Legislature(2001 - 2002)
03/30/2001 03:20 PM House L&C
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 30, 2001
3:20 p.m.
MEMBERS PRESENT
Representative Lisa Murkowski, Chair
Representative Andrew Halcro, Vice Chair
Representative Kevin Meyer
Representative Pete Kott
Representative Norman Rokeberg
Representative Harry Crawford
MEMBERS ABSENT
Representative Joe Hayes
COMMITTEE CALENDAR
HOUSE BILL NO. 175
"An Act making an appropriation to the Alaska Industrial
Development and Export Authority for power projects; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 176
"An Act making an appropriation to the Alaska Industrial
Development and Export Authority for a power transmission
intertie between Kake and Petersburg; and providing for an
effective date."
- BILL HEARING POSTPONED
SUBCOMMITTEE REPORT ON AVIATION INSURANCE
- POSTPONED TO 4/2/01
PREVIOUS ACTION
BILL: HB 175
SHORT TITLE:APPROP: POWER PROJECTS
SPONSOR(S): REPRESENTATIVE(S)LANCASTER
Jrn-Date Jrn-Page Action
03/12/01 0543 (H) READ THE FIRST TIME -
REFERRALS
03/12/01 0543 (H) L&C, FIN
03/30/01 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE KEN LANCASTER
Alaska State Legislature
Capitol Building, Room 421
Juneau, Alaska 99801
POSITION STATEMENT: Sponsor of HB 175.
ERIC YOULD, Executive Director
Alaska Rural Electric Cooperative Association (ARECA)
703 West Tudor Road
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 175; proposed amendment.
ROBERT A. EVANS, Lobbyist
Golden Valley Electric Association;
Purchasing Utilities of the Four Dam Pool
P.O. Box 100384
Anchorage, Alaska 99510
POSITION STATEMENT: Presented information on HB 175.
KEN GATES, Chief Executive Officer and General Manager
Cordova Electric Cooperative
P.O. Box 20
Cordova, Alaska 99574
POSITION STATEMENT: Testified on HB 175.
HAP SYMMONDS, President
Board of Cordova Electric Cooperative;
Plant Manager
Ocean Beauty Seafoods
P.O. Box 548
Cordova, Alaska 99574
POSITION STATEMENT: Testified on HB 175.
ROBERT WILKINSON, Chief Executive Officer
Copper Valley Electric Association
P.O. Box 45
Glennallen, Alaska 99588
POSITION STATEMENT: Testified in support of HB 175.
SANDRA GHORMLEY, Manager
Marketing and Member Relations
Homer Electric Association
280 Airport Way
Kenai, Alaska
POSITION STATEMENT: Testified on HB 175.
STEVE HAAGENSON, Acting President and Chief Executive Officer
Golden Valley Electric Association (GVEA)
P.O. Box 71249
Fairbanks, Alaska 99707-1249
POSITION STATEMENT: Testified on HB 175.
DONALD MAHON
Alaska Power Company
P.O. Box 207
Tok, Alaska 99780
POSITION STATEMENT: Testified on HB 175.
THELMA SCHRANK
HC01 Box 380
Gakona, Alaska 99586
POSITION STATEMENT: Testified on HB 175.
ALAN LeMASTER
P.O. Box 222
Gakona, Alaska 99588
POSITION STATEMENT: Testified on HB 175.
DWIGHT NISSEN, President
Alaska Rural Electric Cooperative Association;
Board Member, Golden Valley Electric Association
P.O. Box 158
Delta Junction, Alaska 99737
POSITION STATEMENT: Testified on HB 175.
MARGY JOHNSON, Mayor
City of Cordova
P.O. Box 150
Cordova, Alaska 99574
POSITION STATEMENT: Testified in support of HB 175.
SYLVIA LANGE, Ratepayer
P.O. Box 135
Cordova, Alaska 99574
POSITION STATEMENT: Testified on HB 175.
DENNIS LEWIS, Electrical Superintendent
City of Petersburg;
Chairman, Four Dam Pool;
Board Member, Alaska Rural Electric Cooperative Association
P.O. Box 327
Petersburg, Alaska
POSITION STATEMENT: Testified on HB 175.
PAUL ANDERSON, President
Thomas Bay Power Authority;
Board Member
Alaska Rural Electric Cooperative Association (ARECA) Board of
Directors;
Council Member, Petersburg City Council
P.O. Box 1454
Petersburg, Alaska
POSITION STATEMENT: Testified on HB 175.
BOB POE, Executive Director
Alaska Industrial Development and Export Authority (AIDEA);
Alaska Energy Authority (AEA)
(No address provided)
POSITION STATEMENT: Testified on HB 175.
JOE RILEY
HC01 Box 540
Slana, Alaska
POSITION STATEMENT: Testified on HB 175.
JAMES KVASNIKOFF
P.O. Box 8006
Nanwalek, Alaska 99603
POSITION STATEMENT: Testified on HB 175.
ACTION NARRATIVE
TAPE 01-43, SIDE A
Number 0001
CHAIR LISA MURKOWSKI called the House Labor and Commerce
Standing Committee meeting to order at 3:20 p.m. Members
present at the call to order included Representatives Murkowski,
Halcro, Meyer, Rokeberg, and Crawford. Representative Kott
arrived while the meeting was in progress.
HB 175-APPROP: POWER PROJECTS
Number 0035
CHAIR MURKOWSKI announced that the committee would hear HOUSE
BILL NO. 175, "An Act making an appropriation to the Alaska
Industrial Development and Export Authority for power projects;
and providing for an effective date."
Number 0123
REPRESENTATIVE HALCRO made a motion to adopt the proposed
committee substitute (CS) for HB 175 [22-LS0705, Version C,
Cramer, 4/5/01]. [No objection was stated; therefore, Version C
was adopted as the work draft.]
REPRESENTATIVE KEN LANCASTER, Alaska State Legislature, sponsor
of HB 175, apologized for the late proposed CS, but said the
Alaska Industrial Development Export Authority (AIDEA), the
Alaska Energy Authority (AEA), and the Office of the Attorney
General had some concerns, which were addressed in Version C.
REPRESENTATIVE LANCASTER said he would briefly go over the
projects. The first [request] is for a $12 million grant for
Cordova Electric to help with the Power Creek hydroelectric
project to keep the kilowatt cost down, and to get a payback
"stream" from power cost equalization (PCE); he explained that
[Cordova Electric] is the largest user of [PCE], at about
$600,000 annually.
REPRESENTATIVE LANCASTER explained that the second project in
the bill is for the Copper Valley Electric Association. He said
$35 million in AIDEA's account was originally dedicated for the
Sutton-Glennallen intertie, which never came to fruition - that
amount is $12.5 million. In the interim, "they" have gone with
a co-generation formula with "Epistar" in Valdez. He mentioned
that some upgrades to the Copper Valley plant are needed.
Number 0249
REPRESENTATIVE LANCASTER stated that another [project] is the
Tok to Chistochina [power-transmission intertie] at a cost of
$8.4 million. This will help provide reliable and efficient
power for the people along the highway, and hopefully help build
a transmission grid that will eventually tie in with the Copper
Valley and Glennallen areas. He expressed the need to start
building the transmission grid throughout the state.
REPRESENTATIVE LANCASTER, going down the list of projects,
stated that the next [request] is for a grant for the south end
of the Kenai Peninsula. There is an underground cable that runs
2.5 miles across the bay through the spit to Seldovia. The
cable is well past its useful life and is in danger of failing.
He said the old Fairbanks "Morris (ph)" generators in Seldovia
are not very reliable, and [the community] had some severe power
outages and suffered some loss, he remarked.
Number 0285
REPRESENTATIVE LANCASTER said the other [request] is to upgrade
the Anchorage-Fairbanks intertie, [allowing for] a larger
capacity of power to flow in both directions; this project will
cost $13.2 million.
REPRESENTATIVE MEYER asked how much money is in the Railbelt
energy fund, and for what purpose was the fund set up.
REPRESENTATIVE LANCASTER responded that the Railbelt energy fund
was originally set up with $2 million for the Susitna
hydroelectric project that never came to fruition. Some of
those funds have been used for the Bradley Lake hydroelectric
power and the south end of the peninsula, and others are
allocated now both to Chugach Electric and to Golden Valley
Electric Association for the northern and southern intertie. He
said the balance in the account today is about $71 million,
which is the money that "we" plan to use. He explained that
some of that money was allocated into the account for the
Sutton-Glennallen intertie, which came to $35 million; it has
accrued quite an amount of interest, since it [started] in 1993.
Another portion being worked on is the Swan Lake to Tyee Lake
intertie project for $20 million. He noted that this money has
also accrued some interest.
Number 0461
REPRESENTATIVE ROKEBERG asked if Representative Lancaster had
done any research into the political and economic history of the
Raibelt energy fund.
REPRESENTATIVE LANCASTER responded that he has been involved
with ARECA for years.
REPRESENTATIVE HALCRO said funds have been set aside for various
reasons, only to be used for other purposes later. He said the
biggest project on the list is to upgrade the Anchorage-
Fairbanks power transmission [line] for $13.2 million. Out of
this $71 million Railbelt energy fund, how much did the
constituents living along the Railbelt actually put into the
fund, he asked. He clarified that the Railbelt energy fund is
to be used for projects in the Railbelt. He said one would
assume that the people in the Railbelt would have some kind of
ownership over this fund.
