Legislature(2021 - 2022)BARNES 124
04/20/2021 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| HB170 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 170 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
April 20, 2021
10:19 a.m.
MEMBERS PRESENT
Representative Calvin Schrage, Chair
Representative Chris Tuck
Representative Matt Claman
Representative Tiffany Zulkosky
Representative Zack Fields
Representative George Rauscher
Representative James Kaufman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 170
"An Act establishing the Alaska energy independence program and
the Alaska energy independence fund in the Alaska Industrial
Development and Export Authority; and providing for an effective
date."
- MOVED CSHB 170(ENE) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 170
SHORT TITLE: ENERGY INDEPENDENCE PROGRAM & FUND: AIDEA
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
04/09/21 (H) READ THE FIRST TIME - REFERRALS
04/09/21 (H) ENE, L&C, FIN
04/13/21 (H) ENE AT 10:15 AM BARNES 124
04/13/21 (H) Heard & Held
04/13/21 (H) MINUTE(ENE)
04/15/21 (H) ENE AT 10:15 AM BARNES 124
04/15/21 (H) Heard & Held
04/15/21 (H) MINUTE(ENE)
04/20/21 (H) ENE AT 10:15 AM BARNES 124
WITNESS REGISTER
CHARLES MCKEE, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 170 on
matters unrelated to the bill.
MELISSA HEWER
Executive Director
Susitna River Coalition
Talkeetna, Alaska
POSITION STATEMENT: Testified during the hearing on HB 170 to
recommend the bill be amended.
ALAN WEITZNER, Executive Director
Alaska Industrial Development and Export Authority
Anchorage, Alaska
POSITION STATEMENT: Offered feedback to proposed amendments
during the hearing on HB 170.
SANDON FISHER, Legislative Counsel
Legislative Legal Services
Juneau, Alaska
POSITION STATEMENT: As bill drafter, answered questions during
the hearing on HB 170.
CHRIS ROSE, Executive Director
Renewable Energy Alaska Project
Anchorage, Alaska
POSITION STATEMENT: Responded to questions during the hearing
on HB 170.
JEFF SCHUB, Executive Director
Coalition for Green Capitol
Washington, D.C.
POSITION STATEMENT: Responded to questions during the hearing
on HB 170.
ACTION NARRATIVE
10:19:31 AM
CHAIR CALVIN SCHRAGE called the House Special Committee on
Energy meeting to order at 10:19 a.m. Representatives Kaufman,
Claman, Fields, Zulkosky, Tuck (via Teams), Rauscher, and
Schrage were present at the call to order.
HB 170-ENERGY INDEPENDENCE PROGRAM & FUND: AIDEA
10:20:15 AM
CHAIR SCHRAGE announced that the only order of business would be
HOUSE BILL NO. 170, "An Act establishing the Alaska energy
independence program and the Alaska energy independence fund in
the Alaska Industrial Development and Export Authority; and
providing for an effective date."
10:20:35 AM
CHAIR SCHRAGE opened public testimony on HB 170.
CHARLES MCKEE, representing self, testified as to the difficulty
of working with the administration.
10:23:35 AM
The committee took an at-ease from 10:23 a.m. to 10:24 a.m.
10:24:40 AM
MELISSA HEWER testified that she is excited about the potential
benefits of the fund proposed under HB 170 but skeptical of
placing the work in the hands of the Alaska Industrial
Development and Export Authority (AIDEA), because it operates
with little oversight and has made controversial investments
that have cost the state millions of dollars. She recommended
the bill be amended to: require coordination with a state
expert, including the Alaska Housing Finance Corporation (AHFC);
make clear that AIDEA's expenditures in the fund are subject to
the Executive Budget Act; narrow the definition of "sustainable
energy development" to ensure the purpose of funding through the
program is to reduce greenhouse emissions and increase energy
efficiency; and strengthen the terms of the bill to ensure funds
are directed to projects primarily focused on developing
sustainable and renewable energy.
10:27:29 AM
CHAIR SCHRAGE closed public testimony on HB 170.
CHAIR SCHRAGE stated that the committee would consider
amendments and that Legislative Legal Services would have
permission to make any technical and conforming changes to the
bill.
10:28:00 AM
CHAIR SCHRAGE moved to adopt Amendment 1 to HB 170, labeled 32-
GH1074\A.6, Fisher, 4/17/21, which read as follows:
Page 1, line 1, following "Act":
Insert "relating to the duties of the Alaska
Industrial Development and Export Authority;"
Page 6, line 8, following "(a)":
Insert "The authority shall consider the energy
policies of the state described in AS 44.99.115 in
managing the operations of the Alaska energy
independence program and fund under AS 44.88.450 -
44.88.456.
(b)"
Reletter the following subsection accordingly.
REPRESENTATIVE RAUSCHER objected.
CHAIR SCHRAGE spoke to Amendment 1. He said it would align the
Alaska energy independence fund (AEIF) program with the Alaska
energy policy.
REPRESENTATIVE RAUSCHER removed his objection to the motion to
adopt Amendment 1. There being no further objection, Amendment
1 was adopted.
