Legislature(2009 - 2010)Kenai
08/07/2009 02:00 PM Senate ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Update on Statewide Energy Plan | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
JOINT MEETING
SENATE SPECIAL COMMITTEE ON ENERGY
HOUSE SPECIAL COMMITTEE ON ENERGY
Challenger Learning Center, Kenai
August 7, 2009
2:13 p.m.
MEMBERS PRESENT
SENATE SPECIAL COMMITTEE ON ENERGY
Senator Lesil McGuire, Chair
HOUSE SPECIAL COMMITTEE ON ENERGY
Representative Charisse Millett, Co-Chair
Representative Kyle Johansen
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
SENATE SPECIAL COMMITTEE ON ENERGY
Senator Lyman Hoffman
Senator Albert Kookesh
Senator Bert Stedman
Senator Bill Wielechowski
HOUSE SPECIAL COMMITTEE ON ENERGY
Representative Bryce Edgmon, Co-Chair
Representative Nancy Dahlstrom
Representative Jay Ramras
OTHER LEGISLATORS PRESENT
Senator Huggins
Representative Chenault
Representative Olson
Representative Seaton
COMMITTEE CALENDAR
Statewide Energy Plan
PREVIOUS COMMITTEE ACTION
No previous action to consider
WITNESS REGISTER
LARRY PERSILY
House Finance Committee Aide for Representative Hawker
State Capital Bldg.
Juneau, AK
POSITION STATEMENT: Presented the status of federal economic
stimulus funds.
DAVE CAREY, Mayor
Kenai Peninsula Borough
POSITION STATEMENT: Commented on keeping the Kenai Peninsula
Borough at the forefront of developing alternative (especially
geothermal) and conventional energies. Supported a statewide
energy plan.
MARK FOSTER
Representing Matanuska Light & Power on a Joint Utility Task
Force
POSITION STATEMENT: Presented a status report for the Joint
Utility Task Force.
JODI MITCHELL
Inside Passage Electric Cooperative
Southeast Alaska
POSITION STATEMENT: Supported an energy plan that considered
regional integrated resource planning process.
FRANK CORBIN, General Manager
Nushagak Cooperative
Dillingham, AK
POSITION STATEMENT: Said section 2 of HB 219 brings the
economists in much too late.
KATHLEEN WILSON
Mainland Co.
Kenai, AK
POSITION STATEMENT: Commented on conservation and energy issues.
CLAY KOPLIN
Cordova Electric Cooperative
POSITION STATEMENT: Commented on his support for hydro power.
MARILYN LELAND, Executive Director
Alaska Power Association (APA)
POSITION STATEMENT: Supported a statewide energy plan.
JIM STRANDBURG, Project Manager
Alaska Energy Authority
POSITION STATEMENT: Supported statewide energy planning.
BRAD REESE, General Manager
Kotzebue Electric Cooperative
POSITION STATEMENT: Supported statewide energy planning.
MERA KOHLER, President and CEO
Alaska Village Cooperative
POSITION STATEMENT: Commented on how rural energy issues relate
to state energy planning.
PAT HAWKINS, representing himself
Soldotna, AK
POSITION STATEMENT: Wanted an in-state gas line.
BILL WARREN, retired pipefitter and welder
Nikiski, AK
POSITION STATEMENT: Supported an in-state gas line.
JIM KAUFFMAN, representing himself
Kenai, AK
POSITION STATEMENT: Supported an in-state gas line and investing
some Permanent Fund money permanently in sustainable electricity
generation.
RICHARD DeMILLO, representing himself
Kenai, AK
POSITION STATEMENT: Urged lawmakers to do something about the
energy situation.
JOHN LANDUA
Engineering and Technical Services, Inc.
Kenai, AK
POSITION STATEMENT: Supported an in-state gas line, having a
Department of Energy and statewide energy planning.
ACTION NARRATIVE
2:13:24 PM
CO-CHAIR CHARISSE MILLETT called the joint meeting of the House
and House Special Committees on Energy to order at 2:13 p.m.
Present at the call to order were Representatives Peterson,
Johanson, Tuck, Chenault, and Millett; Senator McGuire.
2:14:47 PM
^Update on Statewide Energy Plan
LARRY PERSILY, House Finance Committee Aide for Representative
Hawker, presented the status of federal economic stimulus funds.
