Legislature(2023 - 2024)ADAMS 519
04/17/2024 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB269 || SB187 | |
| Presentation: Grid Resilience and Innovation Partnership Federal Funding and Match Requirement by the Alaska Energy Authority (aea) | |
| Presentation: Governor's Budget Amendments by the Office of Management and Budget - Statewide Transportation Improvement Program (stip) Update by the Department of Transportation and Public Facilities | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 269 | TELECONFERENCED | |
| + | SB 187 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 17, 2024
1:54 p.m.
1:54:04 PM
CALL TO ORDER
Co-Chair Edgmon called the House Finance Committee meeting
to order at 1:54 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Lacey Sanders, Director, Office of Management and Budget,
Office of the Governor; Dom Pannone, Administrative
Services Director, Department of Transportation and Public
Facilities.
PRESENT VIA TELECONFERENCE
Curtis Thayer, Executive Director, Alaska Energy Authority,
Department of Commerce, Community and Economic Development;
Sean Holland, Director, Central Region, Department of
Transportation and Public Facilities.
SUMMARY
HB 269 APPROP: CAP; REAPPROP
HB 269 was HEARD and HELD in committee for
further consideration.
CSSB 187(FIN)am APPROP: CAP; REAPPROP CSSB
187(FIN) am was HEARD and HELD in committee for
further consideration.
PRESENTATION: GRID RESILIENCE and INNOVATION PARTNERSHIP
FEDERAL FUNDING and MATCH REQUIREMENT BY THE ALASKA ENERGY
AUTHORITY (AEA)
PRESENTATION: GOVERNOR'S BUDGET AMENDMENTS BY THE OFFICE OF
MANAGEMENT AND Budget - STATEWIDE TRANSPORTATION
IMPROVEMENT PROGRAM (STIP) UPDATE BY THE DEPARTMENT OF
TRANSPORTATION and PUBLIC FACILITIES
HOUSE BILL NO. 269
"An Act making appropriations, including capital
appropriations and other appropriations; making
reappropriations; making appropriations to capitalize
funds; and providing for an effective date."
CS FOR SENATE BILL NO. 187(FIN) am
"An Act making appropriations, including capital
appropriations, supplemental appropriations, and other
appropriations; making reappropriations; making
appropriations to capitalize funds; amending
appropriations; and providing for an effective date."
Co-Chair Edgmon reviewed the meeting agenda.
1:56:47 PM
^PRESENTATION: GRID RESILIENCE and INNOVATION PARTNERSHIP
FEDERAL FUNDING and MATCH REQUIREMENT BY THE ALASKA ENERGY
AUTHORITY (AEA)
1:57:16 PM
AT EASE
1:58:18 PM
RECONVENED
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY,
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT
(via teleconference), provided a PowerPoint Presentation
titled "GRIP Federal Funding and Match Requirement," dated
April 17, 2024 (copy on file). He turned to slide 2 titled
"Grid Resilience and Innovation Partnerships:"
On October 18, 2023, the U.S. Department of Energy
(DOE) announced up to $3.5 billion in Grid Resilience
and Innovation Partnerships (GRIP) Program investments
for 58 projects across 44 states to strengthen
electric grid resilience and reliability across
America.
In the fall of 2023, AEA was awarded $206.5 million by
DOE to advance the Railbelt Innovation Resiliency
(RIR)project, which aims to enhance the resiliency and
transfer capability along Alaska's Railbelt.
To utilize the funds, there must be a commitment to
match 100 percent or $206.5 million bringing the
project's total cost to $413 million.
These federal funds were the result of a successful
collaboration between AEA and Railbelt utilities:
Chugach Electric Association
Golden Valley Electric Association
Homer Electric Association
Matanuska Electric Association, and
Seward Electric.
With this DOE funding, Alaska can leverage dollar for
dollar matching federal investment to expand on
transmission upgrades already underway and modernize
the transmission system for the benefit of all of the
Railbelt communities, while at the same time improve
resilience and energy security, diversify its energy
portfolio, and accelerate the effective future
integration of renewable and clean power.
Mr. Thayer reported that the goal of the collaboration was
to implement the following project. He moved to slide 3
titled "Railbelt Innovation Resiliency Project: HVDC
Submarine Cable:
The Railbelt Innovation Resiliency (RIR) project will
construct a high-voltage direct current (HVDC)
submarine cable to serve as a parallel transmission
route from the Kenai Peninsula to Anchorage, creating
a much-needed redundant system in case of disruptive
events.
