Legislature(2011 - 2012)BUTROVICH 205

02/02/2011 03:30 PM Senate RESOURCES


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03:35:01 PM Start
03:38:39 PM Presentation: Follow-up to Alaska Sustainable Energy Act (sb 220, 26th Alaska State Legislature) Remarks by Senator Mcguire and Senator Wielechowski.
04:52:22 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Follow-Up to Alaska Sustainable TELECONFERENCED
Energy Act (SB220, 26th Alaska State Legislature)
Remarks by Senator McGuire and
Senator Wielechowski
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                        February 2, 2011                                                                                        
                           3:35 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Joe Paskvan, Co-Chair                                                                                                   
Senator Thomas Wagoner, Co-Chair                                                                                                
Senator Bill Wielechowski, Vice Chair                                                                                           
Senator Bert Stedman                                                                                                            
Senator Lesil McGuire                                                                                                           
Senator Hollis French                                                                                                           
Senator Gary Stevens                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                              
Senator Fred Dyson                                                                                                              
Senator Cathy Giessel                                                                                                           
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION: FOLLOW-UP TO ALASKA SUSTAINABLE ENERGY ACT (SB
220-26TH ALASKA STATE LEGISLATURE) AND REMARKS BY SENATOR                                                                       
MCGUIRE AND SENATOR WIELECHOWSKI.                                                                                               
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to consider                                                                                                  
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
GWEN HOLDMAN, Executive Director                                                                                                
Alaska Center for Energy and Power (ACEP)                                                                                       
University of Alaska                                                                                                            
Fairbanks, AK                                                                                                                   
POSITION STATEMENT: Provided update on ACEP's implementation of                                                               
SB 220.                                                                                                                         
                                                                                                                                
MARILYN LELAND, Executive Director                                                                                              
Alaska Power Association (APA)                                                                                                  
POSITION STATEMENT:  Provided update  of APA's  implementation of                                                             
SB 220 for ACEP.                                                                                                                
                                                                                                                                
HANNAH GUSTAFSON, Deputy Director                                                                                               
Renewable Energy Alaska Projects (REAP)                                                                                         
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Provided update of REAP's  implementation of                                                             
SB 220.                                                                                                                         
                                                                                                                                
SARAH FISHER-GOAD, Executive Director                                                                                           
Alaska Energy Authority (AEA)                                                                                                   
Department  of  Commerce,   Community  and  Economic  Development                                                               
(DCCED)                                                                                                                         
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Provided update  of AEA's  implementation of                                                             
SB 220.                                                                                                                         
                                                                                                                                
PETER CRIMP, Deputy Director                                                                                                    
Alternative   Energy  and   Energy   Efficiency,  Alaska   Energy                                                               
Authority                                                                                                                       
Department  of  Commerce,   Community  and  Economic  Development                                                               
(DCCED)                                                                                                                         
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Provided an  update of the  Emergency Energy                                                             
Technology Fund (EETF) relative to SB 220.                                                                                      
                                                                                                                                
RON KREHER, Acting Director                                                                                                     
Division of Public Assistance                                                                                                   
Department of Health and Social Services (DHSS)                                                                                 
Juneau, AK                                                                                                                      
POSITION  STATEMENT:  Provided  update  on  the  Alaska  Portable                                                             
Heating Assistance Program relative to SB 220.                                                                                  
                                                                                                                                
JOEL ST. AUBIN, Chief                                                                                                           
Statewide Public Facilities                                                                                                     
Department of Transportation and Public Facilities (DOTPF)                                                                      
Juneau, AK                                                                                                                      
POSITION    STATEMENT:   Provided    update   on    the   DOTPF's                                                             
implementation of SB 220.                                                                                                       
                                                                                                                                
DIANA ROTKIS, Manager                                                                                                           
Statewide Fleet                                                                                                                 
Department of Transportation and Public Facilities (DOTPF)                                                                      
POSITION  STATEMENT: Provided  update on  the Division  of Public                                                             
Facilities' implementation of SB 220.                                                                                           
                                                                                                                                
