Legislature(2015 - 2016)CAPITOL 17
01/22/2015 10:15 AM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Committee Organization | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
January 22, 2015
10:16 a.m.
MEMBERS PRESENT
Representative Jim Colver, Co-Chair
Representative Liz Vazquez, Co-Chair
Representative Benjamin Nageak
Representative David Talerico
Representative Cathy Tilton
Representative Matt Claman
Representative Adam Wool
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION: COMMITTEE ORGANIZATION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
No witnesses to record
ACTION NARRATIVE
10:16:18 AM
CO-CHAIR JIM COLVER called the House Special Committee on Energy
meeting to order at 10:16 a.m. Present at the call to order
were Representatives Nageak, Talerico, Tilton, Wool, Vazquez,
and Colver. Representative Claman arrived as the meeting was in
progress.
10:16:34 AM
^PRESENTATION: COMMITTEE ORGANIZATION
PRESENTATION: COMMITTEE ORGANIZATION
10:17:20 AM
CO-CHAIR COLVER announced that the only order of business would
be committee organization. He advised that the committee has
the duty to address the high cost of energy in Alaska, because
low cost energy is a vital component of economic growth and a
healthy economy. The committee has a history of working on
energy issues on behalf of Alaskans: House Bill 306, the state
energy [policy], was adopted in 2010; Senate Bill 220, the
Alaska Sustainable Energy Act, was adopted in 2010; Senate Bill
289, the Home Energy Conservation Act, was adopted in 2008;
House Bill 152, the Renewable Energy Fund, was adopted in 2008.
Co-Chair Colver expressed his interest in eliminating roadblocks
to providing low-cost energy to the state. He invited members
to share their expectations regarding the work of the committee.
10:19:42 AM
CO-CHAIR VAZQUEZ said she was excited to be working with the
committee on challenges that may affect the state for 10-50
years in the future.
10:20:32 AM
REPRESENTATIVE NAGEAK provided personal background information
and noted that energy is an important topic for the residents of
Rural Alaska, however, Barrow has an endless supply of natural
gas for its electric utility. Although other villages have
resources, such as methane, natural gas, or coal, the expense of
developing their resources is very high. Having infrastructure
also reduces the cost of energy, and he expressed his support
for a gas line. Representative Nageak recalled that last year
the committee worked on a gasification plant and a
[liquefaction] plant as a source of natural gas for Fairbanks
and for villages along the Yukon River.
10:24:31 AM
REPRESENTATIVE WOOL said Fairbanks does not have a supply of
natural gas, and a trucking plan put in place last year may be
in jeopardy because the [liquefaction] plant has been "shelved."
Fairbanks needs a supply of natural gas - either from the North
Slope or Cook Inlet - and a gas distribution system to homes,
businesses, and schools. In addition, there needs to be an
incentive so residents will convert from oil to gas and thereby
improve the air quality by using gas to generate electricity
instead of diesel fuel. Energy is a big concern in the
Interior.
10:26:44 AM
REPRESENTATIVE TILTON said she represents a large area of the
state in the Mat-Su Borough and the Municipality of Anchorage.
Her background is in real estate development, including bringing
power into subdivisions. The Mat-Su Borough also has a new
energy policy. She pointed out that energy affects all facets
of the state budget, including energy subsidies through the
Department of Health and Social Services. Energy is a basis of
the economy for municipalities and rural areas. Representative
Tilton said she is interested in learning from experts about the
results of previous energy legislation and whether the state's
energy policy has fulfilled its intent to make the state a
leader in petroleum and natural gas production, and in renewable
and alternative energy development. She questioned whether the
state is on track to its goal of 50 percent renewable energy by
2025. Her constituents are personally affected by the price of
energy and providers have issues with the infrastructure needed
to provide energy.
10:28:59 AM
CO-CHAIR COLVER asked committee staff to report on the status of
previous legislation.
10:29:33 AM
CO-CHAIR VAZQUEZ encouraged members to review the resources
listed on the meeting agenda such as the Alaska Energy Authority
web site. A review of these materials will allow the committee
to "tackle a lot more if everybody gets up to speed."
10:30:20 AM
REPRESENTATIVE TALERICO said he represents District 6, which is
a large area that contains 43 distinct communities. Where he
lives there is coal-fired power plant that went online in 1967
and produces 25 megawatts per day for the electric intertie
between Fairbanks and Anchorage. In addition, there is a
windfarm facility with twelve 1.9 megawatt generators. An issue
throughout his district is connectivity: Communities within 100
miles of a power line have no infrastructure in place to connect
them to a utility. He pointed out there is a new hydroelectric
(hydro) project coming online soon near Valdez; however,
residents within 60-70 miles of the hydro project are not
connected to the project. He noted that the cost of electricity
in some villages ranges from $0.66-$0.92 per kilowatt hour, and
even with Power Cost Equalization (PCE), the high cost restricts
new development. For example, in Fort Yukon diesel generators
were near failure this winter, and even though oil prices are
down now, the fuel was purchased at a higher price to fill the
storage tanks before the river closed to navigation.
Representative Talerico expressed his belief that his
constituents want legislators to "leave everything on the
table," and the liquefied natural gas (LNG) project is a high
priority for Alaska. He encouraged the committee to look at the
potential of other resources and noted the success of the
biomass generation project at the school in Tok. The project
heats the school, school buildings, and year-around greenhouses
attached to the school. Coal is produced in his district, and
he advised that Alaska has a tremendous amount of the world's
coal reserves - perhaps five times the British thermal unit
(BTU) value of the known reserves of oil and gas - that with new
cleaner-burning processing, holds potential. Alaska's coal is
subbituminous and is best utilized when crushed to a powder and
burned to heat water and drive steam turbines. Representative
Talerico discussed the most efficient processing of coal and
pointed out that coal can be a significant source of fuel at an
estimated lower cost than natural gas in the Fairbanks area. He
restated his interest in the regional sourcing of fuels such as
biomass, wind, and hydro.
