Legislature(2021 - 2022)BARNES 124
03/02/2021 01:30 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| Overview(s): Alaska Marine Highway System | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
March 2, 2021
1:32 p.m.
MEMBERS PRESENT
Representative Grier Hopkins, Chair
Representative Ivy Spohnholz
Representative Harriet Drummond
Representative Sara Hannan
Representative Tom McKay
Representative Kevin McCabe
Representative Mike Cronk
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
OVERVIEW(S): ALASKA MARINE HIGHWAY SYSTEM
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
ROB CARPENTER
Deputy Commissioner
Department of Transportation & Public Facilities
Juneau, Alaska
POSITION STATEMENT: Shared a PowerPoint and answered questions
during the meeting.
MATT MCLAREN
Business Manager
Alaska Marine Highway System
Juneau, Alaska
POSITION STATEMENT: Shared a PowerPoint and answered questions
during the meeting.
CAPTAIN JOHN FALVEY
General Manager
Alaska Marine Highway System
Juneau, Alaska
POSITION STATEMENT: Shared a PowerPoint and answered questions
during the meeting.
ACTION NARRATIVE
1:32:34 PM
CHAIR GRIER HOPKINS called the House Transportation Standing
Committee meeting to order at 1:32 p.m. Representatives McKay,
Cronk, and Hopkins were present at the call to order.
Representatives Spohnholz, Hannan, McCabe, and Drummond arrived
as the meeting was in progress.
^OVERVIEW(S): ALASKA MARINE HIGHWAY SYSTEM
OVERVIEW(S): ALASKA MARINE HIGHWAY SYSTEM
1:36:08 PM
ROB CARPENTER, Deputy Commissioner, Department of Transportation
& Public Facilities (DOT&PF), shared a presentation on the
Alaska Marine Highway System (AMHS), which covered AMHS routes
in Southeast Alaska, from Bellingham, Washington to Yakutat,
Alaska, as well as the vessels serving this area: the Matanuska,
the mainliner that goes from Bellingham to Skagway; the
Kennicott, going from Bellingham to Yakutat and cross-Gulf to
Southwest Alaska; the LeConte, doing the "village runs"
Gustavus, Pelican, Angoon, and the Lituya, the "day boat"
running from Ketchikan to Metlakatla daily.
MR. CARPENTER showed a depiction of Southwest routing on slide
2, pointing out that the Kennicott, after leaving Yakutat and
crossing the Gulf, generally stopped in Whittier, but when the
Tustumena went out the Aleutian Chain ("chain") to Dutch Harbor,
the Kennicott filled in and provided service from Whittier to
Homer to Kodiak. The Aurora generally served the Prince William
Sound (PWS) Area of Whittier, Valdez, and Cordova, he added.
1:40:25 PM
CHAIR HOPKINS asked what the longest duration was between any
two stops.
MR. CARPENTER replied it would depend on the time of year.
1:41:11 PM
MATT MCLAREN, Business Manager, AMHS, replied during summer
boats went out the chain once per month on a one-week round
trip. In the wintertime, October - April, AMHS did not go out
the chain due to rough seas and weather. The Aurora ran
continuously so long as funding was available, he stated.
CHAIR HOPKINS asked whether cancellations due to funding
decreases were a recent thing or an ongoing pattern.
MR. MCLAREN replied there has been continuous service, but that
it has not been as frequent. The Kennicott has run
consistently, but with additional funding the Aurora and
Tustumena would run more often as well, he added.
CHAIR HOPKINS asked whether the current budget proposal from
Governor Mike Dunleavy would allow the winter run to happen.
MR. MCLAREN replied there was more room in the budget than last
year. The Aurora would need to be laid up in October, he said,
the Kennicott would be running, and the Tustumena would be laid
up beginning in November. The governor's budget did decrease
the amount of time the Kennicott would have to run alone, he
stated.
1:44:15 PM
REPRESENTATIVE HANNAN asked if Kake and Pelican were reflected
in the finalized summer schedule for 2021.
MR. MCLAREN replied yes, the ports of Kake and Pelican were
included. Pelican will be one roundtrip per month; Kake would
be serviced by the Matanuska.
REPRESENTATIVE HANNAN asked whether the Bellingham runs have
been increased, as it could be a profitable season for that run
due to the Canada closures.
MR. MCLAREN replied there was regular service to Bellingham with
six stops per month between the Matanuska (once per week) and
Kennicott (once every other week), but folks headed to Interior
Alaska through Whittier would be serviced by the Matanuska out
of Bellingham's feeding the Kennicott in Juneau.