JERRY BURNETT, Deputy Commissioner                                                                                              
Treasury Division                                                                                                               
Department of Revenue (DOR)                                                                                                     
POSITION STATEMENT:  Provided update on DOR  implementation of SB
220.                                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:35:01 PM                                                                                                                    
CO-CHAIR  JOE  PASKVAN  called   the  Senate  Resources  Standing                                                             
Committee meeting  to order at 3:35  p.m. Present at the  call to                                                               
order were Senators French, Stevens, Wielechowski, McGuire, Co-                                                                 
Chair Wagoner, and Co-Chair Paskvan.                                                                                            
                                                                                                                                
^Presentation:  Follow-up to  Alaska Sustainable  Energy Act  (SB
220, 26th  Alaska State Legislature)  Remarks by  Senator McGuire                                                               
and Senator Wielechowski.                                                                                                       
                                                                                                                                
  Presentation: Follow-up to Alaska Sustainable Energy Act (SB                                                              
 220, 26th Alaska State Legislature) Remarks by Senator McGuire                                                             
                    and Senator Wielechowski                                                                                
                                                                                                                              
CO-CHAIR JOE  PASKVAN said  last year  the legislature  passed SB
220, sponsored by Senators McGuire  and Wielechowski, and this is                                                               
a follow-up on  how much progress has been made.  Its purpose was                                                               
to find ways  to lower energy costs,  increase greater efficiency                                                               
of energy usage and increase the use of non-renewable resources.                                                                
                                                                                                                                
3:38:39 PM                                                                                                                    
SENATOR MCGUIRE said  she and Senator Wielechowski  were asked to                                                               
give a short  overview of this measure,  because agency officials                                                               
were invited to walk through more  of the details where they have                                                               
implemented  parts  of  it.  She explained  that  last  year  the                                                               
majority  of committee  members are  the same  as this  year, and                                                               
they, along  with the  help of Senate  President Stevens,  put in                                                               
place an  energy vision, and with  it an Omnibus Energy  Act, for                                                               
the first time  in state history, and got it  through two bodies.                                                               
She said many  parts to the bill benefit many  different parts of                                                               
Alaska,  but the  bottom line  is  that Alaskans  want access  to                                                               
affordable energy.                                                                                                              
                                                                                                                                
She  referenced   page  2  of   the  Governor's  letter   to  the                                                               
Legislature  that  said  a   commercial  energy  efficiency  loan                                                               
program would  be one improvement to  SB 220, so she  and Senator                                                               
Wielechowski created the program for  public buildings in it. But                                                               
only one community  so far has applied for this  loan. She stated                                                               
that  $250  million worth  in  loans  are available  through  the                                                               
Alaska Housing  Finance Corporation (AHFC) for  energy efficiency                                                               
upgrades,  and it  is available  municipalities, boroughs,  state                                                               
agencies, or any kind of public  facility in the State of Alaska.                                                               
A place  holder was also created  for a loan program  for Alaskan                                                               
businesses which wasn't funded.                                                                                                 
                                                                                                                                
3:42:06 PM                                                                                                                    
CO-CHAIR WAGONER asked which community applied.                                                                                 
                                                                                                                                
SENATOR MCGUIRE answered Fairbanks.                                                                                             
                                                                                                                                
CO-CHAIR WAGONER added that Kenai applied, too.                                                                                 
                                                                                                                                
CO-CHAIR PASKVAN remarked they are  trying to increase the use of                                                               
renewable resources.                                                                                                            
                                                                                                                                