Anticipated outcomes and benefits include:
Increases transfer capacity between regions that
enables higher renewable energy integration into
the electricity system.
Improves resilience and reliability for tribal
and disadvantaged communities in the Railbelt
region, and a reduction in reliance on fossil
fuel generation and associated emissions.
Supports the retention of high-quality jobs in
the region, including 650 highly paid jobs with
competitive employer-sponsored benefits.
Creates apprenticeship and internship programs to
train a new generation of line workers and
wireworkers to reinvigorate Alaska's energy
workforce.
Mr. Thayer highlighted that the project would increase
electrical transmission, which was the largest constraint
to renewable energy development. The project enabled
increased power transfer from Bradley Lake and planned wind
and solar project on the Kenai Peninsula that would be
transmitted to Southcentral Alaska to Fairbanks. He pointed
to a map with a yellow dotted line on the right of the
slide showing the route of the cable. He detailed that it
was 67 miles long.
2:01:51 PM
Mr. Thayer turned to slide 4 titled "HVDC Submarine Cable
from Kenai to Beluga:"
The RIR project encompasses several projects one of
them being the installation of a new submarine high-
voltage direct current (HVDC) transmission line from
the Kenai Peninsula across Cook Inlet to the existing
Beluga Power Plant and, if feasible, one or two
battery energy storage systems (BESS) in the Central
(Anchorage) and Northern (Fairbanks) regions.
Project highlights:
Location: The project involves connecting the
Railbelt's Southern region (Kenai Peninsula) to the
Central region (Anchorage, Matanuska-Susitna Valley)
via Beluga with an HVDC submarine circuit.
Cable length: Approximately 65 miles total length,
37.5 mile subsea cable/2.5 miles from the landing to
Beluga, and 25 miles from the Southern landing to
Soldotna.
Cable size: The cable is approximately 8" in diameter
with roughly 250 megawatt transfer capability.
Cable depth to be buried in the seabed: About 4-6 feet
deep. Landings may be installed using horizontal
directional drilling.
Mr. Thayer proceeded to slide 5 titled "BESS in Central
Anchorage) and Northern(Fairbanks) Regions:
At its most basic level a BESS consists of one or more
batteries that store electrical energy for use at a
later time. This stored energy can then be drawn upon
when needed to meet various demands for power across
different applications.
BESS provides advantages over other energy storage
systems: greater efficiency and flexibility, faster
response times when powering equipment or devices, and
lower costs overall.
Coordinated interregional control and operations of
the BESSs and HVDC line will tie all the individual
systems together to maximize stability and limit
congestion.
Mr. Thayer explained that BESS was a Battery Energy Storage
System (BESS). The GRIP award was for the HVDC system, any
remaining funding could be used for BESS in Southcentral
Alaska and in the northern region, but only for new BESS
construction. The storage system could store power for 2 to
4 hours at a time. He discussed slide 6 titled "Schedule:
The statutory period for the project is eight (8)
years and the construction schedule below is based on
a design-bid-build process a traditional project
delivery method that consists of three distinct phases
in sequence:
-Second Quarter 2024 Award
-Summer 2024 Preliminary Engineering
-December 2024 Complete Preliminary Design
-July 2027 Complete National Environmental
Policy Act (NEPA) Process
-December 2027 Contractor Selection
-January 2028 to December 2029 Long Lead Items
-January 2030 to December 2031 Construction
Mr. Thayer delineated that it would take an act of Congress
to extend the project after 8 years and supply logistics
was a significant issue.
2:05:13 PM
Mr. Thayer turned to slide 7 titled "Why are Transmission
Upgrades Needed?"
Many of the transmission lines and associated
equipment serving Alaska were constructed more than 40
years ago. Transmission upgrades are needed to improve
Alaska's resilience and energy security, diversify its
energy portfolio, and accelerate the effective future
integration of renewable and clean power.
Energy Security
Reliable transmission infrastructure ensures that
those projects will be able to connect to the
grid and provide energy anywhere it is needed
along the Railbelt.
Energy Diversity Redundant Energy
As Cook Inlet natural gas supplies decline, new
energy projects, including renewable energy, will
become increasingly become increasingly important
to our energy security.
