 124
03/27/2012 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB336 | |
| HB323 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 336 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 323 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
March 27, 2012
3:08 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Lance Pruitt, Co-Chair
Representative Bob Lynn
Representative Kurt Olson
Representative Dan Saddler
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 336
"An Act establishing an energy assistance program in the
Department of Revenue to issue an energy voucher to Alaska
permanent fund dividend recipients; and relating to the analysis
and recommendation of an energy assistance program by the
governor."
- HEARD & HELD
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 336
SHORT TITLE: ENERGY ASSISTANCE PROGRAM & VOUCHERS
SPONSOR(s): REPRESENTATIVE(s) THOMPSON
02/22/12 (H) READ THE FIRST TIME - REFERRALS
02/22/12 (H) ENE, L&C, 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)
03/27/12 (H) ENE AT 3:00 PM BARNES 124
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
03/22/12 (H) Heard & Held
03/22/12 (H) MINUTE(ENE)
03/27/12 (H) ENE AT 3:00 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE STEVE THOMPSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as the prime sponsor, explained
one of the differences between the proposed committee substitute
(CS) for HB 336 and the original bill.
TOM STUDLER, Staff
Representative Steve Thompson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Representative Steve Thompson,
prime sponsor, described the changes to HB 336 made by the
committee substitute.
JOHN ANDERSON, Project Officer
Weatherization
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearings on
HB 336 and HB 323.
STACY SCHUBERT, Director
Governmental Relations & Public Affairs
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearings on
HB 336 and HB 323.
MARIE DARLIN, Representative
AARP
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 336.
ANDRIA AGLI, Manager
Shareholder & Corporate Relations
Bristol Bay Native Corporation (BBNC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 336.
CHRIS STORHOK, Specialist
Economic Development Division and Alaska Regional Development
Organization (ARDOR)
Fairbanks North Star Borough (FNSB)
Fairbanks, Alaska
POSITION STATEMENT: Speaking on behalf of the Fairbanks North
Star Borough mayor's office and himself, testified in support of
HB 336.
JOY HUNTINGTON, Legislative Liaison
Tanana Chiefs Conference (TCC)
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 336.
WALTER ROSE, Energy Specialist
Kawerak, Inc. ("Kawerak")
Nome, Alaska
POSITION STATEMENT: Testified in support of HB 336.
JOMO STEWART, Program Manager
Fairbanks Economic Development Corporation (FEDC)
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 336.
REPRESENTATIVE TAMMIE WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as the sponsor, explained the
changes between the proposed CS to HB 323 and the original bill,
and answered questions.
ACTION NARRATIVE
3:08:19 PM
CO-CHAIR NEAL FOSTER called the House Special Committee on
Energy meeting to order at 3:08 p.m. Representatives Foster,
Pruitt, Saddler, Olson, Tuck, and Petersen were present at the
call to order. Representative Lynn arrived as the meeting was
in progress.
HB 336-ENERGY ASSISTANCE PROGRAM & VOUCHERS
3:09:04 PM
CO-CHAIR FOSTER announced that the first order of business would
be HOUSE BILL NO. 336, "An Act establishing an energy assistance
program in the Department of Revenue to issue an energy voucher
to Alaska permanent fund dividend recipients; and relating to
the analysis and recommendation of an energy assistance program
by the governor."
3:09:12 PM
REPRESENTATIVE SADDLER moved to adopt the proposed committee
substitute (CS) for HB 336, Version 27-LS1403\I, Nauman,
3/26/12, as the working document.
3:09:24 PM
REPRESENTATIVE SADDLER objected for the purpose of discussion.
3:09:36 PM
REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, gave a
short history of the origins of the bill, explaining that in the
Interior, rural areas of Alaska, and Fairbanks, the costs of
home heating and electricity are higher than house payments.