3:42:48 PM                                                                                                                    
SENATOR  WIELECHOWSKI  said  the  energy omnibus  bill  had  many                                                               
components;  one  in particular  is  the  Energy Loan  Efficiency                                                               
Program, which he hoped more  communities would take advantage of                                                               
in  the  future.  They  had estimated  it  would  create  several                                                               
thousand  jobs  and  save  tens of  millions  of  dollars  across                                                               
Alaska.  SB 220  also had  a provision  for an  Energy Efficiency                                                               
Revolving  Loan  Fund  and  a provision  to  expand  the  state's                                                               
heating  assistance  program  to   provide  additional  help  for                                                               
Alaskan  families   when  oil  prices  soar.   Another  provision                                                               
required  the state  to retrofit  25 percent  of state  buildings                                                               
over  10,000 sq.  ft.,  which  will save  the  state millions  of                                                               
dollars in  the very  short term  - and  again create  jobs. They                                                               
also  created  an  Emerging  Energy  Technology  Fund  (EETF)  to                                                               
provide  grants to  test new  energy technologies  in Alaska.  He                                                               
said they also co-primed SB 32  that asks the state to capitalize                                                               
the Alternative Energy Loan Fund to the amount of $10 million.                                                                  
                                                                                                                                
GWEN HOLDMAN,  Executive Director,  Alaska Center for  Energy and                                                               
Power (ACEP), University  of Alaska, said as a whole,  SB 220 set                                                               
a very  firm statutory foundation  for implementing  state energy                                                               
policy.  As a  University employee,  and  as the  ACEP is  housed                                                               
within  the University  of Alaska,  her  role is  to provide  the                                                               
legislature  with  information,  so   it  can  make  wise  policy                                                               
choices.  She commended  the committee  for  taking advantage  of                                                               
them as  a resource maybe  more than  any other committee  in the                                                               
building. In contrast, every single day  she is on the front line                                                               
trying to  reduce energy costs.  In her  case, she is  spending a                                                               
lot of time  considering whether small-scale nuclear  is a viable                                                               
option for  Alaska, another provision  in SB 220. She  works very                                                               
closely with the Alaska Power  Association in looking for ways to                                                               
improve  diesel energy  efficiency  or delivering  energy-related                                                               
curricula to  schools through partnerships with  Renewable Energy                                                               
Alaska Projects.                                                                                                                
                                                                                                                                
3:48:57 PM                                                                                                                    
MS. HOLDMAN encouraged members to pick  up on where they left off                                                               
last  session  and make  sure  they  are managing  a  diversified                                                               
portfolio of  energy resources, both renewable  and fossil-based,                                                               
and  determine the  appropriate mechanisms  for funding  projects                                                               
and programs as they move forward.                                                                                              
                                                                                                                                
She said  some unanswered questions  were left on the  table last                                                               
year in the process of shaping  SB 220, and the legislature chose                                                               
to approach at  least some of those by  seeking more information,                                                               
which  has come  back through  reports from  various offices  and                                                               
agencies.  The  legislature  specifically tasked  the  Governor's                                                               
Office to  recommend improvements to the  existing structure, and                                                               
it submitted  "The Energy Report  to the Legislature." In  it the                                                               
Governor  advances the  concept of  an energy  policy coordinator                                                               
(EPC) to  coordinate energy programs  and policies  between state                                                               
agencies, the  Governor's Office  and the legislature.  She looks                                                               
forward to seeing  how this EPC role develops  and emphasized how                                                               
important a coordinated approach is to many of the stakeholders.                                                                
                                                                                                                                
The next  steps are about money,  Ms. Holdman said. They  need to                                                               
work to make sure the programs in  SB 220 are expanded and do not                                                               
become unfunded  mandates, particularly as related  to education,                                                               
outreach, data  collection and reporting  - something  of special                                                               
interest to  ACEP. SB  220 established  a program  for commercial                                                               
energy   efficiency  retrofits,   but   that   program  was   not                                                               
capitalized.                                                                                                                    
                                                                                                                                
The Emerging Energy  Technology Grant Fund was  probably the most                                                               
popular part  of SB 220 from  a public relations stand  point. It                                                               
received  a  one-year  funding increment  of  $2.4  million;  the                                                               
Denali Commission  contributed $3.1  million to the  program last                                                               
year  and it  has planned  an  additional $2.4  million in  their                                                               
budget for  this year. But that  is contingent on the  state both                                                               
continuing the program and providing matching funds or better.                                                                  
                                                                                                                                
