02/06/2006 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB393 | |
| HB335 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 335 | TELECONFERENCED | |
| *+ | HB 393 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 6, 2006
3:28 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Pete Kott
Representative Gabrielle LeDoux
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 393
"An Act requiring that certain health care insurance plans
provide coverage for the costs of colorectal cancer screening
examinations and laboratory tests; and providing for an
effective date."
- MOVED CSHB 393(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 335
"An Act creating the Alaska energy research and development
program in the Alaska Energy Authority and providing for a
Committee on Alaska Energy Research and Development to assist in
the development of that program; and providing for an effective
date."
- MOVED CSHB 335(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 393
SHORT TITLE: INSURANCE FOR COLORECTAL CANCER SCREENING
SPONSOR(s): REPRESENTATIVE(s) ANDERSON
01/25/06 (H) READ THE FIRST TIME - REFERRALS
01/25/06 (H) L&C, HES
02/03/06 (H) L&C AT 4:15 PM CAPITOL 17
02/03/06 (H) -- Meeting Canceled --
02/06/06 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 335
SHORT TITLE: ENERGY RESEARCH & DEVELOPMENT
SPONSOR(s): REPRESENTATIVE(s) BERKOWITZ
01/09/06 (H) PREFILE RELEASED 12/30/05
01/09/06 (H) READ THE FIRST TIME - REFERRALS
01/09/06 (H) L&C, FIN
02/03/06 (H) L&C AT 4:15 PM CAPITOL 17
02/03/06 (H) -- Meeting Canceled --
02/06/06 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
HEATH HILYARD, Staff
to Representative Anderson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 393 on behalf of
Representative Anderson, sponsor.
EMILY NENON
Alaska Government Relations Director
American Cancer Society (ACS)
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 393, provided
comments.
BRIAN SWEENEY JR., M.D.
Anchorage, Alaska
POSITION STATEMENT: During hearing on HB 393, used his
experience as a Gastroenterologist to provide information on
colorectal cancer screening.
CLAUDIA CHRISTENSEN
Alaska Native Tribal Health Consortium (ANTHC)
Anchorage, Alaska
POSITION STATEMENT: During hearing on HB 393, provided
information on colorectal cancer screening in Alaska.
STEPHEN WARREN
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 393, provided
comments.
RICK URION
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 393, provided
comments.
REED STOOPS, Lobbyist
for American Health Insurance Association (AHIA)
Juneau, Alaska
POSITION STATEMENT: Provided information regarding AHIA and
suggested an amendment to HB 393.
JEFFREY TROUTT, Deputy Director
Division of Insurance
Department of Commerce, Community, & Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: During hearing on HB 393, answered
questions.
LISA WEISSLER, Staff
to Representative Ethan Berkowitz
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 335 on behalf of
Representative Berkowitz, sponsor.
BECKY GAY, Project Manager
Alaska Energy Authority (AEA)
Anchorage, Alaska
POSITION STATEMENT: Expressed concerns regarding HB 335.
PETER CRIMP, Project Manager
Alternative Energy and Energy Efficiency
Alaska Energy Authority (AEA)
Anchorage, Alaska
POSITION STATEMENT: Provided information on AEA's current
projects in relation to HB 335.
MEERA KOHLER, President and Chief Executive Officer (CEO)
Alaska Village Electric Cooperative, Incorporated (AVEC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 335.
ACTION NARRATIVE
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:28:52 PM. Representatives
Guttenberg, Crawford, Rokeberg, LeDoux, and Anderson were
present at the call to order. Representatives Lynn and Kott
arrived as the meeting was in progress.
HB 393-INSURANCE FOR COLORECTAL CANCER SCREENING
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 393, "An Act requiring that certain health
care insurance plans provide coverage for the costs of
colorectal cancer screening examinations and laboratory tests;
and providing for an effective date."
HEATH HILYARD, Staff to Representative Anderson, Alaska State
Legislature, Sponsor, explained that this bill will establish a
minimum standard requirement that colorectal cancer screening be
provided in healthcare policies in Alaska, particularly to those
individuals who are over 50 years of age. He added that this is
important because colorectal cancer, if caught in the early
stages, has a 90 percent survival rate; however, if caught late,
the survival rate is around 10 percent.