This situation is unsustainable and residents have been forced
to move away. Representative Thompson said the bill authorizes
a voucher that can be used for 250 gallons of fuel oil or for
1,600 kilowatts (kW) of electrical power. The proposed CS adds
to the bill a qualification that a recipient must be eligible
for the 2012 permanent fund dividend (PFD) in order to qualify
for a voucher. He then compared the cost of energy in Fairbanks
with that of other areas of the state: residents along the
northern coast and in Barrow have access to natural gas for
$0.08 to $0.10 per kW hour; residents in Southeast have
hydroelectric power; in Fairbanks, residents pay over $0.23
cents per kW hour and $4.15 per gallon for fuel oil.
Representative Thompson said, "People are just not able to
survive with that kind of billing." In rural areas, electricity
can be as high as $0.50 cents per kilowatt hour and fuel oil is
higher also, causing an exodus from villages to Anchorage. He
pointed out that there is cheap energy "up north," in Southeast,
in the Cook Inlet-Kenai area, and in the Matanuska-Susitna (Mat-
Su) region and concluded that Fairbanks needs help now.
Although Fairbanks would prefer a large project to provide
sustainable energy into the long-range future, the voucher will
show that the state is concerned, and this relief is welcome in
the interim. Furthermore, the bill requires that after this
year the administration will decide what to do in the next few
years so that the remote areas of the state can survive,
especially in areas that do not qualify for power cost
equalization (PCE).
3:15:38 PM
TOM STUDLER, staff to Representative Steve Thompson, Alaska
State Legislature, said the proposed CS retains all of the major
elements of the original bill while incorporating changes that
will ease the administration of the energy voucher program for
fuel distributors and state agencies. He described the
procedure followed by a fuel distributor to redeem the energy
voucher and to determine the amount of the state payment. This
procedure prevents manipulation of the retail price of energy,
makes the cost of the program more predictable, reduces the
administrative challenges, allows the credit to be used to pay
debts to the distributors, assists the distributors with cash
flow, and encourages energy conservation. Mr. Studler explained
section 1 of the bill directs that the state send a voucher to
every adult PFD recipient - in the fall of 2012 - which can be
redeemed at a fuel distributor or utility for the value of 250
gallons of heating oil, 350 hundreds of cubic feet (CCF) of
natural gas, or 1,500 kW hours of electricity. The recipient
decides how to use the voucher and gives it to the distributor
of their choice. The distributor then sends the voucher to the
state with claims for payment. Upon receipt of the voucher and
claim, the state sends the payment to the distributor to be
credited to the voucher recipient's account. The amount of the
state payment will be calculated by multiplying the quantity of
fuel provided by the voucher, by the distributor's retail price
for that type of energy on a specific date in 2012. The credit
can be used only for energy at the recipient's primary residence
in Alaska and is not transferrable or payable in cash, although
it can be used to pay a debt to the distributor. Distributors
can decide whether to deliver fuel immediately after they
receive a voucher, or wait until they receive payment from the
state. The credit remains in the account until it is spent on
energy delivered to the recipient's home. If the account is
closed before all the credit is used, then the distributor sends
the balance back to the state. Vouchers may not be sold or
transferred, and require the signature of the recipient and the
distributor. Recipients may request a replacement voucher in
the name of their landlord or a check for $250. Individuals may
also qualify for a cash payment of $250 if they do not have a
qualified distributor in their community. Participation by
distributors is voluntary and the program will be administered
by the Alaska Housing and Finance Corporation (AHFC), Department
of Revenue (DOR). Section 2 of the bill provides that the
governor must hear public testimony, evaluate options, and make
a recommendation for the best energy relief program that can be
instituted in 2013 and beyond. Prior to 10/1/12, the governor
must analyze a fuel price reduction program, an individual
account program, and alternative options, and make a
recommendation to the legislature for an efficient and equitable
program. Section 3 of the bill provides that AHFC may adopt
emergency regulations and is exempt from procurement law for the
purposes of implementing the energy voucher program rapidly.
Section 4 of the bill provides for an immediate effective date.
Finally, Mr. Studler pointed out that the proposed CS designates
that AHFC - instead of DOR - administer the program.
3:21:22 PM
CO-CHAIR FOSTER recalled in Glennallen biomass and wood are used
for generating energy. He asked whether the program would
address how to provide for the equivalent cost for cords of wood
for heating.
