Legislature(2005 - 2006)SENATE FINANCE 532

02/22/2006 09:00 AM FINANCE


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09:15:52 AM Start
09:18:44 AM HB243
09:24:59 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 243 SWAN LAKE-TYEE LAKE INTERTIE TELECONFERENCED
Moved SCS CSHB 243(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                         February 22, 2006                                                                                    
                             9:15 a.m.                                                                                        
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Gary  Wilken convened the meeting at approximately  9:15:52                                                          
AM.                                                                                                                           
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
                                                                                                                                
Attending  via  Teleconference:   From  Offnet  Sites:  RON  MILLER,                                                          
Executive   Director,  Alaska   Industrial   Development  &   Export                                                            
Authority/Alaska   Energy   Authority,   Department   of   Commerce,                                                            
Community and  Economic Development; DAVID CARLSON,  Chief Executive                                                            
Officer, Four Dam Pool Power Agency                                                                                             
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 243-SWAN LAKE-TYEE LAKE INTERTIE                                                                                             
                                                                                                                                
Testimony  was provided  from the  Alaska Industrial  Development  &                                                            
Export  Authority/Alaska  Energy  Authority and  the  Four Dam  Pool                                                            
Power Agency. The bill reported from Committee.                                                                                 
                                                                                                                                
                                                                                                                                
Under  separate  business,  Co-Chair  Wilken  distributed  a  report                                                            
titled "FY 05 Wages and  Average Employment" [copy on file] relating                                                            
to  unorganized   boroughs  in  the  State.  He,  assisted   by  the                                                            
Department  of Labor and Workforce  Development, has been  compiling                                                            
this information since  approximately 1998. The format of the report                                                            
would  allow  for  year-to-year   comparisons.  The   report,  which                                                            
utilizes  W-2  records, indicates  that  in  the year  2005,  17,676                                                            
people earned  total wages of $534,168,915 in unorganized  boroughs.                                                            
                                                                                                                                
Co-Chair Wilken  noted that the report  depicts both government  and                                                            
private  employment  and  wages.  A  year-to-year   look-back  would                                                            
reflect that  the number of people  employed by government  entities                                                            
has decreased  and  the people  employed by  private enterprise  has                                                            
increased. "We're moving in the right direction."                                                                               
                                                                                                                                
Senator  Stedman  noted  that  the fact  that  the  average  monthly                                                            
employment  is 48 percent government  and 52 percent private  "would                                                            
surprise  some  people"  who  might  anticipate   there  being  less                                                            
government employment "in the hinterlands".                                                                                     
                                                                                                                                
Senator  Bunde stated  that the  information  is "interesting";  "it                                                            
might be useful" to future [unspecified] legislation.                                                                           
                                                                                                                                
Co-Chair Wilken agreed.                                                                                                         
                                                                                                                                
9:18:44 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 243(FIN)                                                                                             
     "An Act relating to the financial plan for the intertie                                                                    
     between the Swan Lake and Tyee Lake hydroelectric projects;                                                                
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This  was the third  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken stated  that this  bill is sponsored  by the  Rules                                                            
Committee  by Request of  Governor Frank  Murkowski. The bill  would                                                            
provide   "Legislative   approval  to   amend   the  Memorandum   of                                                            
Understanding  (MOU)  authorizing  the  sale of  the Four  Dam  Pool                                                            
hydroelectric  project. The amendment addresses an  escrow agreement                                                            
signed by the  Four Dam Pool Agency and the Alaska  Energy Authority                                                            
(AEA)." Version 24-GH1138\X is before the Committee.                                                                            
                                                                                                                                