Redundant Energy
A second transmission line from the Southern
region (Kenai Peninsula) of the Railbelt to the
Central region (Anchorage) will ensure power in
the event of an emergency shutdown along existing
lines.
Mr. Thayer elaborated that currently there is only one
transmission line from Bradley Lake to Healy where it split
into two lines. He mentioned the Swan Lake Fire four years
prior that affected transmission. In addition, there were 5
military bases in the Railbelt. He emphasized the need for
transmission lines to enable energy diversity.
2:09:08 PM
Mr. Thayer turned to slide 9 titled "Benefits and
Opportunities
Alaska has a once in a generation opportunity to
expand on upgrades underway by leveraging federal
funding to modernize the transmission system for all
Railbelt communities. Transmission line upgrades and
BESS acquisition will provide consumers with multiple
benefits, including:
Decreased line loss: Upgraded line will substantially
reduce energy losses from resistance, contributing to
lower energy prices.
Grid redundancy and stability: Adds redundancy and
stability on the Railbelt by creating an alternate
path for generation to flow north and
Better cost alignment: Align the allocation of
resources with traditional utility methodology, i.e.
cost causer/cost payer.
Rural benefits: Upgrades will benefit rural
communities; when energy costs decrease on the
Railbelt, residential rates are reduced for
communities that receive Power Cost Equalization.
Increased resilience and reliability: BESS increases
grid resilience and reduces outage risk by supporting
load for several hours.
New renewable energy: Allows for development of new
renewable energy projects on the Kenai Peninsula for
consumers.
Increased stability: Regardless of fuel supply
diversity and decarbonization solutions, these
improvements are needed for increased stability.
Mr. Thayer advanced to slide 9 titled "Fiscal Year 2025
GRIP Match." He related that the match amount was $206.5
million. The Department of Energy (DOE) did not require the
full amount up front. However, DOE wanted an accounting of
the flow of match funding over the 8 years and would only
fund up to the matched amount. The Grip match in 2025 would
be $12.7 million from the Alaska Industrial Development and
Export Authority (AIDEA) dividends. An additional $20
million would be used from unallocated bond funds from an
AEA bond issuance of $166 million for transmission upgrades
two years prior. The total match would be $32.7 million and
matched by the federal government. He pointed to the
cashflow analysis chart on the slide and indicated that
state fund sources would need to be identified in the years
2029 until completion in 2031.
2:11:59 PM
Co-Chair Edgmon requested an explanation of the interplay
between phase 1 and phase 2 of the project.
Mr. Thayer replied that he would substitute the word
"round" for phase because they were different projects. The
current project was round 1 that would provide transmission
from the Kenai Peninsula to Beluga or across Cook Inlet.
Round 2 would place an HDVC overhead line from Beluga to
Healy totaling 250 miles. The authority had already filed
the application. The project cost $730 million and would
take a match of $365 million. The utilities would bear the
match expenses and it was not assured that the state would
receive any funding for round 2. There were 50 applications
for the funding, and it would be a challenge to obtain the
second award. He understood that DOE would decide by August
2024.
Co-Chair Edgmon inquired whether the $32.7 million match in
the current budget had any impact or any bearing on the
round 2 application. Mr. Thayer answered in the negative.
He did not know who would be grading the second round. He
had not received any indication from DOE that the round 2
funding was predicated on round 1 funding. Co-Chair Edgmon
shared that there was "some sense" that funding the entire
match amount in FY 25 would make the state more competitive
for the round 2 match; however, Mr. Thayers' answer
dispelled the idea.
2:17:28 PM
Representative Stapp read an excerpt from a letter from all
of the utilities on the Railbelt as follows:
"Additional funding would inform the DOE that the
state of Alaska was fully committed to the Railbelt
Innovation Resilience Project and would reinforce our
delegation's advocacy for phase 2. Both phase 1 and
phase 2 are required to truly achieve a modern
integrated regional system in a GRID."
Representative Stapp interpreted the letter to imply that
based on the minimalistic level of funding allocated toward
the project that it was a bad look" from DOE's standpoint.
He asked why Mr. Thayer thought the current level of
funding was adequate to receive a second GRIP award. Mr.