MR. STUDLER responded that there is no way to address all of the
alternative sources of fuel on an equitable basis; however,
almost everyone uses electricity and residents who use wood or
biomass for heating could apply the voucher to electricity.
REPRESENTATIVE THOMPSON added that the administration for
suppliers of cordwood would be difficult, for instance, most
people gather their own wood and do not purchase it through a
distributor.
REPRESENTATIVE FOSTER suggested adjusting the $250 amount.
3:24:16 PM
REPRESENTATIVE SADDLER asked how to justify the fact that every
dividend recipient would get a voucher regardless of the rates
they pay for energy, or their means.
REPRESENTATIVE THOMPSON advised everyone should benefit equally
statewide. To ask for benefits for one community and not others
is a difficult problem. The difference is that 250 gallons of
heating oil may have a lesser value in another location in the
state, and each area will get a different amount for heating
oil, or for 1,500 kW per hour of electricity.
REPRESENTATIVE SADDLER surmised section 1 of the bill appears to
begin a PCE program for urban areas.
REPRESENTATIVE THOMPSON agreed "there could be a better answer
out there," but relief is needed for the next five years to keep
families in Fairbanks until a solution is found.
3:28:07 PM
CO-CHAIR PRUITT asked for explanations of a "fuel price
reduction program" and an "individual account program."
REPRESENTATIVE THOMPSON said the intent of section 2 of the bill
is that beginning in 2013, the governor and his staff will look
at programs that will reduce the cost of fuel oil by reducing
taxes or other options. There are many ideas that must be
researched besides "giving a check out" that could result in
meaningful relief.
3:31:06 PM
REPRESENTATIVE OLSON assumed there is a companion bill.
MR. STUDLER said SB 203 is a very similar bill.
3:31:46 PM
REPRESENTATIVE PETERSEN called attention to page 3, lines 30 and
31 of the bill, and asked whether the voucher would be viewed as
income by the Internal Revenue Service (IRS), U.S. Department of
the Treasury.
REPRESENTATIVE THOMPSON answered yes, and added that the value
of the voucher would be considered as revenue and income by
federal programs, and could affect recipients of federal aid.
REPRESENTATIVE TUCK asked how the state will verify if a balance
is left in a closed account, and whether AHFC would need to
verify that a voucher was not used in more than one location.
REPRESENTATIVE THOMPSON said each voucher would be numbered and
identified with a name. He added that AHFC will develop details
on the administration of the program. In further response to
Representative Tuck, he confirmed that two vouchers with
different names could be used on one account.
3:35:05 PM
REPRESENTATIVE PETERSEN asked whether members of one household
could use vouchers at different distributors.
REPRESENTATIVE THOMPSON indicated yes.
REPRESENTATIVE TUCK asked whether $250 may be more than an
Anchorage utility bill.
MR. STUDLER said he was unsure.
CO-CHAIR FOSTER restated his questions about the low value of
the voucher to those who heat with biomass, wood, and coal, and
about the pre-qualification of a distributor. Also, he asked
whether the Alaska Energy Authority (AEA), Department of
Commerce, Community & Economic Development, could provide AHFC
with the British thermal unit (Btu) equivalencies for biomass,
wood, and coal.
3:38:05 PM
JOHN ANDERSON, Project Officer, Weatherization, AHFC, said AHFC
can provide the Btu equivalencies for alternate energy sources.
Furthermore, AHFC intends to follow the Low Income Home Energy
Assistance Program (LIHEAP), Administration for Children &
Families, U.S. Department of Health and Human Services, process
for the administration of the program, which does accept wood
vendors.
CO-CHAIR PRUITT asked whether there would be "struggles"
administering vouchers that are issued in the names of tenants.
MR. ANDERSON estimated there are 100,000 renters and 6,000
landlords across the state. He said this could be a complicated
issue.
3:39:49 PM
STACY SCHUBERT, Director, Governmental Relations & Public
Affairs, AHFC, in response to Co-Chair Pruitt, said AHFC
currently does not have the means to implement this program.
With an appropriate legislative appropriation, administration of
the program could be "contracted out," and she was unable to
provide a specific cost at this time.