Number 0606
REPRESENTATIVE LANCASTER replied that of the $71 million being
[discussed here], $35 million was put in for the Sutton-to-
Glennallen intertie, which never came to fruition, and the money
has been sitting there since 1993 earning interest. He said the
other money was put in for the Swan-[Lake]-to-Tyee-[Lake]
transmission project in Ketchikan for $20 million.
REPRESENTATIVE ROKEBERG said he thought this money was
appropriated for the Susitna project.
REPRESENTATIVE LANCASTER responded, "Not these two particular
monies that we are talking about now. The fund was actually
started and originated ... with the Susitna project - the $200
million was put in to study Susitna." He said the two
allocations are for the two projects he just mentioned.
REPRESENTATIVE ROKEBERG asked, "But weren't those allocations
made out of [the] fund and then re-appropriated back into it?"
REPRESENTATIVE LANCASTER said he had a chronological history [of
the Railbelt energy fund] that he would make available for the
committee.
Number 0687
REPRESENTATIVE ROKEBERG explained that his understanding is
somewhat different: The money was there for the establishment
of the Susitna project, and then there were substantial
allocations of other monies, for example, for the creation of
the Four Dam Pool and the establishment of the PCE program in
terms of allocation around the state; therefore, his
constituents and neighbors claim some ownership.
REPRESENTATIVE LANCASTER replied that this is why he is trying
to fix the Fairbanks intertie. He said Eric Yould could speak
more to that as well.
REPRESENTATIVE KOTT asked Mr. Lancaster if Cordova or Copper
Valley Electric is in the Railbelt.
Number 0757
REPRESENTATIVE LANCASTER replied that Copper Valley is in the
Railbelt and there is some ownership. $35 million of this was
actually appropriated for Copper Valley Electric for the Sutton-
to-Glennallen intertie. He remarked that Cordova [being in the
Railbelt] might be "stretching it."
REPRESENTATIVE KOTT directed the committee to AS 37.05.520,
which reads: "The legislature may appropriate money from the
fund for programs, projects, and other expenditures to assist in
meeting Railbelt energy needs." He said he is not sure if this
isn't stretching it to some extent. He wanted to bring this to
the committee's attention since there is no other statutory
change. It would be cleaner, he said, if there were another
statutory change dealing with what the legislature may
appropriate [the fund] for.
CHAIR MURKOWSKI asked how "Railbelt" is defined.
REPRESENTATIVE KOTT replied that he is not sure that it is
defined.
Number 0829
REPRESENTATIVE LANCASTER stated that going back through the
Bradley Lake project, [these project funds] came out of the
Railbelt energy fund, although it is not in the Railbelt either.
He stated that he thought it had to do with the seven utilities
that are in the Railbelt system, (indisc.) down to Homer
Electric.
CHAIR MURKOWSKI asked for clarification that Representative
Lancaster is talking about the Railbelt [area extending] from
Fairbanks down to Homer.
REPRESENTATIVE ROKEBERG agreed because Homer and South Kenai are
part of the Railbelt energy grid and could qualify because they
are interconnected.
REPRESENTATIVE HALCRO asked if there had been any proposals over
the past five to six years to take money out of the Railbelt
energy fund to [pay for] projects in the Railbelt.
REPRESENTATIVE LANCASTER explained that $90 million came out [of
the fund] for the northern and southern interties, which
Commissioner Pourchot [of the Department of Natural Resources]
just [approved] to start building a valley; the one being
studied is on "VIS" on the southern peninsula, he explained.
Number 0904
CHAIR MURKOWSKI said there are appropriations from the fund for
such things as the Bradley Lake hydropower project and the
McLaughlin Youth Center. She asked how all of these projects
came about because it looks like a "laundry list of projects."
REPRESENTATIVE LANCASTER said he couldn't speak for the
department, but said AIDEA received monies from this funding
source for projects.
Number 1010
ERIC YOULD, Executive Director, Alaska Rural Electric
Cooperative Association (ARECA), the trade association for the
electric utility industry in Alaska, said he represents most of
the utilities throughout the state, both large and small
companies. He said [ARECA] is in favor of the bill; however, he
wanted to give some historic perspective on the Railbelt energy
fund. He commented that he was part of many projects in the
1980s that [were paid] for out of the fund.
MR. YOULD said back in the 1980s when the state had more money,
it appropriated funds for the development of the Four Dam Pool
for hydropower projects. Power cost equalization (PCE) was also
started, which has utilized $300 million. The Four Dam Pool was
roughly $450 million. During this time, the Railbelt was
looking to the Alaska Power Authority to develop the Susitna
hydropower project - a 15,000-megawatt project centrally located
between Anchorage and Fairbanks that would take care of the
central part of the state. The idea was that it would be used
to spread the cost of Susitna and other projects throughout the
state and enhance communities that only had diesel power, and
that these [communities] would get a postage-stamp rate.
Number 1086
MR. YOULD said in the early 1980s the legislature established
the Railbelt energy fund; the language said annually the
legislature would appropriate funds to the Railbelt energy fund
for equity contribution in the Susitna project. The state was
looking to put $2.5 billion into the fund; however, due to the
falling price of oil, the Susitna project was shelved. This
happened after spending $134 million on permits and doing
exploration for the project. In the interim, the legislature
appropriated $200 million to the Railbelt energy fund. At that
time, the Railbelt had nothing to show for the early 1980s;
nevertheless, the legislature also appropriated $124 million for
the development of the Anchorage-to-Fairbanks intertie, which
was developed by the Alaska Power Authority. Later, $200
million was appropriated for the Bradley Lake hydropower project
in the Kenai area to partially fund the project, and another
$150 million in revenue bonds were sold and financed by the
utilities.
Number 1181
MR. YOULD said there was $200 million sitting in the Railbelt
energy fund. If a person looks at how much was spent on
Susitna, the intertie, and the Bradley Lake project, the total
was roughly $450 million for the central part of the state where
70 percent of the population is.
MR. YOULD explained that the Railbelt energy fund remained in
place throughout the 1980s, and then in 1993 the legislature
took the $200 million and appropriated it: $45 million went to
the northern transmission intertie between Healy and Fairbanks;
$45 million went for the intertie from Anchorage down to Kenai;
$68 million was appropriated for PCE; $35 million was for a
low-interest loan to Copper Valley Electric for a transmission
line between Sutton and Glennallen; and another $20 million was
appropriated for the Southeastern intertie, a low-interest loan
for a transmission line between Tyee and Swan Lakes.
Number 1253
MR. YOULD said of that $200 million, $90 million is going
forward for the northern and southern intertie within the
Railbelt; with $68 million for PCE expended, $35 million was
left for the Sutton to Glennallen transmission line, which
didn't get developed and probably won't be due to its economic
feasibility. He said $20 million was left sitting in the
Southeastern intertie fund. There is $55 million in the
Railbelt energy fund that has not been expended because neither
of the two projects went forward.
MR. YOULD explained that in addition to the $55 million, another
$16 million in interest was earned on the fund, bringing the
total balance to $71 million. That is what is before the
committee today, he said, a fund of $71 million, out of which
this bill would appropriate $51 million for the [aforementioned]
five projects.
Number 1313
REPRESENTATIVE ROKEBERG stated that the Tyee and Sutton monies
were appropriated from the fund and have now defaulted back into
the fund.
MR. YOULD replied that, in essence, that is correct. Last year
when the divestiture legislation took place, the $20 million
from the Southeast intertie was put back into the fund, and the
$35 [million] was still sitting in the fund because it wasn't
appropriated.
REPRESENTATIVE ROKEBERG asked whether the $68 million for PCE
was [appropriated] last year or the year before.
Number 1390
MR. YOULD explained that PCE [money] was appropriated in 1993.
He said it wasn't an endowment but was appropriated to the PCE
fund for distribution. He said it was supposed to last until
exhausted, and the legislature desired to continue to fund PCE
at a level consistent with the formula through 2014, which
couldn't have been handled by the $68 million in the first
place.
Number 1447
REPRESENTATIVE HALCRO asked Mr. Yould about the purpose and
politics involved in creating the Railbelt energy fund.
MR. YOULD explained that back in the early 1980s there was a
large amount of money going to what is now called the Four Dam
Pool, which were just four separate projects at the time. "We"
were looking at developing other projects, and the legislature
felt that there were other communities that were always going to
be on diesel, so that is why PCE was started. Back in the early
1980s, it was called power cost assistance, later changed to
[PCE].
MR. YOULD explained the politics at the time. He said knowing
that Susitna was going to take several years to be developed,
there was the feeling that there had to be a Railbelt energy
fund that would ensure that Susitna would get developed and be
available. The politics were brutal, he remarked, and there was
the "Susitna blackmail clause," which said - in the event that
$2.5 billion is not appropriated for the Susitna hydropower
project - a prior year's appropriation for the Four Dam Pool and
other grants at the time would resort to loans. He said that
legislation was later repealed because it represented a threat
to the communities receiving power from the Four Dam Pool when
it came time for them to go out and bond for other community
services; that represented a contingent liability.
Number 1549
CHAIR MURKOWSKI asked about the "laundry list" of projects that
are not energy-related. She mentioned the statute that
indicates that monies from this fund would be allocated for
energy-related projects within the Railbelt area.
MR. YOULD remarked that he hadn't seen the "laundry list" but
said money was put into [the Railbelt energy fund] for the
purpose of investment, and then taken right back out. He said
he didn't think Railbelt energy money was used for anything
other than energy projects.
