Legislature(1999 - 2000)
03/29/2000 08:40 AM House URS
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
JOINT MEETING
HOUSE SPECIAL COMMITTEE ON UTILITY RESTRUCTURING
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
March 29, 2000
8:40 a.m.
COMMITTEE CALENDAR
ROUND TABLE DISCUSSION: Power Cost Equalization (PCE)
TAPE 00-7, SIDE A [URS TAPE NUMBER]
[Note: This joint meeting begins about halfway into Side A of
URS TAPE 00-7, following a meeting of the House Special Committee
on Utility Restructuring (URS) that began at 8:02 a.m. Side B of
that tape was not recorded, and there are no further tapes
available for this meeting because of a technical recording
difficulty.]
CALL TO ORDER
REPRESENTATIVE BILL HUDSON, Chair, convened the joint meeting of
the House Special Committee on Utility Restructuring and the
House Community and Regional Affairs Standing Committee at 8:40
a.m.
PRESENT
House Special Committee on Utility Restructuring members present
were Representatives Hudson, Cowdery, Porter, Davies, Berkowitz
and Green. House Community and Regional Affairs Standing
Committee members present were Representatives Harris, Morgan,
Halcro, Murkowski, Dyson, Joule and Kookesh.
SUMMARY OF INFORMATION
CHAIRMAN HUDSON set the stage for the round table discussion on
Power Cost Equalization (PCE), explaining that his committee has
been looking from the alternative energy perspective at what
might be done over time that would preclude the need for
subsidization of power costs in rural Alaska. He said the
legislature supports providing electricity to rural Alaska and
wants to find a person in the Administration who can work with
the legislature on reducing the need for and finding a stable
source of funding for PCE. He passed the gavel to Chairman
Morgan to preside over the joint committee round table.
JEFFREY W. BUSH, Deputy Commissioner, Department of Community and
Economic Development, represented the Administration in the
discussion. His department (DCED) oversees the Alaska Industrial
Development and Export Authority (AIDEA). He said Randy Simmons,
Executive Director, AIDEA, has been designated as the
spokesperson for the Administration on PCE, and that AIDEA is the
agency primarily involved.
MR. BUSH said the Administration agrees that a long-term solution
is needed for funding PCE. Options being explored include:
Selling the Four Dam Pool to create a pool of funds to
use for a long-term solution.
Talking with Alaska's Congressional delegation to try
to enlarge the pool for long-term funding.
Working with the Denali Commission to create
efficiencies and more effective delivery of power in
rural areas, thereby reducing the need for PCE funding.
REPRESENTATIVE HARRIS noted that for years the legislature has
been providing PCE. He said his goal is to try to develop
economically reliable systems to try to reduce or eliminate the
need for a subsidy and try to get the rural communities "on their
own feet to the extent possible." He said that in his home
district, there is a proposed hydropower project that could
eliminate the Cordova area's reliance on PCE, of which it is the
single largest recipient. He also mentioned plans for an
intertie in Southeast that could reduce another PCE subsidy of up
to $300,000 a year.
MR. BUSH noted that the energy program was transferred to AIDEA
just five months ago. Since then, the division has identified
the specific needs and problems and has begun work on the Alaska
Energy Plan, a long-term strategy for the whole state. They
estimate it will take 12-18 months more to complete.
REPRESENTATIVE KOOKESH said he is glad to hear there is an energy
plan being developed for all Alaska. "But we're not ever going
to get away from PCE as a problem unless we follow up on
Representative Harris's comment that we need to do something
drastically different in rural Alaska to get people off PCE," he
said. In his district, "There is more than $20 million sitting
in Ketchikan for an intertie that is supposed to be happening in
Southeast Alaska, and that nobody is doing anything about. About
$8 million of the original amount has been spent for studies.
We're studying the heck out of that intertie and not building
it," he emphasized. "We could get all of Southeast Alaska off
PCE because this is the part of the state that has the water for
hydropower."
REPRESENTATIVE KOOKESH said the solution is to "spend some big
money up front to get some of these areas off the PCE." He wants
the Administration to "either get off the dime or give the money
to somebody else to build the intertie."
REPRESENTATIVE KOOKESH asked if anyone is scrutinizing what the
power companies are charging to supply power to rural Alaska and
how those companies justify their costs.
ERIC YOULD, Executive Director, Alaska Rural Electric Cooperative
Association, was invited to come forward to speak to that
question. He explained that before any payment is made from PCE
funds, the RCA must verify that the costs are legitimate,
thereby providing oversight. The RCA sets efficiency
requirements, and if a utility does not meet those, the utility
does not get the full PCE payment.
REPRESENTATIVE BERKOWITZ said he sees HB 396, of which he is
prime sponsor, as a potential piece of the long-term solution.
That bill would create one Alaska financing entity, starting by
combining the assets and functions of the Alaska Housing Finance
Corporation with those of the Alaska Municipal Bond Bank
Authority and the Alaska Student Loan Corporation.
REPRESENTATIVE JOULE cited the need to provide bulk storage for
fuel along the coast and for runways to bring that fuel into
villages.
KEVIN RITCHIE, Executive Director, Alaska Municipal League, was
invited to testify. He agreed that the Denali Commission has
great potential for achieving energy economies in rural Alaska.
He also presented the Municipal League's "magic bullet," the
concept of an annual dividend to all municipalities, in effect, a
Permanent Fund Dividend to communities in addition to the one now
given to individual citizens.
REPRESENTATIVE DAVIES emphasized the need to develop resources to
provide new sources of power, not just for rural communities but
for the state's economic development.
CHAIRMAN HUDSON drew the round table discussion to a close on a
note of optimism, noting that there are many potential,
complementary pieces to the solution, and saying that he was
looking forward to the Administration's bringing forward "some
sort of vision" the legislature could work toward fulfilling.
ADJOURNMENT
CHAIRMAN MORGAN handed the gavel back to Chairman Hudson, who
adjourned the meeting at 9:32 a.m.
NOTE: The meeting was partially recorded and handwritten log
notes were taken. A copy of the tape(s) and log notes may be
obtained by contacting the House Records Office at 129 6th
Street, Suite 229, Juneau, Alaska 99801-2197, (907) 465-2214,
and after adjournment of the second session of the Twenty-first
Alaska State Legislature this information may be obtained by
contacting the Legislative Reference Library at 129 6th Street,
Suite 102, (907) 465-3808.
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