10:28:53 AM
REPRESENTATIVE ZULKOSKY moved to adopt Amendment 2 to HB 170,
labeled 32-GH1074\A.20, Fisher, 4/19/21, which read as follows:
Page 4, lines 22 - 31:
Delete all material and insert:
"(b) The Alaska energy independence program
advisory board is established. The board consists of
(1) the governor or the governor's
designee; and
(2) eight members appointed by the governor
as follows:
(A) one member who represents a
(i) tribe;
(ii) tribal nonprofit organization or
consortium; or
(iii) regional housing authority;
(B) one member who represents an Alaska
Native corporation;
(C) one member who represents an Alaska
nonprofit corporation specializing in cold climate
housing research;
(D) one member who has experience in
(i) renewable energy;
(ii) electric transportation; or
(iii) similar sustainable energy
development;
(E) four members who have experience in
(i) finance;
(ii) marketing of financial products;
(iii) construction science and
efficiencies;
(iv) renewable energy;
(v) electric transportation; or
(vi) other sustainable energy development."
REPRESENTATIVE FIELDS objected for the purpose of discussion.
REPRESENTATIVE ZULKOSKY spoke to Amendment 2. She said
Amendment 2 would increase the number of advisory board members
from 5 to 9, and she read through the positions listed in the
amendment. She opined that the existing language does not
ensure a broad perspective, vision, or understanding of the
unique conditions across Alaska, and the intent of Amendment 2
would be that AIDEA would have that understanding in relation to
all areas of the state, urban and rural.
REPRESENTATIVE FIELDS removed his objection to the motion to
adopt Amendment 2.
CHAIR SCHRAGE objected for the purpose of discussion.
REPRESENTATIVE RAUSCHER asked to hear feedback from [Mr.
Weitzner].
10:32:18 AM
ALAN WEITZNER, Executive Director, Alaska Industrial Development
and Export Authority, stated that although AIDEA supports an
advisory board being incorporated in the bill, nine members is a
lot. That said, AIDEA supports the amendment if this is the
desire of the committee. In response to Representative
Rauscher, he said AIDEA had anticipated absorbing the costs for
a board of five members but would have to consider whether a
larger number on the board [would impact the fiscal note].
CHAIR SCHRAGE, in response to Representative Rauscher, said he
did not think it necessary to request a new fiscal note.
10:34:13 AM
REPRESENTATIVE KAUFMAN remarked that added members to the
advisory board would result in double the travel costs.
10:34:31 AM
REPRESENTATIVE ZULKOSKY commented that board members could
participate telephonically.
REPRESENTATIVE KAUFMAN suggested a compromise of seven on the
board.
10:35:20 A M
CHAIR SCHRAGE removed his objection to the motion to adopt
Amendment 2.
REPRESENTATIVE RAUSCHER objected.
10:35:30 AM
A roll call vote was taken. Representatives Tuck, Claman,
Zulkosky, Fields, Kaufman, and Schrage voted in favor of
Amendment 2. Representative Rauscher voted against it.
Therefore, Amendment 2 was adopted by a vote of 6-1.
10:36:40 AM
CHAIR SCHRAGE moved to adopt Amendment 3 to HB 170, labeled 32-
GH1074\A.5, Fisher, 4/17/21, which read as follows:
Page 1, line 1, following "Act":
Insert "relating to the duties of the Alaska
Industrial Development and Export Authority;"
Page 5, following line 9:
Insert a new subsection to read:
"(d) The advisory board shall submit a report
for each recommendation the advisory board makes to
the authority under (c) of this section to the senate
secretary and the chief clerk of the house of
representatives and notify the legislature that the
report is available."
Reletter the following subsection accordingly.
Page 6, line 8, following "(a)":
Insert "The authority shall annually prepare a
report containing information regarding the
implementation and operation of the Alaska energy
independence program and fund under AS 44.88.450 -
44.88.456, including the amount of loans made, the
amount available to be loaned, the scope of projects
financed, and actions taken by the authority in
response to recommendations from the advisory board
established under AS 44.88.450(b). The authority shall
deliver the report to the senate secretary and the
chief clerk of the house of representatives and notify
the legislature that the report is available.
(b)"
Reletter the following subsection accordingly.
REPRESENTATIVE CLAMAN objected for the purpose of discussion.
CHAIR SCHRAGE spoke to Amendment 3. He said the advisory report
would provide transparency, and the report pertaining to the
operation of AEIF ensure objectives are met.
10:37:39 AM
REPRESENTATIVE KAUFMAN asked for feedback from AIDEA regarding
the proposed increase in reporting.
10:38:05 AM
MR. WEITZNER remarked that with the previous amendment expanding
the size of the board, there is room for recommendations and
discussion at the board level. He said there would be published
minutes taken from advisory board meetings, so that which
Amendment 3 seeks will already be achieved through those
minutes. He recommended deleting the first part of Amendment 3,
regarding page 5, following line 9, while keeping the remainder.
REPRESENTATIVE KAUFMAN said the suggestion to share the minutes
is a good point. He indicated he would like to offer an
amendment to Amendment 3.
10:40:14 AM
MR. WEITZNER, in response to Chair Schrage, regarding the extent
of reporting, said the recommendations of the advisory board to
the authority can happen during a meeting, via an e-mail, or
other means, and under the first portion of Amendment 3, the
board would have to provide a report for every such action;
there would be a significant number of reports. He then relayed
that the Open Meetings Act requires minutes to be public, and
they are published.