3:31:28 PM
EMILY NENON, Alaska Government Relations Director, American
Cancer Society (ACS), stated that she has been researching this
legislation for 4 years. She explained that colorectal cancer
is the second leading cause of cancer deaths in the United
States, adding that Alaska has an above average rate for colon
cancer in the general population. She went on to say that the
Alaska Native population has the highest rate of colon cancer of
any population group in the country. Ms. Nenon also explained
that [via a colonoscopy, the doctor] can remove polyps before
they become cancerous, adding that this is the only screening
tool available that can prevent cancer. She stated that a
colonoscopy is over 90 percent effective at detecting colon
cancer.
MS. NENON informed the committee that currently 18 states and
the District of Columbia have passed laws that require state
regulated plans to cover colon cancer screening according to the
ACS guidelines. In regards to plans that are not state
regulated, she explained that in the past couple of years, ACS
has increased the number of Federal plans that cover colon
cancer screening. She also informed the committee that current
state law requires coverage for breast, cervical, and prostate
cancer, pointing out that colon cancer is the only cancer with
recommended screening that is not listed. She commented that
[ACS] would like to give people the opportunity to have all
cancer screening covered by insurance, and adding colon cancer
screening would complete the list.
3:36:02 PM
CHAIR ANDERSON inquired about the different types of colon
cancer screening.
3:36:24 PM
MS. NENON replied that it is important for doctors and patients
to make a decision about which screening is most appropriate for
the patient. She stated that colonoscopy is the "gold standard"
because of its ability to find and remove pre-cancerous tissue,
adding that it is not appropriate for everyone. She explained
that in addition to the colonoscopy, the guidelines in [HB 393]
include fecal occult blood test (FOBT), double-contrast barium
enema, and flexible sigmoidoscopy. She went on to say that the
colonoscopy only needs to be repeated once every 10 years for a
person at average risk - for example one colonoscopy at age 50,
another at age 60. Ms. Nenon added that after age 65, Medicare
covers this procedure.
MS. NENON, in response to a question, confirmed that the cost
for each procedure is different. She explained that the ACS did
a study on this issue, looking at the cost of covering a
combination of FOBT and flexible sigmoidoscopy, which are
commonly covered by insurance, versus a colonoscopy. The study
showed that if a person receives a positive result from an FOBT,
they are referred on to receive a flexible sigmoidoscopy or a
colonoscopy. At this point, these are considered "diagnostic"
tests. Ms. Nenon went on to say that the FOBT has a very high
false-positive rate, and a person who receives a false positive
and goes on to receive a colonoscopy then has to pay for both
tests. Therefore, it would be more cost effective to start out
with the colonoscopy.
CHAIR ANDERSON asked for clarification regarding who would be
covered by HB 393.
3:41:21 PM
MS. NENON responded that the retired state employee [insurance]
plan does not cover colon cancer screening, adding that each
state-regulated insurance plan varies as to what is covered.
Self-insured plans are not regulated by the state, and ACS is
working with these employers so that they will be able to make
the changes on their own.
CHAIR ANDERSON offered his belief that if this legislation
passes the population that will be affected will be small.
REPRESENTATIVE LYNN asked how often a "high-risk" person would
be required to get a colonoscopy.
MR. HILYARD referred to page 2, lines 24-26, which read in part:
For individuals considered at high risk for colorectal
cancer, screening shall be provided at a frequency
determined necessary by a health care provider.
REPRESENTATIVE LYNN surmised then, that whatever frequency the
healthcare provider decided would then be covered.
3:44:53 PM
REPRESENTATIVE LEDOUX, referring to page 1, lines 10-11, asked
why fraternal benefit societies are exempt.
MS. NENON replied that this legislation was drafted to match
other cancer screening statutes, and so she does not know why
this population is exempt or how many plans fall under this
category. She noted that someone from the Division of Insurance
may be able to offer this information.
REPRESENTATIVE LEDOUX, referring to page 2, subsection f, asked
if it is common for the insurance provider to notify the
enrollee of coverage.
MS. NENON replied that this type of language is being added
around the country, and is intended to inform people of what
their plan covers and what they are eligible for.