Thayer answered that he had not implied that the utilities
were wrong. He explicated that AEA worked in collaboration
with the utilities on both grants and was the primary
applicant on both applications. He understood the
utilities' view that more funding was beneficial to
advocate for the project. However, he observed that the
governor provided adequate funding for round 1 and had not
even addressed round 2. He thought the matter was a policy
call between the governor and legislature regarding the
current funding level for the match.
2:19:47 PM
Representative Stapp wanted to be clear and direct. He
declared that he was a Fairbanks legislator and all he
cared about was getting the money to upgrade the grid. He
did not believe that they needed to match the entire amount
in FY 25. He asked whether the amount of match funding
potentially jeopardized the ability to obtain a second GRIP
award. Mr. Thayer answered in the negative. Representative
Stapp asked if the first tranche of funding for phase 1
would be paid by the state and the second award would come
directly from utilities in the amount of $365 million. Mr.
Thayer responded affirmatively. He delineated that included
an AEA resolution indicating there was no presumption of
match from the state for the second application. The board
wanted to ensure they were not committing the state to
hundreds of millions without involvement by the governor or
legislature.
2:21:53 PM
Representative Stapp asked if Mr. Thayer had stated AEA had
submitted the application for round 2 with the statement
that the funding would come from the utilities and not from
the state. Mr. Thayer replied that the application
requested AEA identify where the funding would come from,
and it did not make a definitive statement. He restated
that there was a reference that the funding would come from
utilities and other sources. Representative Stapp asked who
would pay if the funding was taken from the utilities. He
asked if it would be the consumer. Mr. Thayer answered that
the ratepayers would likely pay, subject to the approval.
He added that if awarded round 2, it would add another
level of discussions regarding the details lacking the
assumption that the state would come up with $365 million.
He emphasized that the decision was a policy call for the
legislature and governor.
Co-Chair Edgmon stated there were about two weeks to work
on the capital budget in committee. He voiced that it was
incumbent on the committee to come up with a "firmer
response" from DOE relative to phase 2. He noted that
Representative Stapp was not the only legislator with the
same concerns regarding match funding and what was needed
in the capital budget for the project.
2:25:02 PM
Representative Josephson surmised that the application
reflected the state's responsibility for the difference
between $206.5 million, and the $32.7 million. He asked
whether he was correct. Mr. Thayer replied that AEA
identified multiple sources of match funding and indicated
that it would be state, utilities, or other to be
identified funding. The application specifically identified
the $12.7 million from the state and the $20 million from
the utilities paying the debt service on the bonds.
Representative Josephson asked for verification there was
nothing in the scoring rubric that benefitted the state
from providing the $206 million. Mr. Thayer answered in the
affirmative. He furthered that there was nothing in the
second application other than acknowledging a need for the
match. Representative Josephson wondered whether there was
any scenario where the state should commence finding
funding for the second GRIP award. Mr. Thayer asked if
Representative Josephson's question was that currently
should money be obligated and set aside for the phase 2,
Beluga to Healy, portion of the project. Representative
Josephson responded in the affirmative. Mr. Thayer replied
in the negative. He elaborated that the application had
been submitted but the outcome was unknown and identifying
funding was not a criterion for round 2.
2:28:42 PM
Representative Galvin asked if the application deadline for
round 2 was the current day. Mr. Thayer answered in the
affirmative. Representative Galvin asked whether
applications could be updated if there was a larger
investment in the capital budget. Mr. Thayer responded in
the negative. He added that there was not an ability to
change or update an application once submitted.
Representative Galvin looked at slide 9 and asked for
clarification regarding the $32.7 million. Mr. Thayer
answered that the match would be doubled by the federal
government match amounting to $65.4 million.
2:31:23 PM
Representative Galvin referenced the 50 applications for
round two that totaled $3 billion. She asked if the amount
was correct. Mr. Thayer answered in the affirmative. He
indicated that the pool of invitees was 50 and he did not
know how many states had applied.
Co-Chair Edgmon asked about the timeline for a response to
the round two application. Mr. Thayer answered that an
answer was expected in late summer.
2:32:52 PM
^PRESENTATION: GOVERNOR'S BUDGET AMENDMENTS BY THE OFFICE
OF MANAGEMENT AND Budget - STATEWIDE TRANSPORTATION
IMPROVEMENT PROGRAM (STIP) UPDATE BY THE DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES
2:32:57 PM
Co-Chair Edgmon directed attention to the second
presentation.