CHAIR MURKOWSKI referred to the top of page 2 [of a handout for
the committee entitled "History of the Railbelt Energy Fund"],
where it indicates various capital appropriations as grants to
municipalities and unincorporated communities, and state
agencies. She asked if Mr. Yould is suggesting that these
grants were made, and that money actually ended up with the
projects before the committee now.
MR. YOULD said he'd never seen [the list] and it was new to him;
however, he reiterated that he didn't believe that the Railbelt
energy fund was used for anything other than energy projects.
REPRESENTATIVE ROKEBERG commented that it looked as if the 1990
legislature was nearing the end of discretionary capital funds
and had raided the energy fund.
Number 1635
MR. YOULD, when asked about the "[Susitna]-blackmail clause,"
explained that some people call it the "Susitna-equity clause."
Upon being asked to explain the rationale behind the enactment
of the clause, he said there was a feeling that a lot of money
was being appropriated for hydropower projects throughout the
state; those appropriations happened over a one-or two-year
period of time, and would then be up and running. At the same
time, it was realized that appropriations for a $5 billion
Susitna hydropower project would take place over a much longer
period of time; the clause was to ensure that those getting
projects funded over a two-or three-year period of time would
continue to support subsequent appropriations to the Railbelt
energy fund for the Susitna hydropower project.
REPRESENTATIVE ROKEBERG clarified that this was to make sure
that the Railbelt area received a fair allocation. He asked if
that was the rationale for the enactment: to ensure that the
money wasn't disbursed all over the state, with certain
populations not getting their fair share.
Number 1735
MR. YOULD agreed.
REPRESENTATIVE ROKEBERG asked Mr. Yould, as the executive
director of ARECA representing almost all electric utilities in
the state, whether an increase in the generating capacity would
enhance the ability to attract industry to Alaska and help the
economy of the state.
MR. YOULD responded affirmatively and said it would have to be a
large block of power at low cost. He said he is thinking in
terms of large industry, and certainly that is what happened on
the Columbia River system where several thousand blocks of
megawatts were in place at six mills per kilowatt-hour. For
example, if "we" were to develop the Rampart hydropower project,
6,000 megawatts of power, the cost of electricity out of that
project would be very low and might attract industry. He said
the Susitna project was more suited to the size of the demands
of Alaska, and he questioned whether it would attract industry
itself.
MR. YOULD said none of these projects would attract industry if
they have to be debt-financed, because, as with any hydropower
project, they are very expensive in the beginning as inflation
takes place, and become very attractive as time goes by. He
said the same is true of hydroelectric power, but the project
will be in place for 200 years.
REPRESENTATIVE ROKEBERG mentioned the possibility of having
cheap "ANS" [Alaska North Slope] natural gas (indisc.), for
example, or developing the (indisc.) into substantial electrical
generation capacity. He asked if there is enough low-cost
energy to entice major industry into that area.
Number 1786
MR. YOULD said again the answer is yes, but raised the question
of how one gets the cost of that electricity down. He explained
that if it has to be totally debt-financed, it would be very
expensive; however, if it were the state's position to attract
industry and put equity into these projects, it could charge
whatever price it wanted for that power; if [the state] charges
little, it would attract industry.
Number 1875
MR. YOULD stated that there is tremendous energy potential in
Cook Inlet alone, where there is the second-highest tidal power
project in the world; the only one that is bigger is in the Bay
of Fundy in Canada. He said "we" have looked at developing the
project on just a straight economic basis and found that it was
inferior even to Susitna hydropower. Alaska has one-third of
the nation's untapped potential hydropower, but because of the
economics of developing and transmitting it, and the
environmental consequences, it hasn't happened. He said the
same is true of coal; [Alaska] probably has 50 percent of the
United States' reserve of coal, but without the infrastructure
to bring it to market, it is not economically feasible.
REPRESENTATIVE ROKEBERG said he found it interesting that 50
percent of the United States' energy production is coal-fired.
He said [Alaska] almost needs to have it pre-sold to be able to
afford to develop it.
MR. YOULD used the example of the aluminum industry and
commented that [people in the industry] would probably sign on
the dotted line if the money were committed to develop the
project.
Number 1933
MR. YOULD, responding to the question of what the Railbelt is,
said once the transmission line is in place, "they" are
electrically and theoretically part of the Railbelt.
TAPE 01-43, SIDE B
Number 1969
MR. YOULD stated that the submarine cable on the southern end of
the Homer system is a small cable but is part of the Railbelt
system. Geographically, these projects are electrically within
the confines of the Railbelt system.
Number 1945
REPRESENTATIVE HALCRO said [legislators] need to remember that
these are all fairly connected. Certainly, he said, the
benefits of affordable power and adequate energy supplies
benefit the whole state and not just the area where the project
is built.
MR. YOULD agreed. He said that is not to say that there will be
transmission lines going through rural Alaska, because he is not
sure that it could be done economically anyway.
MR. YOULD stated that within the Railbelt area, where there is
the greatest concentration of population, there is no reason why
a transmission line infrastructure shouldn't be developed and
put in place.
Number 1884
MR. YOULD referred to Version C of HB 175. He suggested a
change to the Anchorage-to-Fairbanks transmission line. He
referred to the $13.2 million cost to upgrade the intertie to
230 kilovolts. This is partial funding, he said, and full
funding would be $17.2 million; to fully upgrade the
transmission line from Fairbanks to Kenai would [cost] $24.3
million because of the need to change out substations and
transformers.
Number 1840
MR. YOULD stated that "we" are trying to build a 26-mile stretch
of transmission line from the southern terminus of the existing
Anchorage-to-Fairbanks transmission line to hook up with the
Chugach transmission line so that there will be 230 kilovolts
from Anchorage down the Kenai [Peninsula]. At the present time
there is a 26-mile bottleneck, which is 115 kilovolts, [likened
to] a blocked artery. "We" need to build around that
transmission line segment with 230 kilovolts so that there is
truly a first-class transmission system from Anchorage to
Fairbanks.
Number 1809
MR. YOULD explained that because the energy authority is the
entity that owns the Anchorage-to-Fairbanks intertie, "we" feel
that [it] is the appropriate entity to be building and upgrading
this 26-mile stretch. He recommended the following language:
Upgrade the Anchorage-Fairbanks power transmission
line, with the new language ... [to] read, "the Alaska
Energy Authority extending and upgrading to 230
kilovolts the Anchorage-Fairbanks power transmission
intertie, provided that the cost of this extension and
upgrade, which are funding by this allocation, shall
not be charged to transmitting utilities."
MR. YOULD explained that the previous four appropriations were
for grants to individual utilities, but the Anchorage-to-
Fairbanks extension and upgrade would be to an existing state
authority; therefore, this language is necessary to make it
clear that "they" are to develop this stretch and treat it as
essentially the same grant.
Number 1731
MR. YOULD explained that the 26-mile stretch is from Douglas to
Teeland, up in the Wasilla area on the southern terminus of the
existing transmission line. He added that the "blockage" to be
made into 230 [kilovolts] is owned by Matanuska Electric
Authority (MEA).
REPRESENTATIVE ROKEBERG said he would like to see a bill that
establishes an independent grid authority in the state because
the organization of the power grid is not appropriate.
Currently, each utility within its service area manages its
section of the grid. He remarked that if there were an
independent authority overseeing the grid, problems like that
wouldn't exist.
Number 1662
REPRESENTATIVE HALCRO asked Mr. Yould why MEA wouldn't upgrade
its own segment of the line.
MR. YOULD replied that [MEA] has been approached in the past and
was reluctant to do so; however, even if [MEA] were willing, it
would make more sense to build a parallel line.
REPRESENTATIVE HALCRO asked if there is anyway to recoup the
cost if the state finances the upgrade; does the MEA contribute
at all, he asked.
MR. YOULD said he didn't think it would have anything to do with
MEA per se. He said MEA presently has a "wheeling" agreement
with the State of Alaska whereby power goes over its line for
that stretch. He said if the state chose to charge a "wheeling
rate" in excess of what it took to operate the line, it [would
be] within [the legislature's] purview to do so.
REPRESENTATIVE HALCRO asked if he was correct in assuming that
MEA "feeds" customers off this 26-mile stretch.
MR. YOULD explained that it is like a highway, from one point to
the next.
Number 1556
ROBERT A. EVANS, Lobbyist, Golden Valley Electric Association;
Purchasing Utilities of the Four Dam Pool, said he could speak
to how some of [Railbelt] money was spent from 1986 to 1990. If
another legislature acts in a subsequent year, he explained, by
implication it has modified the prior action of the legislature.
In 1988 there was an indication that $50 million was being
appropriated, and at that time there was an $850 million deficit
in the budget. In order to close the budget, $50 million was
appropriated out of the Railbelt energy fund. At that time,
there was a total of $289 million [appropriated] to the general
fund; subsequently, in 1988, to close the budget gap, there was
an appropriation of $50 million, although it was never drawn on
[referring again to the handout entitled "History of the
Railbelt Energy Fund"].
MR. EVANS stated that at that time, it was the intent of the
legislature to spend the $50 million to pay for general
government out of the Railbelt energy fund.
Number 1464
MR. EVANS explained that any number of other projects, such as
the university project and so forth in 1990, were funded from
the Railbelt energy fund. The biggest one, at the bottom of the
handout on page 2, is $100 million for the "jobs" bill because
the economy was in rough shape; that being the case the governor
and the legislature had agreed to appropriate $100 million to
the general fund, divvying up $5 million per Senate district for
activity that would be happening that spring.