Three other pots of energy efficiency funding are coming to
Alaska through the stimulus program: $18 million to the Alaska
Housing Finance Corporation (AHFC) for the existing home
weatherization, $9.6 million under the Energy Efficiency and
Conservation Block Grants provision of the stimulus act; of
that, 60 percent has to go to communities, 30 percent goes to
the Alaska Energy Authority (AEA) and AHFC. The AEA will likely
administer the grants to communities for the 60 percent. AEA and
AHFC are working to develop criteria for the grants and the
selection process for that 60 percent.
He said the $9.6 million can go to retrofits of residential and
commercial buildings, public buildings, heating system upgrades,
energy efficiency audits, lighting upgrades, public outreach and
most anything that will help reduce energy costs.
In addition to the $9.6 million that is going to the state, $4.5
million under the stimulus act is going directly to the top 10
cities and top 10 boroughs in Alaska by population. They will
receive their money directly from the federal government rather
than going through legislative appropriation. For instance, the
Kenai Peninsula Borough is in line for $192,000 and the City of
Kenai for $50,000. Sixty percent of the $9.6 million that is
going to the state must go to cities and boroughs that don't
receive funding under the top 10. In addition to the money going
to the state and municipalities, about $12 million is going
directly to 241 tribal governments in Alaska - an average of
about $51,000 each.
MR. PERSILY said the $28 million that will be the subject of
Monday's special session is for the State Energy Program. It is
not a new program; it has been around since 1996 and a precursor
of this federal program dates back to 1976. There has never been
much money in the past, and the stimulus money jumps it up quite
a bit. Under federal law the money goes to each state's official
designated energy office, and in Alaska that is the AHFC.
2:21:03 PM
A 1996 Memorandum of Understanding (MOA), amended in 2001, says
the state energy program funds that come to Alaska are shared
50/50 between AEA and AHFC. He has been told by the
administration if the Legislature overrides the $28 million
veto, Governor Parnell will get personally involved in how it
gets spent rather than letting it go out under the MOA.
MR. PERSILY said the Department of Energy's (DOE) objectives for
the State Energy Program are clear, but broad - to increase
energy efficiency to reduce costs for consumers, businesses and
government, to reduce reliance on imported energy, to improve
the reliability of electricity and fuel supplies and reduce the
effects of energy production and use on the environment. The
money can go toward retrofits, weatherizations, loans or grant
programs for energy efficiency projects, to municipalities; it
can be used for promotion, public education of energy efficiency
standards, street lighting upgrades, and almost anything that
would save energy costs. The money cannot go toward land
purchases or new construction of new buildings; it cannot go to
non-energy related repairs, roof rot or to pure research.
2:22:40 PM
In the past a 20 percent state match was required, but it has
been waived for the stimulus funding. If the Legislature fails
to override, the money will stay with the Treasury and not go to
other states. The application deadline was on May 12, and the
AHFC submitted a bare bones application to save a place. The
Department of Energy has agreed to accept a late amended version
and want it wrapped up by September 30.
2:24:04 PM
The Legislature can override the veto, but not direct the
funding. The spending decisions are up to the executive branch
and the governor.
In March AHFC and AEA submitted their spending proposals to the
Office of Management and Budget, but the governor didn't adopt
any proposals at that time. The state can amend its spending
plan in its final application to the Department of Energy. AHFC
proposed $4.5 million for community building weatherization, $2
million for weatherization and rebate support in the Energy
Program, $4 million for a home-based renewable energy program,
$1.8 million for consumer education and $2 million to work on
statewide energy efficiency standards.
2:25:27 PM
AEA proposed adding $7 million to the Renewable Energy Fund,
$2.5 million for development of renewable energy, $3.9 million
for energy efficient equipment rebates and incentives, $775,000
for energy efficiency training and education, and $100,000 for
commercial facility energy audits.
2:26:13 PM
MR. PERSILY related that the federal rules for the state energy
program funds have become contentious. The DOE requires the
governor pledge that the state will promote and encourage
improved energy efficiency for residential and commercial
buildings - period. A letter from the Department of Energy
dated August 5 confirmed that the Legislature does not need to
adopt, impose or enforce a statewide building code in order to
qualify for state energy program funds. It further explained
that the state must provide assurances to the Department of
Energy that it will encourage, promote and assist municipalities
that choose to adopt their own energy efficiency codes to
achieve the goals of the program, which are reduced energy
consumption in public and private buildings.