CO-CHAIR FOSTER asked whether adding wood, biomass, and coal to
the bill would create an issue for AHFC.
MR. ANDERSON opined adding additional energy sources complicate
the program, but it is not impossible to do so.
REPRESENTATIVE TUCK asked how to ensure that vouchers are not
sold or traded.
MR. ANDERSON observed there would have to be a random audit of
the distributors.
REPRESENTATIVE TUCK suggested the use of information from PFD
applications.
REPRESENTATIVE PETERSEN asked whether AHFC will get a list of
residents who have qualified for a PFD to determine who is
eligible for the program.
MS. SCHUBERT understood that the bill directs the Permanent Fund
Dividend Division, DOR to provide AHFC with a list for the
distribution of the vouchers.
3:43:14 PM
REPRESENTATIVE PETERSEN asked whether a landlord has a choice to
apply their voucher to their personal residence or to other
properties they own.
3:44:00 PM
MS. SCHUBERT advised that the bill provides for negotiations
between a landlord and a tenant leading to a contractual
agreement. Also, a signature is required both from the landlord
and tenant. She deferred to the bill sponsor for further
details.
REPRESENTATIVE PETERSEN observed a landlord may pay a portion of
the utilities on behalf of a tenant.
MS. SCHUBERT said she was unsure; however, AHFC, as a landlord
itself, is studying this issue.
3:45:06 PM
REPRESENTATIVE SADDLER removed his objection. There being no
further objection, the proposed CS for HB 336, identified as
Version I, was adopted as the working document.
3:45:40 PM
REPRESENTATIVE SADDLER moved to adopt the fiscal note identified
as HB336-DOR-TAX-03-02-12.
REPRESENTATIVE PETERSEN objected for the purpose of discussion.
He advised that the aforementioned fiscal note is indeterminate,
pointing out that the fiscal note is zero on the front page, but
costs range from $115 million to $430 million on page 2.
REPRESENTATIVE TUCK asked whether there is no longer a fiscal
note from the Department of Administration (DOA), identified as
HB336-DOA-OAH-3-8-12.
MR. STUDLER expressed his belief that the previous fiscal notes
submitted with the original bill will be resubmitted with the
proposed CS. In further response to Representative Tuck, he
said he would inquire as to whether DOA will resubmit a fiscal
note.
REPRESENTATIVE TUCK cautioned that more fiscal notes may be
added to the bill.
3:48:20 PM
REPRESENTATIVE PETERSEN removed his objection. There being no
further objection, fiscal note HB336-DOR-TAX-03-02-12 was
adopted.
CO-CHAIR FOSTER opened public testimony.
3:48:58 PM
MARIE DARLIN, Representative, AARP, referred to written comments
previously submitted in support of HB 336. Although this
program is not the final answer to high energy costs, AARP is in
support of the bill because it will help Alaskans pay their
utility bills and the cost of energy is one of AARP's members'
main concerns.
3:50:20 PM
ANDRIA AGLI, Manager, Shareholder & Corporate Relations, Bristol
Bay Native Corporation (BBNC), read from the following written
testimony as follows [original punctuation provided]:
I am a shareholder of Bristol Bay Native Corporation
(BBNC) and the manager for shareholder and corporate
relations for BBNC. Thank you for inviting BBNC to
testify in support of HB 336 today. We support this
bi-partisan legislation.
I grew up in the village of South Naknek on the Alaska
Peninsula and return every summer to commercial and
subsistence fish. I have family that still live and
work there year round. The high cost of heating fuel
and electricity is a challenge not only for my family
back in Bristol Bay, but all across Alaska.
Currently, the cost of heating fuel in South Naknek is
$ 5.25 per gallon. The cost of electricity is more
than $.50 per kWh. These prices hit everyone hard.
Legislative efforts to provide financial relief for
these high prices are necessary and certainly have
BBNC's support.