REPRESENTATIVE MEYER asked Mr. Evans how "energy" is being
defined, and could [the legislature] use part of this money to
help build the gas pipeline if the state wanted to have part
ownership.
MR. EVANS replied that this money is general fund money that can
be appropriated by the legislature for any purpose deemed
appropriate. And regarding the definition for "energy," he
replied that there is [a definition] in the context of the
statute, but the statute hasn't been followed for appropriation
of the fund in the past. He concurred that the McLaughlin Youth
Center and the Fairbanks Science Building don't have much to do
with energy.
Number 1367
REPRESENTATIVE ROKEBERG said the intention was that this money
was reserved for use by those geographically specific
legislators. Historically, there were some very strong feelings
about that, he explained.
REPRESENTATIVE MEYER asked if using some of this money for the
gas pipeline had been discussed. He said he'd heard that the
state should be part of the pipeline, so it could [help] speed
[the project] along.
REPRESENTATIVE ROKEBERG replied that there is nothing stating
that [the legislature] can't [use it for this purpose]; however,
he said he didn't think that it would be, looking back at the
"blood, sweat, and tears" that went into trying to retain the
money and ensure that it ends up where it belongs.
REPRESENTATIVE MEYER commented that the Railbelt would
definitely benefit if a gas pipeline were brought down through
the middle of the state, with spurs branching off to various
communities.
Number 1245
REPRESENTATIVE KOTT asked if any of the projects before the
committee had received any "seed" or grant money from the state
in the past. He said he is trying to figure out whether money
had been appropriated. In many cases, he said, someone will
have a capital project and will ask for money, [assuring the
state that his or her entity] will [pay for the rest]. He said
he just wants to make sure that [the legislature] is not "doing"
the rest.
KEN GATES, Chief Executive Officer and General Manager, Cordova
Electric Cooperative, stated that "we" haven't received any
money other than a $1 million loan upfront to help with the
licensing process, which is due to be paid back once the project
comes "online."
REPRESENTATIVE ROKEBERG asked whether the House of
Representatives made an appropriation that didn't pass the
Senate, because he thought there had been an appropriation for
this project before.
MR. GATES responded that he wasn't aware of [any]. On another
subject, he said Cordova is in Southcentral Alaska on Prince
William Sound, with a population of approximately 2,500. He
urged the committee's support for HB 175, and strongly urged the
committee to endorse Version C.
MR. GATES explained that the Parkview (ph) project is an
"around-the-river" project for six megawatts that will cost $24
million. It is the energy future of Cordova and will promote
lower rates if fully funded. He stressed that it is critical to
the economic survival of the community. In looking at the ten
years he had researched, he said the growth in Cordova has been
stagnant and electric utility sales have diminished over the
years.
Number 1052
MR. GATES explained that the economy has deteriorated
significantly and this project will help promote economic
development, and retain and employ the people who live there.
It will encourage kids to come back, work, and raise families in
Cordova; right now, kids are moving out because there is no
opportunity.
Number 0984
MR. GATES stated that the project is critical. The fish
processing industry is imperative to the economic health of
[Cordova], and two large fish processors [have left] within the
last ten years. "We've" had many conversations with the
processors there now, he said, and "we" are concerned that if
the rates [don't go] down, there is a real possibility that
[processors] are going to move and send fish elsewhere.
MR. GATES explained that if one fish processor is lost, it is an
immediate 15 percent rate increase, and [the loss of] two
results in a 33 percent rate increase, which would bankrupt the
utility and probably the community as "we" know it today.
MR. GATES said the need for the full $12 million is to help
retire the debt service because it is currently financed through
a banking firm. The current debt service is around $800,000 a
year; should [Cordova Electric Cooperative] receive this money,
it will reduce its debt-service expense, and that money can be
passed on to the customer by reducing the rates. He added that
"we" are all concerned about the environmental impacts of
burning diesel fuel, and "we" expect to save a million gallons
of diesel fuel a year with this project.
MR. GATES stated that "we've" anticipated that 65 percent of the
[power] generation will be from hydroelectric power, but that
could be as high as 90 percent, depending on the water in the
river in the wintertime. This year, hydroelectric power could
have supplied the community's needs all year if it had been
available. He emphasized that it is [paramount] to the
livelihood and survival of Cordova.
Number 0872
MR. GATES commented that one positive attribute of the bill is
that "we" are willing to give up PCE and that money can go where
it is needed elsewhere; however, it can't be done unless [the
project] is fully funded.
CHAIR MURKOWSKI asked what Cordova receives in PCE.
MR. GATES responded that "we" are the largest recipients of PCE,
averaging $615,000 a year; this year a much higher amount
[might] be received because of the high cost of diesel fuel.
MR. GATES explained that it would save a million gallons a year,
which equates to between roughly $1.2 million and $1.4 million a
year in diesel.
REPRESENTATIVE HALCRO asked if it is currently paid for out of
the local government operating fund.
Number 0769
MR. GATES responded affirmatively. On the cost of electricity
and how it is impacted by diesel in the community, he said
Cordova has the highest electric rates in the Southcentral
coastal region, with an average at 12.5 cents per kilowatt-hour,
not counting any fuel adjustment charges on top of that;
currently "we" are charging a fuel adjustment pass-through of
about 5 cents a kilowatt-hour, which makes the overall average
24 to 25 cents. The residential ratepayer is paying nearly 30
cents a kilowatt-hour, he said, which is crippling the economy.
MR. GATES reiterated that sales are down [in the community],
businesses have closed, and the cost of fuel has gone up 65
percent in the last year. He said since [Cordova] is so
dependent on one segment of the business community for survival,
the fish processors, it doesn't really have the capability to
attract new business. Reasonably priced electric rates, water,
transportation, available workforce, and so forth are the
criteria for economic development, he said.
Number 0662
MR. GATES explained that [Cordova Electric Cooperative] could
contribute its part to that by getting electric rates down.
"We" work with the city, the chamber of commerce, and other
entities to develop an economic development plan, identifying
the kind of business that would be coming. The most critical
thing that can be done now is to get those electric rates down
because it is the first thing that [prospective businesses] look
at.
REPRESENTATIVE KOTT asked when the Power Creek project began.
MR. GATES responded that it was before his time and deferred the
question to Hap Symmmonds, the president of the board. He
stated that it was about eight or nine years ago when the
initial planning phase started for the project; the construction
has been underway for two years, and he expects it to be
"online" this summer.
REPRESENTATIVE KOTT stated that Mr. Gates indicated that the
total cost of that project would be around $24 million, with $12
million still needing to be paid off. Where does the other
money come from, he asked, and is it generated through
ratepayers?
Number 0559
MR. GATES replied in the negative. He said "we" have received
nearly $9 million in grants through the Department of Energy,
the "Indian Energy Renewable Energies Act." He said "we" are
seeking another $2.5 million, bringing the federal share up to
half of the cost of the project; the other half is being sought
from the state.
REPRESENTATIVE KOTT asked how the project would be paid off if
the grant wasn't received.
MR. GATES responded that it would be financed through the bank
and the debt service would be paid, [essentially] passed on to
the ratepayers.
REPRESENTATIVE KOTT said consequently there could be a lower
electric bill, even in spite of an increase, if the power
project was that efficient.
Number 0437
MR. GATES said it wouldn't be lower upfront. If the debt
service were paid, the amount of money saved in diesel fuel
would probably be on the negative side a little. It would
probably stabilize rates and [would] require a rate increase.
He added that Cordova Electric Cooperative went through forced
reductions, literally scrutinizing every purchase order received
to reduce expenses, and still only made $45,000 last year. He
stated that that is how close to the margins [Cordova Electric
Cooperative] is.
REPRESENTATIVE KOTT asked what other businesses have closed
besides the hardware store.
MR. GATES commented that there is a retail store down in the old
Alaska Commercial Building that is going to move out after this
summer because they can't afford it, and "we" know there are
others. Many businesses in town are on the brink of closure
because of the effect of the pass-through and the [price of]
diesel fuel.
Number 0337
REPRESENTATIVE ROKEBERG said "we" all think about how much
revenue is gained when energy costs and the price of oil go up,
but it has an impact on communities, on people transportation,
and so forth, so "we" have to pay the cost as well as enjoy
those benefits. He said he was disturbed that it was having
such an economic impact on [Cordova]. He asked why Mr. Gates is
pursuing bank financing, rather than tax-exempt bonds. He asked
if it is because [Mr. Gates] is looking for a potential grant to
pay it off, and then would not have any "covenants" that would
restrict the early calling of those bonds.
MR. GATES said "we" had a line of credit with the bank to
finance this project; there was a desire to go out and seek
grant funding, and the possibility was there to get this project
funded. At the time, "Co Bank" stepped up and was willing to
finance it, he said.
REPRESENTATIVE ROKEBERG stated that depending on what rates are
paid, a commercial bank loan would be extraordinarily higher
than a tax-exempt bond issue, and the ultimate impact on the
[cost per] kilowatt-hour could be lower for the customer. After
going "online" this summer, what will the kilowatt-per-hour cost
be for the consumer, he asked.
Number 0149
MR. GATES replied that if everything is optimum, it could be
down in the 17-cent range, which would mean a reduction of
roughly 20 percent. He clarified that "optimum" means getting
the full $12 million grant.
REPRESENTATIVE ROKEBERG commented that money wouldn't be saved
right now due to the very high diesel rates.