10:41:58 AM
CO-CHAIR SCHRAGE repeated his question to gain the perspective
of [the bill drafter], Mr. Fisher.
SANDON FISHER, Legislative Counsel, Legislative Legal Service,
said if other recommendations were made outside of a meeting, he
does not know whether those would be captured by meeting
minutes. He suggested requiring the advisory board to submit
all its recommendations on an annual or quarterly basis.
10:43:56 AM
REPRESENTATIVE KAUFMAN commented on the broad nature of
reporting being proposed. In response to Chair Schrage, he said
instead of offering an amendment to Amendment 3, he could work
with the bill sponsor to arrive at a desired reporting
structure.
REPRESENTATIVE FIELDS offered to work with Representative
Kaufman and noted the bill would be heard next by the House
Labor and Commerce Standing Committee.
10:45:00 AM
CO-CHAIR SCHRAGE withdrew his motion to adopt Amendment 3. He
then announced that Amendment 4 [would not be moved for
adoption].
10:45:35 AM
REPRESENTATIVE CLAMAN moved to adopt Amendment 5 to HB 170,
labeled 32-GH1074\A.19, Fisher, 4/29/21, which read as follows:
Page 1, line 1, following "Act":
Insert "relating to the membership of the Alaska
Industrial Development and Export Authority;"
Page 1, following line 4:
Insert new bill sections to read:
"* Section 1. AS 44.88.030(a) is amended to read:
(a) The membership of the authority consists of
(1) the commissioner of revenue and the
commissioner of commerce, community, and economic
development; and
(2) five public members [APPOINTED BY THE
GOVERNOR], each of whom has expertise in private
sector business or industry, or both, and possesses
demonstrated leadership skills, appointed as follows:
(A) one member appointed by the governor;
(B) two members appointed by the president
of the senate;
(C) two members appointed by the speaker of
the house of representatives.
* Sec. 2. AS 44.88.030(c) is amended to read:
(c) Public members of the authority described in
(a)(2) of this section serve [AT THE PLEASURE OF THE
GOVERNOR] for four-year [TWO-YEAR] terms. A member
appointed under (a)(2) of this section may only be
removed for cause.
* Sec. 3. AS 44.88.030(d) is amended to read:
(d) If a vacancy occurs in the membership of the
authority, the respective appointing official under
(a)(2) of this section [GOVERNOR] shall immediately
appoint a member for the unexpired portion of the
term."
Renumber the following bill sections accordingly.
Page 8, following line 28:
Insert a new bill section to read:
"* Sec. 11. The uncodified law of the State of
Alaska is amended by adding a new section to read:
ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT
AUTHORITY AND ALASKA ENERGY AUTHORITY; TRANSITION. (a)
The terms of members of the Alaska Industrial
Development and Export Authority under
AS 44.88.030(a)(2), as that statute read before the
effective date of this Act, and the Alaska Energy
Authority under AS 44.83.030 expire on the effective
date of this Act.
(b) Notwithstanding AS 44.88.030(a), as amended
by sec. 1 of this Act, and AS 39.05.055, members of
the Alaska Industrial Development and Export Authority
under AS 44.88.030(a), as amended by sec. 1 of this
Act, and the Alaska Energy Authority under
AS 44.83.030, are appointed to initial terms as
follows:
(1) the member appointed by the governor
serves a term that expires February 28, 2023;
(2) one of the members appointed by the
president of the senate and one of the members
appointed by the speaker of the house of
representatives serve terms that expire February 28,
2023;
(3) one of the members appointed by the
president of the senate and one of the members
appointed by the speaker of the house of
representatives serve terms that expire February 28,
2025.
(c) Nothing in this section prevents the
appointment of a person whose term expires under (a)
of this section to the Alaska Industrial Development
and Export Authority if the person meets the
qualifications in AS 44.88.030(a), as amended by sec.
1 of this Act."
Renumber the following bill section accordingly.
CHAIR SCHRAGE objected for the purpose of discussion.
REPRESENTATIVE CLAMAN spoke to Amendment 5. He explained the
purpose of having more than one entity appoint advisory board
members and doing so in a staggered manner comes from concern he
has heard from the public about little or no oversight of AIDEA
and complaints about some of AIDEA's investments over time. He
gave as example the seafood processing plant in Anchorage. He
said Amendment 5 would strengthen the board and address the
public concern.
10:49:25 AM
MR. WEITZNER responded that the makeup of the advisory board was
heavily debated by the legislature in 2010 and changed at that
time to have a higher involvement of the private sector, which
he said is a benefit. He identified that with the current
process, AIDEA has grown the initial capitalization of $309
million to $1.4 billion. He spoke about the position of
external communications manager for the Ambler [Road project],
verifying that the position is involved in stakeholder
engagement, working with communities and villages along that
route. The amount of funding that has been identified has been
over three years or more. He said AIDEA supports AEIF. He
highlighted AIDEA's statutes and said AIDEA has the financial
competency to undertake the AEIF loan program, having had
success with similar programs in Alaska. He said AIDEA has
provided over $1.2 billion in loans in that program. He
emphasized the competency of AIDEA to do its work.
10:53:48 AM
REPRESENTATIVE FIELDS stated support for Amendment 5, noting
that the public describes AIDEA as ranging from incompetent to
corrupt. He said he thinks the proposed amendment would
rehabilitate the image of AIDEA, which is important because the
agency is needed to make investments and create jobs.