1:47:10 PM
REPRESENTATIVE MCCABE asked after the Kennicott's summer
ridership on the "cross-Gulf" route (Bellingham - Whittier -
Homer - Kodiak), and the "break-even" point.
MR. MCLAREN replied on all routes, revenue came from the car
deck, as passenger seats didn't sell out. When the Columbia ran
out of Bellingham, only about 70% capacity on the car deck was
needed to break even. With military moves, the cross-Gulf route
looked to be in high demand, he stated. In the summertime, the
route paid for itself, he added, and helped pay for some others.
REPRESENTATIVE MCCABE asked whether frequency in wintertime
could be decreased enough, and ridership brought up enough, to
break even on the Kennicott's cross-Gulf trips.
MR. MCLAREN replied frequency had already been limited regarding
the Kennicott, which, due to COVID-19 mitigation measures had
been on a two-week round trip basically covering the entire AMHS
system and seeing a lot of demand. The best way to increase
revenue while keeping frequency of trips down was being
determined, he added.
1:51:51 PM
CAPT JOHN FALVEY, General Manager, AMHS, showed the AMHS "Aging
Fleet" commercial ship status, hastening to point out ships were
normally retired after 30-35 years of service. Starting with the
oldest and moving to the newest: the Malaspina (mainliner built
in 1963, the same year as the Matanuska) was currently laid up
in Ketchikan due to approximately $16 million needed in steel
repair work. The Malaspina is the only ship with its original
engines (58 years old), so their inevitable replacement along
with any "discovery" steel work could cost more than $50
million. The sister ship of the Malaspina, the Matanuska was
one of two ships (the other being the Kennicott), built as a
Safety of Life at Sea (SOLAS) ships, built to service
International Port Prince Rupert. Captain Falvey imparted a
tremendous amount of work had been done in the Matanuska's
engine room, and between the re-power and SOLAS conversion, $40
million was spent. Tustumena, at 57 years old, was in the
shipyard almost one year receiving overhauls each year and
having work done on small projects such as the restrooms,
kitchen, tiling, and lighting, to keep the Tustumena running
efficiently and safely.
1:58:06 PM
CAPT. FALVEY imparted the Le Conte, a 235 ft., 47-year-old ship
historically operating out of Juneau, was receiving its annual
overhaul and had no major issues. The Aurora was currently
having hull steel and interior steel replaced in Ketchikan, he
stated, as well as receiving its upgrades on "habitability"
aspects. On time and on budget, the Aurora was set to go in
water Thursday (March 4, 2021). He added PWS citizens would be
happy to have the Aurora back. The Columbia, also 47 years old
and the largest ship in the fleet, was currently in cost savings
layup and set go in for overhaul in three weeks' time. Non-
extensive steelwork needed to be done. Propellor systems on
Colombia were unable to be replaced due to none big enough built
in US, Captain Falvey stated. The same company that made engines
on the Kennicott could install the new propellor system on the
Colombia, and the latter should be good to go by winter 2022.
The Kennicott, at 27 years old, is AMHS's newest mainliner, due
in the water March 18th with no issues. The Lituya was the
smallest ship, running from Ketchikan to Metlakatla five days
per week. The smallest ship and the closest to break-even; the
Lituya just finished its overhaul and would be completely
repainted next year including decks sandblasted and recoated, as
a federal project, by next summer.
2:03:50 PM
CAPT. FALVEY introduced the two newest ships in the fleet, the
Tazlina and the Hubbard, both built in 2019. Both ships were
going through overhaul and have had new doors installed so they
will be more flexible when they were able to run again. The
Hubbard has not been in operation due to budget; maintenance and
extensive checks would have to be done. The Fairweather and
Chenega, the two fast ferries, 17 and 16 years old respectively,
were both for sale. Operations were ceased on the fast ferries
because of cost, he put forth. Due to personnel needed and
licensing, the fast ferries also struggled in Lynn Canal and
Prince William Sound and didn't handle weather as well. Both
carried as many people as the Le Conte and the Aurora but were
much more expensive to run than the latter ships. There has
been an international bid, a buyer from the Mediterranean
working with a lawyer in Anchorage, on the fast ferries and two
unused spare engines.
2:08:18 PM
REPRESENTATIVE SPOHNHOLZ said the Kennicott was 23 years old,
not 27. She asked Captain Falvey to talk about SOLAS.