MS. HOLDMAN  said ACEP  has worked very  closely with  the Denali                                                               
Commission to develop  this pilot program that has  served as the                                                               
basis for  the Emerging Technology  Grant Fund in what  is called                                                               
"round  zero" of  the program.  The Denali  Commission funded  11                                                               
projects  totaling  approximately $8  million  and  they are  all                                                               
actively  and  aggressively   moving  forward.  Basically,  every                                                               
single  one  of them  is  on-time  and  on-budget. ACEP  is  both                                                               
managing the program  and collecting and analyzing  the data from                                                               
individual   projects   to   make  recommendations   for   future                                                               
applications for these kinds of  technologies. She looked forward                                                               
to working  with the AEA  as it develops  a program at  the state                                                               
level as outlined in SB 220.                                                                                                    
                                                                                                                                
3:52:00 PM                                                                                                                    
Other programs that  are not explicitly mentioned in  SB 220 will                                                               
require some  attention including the Renewable  Energy Fund that                                                               
was  originally  scheduled to  sunset  next  year. There  may  be                                                               
opportunities to  work with  the AEA to  improve this  program or                                                               
add a  complimentary loan component  moving forward,  Ms. Holdman                                                               
said. Similarly,  programs like the AHFC  Home Weatherization and                                                               
Rebate  Program have  been  warmly received  and  have seen  high                                                               
demand and quick  paybacks. They should continue  to invest where                                                               
successful models like this exist.                                                                                              
                                                                                                                                
Another  example  of  people  slipping   through  the  cracks  on                                                               
reporting  is  the Power  Cost  Equalization  Program (PCE),  Ms.                                                               
Holdman said, and  many feel this program  needs restructuring to                                                               
more effectively  meet its objectives which  is levelizing energy                                                               
costs  between rural  and urban  communities. SB  220 was  widely                                                               
viewed as  a first  step to implementing  state energy  policy as                                                               
laid out in HB 306  [26th legislature]. The policy included well-                                                               
known   goals  for   achieving  15   percent  energy   efficiency                                                               
improvement by 2020 and 50  percent renewable energy for electric                                                               
power generation by 2020.                                                                                                       
                                                                                                                                
MS. HOLDMAN drew  their attention to another example  of a policy                                                               
that was mentioned  in two separate sections in HB  306, but only                                                               
partially addressed in SB 220, that says:                                                                                       
                                                                                                                                
     It  is the  intent of  the legislature  that the  state                                                                    
     remain   a  leader   in  petroleum   and  natural   gas                                                                    
     production  and  become  a   leader  in  renewable  and                                                                    
     alternative  energy  development.   And  secondly,  the                                                                    
     state  should invest  in  applied  energy research  and                                                                    
     development  of alternative  and emerging  technologies                                                                    
     including university programs  to achieve reductions in                                                                    
     state  energy costs  and stimulate  industry investment                                                                    
     in the state.                                                                                                              
                                                                                                                                
She  said  this is  something  the  ACEP strongly  supports,  and                                                               
speaks  to   the  larger  objective  of   incentivizing  economic                                                               
development,  which is  ultimately a  big part  of what  they are                                                               
trying to accomplish. Alaska should  become a leader in improving                                                               
extraction technologies for tight  reservoirs and heavy oils that                                                               
are known to exist on  state lands where development could result                                                               
in  significant  revenue generation  for  the  state and  improve                                                               
throughput of the TAPS.                                                                                                         
                                                                                                                                
Other examples include development  of methane hydrates, coal-to-                                                               
liquids and  gas-to-liquids technology,  ocean and  river energy,                                                               
underground   coal   gasification,  high-penetration   wind   and                                                               
advanced storage  technologies. These are all  areas where Alaska                                                               
either has  a unique need or  a unique opportunity in  terms of a                                                               
world-class resource and  where the UAA and ACEP, as  part of the                                                               
university   system,  are   currently   conducting  research   in                                                               
partnership with the private sector.  She said she looked forward                                                               
to working with the legislature on these efforts.                                                                               
                                                                                                                                
3:56:02 PM                                                                                                                    
MARILYN  LELAND,  Executive  Director, Alaska  Power  Association                                                               
(APA), said SB 220 was a  bill they actively supported last year,                                                               
but  a number  of  provisions in  it do  not  directly relate  to                                                               
electric utilities,  so she  would limit  her testimony  today to                                                               
those that do.                                                                                                                  
                                                                                                                                