REPRESENTATIVE KAUFMAN expressed concern that there was not
adequate time to vet what changes would have to happen in AIDEA
in order to bring benefit. He said he did not think Amendment 5
was on track with what the committee should be discussing with
respect to HB 170.
CO-CHAIR SCHRAGE proffered that Amendment 5 would not change the
structure of AIDEA; it would just change the appointment
process.
REPRESENTATIVE KAUFMAN reiterated that that discussion is "worth
looking at in a big picture sense" but warrants a "deeper look."
10:56:30 AM
REPRESENTATIVE CLAMAN commented on the governor's ability to
control a board controlling a $1.4 billion fund. Further, he
reiterated the feature of Amendment 5 to create longevity on the
board.
REPRESENTATIVE KAUFMAN suggested the goal is to make decisions
regarding AIDEA's function in a holistic manner. He said he
thinks this issue would be good to consider in a standalone bill
that considers "all the aspects of governance and execution."
He said he does not support Amendment 5.
10:59:45 AM
CO-CHAIR SCHRAGE withdrew his objection to the motion to adopt
Amendment 5.
REPRESENTATIVE KAUFMAN objected.
10:59:53 AM
A roll call vote was taken. Representatives Tuck, Claman,
Zulkosky, Fields, and Schrage voted in favor of the motion to
adopt Amendment 5. Representatives Rauscher and Kaufman voted
against it. Therefore, Amendment 5 was adopted by a vote of 5-
2.
11:00:41 AM
CHAIR SCHRAGE moved to adopt Amendment 6 to HB 170, labeled 32-
GH1074\A.23, Fisher, 4/19/21, which read as follows:
Page 4, line 4:
Delete ", limited liability companies, or limited
partnerships"
Page 4, line 6, following the first occurrence of
"or":
Insert "one or more subsidiary corporations, limited
liability companies, or limited partnerships"
REPRESENTATIVE CLAMAN objected for the purpose of discussion.
CO-CHAIR SCHRAGE spoke to Amendment 6. He said it would remove
the broad authority to utilize limited liability companies and
limited partnerships and provide that authorization just within
the AEIF.
11:01:33 AM
MR. WEITZNER pointed out that AIDEA has issued and established
limited liability corporations (LLCs) under AS 44.88.178. He
said it is an effective tool for risk mitigation and structuring
of underlying investments in development projects in the EIS
program. He shared it is common practice, and he highly
recommended the committee not delete it "from our ability under
[AS] 44.88.172, our economic development account." He said it
is an essential tool within the AEIF, and AIDEA is trying to
highlight with HB 170 that "it is an effective tool for both
programs" AIDEA is recommending, and that it is available under
the definition of corporations; AIDEA is simply looking to have
additional language for clarification should there be questions
regarding the ability to issue the LLC limited partnerships.
Mr. Weitzner said if Amendment 5 is adopted, AIDEA requests that
the committee "continue with the language for [AS] 44.88.172
..., as well [as] allow the ability to do this for the Alaska
energy independence fund."
11:03:16 AM
REPRESENTATIVE CLAMAN asked Mr. Weitzner to confirm that he was
saying currently under AS 44.88.178, which appears in Section 5
of HB 170, that AIDEA already has the authority to set up LLC
and limited partnerships. If so, he questioned where that
authority comes from today, since "it's not apparently in the
existing language."
MR. WEITZNER answered, "The clarification of this language came
in from consultation with the external parties, which included
[the] Renewable Energy Alaska project." He said, "Through the
Department of Law, it is our interpretation that we are able to
... establish limited liability corporations with the existing
language."
REPRESENTATIVE CLAMAN sought further clarification between the
two aforementioned statutes and how Mr. Weitzner could be saying
AIDEA has authority already from language that it is proposing
be added in HB 170. He told Mr. Weitzner, "Your testimony is
totally inconsistent with the very statute you're proposing to
modify in this bill."
11:04:45 AM
REPRESENTATIVE TUCK offered clarification by pointing out that
AS 44.88.172 is specific to the economic development account;
only under that account [AIDEA] can do the LLCs and partnerships
"underneath ownership." By contrast, what AS 44.88.178 "is
hoping to do," is "expand that for AIDEA to be able to do ... a
creation of all subsidiaries, no matter if it's part of this
fund or the economic development account." As Mr. Weitzner had
indicated, Representative Tuck said this debate was held in the
legislature in 2010, and House Bill 119, passed in 2011, was the
result of that debate. The concern at the time was that the
legislature may be "watering down the authority by going too far
with this, in general, for all projects." He suggested that
finding a way to limit the creation of subsidiaries to just the
AEIF, "much the same way that we already have with the economic
development account," would give comfort.
REPRESENTATIVE CLAMAN expressed that Representative Tuck had
shed light on the distinction regarding the statutes.
11:07:40 AM
MR. WEITZNER commented further on subsidiaries, LLCs, and
limited partnerships, and said the proposed legislation does not
seek to broadly address all AIDEA's capabilities under every
program, because the economic development account under AS
88.44.172 is very specific; the intent is to make viable the
administration of the AEIF while maintaining the capabilities
AIDEA already had under AS 44.88.172.