Alaska is the only state that has not been approved for the
state energy program stimulus funding. The other 49 have
submitted the required assurances to the Department of Energy.
He surmised that a lot of the controversy came in February when
the original report was that states would have to comply with
model energy efficiency standards for 90 percent of square
footage of new and renovated buildings by 2017. Later the DOE
determined that meeting energy efficiency standards was not a
mandate, but a goal. They want each state to prepare a plan
about how they will do it; it is not due at the time of
application for the funds. An acceptable plan would include
outreach, education efforts among home owners, commercial
property owners, builders, lenders, others involved in the
industry, assisting local municipalities that choose to adopt
energy efficiency standards - pretty much a general plan to
promote efficiency and savings and then report on the results of
that plan.
The DOE has issued a contract to the Pacific Northwest National
Laboratory to draft voluntary compliance standards for states
that want to measure their success at improved energy
efficiency, the idea being that states might want to compare
themselves to others.
2:29:49 PM
REPRESENTATIVE CHENAULT said the AEA proposal talks about
spending $3.9 million for energy efficiency equipment, rebates
and incentives. Some individuals who want to put in wind mills
for their own home use have asked why wind farms for nonprofits
would be incentivized, but not them.
MR. PERSILY replied that incentives for wind power would be an
allowable use for the $28 million. He thought the AEA and AHFC
would welcome suggestions on ways to direct that $28 million.
2:31:33 PM
DAVE CAREY, Mayor, Kenai Peninsula Borough, said the question
being asked as a new bureaucracy is being discussed is whether
or not energy policy and application would be enhanced and
streamlined with these funds. Would this assist in getting the
needed natural gas to the Kenai Peninsula and to Southcentral
Alaska?
Developing and administering a comprehensive energy plan for
Alaska is long overdue. It must address production,
distribution, conservation, and consumption must all be
addressed. A unified Railbelt system is required, he said, for
generation and transmission, but distribution must be left to
the local co-ops. Promoting cost effective energy efficiencies
in new construction and renovation and maintenance of existing
public buildings and establishing community standards is good,
but they must be supported by local residents and those in
decision-making positions. This new department would serve as
the conduit for all U.S. DOE funds, which is a good idea if it
speeds up the process of getting funds to the local communities
and those individual who applied for the funds.
MR. CAREY said, however, that all too often the paperwork
required by new government programs makes people walk away; so a
program must be workable while providing needed oversight of
public funds. He supported HB 219 in this respect in that each
project should submit updates at intervals. But it is his
experience that smaller projects require so much paperwork that
a lot of funds are spent on people doing paperwork, not getting
anything done.
2:36:20 PM
He thought that all federal funds should be accepted by the
state. He provided a copy of the Kenai Peninsula Borough agenda,
his goal for becoming a premier leader for the development and
implementation of alternative energy research. He urged them to
keep the Kenai Peninsula Borough at the front of the line
whenever they make funding decisions on alternative energy
grants and programs. Fossil fuels are not the enemy; it is
needed along with alternatives and conservation.
MR. CAREY said the Kenai Peninsula is truly urban and rural with
the needs of each. He urged legislators to not continue
developing energy policy that pits urban against rural against
Southeast. Alaskan energy policy must meet the needs of every
Alaskan and does not support the destruction of the rural ways
of life and people.
Finally, he said, he wanted to promote the development of
geothermal energy. The Kenai Peninsula Borough includes four
active volcanoes: Spur, Redoubt, Iliamna, and St. Augustine.
2:39:35 PM
MARK FOSTER, representing Matanuska Light & Power on a Joint
Utility Task Force comprised of board members from the Railbelt
utilities, presented a status report. He said they got together
to see if they could adopt the Gretsky Corporation concept, an
Electric Generation, Transmission and Gas Transmission and
Supply non-profit corporation. A majority was not in favor of
the current proposal. The utilities expressed concern about the
lack of progress on getting a draft that would get a majority
vote.
State representatives were also concerned about time running out
on addressing critical issues. At the conclusion, the chair
found commitment to work together to get a mutually agreeable
business structure.