MR. GATES clarified that $1.2 million would be saved from fuel
savings, but the cost of debt service when it is all in the
project is going to be a "push," and could be a difference of
$100,000 or $200,000, which is why he said there could be a 3 to
5 percent rate increase to pick that up. There is really no way
that it can be absorbed because [Cordova Electric Cooperative]
is as lean as possible, and more couldn't be done without
jeopardizing the liability and safety of employees and the
public.
MR. GATES explained that [their] lender is Co Bank out of
Denver. He said there are several short-term loans, and the
rates are fixed when the project is done. He said "we" pay an
average that is just over 7.1 percent.
TAPE 01-44, SIDE A
Number 0062
HAP SYMMONDS, President, Board of Cordova Electric Cooperative;
Plant Manager, Ocean Beauty Seafoods, stated that Ocean Beauty
is the second-largest non-government employer in Cordova and one
of only two canneries left in town. It is vitally important to
lower the cost of electricity to maintain the economic viability
of the processing industry. Processors in Cordova are currently
paying the highest electric rates of any Southcentral coastal
community.
Number 0143
MR. SYMMONDS explained that if rates don't come down, it is
likely that processors will ship fish to other parts of the
state, which would have a tremendous negative impact on an
already fragile economy. House Bill 175 is very important for
financing the Power Creek hydroelectric project. The seafood
industry is the largest private employer in Alaska. The coastal
communities are essential to the Railbelt and urban communities.
The largest number of limited-entry-permit holders live in
Anchorage, and nearly all of the transportation, support, and
supply companies are there as well.
MR. SYMMONDS asked the committee to support the bill to help
finance the project.
REPRESENTATIVE HALCRO asked if the seafood plants are seasonal
or operate year-round.
MR. SYMMONDS replied that of the two major plants in Cordova,
one is year-round and the other could be. He added that there
are two cold storages and neither is operating due to the high
cost of electricity.
REPRESENTATIVE HALCRO stated that not only is the seasonal
industry aspect being battled, but also the high-energy costs
associated with keeping those businesses running.
Number 0274
MR. SYMMONDS concurred with what Representative Halcro had said
and added that the season could possibly be extended by freezing
[the fish] and adding value later in the winter.
REPRESENTATIVE CRAWFORD asked for the number of employees
[employed] in the two processing plants.
MR. SYMMONDS stated that seasonally there are between 400 and
500 employees between the two large processing plants.
REPRESENTATIVE KOTT asked how long those plants or canneries
have been in operation in Cordova.
MR. SYMMONDS responded that [Ocean Beauty Seafoods'] plant was
built in 1978, and the North Pacific plant was prior to that
time. He said there have been canneries in Cordova since the
turn of the century. Responding to an earlier question to Mr.
Gates, he said the request for proposals (RFPs) for the Cordova
hydroelectric project went out in 1994.
Number 0374
REPRESENTATIVE ROKEBERG asked about the financing package. He
asked if there has been a commercial bank or if the board
desired to use grant money, and why the choice was made to go to
a commercial bank rather than to the bond market.
MR. SYMMONDS replied that the legislature was approached when
the project first started. Originally, it was planned to grant-
finance 100 percent of the project, half with the state and half
with the federal government. "We" looked into bonding and were
told that the fees associated with that and the bonding package
were too small, and that a commercial bank [would serve the
purpose just as well].
Number 0374
REPRESENTATIVE ROKEBERG asked if AIDEA was [consulted] about a
package or municipal bond bank.
MR. SYMMONDS answered affirmatively. He believed that this
conversation took place in 1997 or 1998.
REPRESENTATIVE ROKEBERG stated that our municipal bond bank is
not working because it is supposed to consolidate those types of
things. He said he thought the House of Representatives did a
$3 million appropriation that failed in the Alaska Senate.
MR. SYMMONDS replied in the negative. He said it was [former]
Representative Kubina's bill, and "we" were looking at walking
away with PCE. It went through two committees, failed, and was
never reintroduced.
Number 0568
ROBERT WILKINSON, Chief Executive Officer, Copper Valley
Electric Association (CVEA), stated that he is in support of HB
175 and more specifically [Copper Valley's] portion of that
request. He provided some written testimony for the committee
and said he'd spoken to many committee members over the past
couple of months.
MR. WILKINSON explained that [CVEA] provides central station
electric service to the Copper River Basin and Valdez, an area
covering 156 miles of the Richardson Highway and approximately
80 miles of the Glenn Highway. "We" go off the Edgerton Highway
halfway to Chitna 17 miles and up the Tok road to the (indisc.)
at mile 12. He said in 1993 the 18th Alaska Legislature
appropriated a $35-million, 50-year, zero-interest loan for the
transmission line between Sutton and Glennallen.
Number 0666
MR. WILKINSON stated that after more than a million dollars was
spent trying to advance that project, it was high-centered,
fraught with economic, political, and environmental problems.
The board of directors, on his advice, set the project on the
back burner. At that time, [CVEA] had pressing power supply
needs, and in favor of the intertie, [CVEA] built a combustion-
turbine cogeneration project with Petro Star Inc. - a Valdez
refinery, and [CVEA's] largest customer.
MR. WILKINSON stated that it is high-tech, "green," has net
environmental and omission benefits, and turns crude oil into
kilowatt-hours. And it adds five valuable megawatts of capacity
to the CVEA system. He said the project was financed through
the industry cooperative bank, which does nothing to reduce the
high cost of electricity and is one of the major "drivers"
behind the 1993 intertie appropriation.
MR. WILKINSON explained that the Copper Valley's residential
rates in the Copper Basin last year were 19.5 cents a kilowatt-
hour, and 16.5 cents in Valdez. Those rates are approximately
seven cents higher per kilowatt-hour than for other small
communities on the road system including Delta Junction, Nenana,
Healy, Moose Pass, Cooper Landing, and others that are similar
in nature to the communities served by CVEA.
Number 0758
MR. WILKINSON stated that [CVEA's] request is for a $12.5
million grant for four energy projects: The largest is to
capitalize the [cogeneration project] of $7.5 million, allowing
[CVEA] to bring down the price of electricity in a region;
[CVEA's] prime generation in Glennallen is approaching 30 years
of age, and [CVEA] would like to replace those units with units
that are more fuel-efficient and less costly to maintain. It is
very difficult to find parts for 30-year-old enterprise units,
although they are relied upon for prime power.
MR. WILKINSON stated that there is also a project to run a
waste-heat loop from the Glennallen plant to the high school to
circulate "jacket water" off the diesel unit and plumb it into
the school district's heating system, thereby reducing the
number of gallons that the school must burn to fire its boiler
for space-heating purposes, which reduces consumption by about
50,000 gallons a year.
Number 0846
MR. WILKINSON explained that there is also a $500,000 request to
repay [CVEA] for the intertie-feasibility study conducted in
1993 and 1994. In 1993, the Alaska Energy Authority (AEA) had
$500,000 in its budget to fund a feasibility study for this
intertie project. The legislation deleted [it] from AEA's
budget, and [CVEA] was instructed to take the money out of the
$35 million loan fund.
MR. WILKINSON added that Copper Valley spent $1.3 million trying
to advance the project. The $500,000 was specifically for the
intertie study required by the legislation. Commenting on some
previous statements from Representative Rokeberg, he said his
understanding was that the $35 million in 1993 was appropriated
for the project and that the money went to the power-project-
loan fund as part of HB 447. That appropriation lapsed back
into the Railbelt energy fund without interest. With respect to
Representative Kott's comments, he said none of these projects
have received any state funding. In the early 1990s, the State
of Alaska had a line-extension fund for small distribution
projects, and that was the last time Copper Valley received
state financial assistance.
REPRESENTATIVE KOTT asked Mr. Wilkinson to indicate what the
$12.5 million would be applied to. He asked if there are new
projects or if this is just the retirement of the capital
construction debt. He said if it is a new project, then there
isn't a debt to retire, so he wondered if the [bill] language
was appropriate based on what Mr. Wilkinson had said.
MR. WILKINSON replied that there are four projects in the
request: the $7.5 million would be to retire existing debt on
the [cogeneration] project; the $4 million would be for yet-to-
be constructed generation in the Glennallen diesel plant, so
there is no debt to be retired there; the waste-heat loop is
also a yet-to-be constructed project; and the intertie
feasibility study would be a reimbursement of costs expended.
REPRESENTATIVE KOTT stated that $7.5 million is to retire the
debt.
MR. WILKINSON responded affirmatively.
REPRESENTATIVE ROKEBERG asked what the interest or financing
mechanism is on the $7.5 million.
MR. WILKINSON stated that [CVEA] is a member of the National
Rural Utility Cooperative Finance Corporation and had borrowed
100 percent. "We" refinanced our "RUS" debt in 1998, went with
"CFC," and are currently paying an interest rate of 7.3 percent.
Responding to a question about why the interest rate is so high,
he stated that it is tied to the cost of money and is a variable
rate. He said "we" didn't move quickly enough and are watching
the rates every day.
Number 1049
REPRESENTATIVE KOTT asked if Solomon Gulch is part of the Four
Dam Pool, and how much power it generates for the grid.
MR. WILKINSON stated that it is part of the Four Dam Pool and is
a 12-megawatt facility. Thirteen megawatts [of power] can be
generated out of the project in the summer when the lake is
full; this happens to be Copper Valley's system load, he said.
It produces reliable energy at a fixed cost but has some
problems, the biggest [one] being that the reservoir will only
hold 50 million kilowatt-hours [worth of water], no matter how
much it rains and snows in Valdez. Solomon carries [CVEA's]
entire system load in the months of June through October. When
things turn cold and start to freeze, the lake drops, and
historically [CVEA] has supplemented that with the Valdez and
Glennallen diesel plants. Now, he said, the supplement to
Solomon is primarily the [cogeneration project].