3:47:09 PM
REPRESENTATIVE ROKEBERG stated that he recently received
information from the Division of Insurance that there are 118
thousand individuals covered under small or large group plans
who would be affected by this legislation. He noted that 83
percent of the people in Alaska would not be covered by this
bill.
3:50:51 PM
REPRESENTATIVE CRAWFORD noted that most union trust plans are
already covering [colon cancer screening].
CHAIR ANDERSON offered his belief that the 83 percent figure may
be misleading, adding that although this bill does not mandate
it, many independent insurance groups are already covering these
costs.
REPRESENTATIVE ROKEBERG responded that this law impacts a
limited number of people, and has no impact on groups that may
cover [colon cancer screening].
3:51:52 PM
REPRESENTATIVE LEDOUX asked if this legislation could be
expanded to include [independent insurance groups].
REPRESENTATIVE ROKEBERG replied that [independent insurance
groups] are excluded by federal law.
3:52:47 PM
BRIAN SWEENEY JR., M.D., informed the committee that he is a
gastroenterologist, and is board certified in internal medicine
and gastroenterology. He stated that 93 percent of patients
that are diagnosed with stage one cancer survive five years,
while only 8 percent of those patients who are diagnosed with
stage four cancer survive five years. He, too, explained that
colonoscopy is the only type of cancer screening that is able to
detect cancer before it starts, adding that FOBT has a 20-40
percent rate of saving lives and flexible sigmoidoscopy has a 60
percent rate. In regard to colonoscopy, he stated that there is
not an exact number, but computer models have shown an 80
percent reduction in mortality.
DR. SWEENEY informed the committee that 40 percent of
[individuals at risk] receive colon cancer screening, which he
noted is up from 20 percent in the last five to ten years. He
opined that the real danger is that some individuals may be at
higher risk and so the insurance company may not want to cover a
"screening procedure," which may result in a decision not to
have the procedure done. He explained that colonoscopy done
once every ten years is more cost effective than any other
screening test that has been studied, including mammography and
pap smears.
CHAIR ANDERSON asked if Dr. Sweeney would agree that because
colon cancer screening has the ability to catch cancer before it
begins, the legislation is valuable.
DR. SWEENEY replied that he would agree, adding that on average,
colon cancer is diagnosed at age 67, at which point Medicare
pays for the medical treatment. He expressed concern that
taxpayers pay for this service. He opined that the cancer most
likely began as a polyp when the individual was in his/her 50s
and could have been taken care of [with screening]. With regard
to the issue of saving money, he opined that for an individual
who has a cancerous polyp and does not have it removed, cost is
not the issue.
3:58:11 PM
DR. SWEENEY, in response to questions from Representative
Rokeberg, explained the procedure for a double-contrast barium
enema. He stated that the ACS guidelines are used in this bill.
He went on to say that the ACS lists this as a potential
screening test, while the American College of Gastroenterology
has eliminated it from their colorectal cancer screening
guidelines. He expressed his agreement with removing the
double-contrast barium enema from the screening guidelines,
adding that there have not been any studies showing the test's
ability to screen and save lives. In addition, if something is
found with this test, a colonoscopy is still needed.
REPRESENTATIVE ROKEBERG asked if allowing family practitioners
to perform the "less intrusive" colon screening procedures is
appropriate.
DR. SWEENEY responded that FOBT has a 3-10 percent positive
rate, must be done every year, and has a high false positive
rate. He explained that studies have shown that the most
accurate results come from the colonoscopy, not from FOBT or
flexible sigmoidoscopy. He stated that if the guidelines are
followed exactly, the patients who receive a positive result
FOBT and flexible sigmoidoscopy will still need to have a
colonoscopy. He opined that getting a person to do any kind of
testing is better than nothing.
4:03:00 PM
REPRESENTATIVE ROKEBERG asked if he would recommend including
the basic tests that can be done by a general practitioner.
DR. SWEENEY responded that he would include it. He explained
that although he feels colonoscopy is "the best" screening test,
no randomized studies have been done to show how effective
colonoscopy is.
CHAIR ANDERSON commented that it is important to know that all
of the tests are critical.
4:04:21 PM
DR. SWEENEY replied that there have been computer models that
suggest that if a person were to do both the FOBT and flexible
sigmoidoscopy, more lives may be saved than by doing the
colonoscopy.