We are an economic cornerstone for Bristol Bay take
the responsibilities that come with that position very
seriously. We've got more than 9,000 shareholders and
since 1978 we've paid more than $100 million in
dividends to our shareholders. In 2012 alone, BBNC
will distribute another $13 million to shareholders in
dividends. We've also established an education
foundation that provides scholarships for higher
education and vocational training, we've created
internships and job opportunities; we've established
an Elder benefit program, and also in 40 years of
business have advocated on behalf of the economic,
cultural and subsistence rights of our shareholders.
We continue this work today to ensure our corporate
mission of "Enriching our Native way of life."
While BBNC is pursuing new responsible economic and
investment opportunities in the Bristol Bay region
that will help better the lives of our shareholders
and residents, we support renewable energy programs
and both renewable and non-renewable resource
development that responsibly allows for our
shareholders to continue to sustain their way of life.
The BBNC Board recently directed the corporation to
invest $30 million over the next 5 years within the
region. Our shareholders have told us they need help
with the high cost of heating fuel and electricity.
BBNC's investment efforts will identify and evaluate
projects that could help provide some energy cost
relief. BBNC supports the legislature's efforts to do
the same with this particular legislation.
High energy costs represent the greatest challenge to
the economic success of villages in the Bristol Bay
region, where average families pay more for their home
energy bills than they do for rent or for mortgage
payments. It is for this reason the BBNC advocates
for energy programs that provide current and long-term
solutions to this growing crisis.
House Bill 336 is a very good complement to BBNC's
strategy to invest in the Bristol Bay region, and has
BBNC's full support. This will not change the price
of heating oil or the cost of electricity in the
short-term; however, it will provide some relief to
rural residents.
Section 1 of the bill will provide an energy voucher
to every adult PFD recipient. For many households
this will provide immediate energy relief but for
households that include extended families with
multiple adults living under the same roof, the total
voucher amount received by this legislation will be
significantly greater. While this is not a permanent
fix, again, it will help the current economic
hardships that are felt in our rural communities.
Section 2 of the legislation is also helpful because
it will prompt ideas for longer-term assistance
strategies for dealing with the recurring problem of
high energy costs. BBNC applauds the legislature's
effort to get such strategies on the table as long-
term energy solutions are needed statewide.
In closing, BBNC supports HB 336 because it will
provide short-term energy assistance to those who are
impacted the most and provide a mechanism to consider
more permanent energy solutions to this ongoing
crisis. Both are needed to bring energy costs to an
affordable level to the benefit of all Alaskans.
Thank you for the Committee's time this afternoon. I
would be happy to answer any questions that you may
have.
3:56:18 PM
CHRIS STORHOK, Specialist, Economic Development Division and
Alaska Regional Development Organization (ARDOR), Fairbanks
North Star Borough (FNSB), said the FNSB mayor's office and he
personally support the bill. Mr. Storhok related that families
in the Fairbanks region are struggling to pay their heating and
power bills and need short-term relief until a long-term
solution is found. Because of this strain on the economy,
businesses are suffering and people are leaving the community.
REPRESENTATIVE SADDLER asked what residents in the Interior have
done in the past in response to fluctuations in energy prices
and periods of extremely cold weather.
MR. STORHOK recalled when oil prices were $125 per barrel in
2007, "there was considerable belt-tightening," and the governor
provided energy relief which helped significantly. Personally,
he installed a more efficient furnace, but many residents
switched to outdoor wood boilers which caused an air pollution
problem. Many hard choices were made.
4:00:10 PM
REPRESENTATIVE SADDLER asked whether local residents expected
the energy dividend by the previous governor to continue, or did
they recognize it as a "one-time-only deal."
MR. STORHOK recalled the program was recognized as one-time-
only, and was followed by lower energy prices. Also, there was
optimism that a gas pipeline or a coal-to-liquids plant would
come to Fairbanks. In further response to Representative
Saddler, he said the voucher is the solution because FNSB worked
with the Cold Climate Housing Research Center, University of
Alaska Fairbanks, AHFC, and federal programs to weatherize many
homes; however, some homeowners in the middle-income level are
now prevented from completing energy efficiency upgrades by the
"credit crunch." He opined Fairbanks has taken advantage of
existing energy efficiency programs, "but we still have a way to
go."
