Legislature(1993 - 1994)
05/08/1993 05:00 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 8, 1993
5:00 p.m.
TAPE HFC 93-134, Side 2, #000 - end.
TAPE HFC 93-135, Side 1, #000 - 397.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee to order
at 5:00 p.m.
PRESENT
Co-Chair Larson Representative Hoffman
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Foster Representative Therriault
Representative Grussendorf
ALSO PRESENT
Representative David Finkelstein; Mike Greany, Director,
Legislative Finance Division; Mel Kronseng, Legislative
Staff, Representative Barnes; Shelby Stastny, Director,
Office of Budget and Management.
SUMMARY INFORMATION
SB 106 "An Act authorizing power transmission interties
between Anchorage and the Kenai Peninsula, between
Healy and Fairbanks, and between the Swan Lake and
Tyee Lake hydroelectric projects, and approving
the design and construction costs of the
interties; and providing for an effective date."
HCS CSSB 106 (FIN) was reported out of Committee
with a "do pass" recommendation and with a zero
fiscal note by the Department of Community and
Regional Affairs and with two zero fiscal notes by
the Department of Commerce and Economic
Development.
SB 126 "An Act making special appropriations for design
and construction of power transmission interties
between Anchorage and the Kenai Peninsula, between
Healy and Fairbanks, and between the Swan Lake and
Tyee Lake hydroelectric projects; and providing
for an effective date."
HCS CSSB 126 (FIN) was reported out of Committee
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with "no recommendation".
SENATE BILL NO. 106
"An Act authorizing power transmission interties
between Anchorage and the Kenai Peninsula, between
Healy and Fairbanks, and between the Swan Lake and Tyee
Lake hydroelectric projects, and approving the design
and construction costs of the interties; and providing
for an effective date."
Co-Chair Larson asked if the Alaska Industrial Development
and Export Authority (AIDEA) had been contacted in regards
to CSSB 106(FIN) am(efd fld) and CSSB 126(RLS) am(efd fld).
MEL KRONSENG, LEGISLATIVE STAFF, REPRESENTATIVE BARNES
replied that AIDEA was contacted by both the Department of
Law and Representative Barnes' staff. She stressed that the
Alaska Energy Authority's corporation structure will be kept
intact.
Representative Brown understood that seventy employees of
AEA would be laid off. She asked Ms. Kronseng to identify
the employees that will be eliminated as a result of the
legislation. Ms. Kronseng replied that approximately 35 CIP
employees will be eliminated if operations are contracted to
the private sector. Transfer of the Bradley Lake project to
the utilities will result in the elimination or transfer of
five employees. Other employees will be transferred to the
Department of Community and Regional Affairs. She indicated
that the exact number of employees who will be transferred
or eliminated is unknown. She emphasized that there will be
a six month transition period.
Ms. Kronseng clarified that AIDEA will issue bonds. The
Alaska Energy Authority will not continue to issue bonds.
She stated that Mr. Snell indicated that AIDEA could take
over the bond functions of AEA with the addition of two or
three employees.
Representative Brown referred to statutes being repealed by
the legislation. Ms. Kronseng stated that statutes
concerning rural functions of AEA are being repealed and
transferred to teh Department of Community and Regional
Affairs.
Representative Parnell expressed support for the
legislation. He expressed concern with the affect the
legislation could have on bonds issued by AEA. He suggested
that a written opinion stating that the bond capacity and
authority of the AEA and AIDEA will not be impaired.
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Co-Chair Larson reiterated the motion to move HCS CSSB 106
(FIN) from Committee (made by Representative Therriault
during the 5/08/93 a.m., House Finance Committee meeting).
There being NO OBJECTION, it was so ordered.
HCS CSSB 106 (FIN) was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note by the
Department of Community and Regional Affairs and with two
zero fiscal notes by the Department of Commerce and Economic
Development.
SENATE BILL NO. 126
"An Act making special appropriations for design and
construction of power transmission interties between
Anchorage and the Kenai Peninsula, between Healy and
Fairbanks, and between the Swan Lake and Tyee Lake
hydroelectric projects; and providing for an effective
date."
Ms. Kronseng pointed out that the appropriation includes
funding for the Department of Community and Regional Affairs
to cover expenses of the functions being transferred. She
expected that a portion of the appropriation will lapse.
Co-Chair Larson provided members with AMENDMENT 1
(Attachment 1). Ms. Kronseng explained that the Amendment
was requested by bond counsel to make AIDEA partner to the
contracts. She clarified that the language is specific to
the Northern and Southern intertie grants. Co-Chair Larson
MOVED to ADOPT AMENDMENT 1. There being NO OBJECTION, it
was so ordered.
Representative Brown provided members with AMENDMENT 2
(Attachment 2). The Amendment was offered by Representative
Brown on behalf of Representative Finkelstein. Amendment 2
would appropriate $8.0 thousand dollars for "ongoing
residential and business energy efficiency improvement
programs."