2:43:20 PM
Consensus was found on building Railbelt transmission
infrastructure, but it has a reliability component. It's focused
on the common interests of strengthening the reliability of the
transmission system reserves that support the transmission
system and rapid recovery resources like batteries to enable the
transition system to quickly recover and be reliable. It also
focuses on the common interest of enhancing reliable access to
renewable resources that are throughout the Railbelt by
strengthening the capacity of the transmission backbone.
He said there is also an interest in creating rules that apply
to people who want to get on to the transmission system and use
it to move power up and down the Railbelt. There is also
interest in building on work of the administration in helping
focus on key energy issues.
Going forward, the Task Force wants to convene as soon as
possible with utility boards, management representatives and a
third party neutral facilitator as the chair for the task of
creating a committee substitute (CS) for the Gretsky bill that
would provide for a reliable regional transmission resource
planning entity.
2:46:12 PM
CO-CHAIR MILLETT asked if they had "narrowed it down to
something less aggressive than what was put forward."
MR. FOSTER replied that they agreed to work on transmission and
reliability concepts.
2:47:33 PM
JODI MITCHELL, Inside Passage Electric Cooperative, said she is
from Southeast Alaska and very much supported an energy plan
that considered a regional integrated resource planning process.
Utilities in Southeast found that sometimes interties don't make
sense; they are cost prohibitive because of the high cost of
submarine cable and risks of failure. For instance, the Hoonah
Intertie went from $26 million less than five years ago to $45
million today. So they are forced to look for local resources to
the extent that they can. To that end, they have identified
several micro-hydros for Hoonah. Maybe a micro grid such as the
Kake-to-Metlakatla line and maybe a Chichagoff Island grid to
connect Hoonah, Pelican, Tenakee and Elfin Cove would be more
cost effective, especially where a road is involved - similar to
the Kake/Petersburg Intertie.
MS. MITCHELL said she also promotes open access and fair rate
treatment for any other micro grid that is built primarily with
public funds. "The goal should be affordable power for Alaskans
first without ineffective and overly expensive construction
projects."
She said she supported HB 219; it makes good sense. She serves
on the Renewable Fund Advisory Committee, and she was concerned
that having an independent economist evaluate each project is an
unnecessary expense, because it is already being done as part of
the process. She urged if they continue to use independent
consultants, benefit costs cannot be the only metric used in
evaluating projects. If the goal is to get rural villages off
diesel, they must consider all the available options and take
the one that "gives us the best bang for the buck." She didn't
think oil prices would go down and diesel generation has to be
minimized.
2:50:43 PM
FRANK CORBIN, General Manager, Nushagak Electric Cooperative,
Dillingham, said section 2 of HB 219 brings the economists in
much too late. They don't have an NBA or a CPA on staff; he
could use many meetings with an economist before filling out the
applications. That would have a cost benefit ratio as the
applications go through the process. He suggested that some
state agency or the University system could supply that
expertise - at the onset.
Fuel pricing is a big issue when you project what the cost of
fuel is going to be for the future. That follows an application
all the way through. It's frustrating to pick a number and three
months later someone tells you you picked the wrong one. He
preferred to use a range of numbers and to follow through with
key identified factors.
2:54:28 PM
KATHLEEN WILSON, Mainland Co., Kenai, said she was married to an
energy auditor, who focused on commercial and industrial
buildings in Oregon for 15 years. He has focused on lighting,
small hydro and solar technologies to reduce energy consumption.
The Oregon Energy Trust offers incentive rebates to businesses
that update their energy systems; Oregon also has tax credits
for the same thing.
She said this legislation is an entrepreneurial opportunity to
mortar some relationships between utility companies, the state,
tribes and villages to bring ideas to fruition. Right now there
is no regulatory oversight language for credentialing commercial
auditors, and she thought they might want to look into that.
AHFC is focused on all residential. Since work is opening up in
the commercial area, she thought they should explore those
parameters.
2:59:57 PM
CLAY KOPLIN, Cordova Electric Cooperative, said he remembered
several years ago, the state was thinking about replacing the
role of the Federal Energy Regulatory Commission (FERC) in
licensing hydro electric projects because a couple of the really
difficult challenges in developing hydro is the long lead time
and the expense of the permitting and design work. Now that the
state is actually building hydro electric projects, it's best to
keep the process as static as possible.