LACEY SANDERS, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, provided a high level overview of
the governor's capital request. She introduced a PowerPoint
presentation titled "Office of Management and Budget:
Overview of the Governor's Capital Budget," dated April 17,
2024 (copy on file). She began on slide 2 titled "Capital
Budget Five-Year History. The graph depicted the total
budget by fund group from FY 2021 through FY 2024 that
included capital supplemental budgets and the FY 2025
proposed capital budget request. She pointed to the federal
funding depicted in blue and noted the increases to the
state due to the Infrastructure Investment and Jobs Act
(IIJA), Inflation Reduction Act, broadband, and the Grip
award that represented a significant investment in federal
funds in the state.
2:35:47 PM
Ms. Sanders turned to slide 3 titled "Governor's Capital
Requests." She pointed to the top chart showing FY 2024
Supplemental Capital requests and drew attention to the
April 9, 2024, supplemental amendments request. She
indicated that the total FY 24 Unrestricted General Funds
(UGF) supplemental request was $27,772 million and a total
of $290 million in all fund sources. She addressed the FY
2025 Governor's Capital Budget requests on the bottom chart
and noted the amended requests, the most recent on April 9,
2024. The capital budget included $297.4 million UGF and
totaled $3.5 billion including all budget sources.
2:37:42 PM
Ms. Sanders reviewed the supplemental requests beginning on
slide 4 titled FY 2024 Capital Supplemental Requests by
Department and turned to the details on slide 5 titled "FY
2024 Capital Supplemental Significant Highlights
Department of Commerce, Community, and Economic
Development:
$5,000.0 UGF Wrangell Dam Safety and
Stabilization Improvements
$213,452.0 ($6,952.0 UGF; $206,500.0 Federal) for
Alaska Energy Authority Grid Resilience and
Innovation Partnership Grant
Department of Corrections:
$3,000.0 UGF for Lemon Creek Correctional Center
Extended Renovation and Repair
Department of Family and Community Services:
$1,444.3 UGF Reappropriate Alaska Pioneer Homes
Payment Assistance Program
Department of Fish and Game:
$3,000.0 UGF for Retrofit of Vessel for Gulf and
Bering Sea Research
Office of the Governor:
$1,250.0 Other for Elections Security under the
Help America Vote Act
Department of Military and Veterans' Affairs:
Net Zero ($375.8 UGF; ($375.8) DFG) for State and
Local Cybersecurity Grant Fund Change
Department of Natural Resources:
$2,220.0 Federal for Resilient Food System
Infrastructure Grants
Department of Transportation and Public Facilities:
$3,300.0 DGF for Alaska Marine Highway System
Vessel Overhaul, Annual Certification and
Shoreside Facilities Rehabilitation
$8,000.0 UGF for Dalton Highway Heavy
Maintenance
Ms. Sanders indicated that the Department of Commerce,
Community and Economic Development's (DCCED) $5 million
request was in response to a landslide in Wrangell in
November 2023. She reiterated the information regarding the
GRIP grant presented by Executive Director Thayer. She
pointed to the $3 million for the Department of Corrections
(DOC) for the Lemon Creek Correctional Center and noted
that the costs had increased due to unknown damage and the
discovery of hazardous materials.
2:40:31 PM
Ms. Sanders addressed the $1.4 million request in the
Department of Family and Community Services (DFCS) that was
reappropriated from unspent payment assistance grant funds
from the Operating Budget. She explained that the $3
million for the Department of Fish and Game (DFG) would be
used to retrofit a vessel that was transferred to the state
from Trident Seafoods. Thus, eliminating the $7.5 million
request that was in the governor's original capital budget
to replace the prior research vessel deemed unseaworthy.
The Office of the Governor (GOV) request included $1
million in federal receipt authority from the federal
grant, $200 thousand in state match, and $50 thousand from
interest earned.
2:43:16 PM
Ms. Sanders moved to the Department of Military and
Veterans Affairs (DMVA) that was a fund source change from
program receipts to UGF. She pointed out that $3.3 million
for the Alaska Marine Highway System (AMHS) was for the
many unanticipated needs that occurred during vessel
operation and resulted in unplanned projects. She provided
examples of issues that arose with the Kennecott and
Tustumena. The $8 million for Dalton Highway Heavy
Maintenance was due to significant road deterioration.