MR. WILKINSON explained that Solomon produces about 60 percent
of the annual requirement, the [cogeneration project] produces
about 30 percent, and the remaining 10 percent comes from the
Glennallen plant.
MR. WILKINSON, upon being asked what the Valdez kilowatt-hour
was, stated that it was 16.5 [cents per kilowatt-hour].
Responding to a question about what "CEA" Anchorage is paying,
surmised that it was 10 to 11 [cents].
[There was an indication from the audience that it was more like
9 to 10 [cents], but that a rate increase had recently taken
place.]
MR. WILKINSON stated that of the 16.5 cents, approximately 8
cents was for the fuel and purchase-power components. He said
the blended fuel and the purchase power from hydroelectric was 8
of the 16.5 cents.
REPRESENTATIVE KOTT asked if there are other communities in Mr.
Wilkinson's service area on PCE.
MR. WILKINSON responded that there aren't, but said there are
adjacent communities such as Chitna and Chistochina, and that he
understood that [the rail system] is coming to Valdez at some
point in time.
Number 1233
REPRESENTATIVE KOTT said Cordova had indicated that it would get
off PCE if [the legislature] gave them the grant.
REPRESENTATIVE ROKEBERG commented that if [the legislature] is
going to "raid" this fund, [the legislature is] not getting much
of a payback offer from these folks, and getting off PCE just
doesn't happen. He said, "Maybe we ought to be able [to] reload
into the back end of their energy fund."
Number 1312
SANDRA GHORMLEY, Manager, Marketing and Member Relations, Homer
Electric Association, spoke in support of HB 175. She said
Homer Electric Association is an electric cooperative utility
serving about 26,000 meter locations in the Lower Kenai
Peninsula. She said although she is speaking for the
Seldovia/Port Graham/Nanwalek regional power project, and
although [Homer Electric Association's] portion of the
appropriation request is the smallest of the five, all of these
energy projects are important, not only to the communities that
are directly impacted, but to all Alaskans.
Number 1410
MS. GHORMLEY stated that these funds would be used to improve a
section of the existing infrastructure on the southern most end
of the Railbelt. In spite of the fact that Homer Electric
Association is often thought of as an urban utility, it provides
service to several remote areas south of Kachemak Bay. For over
25 years, it has served these communities via an underwater
cable that spans 3.8 miles across Kachemak Bay and 60 miles of
power line. It has been the key instrument in getting electric
service to Nanwalek, Port Graham, Halibut Cove, Tutka Bay,
Peterson Bay, and all of the communities in between, about 700
consumers.
MS. GHORMLEY pointed out that she had provided the committee
with a map showing where the submarine cable crosses the bay and
the distance of the lines that serve those communities. Access
to these areas is limited to air or boat [travel], she said,
which is dependent on the weather. Without connection to a
central source of power, these villages and communities would
lose their access to affordable electric service and [might]
require some sort of supplement to survive, perhaps PCE or
something, she said.
Number 1506
MS. GHORMLEY said economies in these rural communities are
fragile, and a rate increase would have a significant impact on
the balance. The 3.8 miles of cable across the bay is in
disrepair, according to a recent engineer's survey, and failure
is eminent. [Homer Electric Association] has four, 52-year-old
diesel generators located in Seldovia that serve as a back-up
source of power during outages. It is known that those
generators couldn't sustain the load for very long if there were
a cable failure. Homer Electric Association is seriously
committed to serving these communities at a level of service
equal to that for the communities on the north side of the bay.
MS. GHORMLEY explained that this summer 25 spans of power lines
would be built and upgraded, and poles damaged during winter
storms would be replaced this year; this will cost roughly
$300,000. [Homer Electric Association] also has determined that
another $2.8 million is going to be needed to clear the spruce-
bark-beetle killed trees from power corridors from China Poot
[Bay] to Tutka Bay, and that is just the beginning, she
remarked.
MS. GHORMLEY stated that with the passage of this bill the state
is paying for needed infrastructure, specifically an underwater
cable and four diesel generators that are the sole supply of
electric service to these communities.
Number 1605
MS. GHORMLEY concluded by saying that there has been widespread
support for this project and bill. The Kenai Peninsula Borough
and the City of Seldovia have offered a resolution of support.
On behalf of the Homer Electric Association's board of
management, she urged the committee to pass the bill, and also
to walk it through the legislative process to ensure the
continuation of affordable, reliable electric service south of
Kachemak Bay.
MS. GHORMLEY mentioned that the Homer Electric Association
supports the appropriation to upgrade the Anchorage-to-Fairbanks
transmission intertie to 230 [kilovolts] in the bill. This
section of line is essential in moving electricity off Kenai to
Fairbanks, she said. Also, it is essential to the future of
this state; as the natural gas pipeline becomes a reality, this
upgrade is going to become very important to moving electricity
northward.
Number 1670
REPRESENTATIVE ROKEBERG asked if the South Kachemak Bay area
receives any PCE.
MS. GHORMLEY stated that it doesn't. Responding to a question
about whether all of these customers are integrated into [Homer
Electric Association's] system, she replied affirmatively, and
said there is a slight difference in the rate today, but that it
isn't significant. Responding to whether the replacement of the
cable or transmission facilities is being amortized, Ms.
Ghormley replied that this particular project is viewed as a
regional power project, part of the infrastructure, which is why
"we've" gone ahead and looked to the state; "we" believe
supporting infrastructure is a good use of public funds, she
said.
REPRESENTATIVE ROKEBERG said historically the transmission
capability of the state has been paid for by capital money;
therefore, it isn't amortized and integrated into part of the
rate base. There is a failed line and there is no sinking fund
to pay for it. Wasn't it amortized, he asked, or at a
depreciated cost?
MS. GHORMLEY stated that 25 to 30 years ago the Seldovia
community was the same size as the Homer community, and had a
thriving fishing industry; there is a very different economic
situation [now compared] to 25 years ago. At that time, "we"
incurred debt and it was repaid through electric rates, but
today that isn't an option for these communities.
REPRESENTATIVE ROKEBERG said Ms. Ghormley's testimony was that
the members financed the installation of the submarine cable and
the transmission area before, put it in the base, and paid for
it that way. He said now that there are some difficulties in
the economic situation as well as other contributing factors,
[Homer Electric Association] can't afford to replace it and make
an adjustment in the tariff. He asked whether that is correct.
MS. GHOMLEY explained that "we" are trying to avoid a rate
increase for those communities.
REPRESENTATIVE ROKEBERG asked what Halibut Cove's kilowatts per-
hour [rate] is.
MS. GHORMLEY responded that [residents] are paying 9 cents for
their energy charge, which doesn't include the wholesale cost of
power pass-through. She said the pass-through for the fuel part
is about 1 cent. Responding to a statement that the rates are
almost comparable to the Anchorage area, she replied
affirmatively.
Number 1847
REPRESENTATIVE ROKEBERG asked if this was like Kenai and
Soldotna too.
[The question was answered from the audience. An unidentified
speaker responded that it would be about 2 cents more on the
south side of the bay.]
Number 1883
STEVE HAAGENSON, Acting President and Chief Executive Officer,
Golden Valley Electric Association (GVEA), via teleconference,
stated that [GVEA] is currently working on quantifying the hard
(indisc.) in the following areas by increasing the transmission
capacity, which will double the amount of hours that will come
to Fairbanks from Anchorage, and the power can flow in either
direction on the transmission line. Perhaps by the time the
natural gas pipeline is constructed, the transmission capacity
increase will allow for delivery of 130 megawatts of North Slope
gas-fired power to the Anchorage bowl.
MR. HAAGENSON said reducing transmission line loss and
[increasing] reliability are other benefits; the addition of a
second circuit [line] will improve the [reliability] between
Teeland and Douglas, which currently has one of the highest
outage rates in Alaska. There will also be reconstruction
benefits; the second line will allow for continued delivery of
power to Fairbanks during construction on these lines. He said
[GVEA} also supports the grant for the Power Creek hydroelectric
project; it would reduce the amount of state participation and
PCE by approximately $200,000 to $600,000.
Number 1973
REPRESENTATIVE ROKEBERG said he was a little disturbed to hear
about the amazing amount of power that is going to be
forthcoming out of Fairbanks, because the flow has been from the
other direction.
MR. HAAGENSON responded that today it is in the other direction.
In anticipation of the gas being delivered to Fairbanks through
some of the "Prudhoe" with the gas lines, "we" expect it to
switch directions and supply any deficiencies in natural gas
down to the Anchorage bowl.
Number 2007
DONALD MAHON, Alaska Power Company, via teleconference, stated
that "we" serve all communities in the Tok region with telephone
and power [service], with most of those communities being
remote. He emphasized that he has been in Tok for ten years,
and that the residents along the highway and those from Slana
have requested funding continually for central power. This
request started back in 1978, and in the last ten years "we"
have been working with "them"; "we" submitted the request in
1994 and are now submitting another request to get those people
on central power.
MR. MAHON stated that not only will it provide central power for
the residents along the highway, reducing costs for Mentasta
[Lake] and Chistochina that are now on stand-alone diesel, but
it will also put the residential, small commercial [areas]
within that 90-mile [stretch] along the highway on Tok power,
which is at a reduced cost.