CAPT. FALVEY explained SOLAS was a set of international rules
mainly in place for ships in the ocean to get to foreign ports
required to have many more safety features, such as evacuation
routes, in place. The catch with Prince Rupert, though it is an
inland port, is a foreign country, so ships traveling through it
must abide by SOLAS. The SOLAS ships were more expensive to
build and to maintain, he added.
REPRESENTATIVE SPOHNHOLZ asked about ferry funding and sources
for ferry repair.
CAPT. FALVEY said AMHS received $23 million in federal funding
per year for repair, plus the state match.
REPRESENTATIVE SPOHNHOLZ asked what the funding source was.
CAPT. FALVEY replied federal highways and, on occasion, federal
transit.
2:11:51 PM
REPRESENTATIVE MCCABE asked about the doors on the Tazlina and
Hubbard that had been done, and if the crew bunk installation on
day ships was still being done.
CAPT. FALVEY replied yes, forward starboard doors on both the
Tazlina and the Hubbard had been installed to make them more
flexible in any port, with or without crew cabins. The Tazlina
was operated with two back doors from Juneau to Haines to
Skagway but it became awkward to maneuver vehicles with only
back doors. Boats had both been built without crew quarters, he
answered, but with quarters ships could run 24/7. Without
cabins, they would fall into 12-hour days and would be much more
restrictive in PWS and Juneau. Cabins have been designed, he
stated.
REPRESENTATIVE MCCABE asked if the designed cabins would cut
into revenue (car space on main deck, passenger seating), and
whether that would affect revenue. He asked also about the 12-
hour rule.
CAPT. FALVEY replied cabins would not affect revenue from
passengers or cars, and that the 12-hour rule was a US rule that
worked its way down to the Coast Guard.
REPRESENTATIVE MCCABE asked for more information on the
regulations.
CAPT. FALVEY replied the regulations were a US requirement and
that he would provide more information.
2:16:39 PM
REPRESENTATIVE HANNAN, referencing the Colombia's no-cost layup,
asked, if the Malaspina would be sold, what was it costing to
store/moor.
MR. MCLAREN replied it cost $8K per week or $400K per year for
mooring costs, security, and utilities.
REPRESENTATIVE HANNAN asked how long the Malaspina had been laid
up with AMHS paying for its storage.
MR. MCLAREN replied since mid-December 2019, so $450K this
fiscal year plus $233K spent in past.
2:20:05 PM
REPRESENTATIVE SPOHNHOLZ asked what it would cost to build up
crew quarters on the Tazlina and Hubbard.
CAPT. FALVEY replied around $15 million per ship.
REPRESENTATIVE SPOHNHOLZ asked with regard to ensuring folks in
upper Lynn Canal had consistent AMHS service, if there was a
preferred alternative between retrofitting ships with cabins or
creating another terminal at Cascade Point.
MR. CARPENTER replied the development of Cascade Point would
work but it may be seasonal, and with a crew ships could run out
of Auke Bay and Prince William Sound. That being said, he
added, the two were not mutually exclusive.
2:22:55 PM
REPRESENTATIVE MCCABE asked how much adding crew increased
operating cost per hour, and if the crew always had to equal the
crew quarters if it was a day trip.
CAPT. FALVEY replied night crew would be on shore side so with
or without the cabins the crew would not increase. He added it
would be a matter of working with unions to get agreements
needed to efficiently and cost effectively run the ships.
MR. MCLAREN replied there were challenges without crew quarters.
With the distance from Juneau to Haines to Skagway with the
Tazlina, crews were overnighted in Haines which added about $25K
per week. Crew quarters would decrease that expense, runs could
be made longer, and revenue increased as more ports could be
accessed.
2:26:46 PM
CHAIR HOPKINS asked what would happen to revenue from the
international sale.
CAPT. FALVEY replied the revenue would go back into federally
eligible "pot." Permission was granted to AMHS from federal
highways to sell the boats, and funds would report back to
federal highways after the sales were complete.
CHAIR HOPKINS asked about the maintenance agreement between AMHS
and Vigor Shipyard.
CAPT. FALVEY replied the maintenance agreement was renegotiated
every three years, and when any ships were brought in for an
overhaul there was a full crew doing work that would not be done
by shipyards.
CHAIR HOPKINS asked if the crew was able to repair en route, in
light of a complete overhaul.
CAPT. FALVEY replied yes, and the ship also needed to come in
for licensing and certificate renewal, so it was a group effort.
CHAIR HOPKINS asked how the tasks were delineated.