REPRESENTATIVE DAVID FINKELSTEIN provided members with a
memorandum, dated 5/08/93, explaining Amendment 2
(Attachment 3). He reviewed Attachment 3. He concluded
that energy conserved is the same as energy produced. He
emphasized that retrofitted and energy efficient buildings
would result in lower operating costs by 20 to 30 percent
annually. He maintained that costs would be recouped in
approximately three years.
Representative Brown MOVED to ADOPT AMENDMENT 2.
Representative Martin OBJECTED. Co-Chair MacLean noted that
there is a $17 million dollar capital appropriation to the
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Alaska Housing Finance Corporation (AHFC) for home
improvements. Representative Finkelstein stressed that the
demand for the low income weatherization program in AHFC far
exceeds the amount of money available. He stated that the
Department of Transportation and Public Facilities cannot
afford to retrofit state buildings.
A roll call vote was taken on the motion to adopt Amendment
2.
IN FAVOR: Brown
OPPOSED: Grussendorf, Navarre, Foster, Hanley, Martin,
Parnell, Therriault, MacLean, Larson
Representative Hoffman was not present for the vote.
The MOTION FAILED (1-9).
Representative Brown provided members with AMENDMENT 3
(Attachment 4). Amendment 3 would appropriate $15.0 million
dollars to the Department of Transportation and Public
Facilities for institutional facilities demand-side
management programs. Representative Navarre spoke in favor
of Amendment 3.
SHELBY STASTNY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET
agreed that expenditures on energy efficiencies would result
in savings. He acknowledged the legislature's prerogative
to decide how the state's money is spent.
Representative Navarre asked Mr. Shelby to investigate cost
savings which would be generated by retrofitting state
facilitates for energy efficiency.
Representative Martin asked Mr. Shelby to develop a list of
priorities for state facilities. Representative Hanley
recommended that a comprehensive plan for increased energy
efficiency be developed. Representative Grussendorf
suggested that a deferred maintenance list be included.
A roll call vote was taken on the motion to adopt Amendment
3.
IN FAVOR: Brown, Grussendorf, Navarre
OPPOSED: Foster, Hanley, Martin, Parnell, Therriault,
MacLean, Larson
Representative Hoffman was not present for the vote.
The MOTION FAILED (3-7).
Representative Brown provided members with AMENDMENT 4
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(Attachment 5). Amendment 4 would delete section 15. She
stated that the intent is to allow the separation of HCS
CSSB 106(FIN) and CSSB 126(RLS) am(efd fld). Representative
Navarre spoke in support of Amendment 4. He felt that it
would be bad policy to base the passage of CSSB 126(RLS)
am(efd fld) on HCS CSSB 106(FIN).
Ms. Kronseng stressed that authorization language is needed
to execute the bonding package.
Representative Brown MOVED to ADOPT AMENDMENT 4.
Representative Hanley OBJECTED. A roll call vote was taken
on the motion.
IN FAVOR: Brown, Grussendorf, Hoffman, Navarre, Therriault
OPPOSED: Foster, Hanley, Martin, Parnell, MacLean, Larson
The MOTION FAILED (5-6).
Representative Brown provided members with AMENDMENT 5
(Attachment 6). She explained that Amendment 5 incorporates
suggestions made by residents in the Sutton/Glennallen area.
The amendment mandates that feasibility studies are
completed prior to the dispersion of funds. Representative
Martin objected to the amendment. He felt that the
restrictions placed by the amendment would be costly.
Representative Brown WITHDREW AMENDMENT 5. Co-Chair Larson
noted that Amendment 5 reflects the concerns of area
residents.
Representative Navarre asked for further information
regarding the Tazimina River hydroelectric power project.
Co-Chair Larson pointed out that the project is also
contained in the capital budget.
Ms. Kronseng explained that the intent is to build a small
generator at the base of a waterfall located on the River.
She observed that feasibility studies have been completed
and the project is ready for construction. The total
project cost is estimated at $10.0 million dollars. It will
serve NewHalen and Nondalton. She added that six or seven
other communities could be served.
Representative Brown asked who would pay for the interties
to connect other communities. Mr. Stastny explained that
three or four communities would be connected without an
additional intertie. There are two or three communities
that would be connected with the addition of one intertie.
Co-Chair MacLean noted that the project is on AEA's project
list.
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Representative Brown stressed that projects contained in HCS
CSSB 126 (FIN) are not economically efficient uses of the
state's money.
Representative Hoffman expressed concern that AEA is being
"dismantled". He stated that money would be better spent on
solving fuel storage tank problems in Western Alaska.
Representative Therriault MOVED to report HCS CSSB 126 (FIN)
out of Committee with individual recommendations.
HCS CSSB 126 (FIN) was reported out of Committee with "no
recommendation".
ADJOURNMENT
The meeting adjourned at 6:30 p.m.
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