4:03:56 PM
JOY HUNTINGTON, Legislative Liaison, Tanana Chiefs Conference
(TCC), stated the TCC organization is the Native nonprofit for
the Interior that represents 42 federally recognized tribes and
about 40 villages. Ms. Huntington stated the highest price for
fuel in the state is in Arctic Village, where it costs $10 per
gallon. She stated her support of HB 336, noting that TCC
anticipates a long-term solution is coming; in fact, TCC has
received over $1 million through AEA's renewable energy fund for
future biomass heat facilities. Although this bill provides for
a short-term solution, at this time there is a great need in the
Interior region where it has been extremely cold. Ms.
Huntington expressed TCC's intent to continue working with AHFC
and other agencies on weatherization and other long-term
projects such as wood heating, clean diesel, pre-paid electric
metering, and Organic Rankine cycle (ORC) projects.
4:09:03 PM
REPRESENTATIVE SADDLER asked for more information on ORC
projects.
MS. HUNTINGTON said an ORC project has been funded by AEA and
the Denali Commission and is being tested at the University of
Alaska on improving the fuel efficiency of a diesel generator.
She offered to provide more information.
4:10:39 PM
WALTER ROSE, Energy Specialist, Kawerak, Inc. ("Kawerak"),
informed the committee Kawerak is the regional Native nonprofit
serving 20 tribes in the Bering Strait. Kawerak supports HB 336
because expensive heating fuel has been hurting the region for
years; for example, fuel oil costs an average of $6.33 per
gallon. The average home in the region consumes 800 gallons to
1,000 gallons of heating fuel per year, and last January was the
coldest on record, thus heating fuel consumption was 23 percent
above normal. Although the future is unknown, the passage of HB
336 will leave the region better prepared for next year. Mr.
Rose opined the best way to use state funds for energy relief -
during times when oil prices are high - is unclear, and HB 336
requires investigations and makes recommendations to the
governor. Kawerak also supports the bill because it provides
fuel in the short run, while searching for a sensible way to
provide relief in the future. In addition, by the use of
vouchers, HB 336 minimizes the potential for fraud and abuse
without added bureaucracy, and it quickly and effectively
provides energy security for next winter.
4:13:24 PM
JOMO STEWART, Program Manager, Fairbanks Economic Development
Corporation (FEDC), stated HB 336 is not the kind of bill FEDC
normally supports, but does. He explained that FEDC is
dedicated to building a system across the state that more
equitably distributes energy and creates a basis for economic
development, growth, and prosperity, as modeled by the ENSTAR
gas system in Anchorage. However, in Alaska during times of
high energy costs, it is difficult for residents who use oil for
space heating or to generate electricity. Unlike the previous
resource rebate, which was not equitable in the value of the
energy used, HB 336 is an equitable distribution of energy:
giving the most value to those who need it most. Mr. Stewart
also stated FEDC's and his personal support of the reporting
required by the bill which will enable the state and the
legislature to gain an understanding of the impact of the oil
economy on Alaska residents.
4:16:40 PM
CO-CHAIR FOSTER held over HB 336.
HB 323-NONATTAIN AREA HOME HEATING SYSTEM GRANTS
4:17:08 PM
CO-CHAIR FOSTER announced that the final 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."
4:17:24 PM
REPRESENTATIVE SADDLER moved to adopt the proposed committee
substitute (CS) for HB 323, Version 27-LS1275\I, as the working
document.
REPRESENTATIVE SADDLER objected for the purpose of discussion.
4:17:32 PM
The committee took an at-ease from 4:17 p.m. to 4:22 p.m.
[Although not formally stated, Representative Saddler's
objection was treated as removed.]
4:22:13 PM
CO-CHAIR FOSTER announced the proposed CS for HB 323, Version
27-LS1275\I, was adopted as the working document.