He liked the concept in HB 218 of having an energy department
where the different aspects of the energy sectors can work
closely together and avoid duplication of effort. Section 1 of
HB 219 on due diligence is good. He agreed that adding an
economist was just extra effort and money; and there is already
enough review.
He remembered in going through college, he was surprised that a
student loan program would fully reimburse teachers that moved
out to the Bush and taught in rural communities for five years
after they graduate from college. It was a successful program
and it helped get good education out to the rural areas, but at
the time he thought:
Boy, why aren't we doing this for electrical engineers
and geologists and the human resources that we need to
develop our energy in the state? Maybe now is the time
to look at that. If I had my druthers, I would say if
I was going to add one more layer of review to these
AEA projects, I'd grab five university students and
instead of having them looking at rocks in the lab up
at UAF or modeling hydrology on a river, I'd get them
out there with hammers and send them to Nushigak and
walk up and down those creek beds - can we build a dam
here - send them up to, you know, put a flow meters in
the rivers to see if there is hydro electric resources
there - and actually get those students out there and
engaged in the industry so that hopefully we can keep
a few of them up here. Because we have the energy
resources.
3:05:48 PM
He concluded saying this state is fortunate because it has both
energy and capital resources, however not the man power. He has
seen huge cost escalations on his hydro electric project; a lot
of it is due to the consultants they have to bring in, the
materials they have to import and just the overall market right
now with stimulus money on the streets setting the profit
margins for companies to work with. He encouraged them to look
for a different mechanism for the second section of HB 219.
3:06:32 PM
MARILYN LELAND, Executive Director, Alaska Power Association
(APA), thanked them for holding their meeting here and timing it
to be in conjunction with their annual meeting. She thanked them
for their work on HJR 25 asking the federal government to
consider hydro as a renewable energy. A few years ago APA
approved a resolution asking the governor to create a cabinet
level Department of Energy and she appreciated the bills that
have been introduced to that end. Some fine tuning needs to be
done; and while she appreciated Mr. Koplin's comments about not
wanting to disrupt the work that is already going on, an
existing lack of coordination needs to be brought together.
MS. LELAND said she has been invited to join an energy think
tank that the House Special Committee on Energy created; it is a
good way to work together in developing solutions. They have
found that there are already 15 state entities around the state
were doing a so-called state energy plan.
3:09:50 PM
She updated them on the status of net metering saying that three
bills were introduced this session. Earlier, she asked them to
hold off on those bills because the RCA has a docket before it
on net metering. They have had more public participation in this
than they have had on anything. Many ideas have come forward
that involve both utilities and the public sector and the RCA
would be adopting some proposals that will work everyone.
3:11:09 PM
JIM STRANDBURG, Project Manager, Alaska Energy Authority (AEA),
said that AEA participated in the recent joint utility board
task force meeting and were pleased to participate in real
positive conversations that occurred between the utility board
members.
He explained that AEA feels they are facing an emerging energy
future that is best approached through joint action by the
utility industry itself. Under that concept, they sponsored a
process between utility representatives and have provided
Department of Law representatives for drafting a statute to form
a new company.{ He said there will be very urgent shortages of
energy for both power generation and heating. At the meeting,
three utilities - NEA, Chugach and the City of Seward - were
willing to actively pursue the continued drafting process for
the committee substitute for the Gretsky legislation.
MR. STRANDBERG said that each of these utilities and their
boards are committed to serving the best interests of their
individual members. There are six utilities in a relatively
small area with a relatively small population base. This
configuration is very good when you have relatively plentiful
supplies of fuel and each utility can act insularly for its own
interests. However, they now have emerging issues which are
beyond the capabilities of any one utility. The entire
regulatory regime and business regime makes it very difficult
for individual utilities to think "globally." The utilities
recognize the need for joint action and that is what is
occurring.
3:16:10 PM
BRAD REESE, General Manager, Kotzebue Electric Cooperative, said
the NANA Regions looked at energy planning that is fitting in
with state energy plan. It also fits in to a department down the
road. It makes sense to get all the passengers in the same car.
He reported significant efforts in his region for conservation,
but noted that they had no energy auditors going into last
winter. They had a very difficult time; 80 volunteers
weatherized all the homes of the elders in that community. But
it would take a larger effort to get trained energy auditors in
his region in order to allow them to come up with their own
energy solutions. The AEA meetings create a real tie that would
benefits the whole state.