11:09:11 AM
MR. FISHER, in response to Chair Schrage, said if Amendment 6
were adopted, AIDEA would have the ability to create LLCs with
respect to projects under AS 44.88.172, which pertains to the
economic development account. He noted that AS 44.88.172(a)(2)
discusses ownership of corporations or limited liability
companies. He said AIDEA would have the authority to establish
the subsidiary corporations, limited liabilities, or
partnerships for the purposes of administering or expanding the
AEIF program. He concluded that absent specific authority, he
does not believe [AIDEA] would have the ability to create an
entity other than a corporation, "except for those two
instances."
11:10:50 AM
REPRESENTATIVE KAUFMAN questioned what specific problem was
trying to be avoided through Amendment 6 that adequate oversight
would not overcome.
11:11:37 AM
CO-CHAIR SCHRAGE commented that Amendment 6 would not limit
AIDEA's ability; it would simply not grant a new authority to
grant LLCs. He acknowledged this may be an issue to address at
a later date.
11:12:22 AM
MR. WEITZNER clarified that Amendment 6 would limit what AIDEA
is currently able to do under AS 44.88.178 for the AS 44.88.172
economic development account program. He is seeking to prevent
any deletion of AIDEA's current capabilities, which could
negatively impact AIDEA's risk management of its investments and
projects, the way that it engages with the private sector on
those projects, and its manner of attracting capital for
Alaska's economic development.
11:13:46 AM
REPRESENTATIVE CLAMAN, looking not at Amendment 6 but at the
bill itself and existing statute, asked Mr. Fisher whether AIDEA
has the ability to create LLCs related to AS 44.88.172 the
economic development account without any change in language.
MR. FISHER responded that he thinks the answer is "probably yes"
because of the language in AS 44.88.172(a)(2), which allows
AIDEA to own corporations or LLCs with respect to the economic
development account. He offered his understanding that there is
not the ability to create a limited partnership, because that is
not addressed under AS 44.88.172.
REPRESENTATIVE CLAMAN said he is trying to figure out how
deleting the language on line 4 of HB 170, regarding LLCs and
limited partnerships, "would change the present reality that
creating those today is limited to the Section 172 economic
development account." He asked, "Wouldn't they still have that
authority if we took the language out?"
MR. FISHER said he believes so; however, he remarked that
"potentially this could be considered legislative intent to the
contrary." He recommended clarifying the legislative intent "to
prohibit [AIDEA] from creating those types of entities with
respect to [AS] 44.88.172."
REPRESENTATIVE CLAMAN, following the assumption that AIDEA has
the authority already, questioned what purpose Amendment 6 would
have.
MR. FISHER answered that Amendment 6 would not result in
substantial changes; it would clarify AIDEA's ability to create
these entities. He said that "setting aside limited
partnerships," he does not believe there would be "a change with
respect to [AS] 44.88.172."
REPRESENTATIVE CLAMAN concluded that Amendment 6 would allow the
AEIF program to get involved in a limited partnership, while the
economic development account could not. If the committee wants
to expand this to both entities, it should not support Amendment
6.
MR. FISHER confirmed that's correct.
11:18:34 AM
REPRESENTATIVE TUCK pointed out that "by opening it up to
limited partnerships, you're not under the same scrutiny as you
would be with the other subsidiary corporations already allowed
under the economic development account that will now go into the
Alaska energy independence fund."
CO-CHAIR SCHRAGE, in response to Representative Tuck, clarified
the purpose of Amendment 6. In response to a follow-up
question, he said Amendment 6 would retain any authorities
currently under the economic development account.
REPRESENTATIVE TUCK concluded that "the economic development
account can still do the limited liability companies but they
... could not do the additional limited partnership."
CO-CHAIR SCHRAGE confirmed that is the intent of Amendment 6.
11:21:29 AM
MR. WEITZNER, in response to a request from Representative Tuck,
explained how a limited partnership can be utilized.
11:22:19 AM
CHRIS ROSE, Executive Director, Renewable Energy Alaska Project,
said Mr. Hunter from the Connecticut Green Bank, who had
testified the prior week, has been adamant that LLCs are an
important tool. He shared Mr. Hunter's e-mailed description of
the difference between an LLC and a corporation, as relates to a
green bank.
REPRESENTATIVE TUCK clarified his interest is in hearing about
limited partnerships.
11:24:39 AM
JEFF SCHUB, Executive Director, Coalition for Green Capitol,
said both LLCs and limited liability partnerships are
fundamental structuring elements for how capital is aggregated.
The inability to use those structures, he said, "would make this
fund almost unworkable."
REPRESENTATIVE TUCK asked if this is about going into
partnership with a private entity or a subsidiary corporation
under AIDEA setting up its own partnership.
CHAIR SCHRAGE asked Mr. Schub if he could provide Representative
Tuck with a specific example.
MR. SCHUB declined to give a specific example.
11:27:44 AM
MR. ROSE said the e-mail from Mr. Hunter did not address
partnerships.
11:27:54 AM
REPRESENTATIVE CLAMAN offered his understanding that Mr. Schub
had said, specific to green energy funds, that having the option
to create a limited partnership is often essential to getting
investments, and those are investments distinct from those for
an LLC.
MR. SCHUB clarified that he knows the ability of the fund to
create and invest in LLCs is essential and fundamental, and
project finance transactions that will involve private actors
almost always involved limited partnerships. Notwithstanding
that, he said he is not comfortable asserting the opinion that,
either way, the fund itself would need to be able to participate
or create in those limited partnerships.