2:46:08 PM
Representative Hannan asked why some of the supplementals
were not FY 25 requests. She determined that some were new
projects. Ms. Sanders answered that for some FY 2025
projects there already was work currently being done and a
supplemental appropriation allowed work to continue or
begin immediately rather than on July 1. The Office of
Management and Budget (OMB) evaluated when the work needed
to be done to determine if it was a supplemental need.
Representative Hannan asked if the Grip award should be
presented over the span of 7 fiscal years. She deduced that
it was appropriated as an FY 25 match, but it was actually
an FY 24 expenditure. She wondered if it was off by a year.
Ms. Sanders responded that the way the $6.5 million was
appropriated provided a match for AEA to start the work.
She reminded the committee that capital projects had a 5
year life expectancy allowing for flexibility to begin work
immediately and transitioning funds into the next year. The
majority of the work under the $37.5 million would happen
in FY 25.
Co-Chair Edgmon interjected that the timing seemed
appropriate.
Representative Hannan offered that there was internal
debate on whether the entire $206 million was needed
upfront. She surmised that the supplemental amount in FY 24
"threw her off," but she understood it would count in the
total match funding.
Ms. Sanders reviewed the Capital Budget requests beginning
on slide 6 titled "FY 2025 Capital Requests by Department"
and turned to the details on slides 7 through 9 titled "FY
2024 Capital Budget Significant Highlights
• Department of Administration
• $9,000.0 Other for the Benefits and Retirement
Systems (BEARS) Enhancement
• $1,000.0 UGF to Replace Aging Infrastructure
• $2,050.0 UGF to Expand and Complete Digitization of
Payroll Services and Recruitment
• Department of Commerce, Community, and Economic
Development
• $1,012,139.6 Federal for Broadband Equity Access
and Development Program
• $3,453.9 UGF for AEA Grid Resilience and
Innovation Partnership Topic 3 Railbelt Utilities
• $5,000.0 DGF for continued investment in Renewable
Energy Project Grants
• $2,500.0 UGF for a grant to Alaska Travel Industry
Association
• Department of Corrections
• $10,904.3 UGF for Statewide Institution
Improvements
• Perimeter Fences and Gates
• Security Doors and Windows
• Backup Power System Upgrades
• Statewide Closed Circuit Television (CCTV)
Systems
• Department of Education and Early Development
• $3,986.5 UGF for School Construction Grant Funds
• $4,270.2 UGF for Major Maintenance Grant Funds
Slide 8:
• Department of Fish and Game
• $2,000.0 UGF for Stock Identification of Salmon
Harvested in South Peninsula Fisheries
• $1,300.0 UGF for continued funding for the Alaska
Marine Salmon Program
• Office of the Governor
• $28,222.5 DFG for Statewide Deferred Maintenance,
Renovation, and Repair
• $250.0 UGF for Elections Voting Booths
• Department of Natural Resources
• $3,575.0 UGF for Silviculture Treatments and
Precommercial Thinning
• Department of Public Safety
• $9,500.0 UGF for Patrol Vessel Enforcer Replacement
• $6,200.0 UGF for Pilatus PC-12NG Aircraft
Acquisition
• $4,675.0 UGF for Aircraft and Marine Vessel (M/V)
Maintenance and Repair
Slide 9:
• Department of Revenue
• $25,000.0 UGF for Alaska Housing Finance
Corporation Down Payment Assistance Grants
• $62,720.0 ($26,700.0 UGF; $14,420.0 Other;
$21,600.0 Federal) for Alaska Housing Finance
Corporation Annual Housing Programs
• $7,500.0 Other for Dividend Application Information
System Replacement Phase 1
• Department of Transportation and Public Facilities
• $822,393.0 Federal for Surface Transportation
Program
• $115,983.0 Federal Receipts for Rural Ferry Grants
$23,196.6 Toll Credits for Match
$92,786.4 for M/V Tustumena Replacement
Vessel
• $4,250.0 UGF for Copper River Highway Wood Canyon
Bridges and Trails
• $2,666.6 UGF for Williamsport Iliamna Intermodal
Connector
• $2,533.3 UGF for Statewide Per- and Polyfluoroalkyl
Substances (PFAS): Fleetwide Foam Replacement
• University of Alaska
• $1,000.0 UGF for Alaska Center for Energy and Power
Energy Data Storage and Access Revitalization
Project
• $10,000.0 ($5,000.0 UGF; $5,000.0 DGF) for
University of Alaska Drones Program Year Three
• $11,100.0 ($2,220.0 UGF; $8,880.0 Federal) for
University of Alaska Fairbanks Alaska Railbelt
Carbon Capture and Sequestration Project
• $20,000.0 ($10,000.0 UGF; $10,000.0 DGF) for University
of Fairbanks to Achieve Research 1 Status
Co-Chair Edgmon inquired whether Ms. Sanders would
delineate the difference between items that were originally
in the budget and items that were removed by the Senate.