Number 2101
MR. MAHON pointed out that another important aspect of this tie
line is that this project is the beginning of an energy tie-line
system for eastern Interior Alaska. In the future, this line
could connect to the Railbelt grid, either through Glennallen or
by the construction of a tie-line from Delta Junction to Tok.
Looking to the future, there continues to be extensive
exploration in eastern Interior Alaska. Just recently there was
a promising precious-metal discovery at North (indisc.), which
is along the Alaska Highway. He said two infrastructures are
needed for mining to be economical; one is the transportation
system, and the other is economical energy. The eastern
Interior intertie project would provide economical energy, he
explained.
MR. MAHON mentioned letters of support received from Ahtna,
Incorporated; Copper River School District; Copper Valley
Telephone, Chistochina Tribal Council, Mentasta Traditional
Council, and the Department of Transportation and Public
Facilities because of the expansion. He said people are being
turned away from Denali National Park and Preserve, and some
people say that Wrangell-Saint Elias National Park and Preserve
will be the next Denali. Looking into the future, this tie line
is the start of economic development for eastern Interior
Alaska, (indisc.) requires approximately 30 megawatts of energy.
Number 2199
REPRESENTATIVE ROKEBERG referred to the information in the
committee's packet that indicates that the average price is 20
cents a kilowatt-hour in the Tok area, whereas the standalone
generation in Mentasta and Chistochina is about 35 cents an
hour; he asked if that is because [Alaska Power Company's]
generators are larger and more efficient; he also asked if
"they" are dependent on diesel fuel.
MR. MAHON replied affirmatively and said the Tok and
Chistochina-Mataska operations are diesel. He said it is a
matter of economics, and "we" are running about 1.5 megawatts in
Tok compared to an average of 70 kilowatts for an average load
in Chistochina and Mentasta. He pointed out that the cost of
fuel is higher for smaller operations.
REPRESENTATIVE ROKEBERG asked if there is a small distribution
system in those areas, and whether individuals in Mentasta,
Chistochina, and Slana have their own generators or use a
community distribution system.
MR. MAHON said in Mentasta and Chistochina there is a community
distribution system, but between those two locations is
residential generation.
Number 2267
THELMA SCHRANK, via teleconference, said "we" have been trying
for a long time to get central power at a reasonable cost. Most
of the people in the area have generating plants; many rely on
2,500 kilowatts gasoline generator and run "basic stuff" off
that two to three hours a day.
MS. SCHRANK stated that "we" might get an assisted-[living]
facility in the area, and it would be advantageous to have
commercial power to cut the cost of taking care of some of the
elderly folks in the Chistochina, Slana, and Mentasta areas.
She said she had worked with Mr. Mahon from the onset of the
project, and [she offered her assistance].
Number 2357
ALAN LeMASTER, via teleconference, said this is an important
issue across the Copper Valley. He said oftentimes people talk
about the Copper Valley Electric Association and think of Valdez
and Glennallen, but 12 to 14 other communities are also served.
He said [Copper Valley Electric Association] also "serve ... as
12 or 15 agencies of the federal government and about 20
agencies of the state," and all those agencies and communities
are paying one of the highest rates of electricity in Alaska.
MR. LeMASTER stated that the electric association came up with
cost efficiencies and its rates declined slightly; however, due
to the increase in fuel in the last couple of years, the rate is
now back at about 19.5 cents per kilowatt-hour. The prospect of
that is very bleak, and "we" are going to see a substantial
increase in fuel costs again this summer, he remarked.
MR. LeMASTER explained that anything "we" can do to retire the
debt or bring our existing equipment up to speed with more
efficient energy generation is going to be good for the
community. One of the biggest problems "we" have in developing
industry in [the Copper Valley] is that energy and fuel costs
are so high.
Number 2437
MR. LeMASTER stated that construction would resume at the end of
next month at the Princess Hotel. And the National Park Service
is building a new visitor's center in Copper Center. Those two
new projects are going to bring focus to the valley as marketing
goes out. This will bring a tremendous burden on the people who
work there. He said he had to close his business all winter
long because he couldn't afford the cost of fuel.
TAPE 01-44, SIDE B
MR. LeMASTER said "our" debt service is holding us up, because
the only way to pay high debt service is through high energy
costs.
MR. LeMASTER said as a result, "our" board of directors and
general manager are moving one step forward and trying to reduce
energy costs to try to [bring] business into the community, and
to keep the ones that are here open. He said he hopes that what
is happening in Cordova isn't going to happen here. He asked
the committee to [move] the bill to the House floor.
Number 2401
DWIGHT NISSEN, President, Alaska Rural Electric Cooperative
Association (ARECA); Board Member, Golden Valley Electric
Association, via teleconference, stated that ARECA is made up of
20 electric cooperatives in six cities in Alaska. More than
556,000 Alaskans get their electricity from these cooperatives
and municipalities, he said. "Our" managers and board members
have testified in support of HB 175, and he hopes that the
committee will support it and help with the electric problem in
Alaska.
Number 2346
MARGY JOHNSON, Mayor, City of Cordova, via teleconference,
stated that Cordova is the historic and original home of the
Railbelt, the original Copper River and Northwestern railroad.
She said the City of [Cordova] supports HB 175; she encouraged
the committee to look at it as an investment. The economies of
rural Alaska, and Cordova in general, are stumbling. Before
"we" fall into that abyss and apply for state aid for unemployed
families, "we" urge [the committee] to support this and lower
the cost of energy [in Cordova].
MS. JOHNSON explained that the fish processors there are
exceedingly important. If they leave Cordova, many won't stay
in Alaska, and Canada is courting them [right now]. She
encouraged the committee to support HB 175.
Number 2305
SYLVIA LANGE, RatePayer, via teleconference, said she was born
and raised in Cordova and is raising three children; she and her
husband are small business owners. They own a property that
includes several small mom-and-pop businesses, and lease a
portion of their property to a fish processor. There also is
have a one-million-pound cold storage facility that hasn't truly
operated since the herring season closed two years ago because
the electric rates are not affordable.
MS. LANGE stressed the importance of reducing electric rates in
the community as a whole, and to her family in particular. It
will make the difference between her being able to raise her
family here, and her children being able to return back to a
community that can support them. She asked the committee to
pass the legislation and said if "we" can keep this fully
funded, "we" might be able to stay on a level playing field with
the economy in the rest of Alaska.
Number 2233
DENNIS LEWIS, Electrical Superintendent, City of Petersburg;
Chairman, Four Dam Pool; Board Member, Alaska Rural Electric
Cooperative Association (ARECA), via teleconference, stated that
all of the projects in HB 175 are fully supported by the Four
Dam Pool and the City of Petersburg, and that he hoped [the
committee] would pass HB 175.
PAUL ANDERSON, President, Thomas Bay Power Authority; Board
Member, Alaska Rural Electric Cooperative Association (ARECA)
Board of Directors; Council Member, Petersburg City Council, via
teleconference, stated that Thomas Bay Power Authority
unanimously supports HB 175. This bill provides the means to
give citizens affordable, reliable electrical power. In the
early 1990s, under previous legislation, the Four Dam Pool debt
retirement of approximately $10 million a year was subject to a
40-40-20 split: 40 percent to the Southeast intertie, 40
percent to PCE, and 20 percent to state energy projects through
AIDEA and AEA.
MR. ANDERSON stated that $4.5 million of that was PCE money. He
said Copper Valley, Kodiak, Petersburg, Wrangell, and Ketchikan
were all [receiving] PCE. The ratepayers down here have given
the state money through the rates, and by spending money out of
the Railbelt energy fund, there is the opportunity to save the
state money in PCE costs; "we" support HB 175 and hope for
passage.
Number 2122
BOB POE, Executive Director, Alaska Industrial Development and
Export Authority (AIDEA) and the Alaska Energy Authority (AEA),
via teleconference, spoke in support of the proposed CS and
thanked the committee for hearing the bill.
Number 2095
JOE RILEY, via teleconference, offered some comments about the
bill. A few people want to keep those outside of the Railbelt
literally "in the dark." He asked: If the fund were the Alaska
Energy Fund, would there be the same questions about allocation?
He said the $8.4 million for the Tok-to-Chistochina line
includes a line for the South Slana settlement area that has the
largest concentration of population in the Slana area. If the
Tok-to-Chistochina line is built through Mentasta and
Chistochina, are PCE funds lost, he asked, and/or does the Slana
area become eligible for those funds?
Number 2007
MR. RILEY said it is his understanding that these funds have
collected interest, as much as $17 million. He said the
interest alone could twice fund the cost of the Tok-to-
Chistochina [project]; he said it was his understanding that
there are federal funds available for local power generation and
that this is an area that would benefit from wind power type
generation. He asked why the research hadn't been done.
MR. RILEY said this is one of the few systems in the entire
United States on a major road system that has no commercial
power. He said this bill should be passed as soon as possible.
Number 1943
JAMES KVASNIKOFF (ph), via teleconference, stated that he wanted
to speak about the importance of the energy provided in
Nanwalek, the Lower Cook Inlet area. The Homer Electric
Association is putting in a proposal for a $4.8 million project
so power can be supplied to the Lower Cook Inlet. Without it,
the village would be in a lot of trouble trying to afford
electricity. Right now the rates are at an affordable level for
the areas that have high unemployment rates. [On behalf of]
Nanwalek, he said, "we" support HB 175.
Number 1943
REPRESENTATIVE HALCRO commented that it is a good bill. He said
there are obviously some proprietary concerns as far as the fund
being established, but every legislature has the ability to fund
programs and use the general fund dollars as they see fit.