REPRESENTATIVE CLAMAN said Mr. Schub's response illuminates the
purpose of Amendment 6, which is to give authority to create a
limited partnership specific to the AEIF program, but would not
give that same authority in other circumstances.
11:30:10 AM
REPRESENTATIVE CLAMAN removed his objection to the motion to
adopt Amendment 6.
REPRESENTATIVES RAUSCHER and KAUFMAN objected.
11:30:27 AM
A roll call vote was taken. Representatives Tuck, Claman,
Zulkosky, Fields, and Schrage voted in favor of Amendment 6.
Representatives Rauscher and Kaufman voted against it.
Therefore, Amendment 6 was adopted by a vote of 5-2.
11:31:18 AM
REPRESENTATIVE TUCK said he would not be offering Amendment 7.
11:31:21 AM
REPRESENTATIVE TUCK moved to adopt Amendment 8, labeled 32-
GH1074\A.13, Fisher, 4/17/21, which read as follows:
Page 5, lines 29 - 31:
Delete "In order to promote sustainable energy
development in the state, the investment policy
adopted by the authority may deviate from the prudent
investor rule and traditional institutional financing
criteria."
REPRESENTATIVE RAUSCHER objected for the purpose of discussion.
REPRESENTATIVE TUCK spoke to Amendment 8. He questioned how the
traditional institutional financing criteria prevents the
program from operating effectively. He said he had asked the
question at the prior hearing and never heard an answer.
11:32:47 AM
MR. WEITZNER answered that AIDEA had responded to explain that
the "and tradition institutional financing criteria" language
was added to identify and exclude AIDEA's requirements to the
prudent investor rule and enable AIDEA to enter into
unconventional structures.
REPRESENTATIVE TUCK said he had not seen the e-mail from AIDEA
and would like to further consider the response; therefore, he
would like to withdraw Amendment 8 after hearing response from
other committee members.
11:35:42 AM
REPRESENTATIVE ZULKOSKY asked whether Amendment 8 would prohibit
Alaska's green bank from utilizing credit enhancement tools that
would help rural communities to utilize funding through the
program.
MR. ROSE offered his understanding that it would.
11:38:09 AM
MR. WEITZNER confirmed Mr. Rose was correct, and he said that is
the situation AIDEA is seeking to avoid. He spoke about
considering risk and returns in fiduciary management and seeking
alternatives with lower risk when subject to the prudent
investor rule.
REPRESENTATIVE ZULKOSKY, considering the difficulties rural
Alaska already faces with regard to infrastructure, questioned
whether she could support Amendment 8.
11:39:55 AM
REPRESENTATIVE KAUFMAN recommended referring to other states'
models to discern how they have handled this issue. He said he
suspects the other states "do not have this requirement in
place."
11:40:17 AM
REPRESENTATIVE TUCK moved to withdrew Amendment 8. There being
no objection, it was so ordered.
11:40:30 AM
REPRESENTATIVE TUCK moved to adopt Amendment 9 to HB 170,
labeled 32-GH1074\A.14, Fisher, 4/17/21, which read as follows:
Page 8, line 22, following "infrastructure":
Insert "for emissions reductions"
REPRESENTATIVE FIELDS objected.
11:40:53 AM
REPRESENTATIVE TUCK spoke to Amendment 9. He explained he
wanted to make sure the fund is not used to build new gas
stations, since that is not specified in the bill language, but
he thinks that is the intent.
REPRESENTATIVE FIELDS asked for feedback from Mr. Fisher.
11:41:47 AM
MR. FISHER confirmed that Amendment 9 would clarify that the
fueling structure would have to be related to reducing
emissions. He indicated that his interpretation is that "it
would have to relate to [an] electric vehicle."
REPRESENTATIVE FIELDS offered his understanding that AIDEA had
previously testified that fueling infrastructure could refer to
hydrogen, which would reduce emissions. At his point, he said
he is inclined to support Amendment 9, and he sought response
from Mr. Weitzner.
11:42:52 AM
MR. WEITZNER said AIDEA is in support of [HB 170] being as broad
as possible to meet the state's energy demands. He confirmed
there had been mention of hydrogen fuel at the last meeting. He
concluded, "It's intended to be inclusive of that type of
fueling technology; it's also intended to be inclusive of what's
been presented to Representative Tuck." In response to Chair
Schrage, he said he thinks the bill language is already broad,
and he views Amendment 9 as clarifying the relation to emission
reduction fueling technology rather than to electric vehicles.
11:44:02 AM
REPRESENTATIVE FIELDS said that is how he interprets Amendment
9. That said, he removed his objection to the motion to adopt
Amendment 9. There being no further objection, Amendment 9 was
adopted.
11:44:22 AM
REPRESENTATIVE ZULKOSKY moved to adopt Amendment 10 to HB 170,
labeled 32-GH1074\A.17, Fisher, 4/17/21, which read as follows:
Page 8, line 11, following "clean":
Insert "or more efficient"
REPRESENTATIVE FIELDS objected.
REPRESENTATIVE ZULKOSKY spoke to Amendment 10. She recollected
having heard from AIDEA that there is approximately $327 million
in deferred maintenance for rural power systems. She explained
that Amendment 10 would ensure there is an avenue for funding
more efficient energy transmission.