4:05:25 PM
REPRESENTATIVE ROKEBERG noted that the legislation provides
coverage for those over 50 years of age, or less than 50 years
of age with a high risk of colon cancer. He asked what would be
required for someone to be considered "high risk."
DR. SWEENEY replied that having two first-degree relatives
(mother/father) who die of colorectal cancer makes a person
"high risk". He expressed his feeling that there is no excuse
for not screening "high risk" patients, adding that in this
case, a colonoscopy would be the most appropriate, since a
person with a family history would be likely to get colon cancer
higher up in the colon. He stated that a person who has one or
two first-degree relatives with colon cancer should begin
screening at age 40. He went on to say that the American
College of Gastroenterology did a study that showed that African
Americans should begin screening for colon cancer at the age of
45.
4:08:40 PM
REPRESENTATIVE ROKEBERG noted that the "patients' bill of
rights" is intended to help patients, adding that they can
appeal a dispute about coverage.
DR. SWEENEY stated that although it sometimes takes extra effort
from the patient, he has yet to see any situations where the
insurance company refuses to pay for the procedure.
REPRESENTATIVE LEDOUX, referring to page 3, line 9, inquired as
to the meaning of, "other predisposing factors."
DR. SWEENEY explained that this would include persons with a
genetic defect which makes them more likely to develop polyps
and colon cancer. He added that he feels that these patients
are "surveillance" patients, rather than "screening" patients.
He went on to say that high-risk patients, such as those with
Crohn's Disease, are more likely to receive colonoscopies
regularly.
CHAIR ANDERSON highlighted that "ethnicity" would fall under
[other predisposing factors].
4:11:22 PM
CLAUDIA CHRISTENSEN, Alaska Native Tribal Health Consortium
(ANTHC), informed the committee that she has been involved in
colorectal cancer screening for the past six years. She stated
that in addition to having a high rate of colorectal cancer,
Alaska Natives also have low screening rates in comparison to
other ethnic groups, due to the majority of them being located
in Alaska's remote and rural areas. Ms. Christensen informed
the committee that the ANTHC and the Southcentral Foundation
began a screening program in Anchorage, and explained that they
offer colonoscopy and flexible sigmoidoscopy. She noted that
they now have a 50 percent screening rate, which is "well over
the national average." She went on to say that rural areas
still have low screening rates, adding that the ANTHC is working
on recognizing patients with a family history in order that they
begin screening. Ms. Christensen stated that the ANTHC does not
have gastroenterologists, but does have general surgeons who
make field visits to rural areas in an effort to increase
screening rates.
4:13:47 PM
REPRESENTATIVE ROKEBERG asked what type of health insurance is
available for Alaska Natives.
MS. CHRISTENSEN replied that the Indian Health Service (IHS)
covers colorectal screening for Alaska Natives living in areas
where the screening is offered, adding that not all Alaska
Natives use the IHS.
REPRESENTATIVE ROKEBERG opined that some Alaska Natives have a
health insurance company as their primary carrier but use the
IHS as a backup. With regard to the issue of "stop loss"
insurance, he said that some individuals may be covered under a
high deductible.
DR. SWEENEY, in response to questions from Representative
Rokeberg, stated that billable charges for a colonoscopy are
around $2,500, including operating room costs. He added that
Medicare reimbursement is around $700. He explained that
facility fees range from $1,500-$2,000, while the doctor's fee
is about [$750-$1,000], noting that if a polyp is found, the
cost rises.
4:16:43 PM
STEPHEN WARREN informed the committee that his brother was
recently diagnosed with symptomatic colorectal cancer and has a
10 percent chance of survival. He stated that his brother's
insurance did not cover the screening and, urged the committee
to pass HB 393.
MR. WARREN, in response to questions from Representative
Rokeberg, said that he is not aware of what insurance company
was used, adding that his brother works for the state.
4:18:30 PM
RICK URION informed the committee that although he usually
speaks on behalf of the Division of Occupational Licensing, he
would be speaking today as a "cancer patient." He said "It
makes a whole lot of sense to me, given my personal experience,
that you would spend a few bucks up front, to save ... the big
costs ... later on if you have full-blown cancer." He informed
the committee that he had received a colonoscopy during which
polyps were removed. Less than one year later, a second
colonoscopy was performed, this time finding full-blown cancer.