He hoped they would accept the stimulus money; there is a great
need for it. He is concerned with Denali Commission's ability to
help with energy projects; he said rural infrastructure is
diminishing rapidly. Hopefully the state could fill in some of
that role, because the need is still great.
Under HB 219, he agreed that an additional economist was not
needed. He is on the Renewable Energy Fund Advisory Committee,
and significant effort was put into economic review of all
projects going forward.
3:19:50 PM
He was a little concerned about the emphasis on matches, because
it has a very negative impact on small rural communities where
the energy costs are higher than anywhere else. They don't have
the wherewithal to come up with matches using pull-tabs for a
couple hours a day. This is will put them at a real
disadvantage.
3:20:34 PM
MR. REESE said that economic analysis is good, but there is a
risk that they don't weigh, and that is the risk of not doing
anything, or if they put too much weight on the economics then
the risk of the community disappearing or other negative risks
wouldn't be evaluated.
3:21:25 PM
MERA KOHLER, President and CEO, Alaska Village Cooperative, said
they serve 53 villages throughout primarily western Alaska. She
asked rhetorically how many utilities are in Alaska or how much
electricity is generated in Alaska and how much it costs. No one
has maintained these statistics (for about 15 years) that used
to be maintained by the state.
She said there was an intent to put Alaska power statistics
together a few years ago when the AEA retained ISER that did so
for 2001. But there are no records thereafter. They have to know
what is going on in order to manage it, she emphasized.
She pointed out that a Sacramento utility of about the same size
as Alaska utilities, serves a community of 900 square miles and
sells twice as much electricity as all of Alaska does. This puts
into perspective how very small our state is electrically. They
are delivering electricity across 586,000 square miles with the
participation of hundreds of utilities. She didn't know exactly
how many, but between 200 and 250 utilities - some of which have
almost fallen off the map. A significant number of Alaskans
don't have reliable electricity are paying over $1/kWh; they are
not on the PCE program because they don't have the ability to do
the paperwork.
On the other hand, regions have been created within the state -
Southeast Alaska, Southcentral Alaska, rural Alaska, et cetera
and they are all competing against each other on a regular basis
for small pockets of money that go into their various systems.
But nothing has been solved and Southcentral is in a crisis;
it's almost out of gas.
She said the Railbelt transmission system can only move about
70-100 mgW between communities and peak load in those
communities is about 700 mgW. She is worried about what happens
with the transmission system when they have a failure like the
one a few years ago when a transmission line went down from
Beluga to Southcentral. Major issues are confronting them and
not much has been done about them.
3:25:59 PM
MS. KOHLER said until the Denali Commission was developed 10
years ago, there was no major investment in infrastructure in
Alaska. The Denali Commission "pumped" almost a half billion
into basic energy infrastructure; the state has not pumped
anything to match fed money.
She urged them to pay close attention to her concept paper
called "An All Alaska GNT." It is a position paper about
potentially uniting the entire state behind solutions that
deliver "the greatest bang for the buck." This typically means a
project in Southcentral Alaska, the benefits from that would get
spread throughout the state through a "virtual GNT." She said
they should not be investing money in tiny projects that are
going to live a short time and then die due to lack of
maintenance or lack of funds for regeneration of equipment. They
need to look at wise investment of scarce dollars.
3:27:36 PM
SENATOR HUGGINS asked her to describe the statewide energy
inventory (done by Steven Haagenson, AEA) going forward on a
step by step basis that will bring energy to communities that
she is concerned about.
MS. KOHLER replied that he identified potential resources for a
specific community. The flaw with that approach is that the
implication is that every community can expect to get money for
one source or another to build out their particular resource.
She explained that AVEC has pioneered a number of wind/diesel
systems; nine communities receive wind - some to a fairly
significant level. All of those projects are mid-penetration
projects. So they can achieve a penetration of up to 85 percent
off their load from an alternative energy source, basically
wind, but it is an intermittent source. So, on an overall basis
they are looking at 20-25 percent displacement of diesel. On
average, those systems have cost them about $4 - $5 million. If
you extrapolate that number and want to displace 80 percent of
diesel fuel, you would have to have a penetration of two-three
times installed capacity of diesel. That would cost $12-$15
million for a community of 400-500 people. The investment would
be unimaginable. That is why her proposal is that they look at a
Chakachamna or a Susitna or something like that that could
deliver the maximum number of kilowatt hours at the lowest
possible cost. Then those benefits get spread throughout the
state.