11:46:00 AM
REPRESENTATIVE KAUFMAN concurred.
11:46:16 AM
REPRESENTATIVE FIELDS removed his objection to the motion to
adopt Amendment 10. There being no further objection, Amendment
10 was adopted.
11:46:43 AM
REPRESENTATIVE ZULKOSKY moved to adopt Amendment 11 to HB 170,
labeled 32-GH1074\A.22, Fisher, 4/19/21, which read as follows:
Page 8, following line 1:
Insert a new subsection to read:
"(e) At least 35 percent of active loans and other
forms of financing for sustainable energy development
made under AS 44.88.450 - 44.88.456 must be made in
communities that receive, or that have residents who
receive, power cost equalization under AS 42.45.100 -
42.45.150."
REPRESENTATIVE Fields objected.
REPRESENTATIVE ZULKOSKY spoke to Amendment 11. She said the
goal of the amendment is to set a floor to the amount of lending
that would be made available to rural communities with a lack of
infrastructure. She said testimony and her own experience shows
there is a lot of opportunity to invest in rural Alaska.
11:48:44 AM
MR. WEITZNER clarified that AIDEA supports the inclusion of
power cost equalization (PCE) communities under any programs
being structured for AEIF, and he said HB 170 was structured
with the maximum flexibility in mind. That said, he highlighted
a problematic feature of Amendment 11 was that it would require
that 35 cents out of every [emphasis on "every"] dollar put
together under AEIF have a PCE community accepting those funds
before the full programs can be done. The structure of the fund
is to seek leverage with Alaska's financial sector in order to
create larger programs. He said the financial sector would need
to be involved, and there would need to be assurance that the
communities take the loans, which is not a certainty. So,
Amendment 11 would hamper the ability to establish and grow the
programs. He pointed to the makeup of the advisory board to
indicate inclusion of PCE communities. He recommended hearing
from Mr. Schub or Mr. Rose on this issue.
11:51:03 AM
REPRESENTATIVE FIELDS asked how many communities would be
encompassed under Amendment 11.
REPRESENTATIVE ZULKOSKY replied that she did not have the exact
number, but she said she had a map showing the communities,
which are located outside the railbelt, Juneau, and "communities
that benefit from the hydroelectric investment that Alaska has
made."
REPRESENTATIVE FIELDS observed by looking at the map that there
may be at least 100 communities.
11:53:05 AM
REPRESENTATIVE CLAMAN asked whether there have been similar
targets in terms of where money has been invested.
MR. SCHUB responded that there are numerous green banks that
have set the objective of an increasing amount of investment in
targeted, underserved, and low income communities; some have
made management decisions to establish targets for either a
specific percentage or a total dollar amount going to such
communities. He said these plans are by choice and not set
under statute, and putting this requirement in statute would be
limiting. He added that the federal government, through the
Clean Energy and Sustainability Accelerator, has a requirement
for 40 percent of funds to go to disadvantaged communities;
therefore, the dollars that flow from the accelerator to the
AEIF "would have that requirement on it."
MR. WEITZNER identified there are 197 PCE communities.
REPRESENTATIVE CLAMAN offered his understanding of Mr. Schub's
statement that [Amendment 11] would be a lower threshold than
the proposed federal legislation.
MR. SCHUB confirmed that's correct. He added information
regarding which types of communities fall under the category of
PCE.
11:57:10 AM
REPRESENTATIVE KAUFMAN commented an alternative way of looking
at this is that the citizens that live in PCE areas "shall be
required to account for 35 percent of the lending." He said he
respects the goal but wonders how to compel the loans to occur.
11:57:55 AM
REPRESENTATIVE TUCK noted that it was difficult for Alaskans to
take advantage of an Alaska Housing Finance Corporation (AHFC)
home energy rebate program, and he viewed HB 170 overall as an
opportunity for those living in rural areas to obtain energy-
saving measures. He asked how [Representative Zulkosky] arrived
at the 35 percent designation.
11:58:48 AM
REPRESENTATIVE ZULKOSKY answered that the intention behind the
35 percent was to ensure rural Alaska has an equitable
opportunity without the number being overly burdensome.
REPRESENTATIVE TUCK said he is comfortable with 35 percent. He
remarked on the unique conditions of Alaska as compared to other
states.
12:00:34 PM
REPRESENTATIVE FIELDS removed his objection to the motion to
adopt Amendment 11.
CO-CHAIR SCHRAGE objected for the purpose of discussion.
12:01:32 PM
MR. WEITZNER reiterated the idea of the flexibility of HB 170
and questioned how the requirements in Amendment 11 would be
enforced and allow for growth of the fund.
12:03:01 PM
REPRESENTATIVE ZULKOSKY indicated she had essentially asked the
same question, and talked about the advisory board and the
history of rural Alaska being left out. She disagreed that
Amendment 11 would require a certain dollar amount but rather
said it asks that a percentage of the active loans in the
program to be placed in communities that would benefit.
12:04:13 PM
REPRESENTATIVE KAUFMAN asked about "the measurement window" and
the flexibility of the criteria. He warned that "it could
create a risk that would prevent what you may be trying to
obtain."