He said "I'm before you today as, I hope to say, a 'cancer
survivor' because of early detection, and I think it's a
wonderful thing that you would include this in insurance
policies, and I think it's a good deal."
4:20:13 PM
REED STOOPS, Lobbyist for the American Health Insurance
Association (AHIA), explained that there have been 12 or more
mandated coverages adopted by the legislature. Individually,
the cost implications are "marginal", but when combined, the
cost is more significant. He stated that this policy trade off
provides better coverage, but raises the cost for [small groups
and individuals]. Mr. Stoops noted that the AHIA recommends
mandated offerings as an alternative to [mandated] coverage,
thus giving the individual the option to buy coverage but not
requiring it. Referring to a handout in committee packets, he
recommended that the committee adopt language from Tennessee
law, which references current American Cancer Society guidelines
and United States Preventive Services Task Force guidelines,
explaining that this would keep the law up to date with the most
recent research.
CHAIR ANDERSON moved that the committee adopt Amendment 1, as
follows:
Page 2, lines 5-14;
Delete all material
Insert:
"coverage for colorectal cancer examinations and
laboratory tests specified in current American Cancer
Society guidelines or United States Preventive
Services Task Force guidelines for colorectal cancer
screening of asymptomatic individuals."
[Following was a brief discussion regarding other language in
the handout.]
REPRESENTATIVE LYNN objected for discussion purposes and asked
if this language would cover the guidelines that are currently
written out in the bill.
CHAIR ANDERSON offered his understanding that it would and would
also allow for any future changes.
REPRESENTATIVE ROKEBERG asked Chair Anderson if he would be
amenable to amending Amendment 1 by adding the words "as an
optional benefit."
CHAIR ANDERSON said he would not be amenable to such an
amendment to Amendment 1.
CHAIR ANDERSON asked if there was any further objection to
Amendment 1. There being none, Amendment 1 was adopted.
4:28:31 PM
MR. STOOPS, in response to questions from Representative
Rokeberg, stated that Aetna, Inc., is a member of the AHIA and
traditionally covers colorectal screening, including the State
of Alaska plan. He stated that Aetna, Inc., and Blue Cross Blue
Shield have a combined market share of 80-85 percent. He noted
that the agencies who represent the small-group and individual
market in Alaska will be affected the most by the legislation.
REPRESENTATIVE LEDOUX asked if there was any information
regarding the change in individual policy cost if HB 393 were to
pass.
MR. STOOPS replied that he would attempt to get cost information
before the next committee hearing.
4:31:15 PM
JEFFREY TROUTT, Deputy Director, Division of Insurance,
Department of Commerce, Community, & Economic Development
(DCCED), in response to questions from Representative Rokeberg,
informed the committee that the department does not support or
actively oppose mandates. He explained that HB 393 would cost
money, but was unable to give an exact amount.
REPRESENTATIVE ROKEBERG asked if there is an average deductible
for "stop loss" [insurance] carriers, and requested information
on how Blue Cross Blue Shield will be affected.
MR. TROUTT replied that he is not aware of whether there is an
average or deductible.
CHAIR ANDERSON requested that this information be supplied
before the bill is heard in the next committee of referral.
4:33:32 PM
REPRESENTATIVE LYNN moved to report HB 393, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes.
REPRESENTATIVE ROKEBERG objected, and urged committee members to
consider the ramifications, pointing out that a majority of the
people in Alaska are covered by independent insurance plans or
"stop loss" plans and therefore would not be affected by this
legislation. He commented that 20 percent of Alaskans and 50
percent of the children in Alaska are on Medicaid, and asked
members to consider the direction of healthcare in Alaska, and
urged them to "be very careful."
REPRESENTATIVE ROKEBERG then withdrew his objection.
CHAIR ANDERSON commented that he would be interested in seeing
the statistics regarding the aforementioned states that have
similar laws, and whether insurance carriers will say they won't
provide services in Alaska because of mandatory colorectal
screening.
CHAIR ANDERSON asked whether there was any further objection.
There being none, CSHB 393(L&C) was reported from the committee.