In  section 1,  she was  pleased to  see language  that helps  to                                                               
remove the  barriers to the  development of nuclear energy  as an                                                               
alternative technology  in Alaska.  But, she  was not  aware that                                                               
any  nuclear projects  are  under  way as  a  result  of the  new                                                               
provisions yet.                                                                                                                 
                                                                                                                                
Section 14  deals with  the Emerging  Energy Technology  Fund and                                                               
they believe this  section to be very important.  Ms. Leland said                                                               
there  is no  silver bullet  that is  going to  help everyone  in                                                               
Alaska  solve  their  energy  problems   and  she  commended  the                                                               
legislature  for creating  this  fund and  including an  advisory                                                               
committee  populated by  experts in  the science  and engineering                                                               
fields. APA  has a  designated seat on  that committee  which has                                                               
been  filled by  Eric Erickson  who  is an  engineer with  Alaska                                                               
Electric Light  and Power  in Juneau. The  committee has  had its                                                               
initial  organizational  meeting at  which  a  draft request  for                                                               
grant applications was  reviewed. That RFA was  issued on January                                                               
7  with applications  due March  2. She  explained that  once the                                                               
applications  are  received  the advisory  committee  would  meet                                                               
again  to  review them  and  make  recommendations on  the  grant                                                               
award.                                                                                                                          
                                                                                                                                
3:58:23 PM                                                                                                                    
One concern, Ms.  Leland said, is that the bill  does not allow a                                                               
business or organization represented by  a member of the advisory                                                               
committee  to  actually  receive  a  grant.  She  understood  the                                                               
reasoning  behind   that  provision,  but  thought   they  should                                                               
consider removing  it, because  Alaska has a  very small  pool of                                                               
individuals who  are qualified for  serving on the  committee and                                                               
who have the technical ability  to develop emerging technologies.                                                               
Rather  than simply  prohibiting them  from receiving  the grants                                                               
she thought  it would be  better to allow  them to apply  for the                                                               
grants, but  prohibit them  from actually  being involved  in any                                                               
deliberations  or  voting on  the  recommendations  of the  grant                                                               
awards.                                                                                                                         
                                                                                                                                
Section 42 adds  a provision allowing the AHFC to  issue bonds in                                                               
an amount not  to exceed $250 million and to  make loans from the                                                               
Alaska  Energy  Efficiency  Revolving   Loan  Fund.  This  is  an                                                               
excellent provision  although she didn't  know the status  of the                                                               
expended bonding capacity.                                                                                                      
                                                                                                                                
3:59:46 PM                                                                                                                    
MS.  LELAND said  she was  asked  what the  legislature needs  to                                                               
focus  on now,  and  APA  developed a  list  of initiatives  that                                                               
should be  considered. They don't all  relate to SB 220,  but she                                                               
wanted to summarize them.                                                                                                       
   · First, develop an implementation plan for Alaska's energy                                                                  
     policy authorized by HB 306 last year.                                                                                     
   · Develop large-scale hydro electricity for the Railbelt and                                                                 
     develop renewable  energy resources - hydro,  geothermal and                                                               
     wind - for other regions  of the state. Large hydro electric                                                               
     projects could  meet the needs of  as much as 75  percent of                                                               
     Alaska's population  well into  the future,  but communities                                                               
     not on the Railbelt can't be forgotten.                                                                                    
   · Encourage the development of the Cook Inlet gas management                                                                 
     plan for  continued gas delivery  to South  Central. Natural                                                               
     gas is critical to South  Central and the economy statewide;                                                               
     demand  for natural  gas  in South  Central  is expected  to                                                               
     exceed supply as early as 2013.                                                                                            
   · The legislature and the governor need to take a                                                                            
     comprehensive view  of the  situation; develop  policies and                                                               
     ensure coordinated actions.                                                                                                
   · Next, fund the Renewable Energy Fund and the Power Project                                                                 
     Loan  Fund. Both  funds  are the  primary  state sources  of                                                               
     capital funding for new energy  projects, and they have been                                                               
     woefully undercapitalized  in recent  years in light  of the                                                               
     goals  set  forth  in  the state  energy  policy.  Fund  $50                                                               
     million   annually  for   the  Renewable   Energy  Fund   as                                                               
     authorized and  properly capitalize  the Power  Project Fund                                                               
     at a  level that  supports the goals  set forth  in Alaska's                                                               
     energy policy.                                                                                                             
   · Next, continue to fund the power cost equalization (PCE)                                                                   
     program,  as  the  very  survival   of  many  rural  Alaskan                                                               
     communities depend  on meaningful relief from  the crippling                                                               
     cost  of energy.  The legislature  should  continue the  PCE                                                               
     benefit at  100 percent for FY11  and fully fund PCE  in the                                                               
     administrations FY12 operating budget.                                                                                     
   · Last, develop policy and legislation that expands funding                                                                  
     for energy efficiency  and conservation activities. Continue                                                               
     to support  the highly  successful programs  of the  AEA and                                                               
     AHFC for home energy  audits, energy improvement rebates and                                                               
     weatherization.                                                                                                            
                                                                                                                                