9:19:39 AM                                                                                                                    
                                                                                                                                
RON MILLER,  Executive  Director,  Alaska Industrial  Development  &                                                            
Export Authority/Alaska  Energy Authority,  Department of  Commerce,                                                            
Community  and Economic  Development  testified  via teleconference                                                             
from  an offnet  site.  As authorized  by Chapter  60  SLA 2000,  an                                                            
agreement and  MOU for the sale and  purchase of the AEA  owned Four                                                            
Dam Pool hydroelectric  projects to  the Four Dam Pool Power  Agency                                                            
was developed  that included establishing a Power  Cost Equalization                                                            
(PCE) endowment,  authorized Alaska Industrial Development  & Export                                                            
Authority (AIDEA) financing  of the sale, and the incorporation into                                                            
law of the MOU  dated April 11, 2000 between AEA and  the purchasing                                                            
utilities. The  April 2000 MOU and the agreement for  the sale "were                                                            
amended with  the escrow  agreement that AEA  and the Four  Dam Pool                                                            
Power Agency entered into."                                                                                                     
                                                                                                                                
Mr. Miller noted that the  sale price of $73 million was established                                                            
and  a five  million dollar  credit  was authorized  "contingent  on                                                            
certain" conditions.  One of those conditions was  that by April 11,                                                            
2005, the  Four Dam Pool  Power Agency must  have provided  to AIDEA                                                            
"an  approved  financing  plan  that  demonstrated  committed  funds                                                            
sufficient  to complete" the Swan  Lake and Tyee Lake hydroelectric                                                             
projects. The  plan also required the Four Dam Pool  Power Agency to                                                            
provide five million dollars  to the PCE endowment. Those conditions                                                            
were  not  met,  and  the  Four  Dam  Pool  Power  Agency  requested                                                            
additional  time  in  which  to  complete  the  financing  plan.  An                                                            
agreement  was subsequently  made that  provided  the Four Dam  Pool                                                            
Power Agency  additional time in which  to complete their  financing                                                            
provided  they  deposited  five million  dollars  into  an  interest                                                            
bearing escrow account.                                                                                                         
                                                                                                                                
Mr. Miller stated that  this bill would provide Legislative approval                                                            
allowing  that amendment  to apply to the  original purchasing/sale                                                             
agreement in the MOU. Were  sufficient funds to complete the project                                                            
not forthcoming,  the principal and  interest in the escrow  account                                                            
would be  deposited in the  PCE endowment  fund. Were the  financing                                                            
completed, the principal  and interest would be earmarked to provide                                                            
the final funding of the project.                                                                                               
                                                                                                                                
9:22:58 AM                                                                                                                    
                                                                                                                                
DAVID CARLSON, Chief Executive  Officer, Four Dam Pool Power Agency,                                                            
testified via  teleconference from  an offnet site and informed  the                                                            
Committee that  once the Four Dam  Pool Power Agency completes  a 57                                                            
mile  intertie   segment  linking  the  Tyee  Lake   and  Swan  Lake                                                            
hydroelectric   projects,  a  power   transmission  line   would  be                                                            
available  between Southeast  Alaska communities  from Ketchikan  to                                                            
Petersburg.  "It has  been a difficult  project".  As stated  by Mr.                                                            
Miller,  one  of the  provisions  in the  original  MOU  was that  a                                                            
financial plan  should have been presented by April  11, 2005, which                                                            
was five  years after the  original agreement  was signed.  That had                                                            
not occurred.  This  legislation would  extend that  date and  would                                                            
allow the five  million dollars provided by the Four  Dam Pool Power                                                            
Agency to be  applied toward the construction  of the Swan  Lake and                                                            
Tyee Lake  intertie. This  project "is important"  to both  the Four                                                            
Dam Pool Power Agency and Southeast Alaska.                                                                                     
                                                                                                                                
9:24:11 AM                                                                                                                    
                                                                                                                                
Senator  Bunde  moved  to  report  the  bill   from  Committee  with                                                            
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
There  being no  objection, SCS  CS HB  243(FIN)  was REPORTED  from                                                            
Committee with  a new zero fiscal  note dated February 1,  2006 from                                                            
the Department of Commerce, Community and Economic Development.                                                                 
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Gary Wilken adjourned the meeting at 9:24:59 AM.                                                                     

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