HB 335-ENERGY RESEARCH & DEVELOPMENT
4:37:33 PM
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 335 "An Act creating the Alaska energy
research and development program in the Alaska Energy Authority
and providing for a Committee on Alaska Energy Research and
Development to assist in the development of that program; and
providing for an effective date."
4:38:02 PM
LISA WEISSLER, Staff to Representative Ethan Berkowitz, Alaska
State Legislature, Sponsor, stated that Alaskan communities are
paying "ever-increasing" costs for fuel, adding that long-term
solutions are needed in order to make communities more self-
reliant. She informed the committee that HB 335 contains three
main provisions. The first provision states that the Alaska
Energy Authority (AEA), via a proposed Alaska energy research
and development program, will conduct the initial assessments to
determine the viability of alternative energy sources, and will
then report its findings and assist communities in determining
the appropriate energy source for their location. The State of
Alaska will conduct any necessary further assessments. Ms.
Weissler explained that this will allow the state to take
advantage of the cost efficiencies associated with coordinated
assessment, and address the inability of many communities to
afford the upfront cost.
MS. WEISSLER said that the second provision is the energy loan
fund. This provides a way for communities to pay for
alternative energy. Production incentive credits are generated
by the production of alternative energy facilities, and are
available to "pay down" the loan. Ms. Weissler stated that this
provides the incentive to keep the [alternative energy] facility
in good, working condition. The third provision pertains to the
establishment of the Committee on Energy Research and
Development. This committee will develop and guide
implementation of aforementioned the energy research and
development program. She added that it is the sponsor's hope
that once the facilities are built, they will provide Alaskan
communities with stable energy prices.
MS. WEISSLER explained that a proposed Committee Substitute
(CS), included in members' packets, is based on a conversation
with utilities and addresses their concerns. The biggest change
gives the committee the duty to develop the regulations. It
also deletes the requirement for the committee to create energy
portfolio standards and a tradable credit system. She explained
that this would have required utilities to produce a certain
amount of energy from alternative energy sources, and if unable
to do so they would have been able to purchase credits from an
area that was producing alternative energy. She went on to say
that there was concern about whether this would have worked in
Alaska.
4:41:09 PM
CHAIR ANDERSON moved CSHB 335(24-LS1354\I, Wayne, 2/1/06, as the
working document. There being no objection, Version I was
before the committee.
REPRESENTATIVE LYNN asked if there would be any statutory
conflict between the Alaska Energy Authority and the proposed
Committee on Alaska Energy Research and Development.
MS. WEISSLER replied that Legislative Legal and Research
Services commented that there may be an issue, but did not
specifically say that there was.
CHAIR ANDERSON asked for documentation from Legislative Legal
and Research Services regarding this question.
REPRESENTATIVE LYNN stated his understanding that the AEA
currently manages 47 projects, and asked if this legislation
would cause any conflicts with these.
MS. WEISSLER answered that the intent of the legislation is to
coordinate and bring all of these projects together.
4:42:57 PM
BECKY GAY, Project Manager, Alaska Energy Authority (AEA),
stated that the AEA's concerns regarding HB 335 relate to the
duplication of efforts and statutory powers and the potential
for conflicts of interest, particularly between the AEA's board
of directors and the proposed Committee on Alaska Energy
Research and Development. She explained that AEA's statutory
powers include: equipping and improving power projects, waste
energy [projects], energy conservation [projects], and
alternative energy facilities and equipment. AEA's statutory
powers also include loans for [alternative energy facilities and
equipment]. To support these efforts, AEA projects and programs
provide assistance for the development of safe, reliable, and
efficient energy systems throughout Alaska that are sustainable
and environmentally sound. Ms. Gay went on to say that these
projects provide reduced electricity costs for residential and
community facilities in rural Alaska and also increases the
AEA's ability to respond quickly and effectively to electrical
emergencies.
MS. GAY stated that AEA's professional engineering and
accounting staff allows AEA to focus on implementing
commercially proven technology, including alternatives to
diesel. The AEA partners with Arctic Energy Technology
Development Laboratory (AETDL) based at the University of Alaska
Fairbanks (UAF) for the research and development aspects of
diverse areas such as fuel cells, energy storage, diesel
efficiency, and the rural energy conference. She explained that
the AETDL program is federally funded.