There are few [people] left in this legislature that were around
when the Railbelt energy fund was created; the largest proposal
on the project list goes to the Railbelt [area], and regarding
some of the others, it could be argued that there is great
benefit to those that live in the Railbelt. He said precedent
is set every year when funds that are dedicated for specific
purposes are used for other things, such as the Alaska Housing
Finance Corporation (AHFC) dividend, AIDEA dividend, tobacco
settlement money, and so forth.
REPRESENTATIVE HALCRO stated that these projects help the people
of Alaska and regardless of the political history behind the
fund, these projects are good for Alaska and will benefit the
entire state, which is really what the money should be for.
Number 1788
CHAIR MURKOWSKI pointed out that there had been a proposed
amendment suggested by Mr. Yould to "bump" up the
[appropriation] amount for the 26-mile Anchorage-to-Fairbanks
intertie.
REPRESENTATIVE ROKEBERG said [an appropriation for] something
else would have to be [lowered] if [the legislature] wanted to
do that. He said he is glad that Representative Lancaster
brought this bill forward because it exposes some of the needs
in the state. He stated that he takes particular interest in
the Cordova project; the people of Cordova have been coming to
this building for years looking for assistance, and it has been
very limited. The legislature needs to do something there, he
said.
REPRESENTATIVE ROKEBERG said he is particularly concerned about
paying back Copper Valley for [sinking money] into a project
that their money determined might not even be feasible. The
concept of a circular grid from Nanwalek up through Fairbanks,
down through Delta to Tok, and down to Glennallen and Valdez
could be extremely important for the whole state someday because
it is technically feasible and will eventually supply cheaper
power to a lot of areas of the state that don't receive it now.
REPRESENTATIVE ROKEBERG said all of these things make a lot of
good sense, but nevertheless [the legislature] needs to be
extremely careful about the spending of this money in its
historic perspective.
REPRESENTATIVE ROKEBERG said he thought Representative Meyer
made a good point in terms of the great potential that could be
derived, particularly revolving around the potential North Slope
natural gas [line]; he mentioned providing at least a spur line
to the Cook Inlet tidewater, which he said was extremely
important for the energy needs of the people in the Cook Inlet
area.
REPRESENTATIVE ROKEBERG remarked that he is reluctant to take
money set aside for the Railbelt and expend it immediately
without having a long-term plan. Every one of these projects
has merit and should be funded or at least assisted with funding
from the state. He noted that he would have a great deal more
comfort if he knew that some of these communities would be able
to get off PCE, and might also be able to pay [the state] back.
He said there have been several formulas historically, and even
the current PCE endowment fund makes assumptions about payback
of the Four Dam Pool into the fund to help offset those ongoing
costs. He said he is very concerned if $71 million is taken and
expended, but there is no return.
REPRESENTATIVE ROKEBERG commented that it is "seed money" that
can be utilized and leveraged, so it needs to be look at from a
broader perspective.
Number 1530
REPRESENTATIVE ROKEBERG pointed out that during discussion of
the 1990 "jobs bill" when there was a mild recession in the
United States and [the state] was coming off the little
[economic] burst from the unfortunate Exxon Valdez spill, the
legislature decided to try to make some macroeconomic and fiscal
policies in that dire situation. He said he would be very
reluctant right now to expend these monies without at least a
long-range plan, and it would be a grave mistake for the people
of Alaska.
Number 1509
REPRESENTATIVE MEYER pointed out that Representative Rokeberg
had commented that the amendment couldn't be made without
reducing [spending] elsewhere. He asked if there is just $50
million [to spend].
CHAIR MURKOWSKI said [the legislature] only used up $51 of the
$71 [million]; there is [roughly] $20 million left.
REPRESENTATIVE MEYER said there was no reference in the title.
REPRESENTATIVE HALCRO pointed out that in 1993, $55 million was
appropriated out of this fund for two specific projects that
didn't come to fruition, so that money was re-appropriated back
into the fund. He asked why, eight years later, there
[shouldn't] be the ability to take a look at the energy needs
and projects out there that would benefit the people of Alaska.
For all intents and purposes, that $55 million should have been
spent, but it lapsed back into the fund, picked up an additional
$16 million in interest for a total of $71 million, and [now the
legislature is] only going to spend $51 million. These projects
make sense and will help economic development.
REPRESENTATIVE HALCRO said it is [time] for [the legislature] to
look at the list of needs in the state, whether in the Railbelt
or close to the Railbelt, and make those decisions. There will
still be $20 million left in the fund, which could go to do
feasibility studies or to design projects. He reiterated that
the money was anticipated to be spent.
Number 1309
CHAIR MURKOWSKI said the testimony heard was overwhelmingly in
support of these projects.
REPRESENTATIVE ROKEBERG said it is a question of how to allocate
the fund, but even further, this legislature started with the
scrutinization of the tobacco settlement agreement. [The
legislature] determined that some of this money can be leveraged
using creative financing techniques. [The legislature] is able
to have money upfront for a future income stream at a relatively
modest price. He said he believes there would be a way to take
the corpus of the money and look at how it can be used.
Number 1210
REPRESENTATIVE ROKEBERG said this looks like an old-fashioned,
"I want the money, and hand me the cash" bill, and at this stage
he isn't comfortable with that. He said it would be a mistake
for the committee to hand out money without looking at the
alternatives.
REPRESENTATIVE ROKEBERG stated that he would be working on
legislation to set up a grid authority for the state that would
be independent of the utilities, to ensure that the Railbelt
grid is working; he doesn't think it is represented in this
bill.
REPRESENTATIVE LANCASTER commented that HJR 1 passed out of the
House Rules Committee; [that legislation authorized the
formation] of a task force to look at the energy needs of the
state. The Alaska Rural Electric Cooperative Association
[realizes] that a plan is needed. He agreed with Representative
Halcro that the money has been around for a long time and has
earned good interest. What is [the legislature] waiting for, he
asked; is this state ever going to be "grown" and money saved
for these people? "We" do have a small payback from Cordova at
$600,000 plus a year on PCE, which they could use to payback the
loan, and roll it back into PCE again. He said maybe the
"tweaking" [of the bill] could happen in the House Finance
Committee.
Number 1057
REPRESENTATIVE ROKEBERG mentioned that the 21st Alaska
Legislature had established an alleged endowment for PCE with a
$4-million-a-year short[fall]. That is something that [the
legislature] needs to look at because it becomes a problem when
the issue has to be revisited each year to make up the
[deficit]. At $71 million, [the legislature] would more than
endow the balance of that, to bring it up to full funding; the
corpus of this money would be more than enough to cover that
gap.
REPRESENTATIVE LANCASTER, referring to PCE, said he is working
with AIDEA, AEA, and the Denali Commission on some legislation.
He said "we" used about 30 million gallons a year to fund those
PCE generators, schools, and so forth. He said he thinks there
is a way to deliver that fuel better and to buy it cheaper, and
the money saved would roll back into [the fund], and would
hopefully be enough to fully endow that PCE.
REPRESENTATIVE HALCRO said "we" have the benefit of the Denali
Commission, which is looking at energy problems around the state
and alternatives, and certainly [the commission] is going to
look at rural Alaska. These programs, in conjunction with what
the Denali Commission is doing, will hopefully lift the state up
so [everyone] will be able to enjoy affordable energy.
Number 0870
REPRESENTATIVE MEYER asked Representative Lancaster whether he
supports the amendment proposed [by Mr. Yould]?
REPRESENTATIVE LANCASTER responded affirmatively and said it is
a technical change. Responding to Representative Halcro's
comments he said he agrees and that it is a shame that [U.S.
Senator Stevens] has to bail the state out of its own industry -
to have the Denali Commission come up and "clean up" around us
and send more funds so [Alaska] can be better administered. He
said he doesn't know what the money would be saved for. The
Alaska Industrial Development Export Authority (AIDEA) has an
energy plan in rough draft; one was done for the Railbelt, which
wasn't well received, and one for rural Alaska, which was
somewhat better received. It is a starting place, he said,
along with the assessments the Denali Commission and AIDEA have
done with all of the rural utilities. He urged [the committee]
to support the bill because he said the money couldn't be saved
forever.
REPRESENTATIVE KOTT asked Representative Lancaster if AIDEA and
AEA [had helped identify] these projects.
REPRESENTATIVE LANCASTER explained that he had spoken to Mr. Poe
and to ARECA. He said [the projects] are somewhat prioritized
and have some positive effects on the other utilities that
aren't immediately or directly touched by them - there will be
some savings that will help build the grid. He added that Mr.
Poe is fully in support of these projects.
Number 0681
CHAIR MURKOWSKI said one way or another, it is still going to
get down to a situation in which these [issues] are weighed in
the House Finance Committee. She said she isn't sure she wants
to determine the merits [of the projects] versus other energy
needs out there. [The committee] had some good testimony, she
said, which ought to carry members through.
REPRESENTATIVE KOTT asked that if [the bill is] brought up
again, the proposed CS be prepared with the amendment that Mr.
Yould provided. He said he would support the $24.3 million
level, increasing it from the $13.2 [million]. He said he would
like to get testimony from Mr. Wilkinson and identify more
specifically the projects in his line-item [list]. He said "we"
are not retiring a capital debt; there are new projects here
that need to be identified.
REPRESENTATIVE KOTT said the other areas of the bill where money
has been appropriated or grants identified are pretty specific;
however, the $12.5 million is a little misleading and needs to
be cleared up.
[HB 175 was held over]
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
6:00 p.m.
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