Ms. Sanders answered that she had included a backup handout
titled "Attachment C" (copy on file) that compared items in
the governor's original request, were modified, or removed
by the Senate. It did not account for items added by the
Senate. She described the significant changes beginning on
slide 7. She reported that the Department of
Administration's (DOA) $9 million was in retirement
receipts (Other fund category) for modifications and
Information Technology (IT) enhancements for the BEARS
system; a new retirement and benefits calculation system.
The $1 million request was for the Office of Information
Technology. The $2 million to expand and complete
digitization of payroll services was a continuation of a
phased project that began in the previous year.
2:53:55 PM
Ms. Sanders highlighted items for DCCED. The $1 billion for
the federal Broadband Equity Access and Development (BEAD)
program was in federal receipt authority. She delineated
that the $5 million for the Renewable Energy Project Grants
was capitalized in the Operating Budget Renewable Energy
Grant Fund and was appropriated in the capital budget.
However, the Senate reduced the amount by $1 million and
currently totaled $4 million. The $2.5 million grant to the
Alaska Travel Industry Association (ATIA) was removed from
the Senate's Capital Budget. She briefly described the
Department of Corrections (DOC) requests. She remarked that
the funding for the perimeter fences and gates and security
doors and windows was removed by the Senate. In addition,
the project requests took a phased approach spread out over
a three year time period.
2:57:33 PM
Representative Galvin referenced the funding for AEA and
determined that $2 million was lacking from the total
match. She asked where the remaining amount was located.
Ms. Sanders responded that $2.3 million was a
reappropriation from a prior AEA power transmission
project.
Representative Coulombe asked about the $9 million for the
BEARS enhancement. She thought that the project was almost
completed. Ms. Sanders answered that it was a new system.
She explained that the department needed additional funding
for modifications that were mandated by a court ruling. She
agreed that the amount sounded high, but the costs for
Information Technology systems were significant. She
exemplified that an IT project for Department of Revenue
(DOR) cost about $20 million. She could follow up with
additional information.
3:00:15 PM
Ms. Sanders highlighted funding for the Department of
Education and Early Development (DEED). She noted that the
Senate version added funding for Minto K-12 School
Renovation/Addition and the Mount Edgecumbe High School for
$8 million. The Senate also added the Nelson Island School
Replacement - Phase 1 at roughly $21.6 million and the
Newtok K-12 School Relocation/Replacement for approximately
$4 million.
3:01:57 PM
Ms. Sanders moved to slide 8 and continued with capital
budget highlights beginning with DFG. The funding for both
projects enabled continuing research. She pointed to the
funding for the Office of the Governor for $28.2 million
for statewide deferred maintenance, renovation, and repair
from the Alaska Capital Income Fund for all state agencies.
She mentioned that a single appropriation allowed OMB
flexibility if emergencies arrive that need immediate
attention and in project ranking to accommodate
emergencies. In addition, the funding for elections voting
booths was for a pilot project where inmates would
construct about 1,000 plastic voting booths according to
specific statutory requirements for use. The plastic
prototypes were lighter and easier to ship.
3:04:52 PM
Ms. Sanders addressed the $3.7 million UGF for the
Department of Natural Resources (DNR) and explained that
the project provided funding to purchase and plant conifer
seeds where timber had been harvested and tree thinning in
advance of future timber harvests. She reviewed the three
requests for the Department of Public Safety (DPS).
Representative Galvin referred to the DNR increment for
precommercial thinning asked if it was also related to fire
suppression. Ms. Sanders deferred the answer to DNR. She
offered to follow up. She noted that the DNR item was
removed from the Senate's version of the budget.
Ms. Sanders resumed her review of funding for DPS. She
pointed to the $6.2 million for the acquisition of the
Pilatus Aircraft and elaborated that the aircraft was able
to land in 96 percent of the 215 maintained airports in the
state allowing DPS to rapidly respond to incidents. She
commented that the $4.7 million request was for the
overhaul, repair, and replacement of components when they
reached the end of their useful life. It was a recurring
capital item.