MS. GAY, with regard to the potential conflicts of interest,
stated that the members of the [proposed Committee on Alaska
Energy Research and Development] would likely be drawn from the
same pool of past and future AEA grantees. She added that AEA's
powers are vested in its board of directors. The proposed
legislation states that AEA "shall administer" the programs, but
the [Committee on Alaska Energy Research and Development] shall
provide oversight. She stated that this usurps statutory powers
and responsibilities of the board, in addition to potentially
causing management conflicts. She opined that if the proposed
committee is responsible for developing regulations and AEA is
required to adopt these regulations, this may violate due
process protections if [in doing so] AEA is constrained from
following the Administrative Procedure Act (APP).
MS. GAY stated that AEA currently has a wide variety of energy
initiatives, some of which are addressed in HB 335. These
include: alternative energy source development and application,
alternative energy resource assessment and data dissemination,
and community and/or regional meetings on alternative energy
options, among others. Ms. Gay noted that AEA is also an owner
of large alternative energy assets for Alaska, including the
Bradley Lake Hydroelectric Project near Homer and the Larson Bay
Hydroelectric facility on Kodiak Island. She opined that the
non-commercial research efforts suggested in the legislation may
be better cultivated in an academic setting, such as the
University of UAF, adding that this may enhance the combined
efforts and lead to new technology applications for Alaska.
4:48:10 PM
CHAIR ANDERSON opined that the intention of the new committee is
not to replace the AEA, but rather to channel the direction
towards alternative energy methods.
MS. GAY, in response to questions from Chair Anderson, replied
that upon review, the AEA feels that the committee would have
broad powers with regard to its control over AEA's current
programmatic efforts. She added that because there is no
funding effort accompanying the legislation, it would be
diluting AEA's efforts.
REPRESENTATIVE LYNN inquired as to the possibility of private
companies "filling in the gap."
4:50:46 PM
PETER CRIMP, Project Manager, Alternative Energy and Energy
Efficiency, Alaska Energy Authority (AEA), replied that it takes
all kinds of assistance, adding that some projects are best
addressed with commercial technologies and power utilities. He
stated that hydroelectric is a "mature" technology that works.
Technologies such as fuel cells, microturbins, and biodiesel
require assistance from a University.
4:52:04 PM
MR. CRIMP, in response to questions, replied that the AETDL is
based at the UAF and is funded by the U.S. DOE's, and that AEA
sits on the board that helps choose remote energy projects.
REPRESENTATIVE ROKEBERG asked if this includes wind energy.
MR. CRIMP replied that the AETDL currently receives most of it's
funding from the DOE's fossil energy section. He opined that
the AETDL would be better served if some of the funding came
from the DOE energy efficiency and renewable energy funds,
adding that this would give wider applicability in places where
hydro, wind, and other renewable [energy sources] are being
considered.
REPRESENTATIVE ROKEBERG asked if members of Alaska's
congressional delegation have been made aware of this.
MR. CRIMP replied that a letter has been written.
4:53:52 PM
REPRESENTATIVE LYNN asked if this program would be similar to
those in the former Alaska Science and Technology Foundation
(ASTF), and if so, why the legislature is "reviving" projects
that the state previously decided were no longer "fit" to fund.
MS. WEISSLER answered that the sponsor was not aware of the
[ASTF] programs. She stated the sponsor's intent to look at
what is currently happening and find a way to jump-start
alternative energy development in the state.
REPRESENTATIVE LYNN expressed his support for alternative energy
and requested an answer to the previous question.
CHAIR ANDERSON explained the process by which the ASTF was
removed from the budget, and noted that HB 335 includes many of
the same projects.
REPRESENTATIVE ROKEBERG, referring to CS, asked if the language
regarding "carbon credits" is completely removed from the bill.
MS. WEISSLER replied that it is still included, and explained
that there is a general belief that there will eventually be a
national carbon [production] cap that the state may be able to
take advantage of through carbon sequestration.
REPRESENTATIVE ROKEBERG offered his understanding that the US is
the only industrialized country that has stayed well below the
carbon production cap listed in the "Kyoto treaty."