REPRESENTATIVE ZULKOSKY responded regarding adherence to
statutes and questions raised as to how to uphold statutes, and
she said that does not dissuade her from trying to seek parity
for underserved communities with the most disproportionate
impact resulting from the cost of energy. She opined that 35
percent, when the federal government proposes 40 percent, is
"pretty darn conservative."
12:06:52 PM
REPRESENTATIVE FIELDS suggested the language of Amendment 11 is
perhaps not as confining as Mr. Weizner fist interpreted it to
be.
12:07:30 PM
REPRESENTATIVE RAUSCHER expressed concern that a large, "shovel-
ready project" might not get the green light because "we still
have to keep that 35 percent in play." He recommended seeking
the intent rather than putting this in statute. He said he did
not support Amendment 11.
12:09:25 PM
CO-CHAIR SCHRAGE commented on the focus of the program on small-
scale projects, and he suggested that any large-scale projects
may best be facilitated by "traditional AIDEA project
management."
12:09:43 PM
REPRESENTATIVE KAUFMAN requested hearing from Mr. Weitzner as to
"the practical implementation of this."
12:10:01 PM
MR. WEITZNER reiterated that it would be difficult to implement
a program. He noted that other states have not defined it this
way.
12:11:44 PM
REPRESENTATIVE TUCK said he finds problematic the idea that
investing 35 percent in PCE communities is inherently going to
hurt the growth of this fund. He remarked that it is easier to
save a kilowatt of energy than it is to produce another kilowatt
of energy. He said HB 170 is specific on what sustainable
energy development means and the powers of authority. It will
be enforced the same in urban and rural areas. He noted AIDEA
has the authority of review and can write its own procurement
laws. He stated that he wholeheartedly supports Amendment 11,
and he emphasized that he wants to make sure that "we are
spreading this across the diversity of the populations here in
Alaska effectively."
12:14:40 PM
MR. WEITZNER, in response to Representative Tuck, said AIDEA
does not see any loans that go to PCE communities as detracting
from the fund. He clarified that under Amendment 11, in order
for AIDEA to initiate one program, it would need to ensure that
it has 35 percent of PCE communities. He said he is talking
about the roll out of the fund and initial capitalization. He
stated the intent is to grow the fund. He further questioned
how compliance would be measured.
12:16:51 PM
REPRESENTATIVE ZULKOSKY offered closing comments on Amendment
11, referring to the comments committee members had made and
encouraging "a yes vote."
12:17:50 PM
CHAIR SCHRAGE withdrew his objection to the motion to adopt
Amendment 11.
REPRESENTATIVE KAUFMAN objected.
12:17:58 PM
A roll call vote was taken. Representatives Tuck, Zulkosky,
Fields, Claman, and Schrage voted in favor of Amendment 11.
Representative Kaufman voted against it. Therefore, Amendment
11 was adopted by a vote of 5-1.
12:18:51 PM
The committee took a brief at-ease at 12:19 p.m.
12:19:15 PM
REPRESENTATIVE ZULKOSKY moved to adopt Amendment 12 to HB 170,
labeled 32-GH1074\A.21, Fisher, 4/19/21, which read as follows:
Page 1, line 1, following "Act":
Insert "relating to exempt employees; relating to
the powers of the Alaska Energy Authority;"
Page 1, following line 4:
Insert new bill sections to read:
"* Section 1. AS 39.25.110 is amended by adding a
new paragraph to read:
(46) an analyst employed in a professional
capacity by the Alaska Energy Authority under
AS 44.83.055.
* Sec. 2. AS 44.83 is amended by adding a new
section to article 1 to read:
Sec. 44.83.055. Analyst position. The authority
may hire one analyst to assist underserved communities
with the technical development of projects and
applications for funding from the Alaska energy
independence fund and program under AS 44.88.450 -
44.88.456."
Page 1, line 5:
Delete "Section 1"
Insert "Sec. 3"
Renumber the following bill sections accordingly.
REPRESENTATIVE Claman objected for the purpose of discussion.
REPRESENTATIVE ZULKOSKY spoke to Amendment 12. Under the
proposed amendment, AIDEA would be able to hire an analyst to
help underserved communities in the area of technical
development for the purpose of assisting those communities in
developing projects.
12:20:39 PM
MR. WEITZNER noted he had spoken with Curtis Thayer, Executive
Director, Alaska Energy Authority (AEA), and he learned that AEA
supports Amendment 12. He asked the committee to consider
broadening the approach so that the analyst position is not
limited to just the AEIF and its programs, "but in general, to
programs to those communities."
12:21:21 PM
REPRESENTATIVE CLAMAN suggested the next committee of referral
to address [that which Mr. Weizman requested]. He then removed
his objection to the motion to adopt Amendment 12. There being
no further objection, Amendment 12 was adopted.
12:21:55 PM
The committee took back-to-back at-eases from 12:22 p.m. to
12:24 p.m.
12:24:11 PM
REPRESENTATIVE ZULKOSKY moved to report HB 170, as amended, out
of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
170(ENE) was reported out of the House Special Committee on
Energy.
12:24:44 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at [12:25]
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 170 H ENERGY Amendment Packet 4.20.2021.pdf |
HENE 4/20/2021 10:15:00 AM |
HB 170 |
| HB 170 H ENERGY Final Vote Amendment Packet 4.20.2021.pdf |
HENE 4/20/2021 10:15:00 AM |
HB 170 |