Bush Alaska only represents about 6-7 percent of the electricity
that is generated in the state. So, trying to displace a
significant portion of Bush Alaska's electricity, the investment
could pay for a lot of production elsewhere at much greater
value. "But until we all start benefiting it, you are not going
to get universal support across the state. So we need to build
up that system."
3:30:47 PM
PAT HAWKINS, representing himself, Soldotna resident, said he
came back from Viet Nam in 1968 on a nuclear powered ship that
could power all of Los Angeles County. Now we're facing an
energy shortage. We're the greatest state in the nation, but we
don't have the will and leadership to get a gas line built. It
will solve our problem and others. He is retired on a fixed
income and it's getting hard to make ends meet with rising
energy costs.
3:35:24 PM
SENATOR HUGGINS saluted him for what he said because he agreed
with him. He hoped to get Agrium opened up again and expand the
LNG plant. Alaskans deserve instate gas, but it has to be
affordable and it takes a long time.
3:36:31 PM
BILL WARREN, representing himself, said he is a retired
pipefitter and welder and has spent 59 years up here. He made a
bucket of money supporting his family on value added industries
in Cook Inlet, but it is a rust belt now. Despite all endeavors
to get Cook Inlet to drill, many companies are bankrupt. We're
in an energy crisis now and maybe next winter schools will close
down. He couldn't understand why the gas pipe line is taking so
long. He didn't like the line across Canada. We are way behind
the curve on things now; an LNG chain is being put in British
Columbia and Norway is breaking trail. The original 2004 gas
project should have been going. "Now we're in a bind, a train
wreck. And I'm for alternatives, but they cannot save our ship
now." He said nothing else is big enough to run the state except
natural gas.
3:44:22 PM
JIM KAUFFMAN, representing himself, Kenai, said he used to work
for Agrium and he can say that in the state of Alaska there is
zero industrial priced energy. There is barely commercial
energy; we have residential energy, which will be the last to
shut down. Many of the people he worked with went to a plant
that is owned by a Swedish Company in Washington State - because
it had cheap electricity. Alaska has cheap energy, but lacks the
human energy to make it happen. "We are paying more for own gas
in our own state than the Japanese do." LNG ships into the east
coast of America at $5.21 on average today.
MR. KAUFFMAN supported bringing all the utilities together and
if not physically, at least the dollars at the back end. He said
rural Alaska needs the help of Alaskans and almost everyone has
it in their heart to add a penny to their kilowatt hour to help
fund that. ANGDA is a great tool for Alaska; pushing that
through from Beluga north to Delta would be a good start and
then if the big pipeline failed, they could continue going
north. They could be turning dirt in 16 months.
He suggested instead of paying back AIDEA loans to invest
Permanent Fund money permanently into electricity so that the
interest only is what they get back. Leave the money there for
50 years or whatever. Reasonably priced industrial fuels are
needed and they don't exist in Alaska today.
3:55:33 PM
RICHARD DeMILLO, representing himself, Kenai, said he made a
deal with HEA so he could pay his electrical bill. You can't
believe the politicians when they day something will be done,
and he is tired of it. He said Cook Inlet and one other area in
the world are the best for tidal current energy and nothing has
been done with it.
3:59:01 PM
SENATOR HUGGINS said on the subject of tidal energy, someone in
Anchorage has a proposal for tidal. He is talking with him about
having CH2M Hill do some additional engineering. But this does
not mean they will have tidal tomorrow; tidal energy production
is a little ways out. It is an issue that is being pursued, but
it's not tomorrow.
4:00:00 PM
JOHN LANDUA, Engineering and Technical Services, Inc., Kenai,
said he worked at Agrium, as well and added support to an in-
state gas line. It is the necessary ingredient to any sort of an
interim solution for the Railbelt, and in particular for the
Kenai Peninsula. He also supported having a Department of Energy
and statewide energy planning.
REPRESENTATIVE SEATON thanked APA members for voicing their
opinions.
4:04:53 PM
There being no further business to come before the committee,
Co-chair Millett adjourned the meeting at 4:04 p.m.
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