CAPT. FALVEY replied it was based on need and they worked
downward based on importance.
CHAIR HOPKINS asked if this was done with an eye toward cost
savings, or how it was evaluated.
CAPT. FALVEY replied in terms of state overhauls they had to be
done within the state.
2:36:17 PM
REPRESENTATIVE HANNAN asked after the long-term plan for the
Tustumena.
CAPT. FALVEY replied the new Tustumena was at 60% completion and
there was another year or so.
MR. CARPENTER replied once it was fully designed, coming up with
the money was the tricky part. The new Tustumena penciled out
about $238 million non-SOLAS, he stated; SOLAS would add another
$46 million or so. Funding through highway system was about $600
million a year and that serviced demands from all over the
state, so there was a need to be creative about financing.
REPRESENTATIVE HANNAN asked how much money was in the vessel
replacement fund currently and what was expected to be generated
off the Chenega and Fairweather.
MR. CARPENTER replied $19 million in now, $2.5 million in the
match set aside. He said the amount of the fast ferries' sale
was not public yet.
REPRESENTATIVE HANNAN commented the fatal plane accident in
Dutch Harbor 18 months ago made folks take a hard look at the
number of people stuck with charter flights when there is
private sector AMHS in existence, still no options.
2:42:39 PM
REPRESENTATIVE DRUMMOND asked if any thought had been given to
an infrastructure plan vis a vis Washington and the Biden
administration.
MR. CARPENTER replied yes, the infra-grant upwards of $100
million and there was some "political sway" as to how they were
handed out.
REPRESENTATIVE DRUMMOND suggested if AMHS was mentioned as one
of the largest state-run highway systems in the nation, they
might pay more attention.
2:44:50 PM
CHAIR HOPKINS asked if DOT&PF had looked at the possibility for
electric ferries for shorter runs such as the Le Conte, Lituya,
and Aurora.
CAPT. FALVEY replied AMHS had looked into battery technology for
shorter runs, especially for the Lituya, but it would require
"major work and redesign." He mentioned LNG engines were
convertible.
2:48:29 PM
MR. MCLAREN referenced slide 8, "Historical Traffic and
Operating Weeks," in which vehicle traffic history went back 30
years. The red line "bumping up and down" represented the
number of operating weeks for the year, he stated. Vehicle
traffic was consistent, passenger traffic has declined but
remained constant vis a vis the number of operating weeks, he
pointed out. Between 2004 and 2008 operating weeks jumped from
300 to 425 service weeks, he said, but passenger traffic did not
go up the same during those years, he said.
CHAIR HOPKINS asked for a definition of operating weeks.
MR. MCLAREN replied it was a week a ship was operating, so if
seven vessels were operating it counted as seven operating
weeks, even if it was only one calendar week.
CHAIR HOPKINS asked for a schedule without the Lituya, so it was
not skewed in that consistently traveling ship's direction.
2:52:32 PM
MR. MCLAREN referenced slide 9, with more detailed passenger
detail from 2011-2020. Without the Lituya's 50 operating weeks,
33,000 passengers per year could be removed, but a new chart
would be provided.
MR. MCLAREN moved on to slide 12, "Tariff Increase History."
Increases since May 2015, part of recommendation was to levelize
tariffs.
2:56:25 PM
REPRESENTATIVE HANNAN asked if "tariffs" were interchangeable
with "fares."
MR. MCLAREN replied yes.
MR. MCLAREN introduced slide 13, "Dynamic Pricing." Table
showed the amount of increase in fare above the base fare. The
AMHS hasn't had a "traditional normal year" to look at numbers
but has seen increase in revenue.
REPRESENTATIVE HANNAN asked if analysis has been done on the
inverse of dynamic pricing, such as offering discounts if spots
hadn't been filled, instead of charging more.
MR. MCLAREN replied it had come up, and other options would be
looked at.
REPRESENTATIVE HANNAN related since dynamic pricing there have
been a lot of complaints. When a trip was cancelled it was
extra frustrating and didn't make sense. The fallout of default
dynamic pricing was not the fault of the consumer, she stated.
3:01:05 PM
CHAIR HOPKINS asked what came out of the AMHS reshaping ferry
group.
MR. CARPENTER replied AMHS was working on leveraging the road
system toward Cascade Point, dynamic pricing, and other things.
3:03:28 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 3:03
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| House Transportation - AMHS Overview 03.02.2021 FINAL.pdf |
HTRA 3/2/2021 1:30:00 PM |
DOTPF - Alaska Marine Highway Overview |