4:22:23 PM
REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, speaking
as the sponsor of the bill, explained the first change by the
proposed CS specifies the grant amount for a furnace is $7,500
and requires the furnace to be installed. Also, the grant
amount for an Environmental Protection Agency (EPA) certified
wood stove is $5,000. She said, "It should be reflected also in
the fiscal note: $1 million, not $100 million." The source of
the aforementioned estimate is the Fairbanks North Star Borough
(FNSB) wood stove change out program, which replaced 385 wood
stoves for $441,000. Representative T. Wilson stated the
program authorized by the bill is not a free giveaway but is
modeled after the AHFC weatherization and rebate programs, and
from funding that is currently being used for this type of
activity.
4:23:48 PM
CO-CHAIR PRUITT called attention page 1, lines 6 and 7 of the
bill that specified the funds come from the Alaska energy
efficient home grant fund. He asked whether this is the same
fund given to AHFC for the weatherization program.
4:24:15 PM
REPRESENTATIVE T. WILSON said, "There is nothing in that fund.
It is a separate fund. We took it away from the rebate one so
it would not be confused, ... [a] brand-new fund." In further
response to Co-Chair Pruitt she said the bill does not create a
fund but makes changes to a fund that was not being utilized.
CO-CHAIR PRUITT expressed his understanding that an EPA-
certified wood stove will produce little particulate matter and
will be O.K. to use.
REPRESENTATIVE T. WILSON responded that most non-EPA certified
stoves do not have catalytic converters, thus pollute more. As
guidelines become stricter, stoves will be cleaner.
CO-CHAIR PRUITT asked about the possibility that EPA may change
its regulations after people invest in new stoves.
4:25:55 PM
REPRESENTATIVE T. WILSON recalled that the air quality in
Fairbanks did not change, but EPA reduced the "numbers" from 65
parts per billion to 35 parts per billion. In fact, stoves are
not tested in cold climates, "so some of the numbers sometimes
are skewed." She pointed out that if Fairbanks was able to use
the previous guidelines it would not be out of attainment.
CO-CHAIR PRUITT expressed his concern that EPA could change its
certification on stoves.
REPRESENTATIVE T. WILSON pointed out that EPA is not likely to
change its certification on stoves, but can change the number on
emissions, and she described how a concentration of homes in a
neighborhood affects air quality.
REPRESENTATIVE SADDLER gave an example of everyone in Fairbanks
getting an EPA-certified stove, and asked whether that would
automatically meet attainment.
REPRESENTATIVE T. WILSON said, "Gas is probably the only thing
that gets us there." She added that Fairbanks does not want its
residents who have gas or district heat to convert to wood
stoves, but seeks to replace existing non-certified wood stoves.
In further response to Representative Saddler, she said her
frustration is that EPA does not provide a model for the
community or the Department of Environmental Conservation (DEC)
to follow, but simply sets levels for attainment.
4:30:06 PM
REPRESENTATIVE SADDLER asked whether the new standards from EPA
came with any funding to achieve them.
REPRESENTATIVE T. WILSON said yes. Two years ago there was a $1
million grant from the Congestion Mitigation and Air Quality
(CMAQ) Improvement Program for testing and study, but the funds
are now gone. In further response to Representative Saddler,
she said Libby, Montana, had funding from EPA to provide a
program similar to that proposed by the bill.
REPRESENTATIVE PETERSEN noted to qualify for a grant, an
existing oil furnace would have a rating of less than 80 percent
efficiency. He asked if 80 percent efficiency is the highest
available for fuel oil.
REPRESENTATIVE T. WILSON explained that in a cold climate a
percentage from 82 to 90 does not greatly affect air quality.
CO-CHAIR PRUITT questioned whether EPA would acknowledge a good-
faith effort if Fairbanks does not reach attainment by 2014.
REPRESENTATIVE T. WILSON indicated yes, explaining that there
must be a state implementation plan, and this program would
count as one of the ways to cure the problem; in fact, the
intent of HB 323 is to show EPA the state's interest and to
prevent a ban on burning wood stoves during times of an air
inversion.
4:34:11 PM
REPRESENTATIVE SADDLER asked whether there is an impediment to
the reuse of a replaced stove.
REPRESENTATIVE T. WILSON said the FNSB program destroys the
replaced stoves.
REPRESENTATIVE SADDLER encouraged the reuse of stoves.