10:30:20 AM
REPRESENTATIVE NAGEAK said continuing to serve on the committee
stems from his concern about the high cost of energy throughout
the state. He agreed that coal can provide much needed energy
and thereby relieve the state's dependence on natural gas and
oil. Coal can be shipped to Europe by the "Northern Route," and
sourced locally from Point Lay for shipment to Russia, Japan,
and China Minerals can also be a potential source of revenue for
the state; however, infrastructure is necessary to connect the
state's communities. He stressed the need to diversify sources
of energy.
10:40:19 AM
REPRESENTATIVE CLAMAN said most of his experience in energy
matters is in urban Alaska. He pointed out that a city the size
of Anchorage located in the rest of the U.S. would have one
electric utility; however, Anchorage has Anchorage Municipal
Light & Power, Chugach Electric Association, and Matanuska
Electric Association. The delivery of power in Anchorage is
less efficient partly because there are three utilities, and
similar situations exist throughout the Railbelt and Alaska. He
recalled a time when neighbors were paying different rates for
electricity. Consumers throughout Alaska need lower energy
prices because that is a key to economic development.
Representative Claman stated his concern for issues of
efficiency and for delivering energy efficiently and
effectively, thus his criticism of mega-projects such as the
Susitna-Watana Hydroelectric Project. He expressed his support
for focusing state dollars on smaller regional projects that are
a more effective use of state resources in terms of developing
infrastructure and reducing energy costs. He restated his
concern for how to increase efficiencies, lower energy costs,
and increase the number of residents connected to the power
grid.
10:43:42 AM
CO-CHAIR COLVER observed that energy is one of the biggest
statewide issues for legislators whether they represent the
Railbelt, or rural, coastal, or Southeast Alaska. The problem
has been around for many years and there have been some good
solutions such as the renewable energy loan and grant fund which
provided 50 percent match funding for a hydro project in Valdez,
and upgraded diesel power generation systems in the Bush.
Defending continued funding for this program will be challenging
given fiscal constraints, even though the program has been
successful and is a valuable tool. He charged the committee
with providing advice and direction on energy solutions and to
provide short-term and long-term solutions for the Interior and
for the delivery of gas to rural Alaska. The long-term plan
would address the delivery of natural gas resources from the
North Slope to market and to Alaskans. He expressed his hope
that the committee will make recommendations and be involved and
engaged in providing answers for the short-term. Although the
proposal for trucking gas is in doubt, the governor stated that
a Japanese firm, Resources Energy, Incorporated (REI) is
interested in building an LNG plant in Cook Inlet and WesPac
Midstream also has announced a similar plan to deliver gas
throughout the state. Private sector investment should be
encouraged and may be a short-term solution. Co-Chair Colver
suggested that other topics on which to focus are distribution,
loan programs, and state and federal funding sources to fund
distribution extensions. A low-interest bond fund to create a
vehicle for financing is also a possibility. He noted his
district is served by several utilities and encouraged the
committee to find out what problems are faced by the private
sector and to prioritize. He said "everybody have their own
plan" hasn't worked in Alaska.
10:48:56 AM
REPRESENTATIVE NAGEAK pointed out that the governor said he
wants to build a gas line, and the legislature has a plan to
build a gas line that was passed last year. He asked about the
governor's plans. Starting last year, building a gas line is
also the desire of the legislature.
10:50:36 AM
CO-CHAIR VAZQUEZ recalled her personal experience living without
electricity and noted her service on the board of directors of
Chugach Electric Association. She agreed with Representative
Claman that having seven utilities in the Railbelt is "very
inefficient [and] everyday increasing the cost because everybody
is building their own generation." In addition, a sufficient
transmission system is lacking. She opined the committee has
the serious charge of exploring what has transpired from the
state's energy projects and policies; visiting and refining the
state's energy plan; making suggestions on a regulatory and
statutory basis; looking at state energy policy; developing
energy assurance plans for the transmission grid; and hardening
the grid to protect it from sun flares and other situations.
Also, because of the fiscal situation, energy funds have not
been replenished and the state may want to establish the
authority to issue bonds. Co-Chair Vazquez cautioned that the
hardest question will be how to finance projects outside of the
general fund. She reviewed three scheduled upcoming
presentations.
10:54:17 AM
CO-CHAIR COLVER said Chugach Electric will present an overview
on the shortcomings of the statewide transmission system. For
example, in the Railbelt, available power from Bradley Lake
Hydroelectric Project cannot be transferred to Golden Valley
Electric Association, so the concept of a manager to move the
power instead of individual utilities will be presented. This
concept does not necessarily require legislation, but would
manage generation in the Railbelt more effectively. He noted
several power projects that are in progress. There will also be
a presentation by the Alaska Housing Finance Corporation on the
home and commercial weatherization programs that still have
funding.
10:57:51 AM
CO-CHAIR VAZQUEZ observed that the first meetings will provide
background on energy problems that have been around for many
years. She restated that the big issues are financing solutions
and statutory or regulatory solutions. She pointed out that PCE
is not available for business or industrial use, and the high
cost of energy will cause a loss of the state's population base.
10:59:51 AM
REPRESENTATIVE NAGEAK advised that last session the Alaska
Village Electric Cooperative (AVEC) made a presentation on
creating a mini-grid between nearby communities, which is a
cost-effective idea.
11:02:21 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:02 a.m.
| Document Name | Date/Time | Subjects |
|---|