4:57:32 PM
MEERA KOHLER, President and Chief Executive Officer (CEO),
Alaska Village Electric Cooperative (AVEC), informed the
committee that she is in support of HB 335. Acknowledging that
the AEA has concerns regarding conflicts between the proposed
Committee on Alaska Energy Research and Development and the AEA
board, Ms. Kohler opined that the AEA board does not represent
the interests needed to develop the regulations that will impact
many [rural] Alaskan communities. She informed the committee
that AVEC serves 44 percent of Alaska's village population and
52 villages throughout Alaska. In the last two years, AVEC has
started to bring alternative energy sources to the communities
they support, which is expensive and laborious; however, AVEC
believes this needs to be done. She commented that HB 335 is a
"pretty modest" attempt to offset the high costs of alternative
energy development. Typically, wind energy costs $5,000-$6,000
per kilowatt, which is 5-6 times the cost of diesel generation.
She explained that a 2 percent loan program has the potential to
bring the $30,000 per year costs on a $300,000 project down to
about $25,000 per year. She added that this is modest, but
valuable and has the potential to bring up projects that may not
occur otherwise.
5:00:48 PM
REPRESENTATIVE GUTTENBERG asked if AVEC feels that not enough
has been done regarding alternative energy.
MS. KOHLER replied that a lot remains to be done, explaining
that AEA is making good progress in assessing wind regimes that
may yield alternative energy in rural Alaska, adding that this
needs to be done in more of the state. She opined that this
legislation will encourage this. With regard to development of
alternative energy, she commented that this is usually done by
the local utilities.
REPRESENTATIVE ROKEBERG asked if AVEC would prefer the
legislature to appropriate monies to the emergency fuel and
rural fuel program or to an energy loan fund.
MS. KOHLER answered that "in the best of all worlds" she would
want both programs to be funded.
CHAIR ANDERSON stated that there are many different concerns
regarding HB 335 and suggested appointing a subcommittee. He
asked Ms. Kohler if, in her opinion, there are any areas of the
bill that would adversely affect AEA's ability.
MS. KOHLER replied that she does not think so, and opined that
it could be a "harmonious" relationship. She noted that AEA is
not in the business of developing and installing alternative
energy in rural Alaska, adding that this is an area that the
utilities should be responsible for.
CHAIR ANDERSON requested a more detailed analysis of the
proposed CS from AEA, adding that he does not see a problem with
moving the bill from committee.
REPRESENTATIVE ROKEBERG expressed concern regarding a possible
Alaska Industrial Development and Export Authority (AIDEA)
fiscal note and stated that this legislation would take a "stand
alone" appropriation [in the budget]. He opined that it may be
more effective to "marry" AEA with the provisions in the bill
and also use the UAF program. He commented that Alaska is a
small state and so trying to finance multiple programs may
result in competition for funding.
REPRESENTATIVE CRAWFORD stated that he is a cosponsor of HB 335
and does not feel that the focus [in Alaska] has been on
alternative energy sources, and HB 335 is intended to do this,
especially in rural areas where the cost to generate diesel is
high. He stated that this legislation was not meant to be in
competition with [current programs], but rather be in addition
to these programs.
REPRESENTATIVE KOTT asked if there are any nuclear projects
"springing up" in the state.
MS. KOHLER replied that she is aware of one project proposed for
Galena but is not sure how close it is to being permitted. She
stated her understanding that the cost is being covered by
Toshiba, which is one of the primary sponsors, and estimated the
project start time to be several years away if the permit is
granted. She noted that nuclear energy is not covered in HB
335.
REPRESENTATIVE CRAWFORD moved to report the proposed CS for HB
335, Version 24-LS1354\I, Wayne, 2/1/06, out of committee with
individual recommendations and the accompanying fiscal notes.
5:13:18 PM
REPRESENTATIVE ROKEBERG objected.
A roll call vote was taken. Representatives Kott, Guttenberg,
Crawford, Lynn, LeDoux, and Anderson voted in favor of moving
CSHB 335, Version 24-LS1354\I, Wayne, 2/1/06, out of committee.
Representatives Rokeberg voted against it. Therefore, CSHB
335(L&C) was reported out of the House Labor & Commerce
Committee by a vote of 6-1.
5:13:27 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:13 p.m.
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