3:08:22 PM
Ms. Sanders turned to slide 9 and addressed items for DOR
including the Alaska Housing Finance Corporation (AHFC)
Down Payment Assistance Grants for $25 million UGF. She
elucidated that the grant program was eligible for college
educated or trade school certificated individuals. The
grant would provide approximately 1,250 households with $20
thousand in assistance for down payments. She listed some
of the housing programs the AHFC offered under the second
bullet point. She shared that the $7.5 million for Dividend
Application Information System replacement was necessary
due to the current system reaching the end of its life.
There would be an additional phase 2 request in the
following fiscal year.
Ms. Sander addressed the Department of Transportation and
Public Facilities (DOT) items and cited that backup
Attachments D and E (copies on file). She explained that
all of the Surface Transportation Improvement Program's
(STIP) items from the original budget were replaced with
the approved projects by the US Department of
Transportation. She noted that the attachments included the
approval letter (Attachment D) and the new STIP
list(Attachment E)(copies on file).
Representative Stapp asked whether the state ever told the
federal government that state matching highway funds may
not be available. Ms. Sanders deferred the question to DOT.
DOM PANNONE, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF TRANSPORTATION AND PUBLIC FACILITIES, answered that the
state was required to demonstrate fiscal constraint and the
availability of matching funds. He added that in the STIP
document DOT demonstrated that the state would put up
matching funds for the federal revenues. Representative
Stapp wanted to make it clear that when the state asked for
federal matching dollars the state guaranteed it would
provide the match funds.
3:13:54 PM
Representative Galvin asked for a general update on what
had taken place since DOT had last presented to the
committee. [February 28, 2024]
Co-Chair Edgmon asked for a general update.
Mr. Pannone stated that he along with the Commissioner
(Commissioner Ryan Anderson) presented a STIP update on
February 28, 2024, which was 2 days prior to submitting the
final version on March 1, 2024. The STIP approval arrived
on March 27, 2024. He delineated that the original Federal
Planning Finding (FPF) from the Federal Highway
Administration (FHWA) was divided into three tiers. The
Tier 1 items were required for the state to get STIP
approval. Therefore, DOT addressed all the Tier 1 findings.
A few items were noted as partially solved and moved to
Tier 2. The tier 2 items would be worked on in the next six
months and were required to be addressed before the STIP
was amended. He added that the Tier 3 findings were largely
notational and commentary, but the federal government did
not have time to review them. The department considered the
Tier 3 items resolved.
Representative Josephson cited the West Susitna Access Road
and noted it was on the STIP list. He wondered whether the
STIP reflected the items the federal government approved
and what the total cost was. Mr. Pannone answered that the
West Susitna project STIP was for a public road. The amount
requested was for $20 million for a 24 foot wide road. He
deferred further answer to a colleague.
SEAN HOLLAND, DIRECTOR, CENTRAL REGION, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES (via teleconference),
replied that there were two items for the West Susitna
Access Road; the one mentioned and another line item for
$58 million. He furthered that the plan was to phase the
project with construction beginning the following summer
[2025].
3:18:24 PM
In response to a question by Representative Josephson, Mr.
Holland responded that the terminus was on the other side
of the Susitna River.
3:19:12 PM
AT EASE
3:19:38 PM
RECONVENED
Co-Chair Edgmon noted there was one additional page
remaining of the presentation.
Ms. Sanders briefly reviewed the remaining DOT capital
projects and turned to the remaining items for the
University of Alaska (UA). She indicated that the $2.2
million UGF for the carbon capture and storage project
reflected the required 20 percent match.
3:23:15 PM
Representative Cronk asked if the committee would receive
an updated presentation showing what the Senate removed.
Ms. Sanders reiterated that the committee members refer to
Attachment C, which contained the information.
Co-Chair Edgmon noted there would be a staff presentation
on Monday.
HB 269 was HEARD and HELD in committee for further
consideration.
CSSB 187(FIN) am was HEARD and HELD in committee for
further consideration.
Co-Chair Edgmon reviewed the schedule for the following
day.
ADJOURNMENT
3:24:39 PM
The meeting was adjourned at 3:24 p.m.