REPRESENTATIVE T. WILSON pointed out FNSB has an ordinance to
prevent the sale of non-EPA certified wood stoves in the
nonattainment area.
4:36:16 PM
REPRESENTATIVE SADDLER removed his objection. There being no
further objection, Version I was adopted as the working
document.
4:36:45 PM
STACY SCHUBERT, Director, Governmental Relations & Public
Affairs, AHFC, informed the committee that the zero fiscal note
submitted by AHFC [HB323-DOR-AHFC-03-01-12] attached analysis
that included 10,000 homes participating in the program at an
average cost of $10,000 per grant. Also, additional operating
expenses to AHFC were estimated at $1.8 million. Alaska Housing
Finance Corporation now recognizes that the intent of the bill
is for the legislature to appropriate $1 million to the fund and
reduce the amount of the grant thus the corporation will revise
its estimate and provide an amended fiscal note to the
committee. She also clarified that on page 1, lines 6 and 7,
the bill identifies the Alaska energy efficient home grant fund,
which is an inactive grant fund within AHFC that presently has
zero funds. Testimony by AHFC on 3/22/12 referred to a balance
of $64 million in the home energy rebate fund; this entire fund
is encumbered or obligated.
4:39:20 PM
CO-CHAIR PRUITT asked whether the lower grant amounts in the
proposed CS are adequate to complete the change outs in the
Fairbanks area.
4:39:57 PM
JOHN ANDERSON, Project Officer, Weatherization, AHFC, said AHFC
is completing its weatherization outcomes report which will
provide details on every weatherization project; however, a
recent sample of 10 "boiler swap-outs" in the Fairbanks area
indicated that they cost an average of $8,900.
REPRESENTATIVE TUCK observed that a homeowner cannot participate
in the energy rebate program if they participate in the proposed
wood stove or furnace program. He asked whether the sponsor
considered allowing a homeowner to participate in both programs
if the two grant amounts do not exceed $10,000.
MS. SCHUBERT deferred to the sponsor.
REPRESENTATIVE SADDLER asked whether the change outs averaging
$8,900 were for gas furnaces or wood stoves.
MR. ANDERSON answered that the change outs were from low-
efficiency oil furnaces to high-efficiency oil furnaces. In
further response to Representative Saddler, said the
weatherization and rebate programs do not recognize wood stoves
as primary sources in the rating process, so there is no
analysis on wood stoves.
4:42:39 PM
CO-CHAIR FOSTER opened public testimony on the proposed CS for
HB 323. After determining no one wished to testify, public
testimony was closed.
CO-CHAIR PRUITT noted that the present bill is for homeowners.
He asked whether AHFC's cost estimates included only owner-
occupied homes.
MR. ANDERSON understood that AHFC's estimate of 42,000 included
rentals and owner-occupied units. In further response to Co-
Chair Pruitt, he said including only owner-occupied units would
change the estimate, as will the changes in the proposed CS. He
offered to provide further estimates.
4:44:54 PM
CO-CHAIR FOSTER held over HB 323.
4:45:42 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 4:45 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 1a CSHB 336 Version I.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 1 HB 336 version A.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 336 |
| 2 HB 336 Sponsor Statement.pdf |
HENE 3/13/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 336 |
| 2a CSHB 336 Sponsor Statement.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 2aa CSHB 336 Sectional Analysis.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 3 HB336-DOR-TAX-03-02-12.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 4HB336-DOA-OAH-3-8-12.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 5 HB336-DOR-PFD-03-02-12.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 6 HB 336 support letter AARP.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 7 HB 336 Kawerak letter of support.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 8 HB 336 Bristol Bay letter of support.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 9 AK Commision on Aging HB 336 Energy Assistance.pdf |
HENE 3/27/2012 3:00:00 PM HENE 4/3/2012 3:00:00 PM |
HB 336 |
| 1a CS HB 323( ).pdf |
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 |
| B- HB 323 Presentation.pdf |
HENE 3/22/2012 3:00:00 PM HENE 3/27/2012 3:00:00 PM |
HB 323 |