In addition,  she encouraged  providing commercial  energy audits                                                               
for  government,  schools,  and public  institutions  that  offer                                                               
energy  efficiency  and  conservation  block grants.  HB  36  has                                                               
already been introduced this session  to expand the AHFC's energy                                                               
efficiency  program for  commercial  buildings. She  complimented                                                               
the legislature  again on all  the hard  work that went  into the                                                               
development  of SB  220. It  was an  excellent beginning  to what                                                               
needs to be done to solve Alaska's energy problems.                                                                             
                                                                                                                                
4:03:45 PM                                                                                                                    
HANNAH  GUSTAFSON,  Deputy   Director,  Renewable  Energy  Alaska                                                               
Projects  (REAP), said  REAP is  a  coalition of  over 70  Alaska                                                               
electric   utilities,  businesses,   consumer  and   conservation                                                               
groups, Alaska  Native organizations  and local, state  and local                                                               
entities that  all share the  goals of increasing  the production                                                               
of renewable  energy and promoting  energy efficiency  in Alaska.                                                               
The passage of SB 220 along  with HB 306 provides a landmark from                                                               
which  Alaska can  move  forward. She  said  renewable energy  in                                                               
particular  provides  a  hedge against  the  inevitable  rise  in                                                               
fossil fuel  prices in the  coming decades. HB 306  set ambitious                                                               
goals for  the state and SB  220 contains the beginning  steps to                                                               
meet these goals.                                                                                                               
                                                                                                                                
4:05:22 PM                                                                                                                    
She  said REAP  was  a  great proponent  of  the Emerging  Energy                                                               
Technology Fund  (EETF) in SB  220. Because the  Renewable Energy                                                               
Grant Fund that passed in 2008  was not designed to fund immature                                                               
or emerging technologies, REAP and  many other entities including                                                               
the Denali  Commission, the Alaska  Center for Energy  and Power,                                                               
the  National Renewable  Energy Laboratory  and the  Alaska Power                                                               
Association  recognized  that Alaska  needed  a  program to  take                                                               
advantage of the  many excellent opportunities it  has to develop                                                               
emerging  technologies  that  use Alaska's  vast  biomass,  river                                                               
current, and tidal and wave  resources. Grants from the EETF will                                                               
help demonstration  projects leverage private and  federal monies                                                               
to accelerate  the technology innovation  in Alaska while  at the                                                               
same time  providing ways  to sustainably  provide energy  to the                                                               
state's communities.                                                                                                            
                                                                                                                                
She said the  AEA administered EETF as part of  SB 220 and issues                                                               
concerning intellectual  property rights and allowable  costs are                                                               
currently  being   worked  out  within  the   advisory  committee                                                               
process.  They hope  the legislature  will  consider funding  the                                                               
EETF this  year as  a piece  of federal  funding from  the Denali                                                               
Commission would be contingent upon a state match.                                                                              
                                                                                                                                
MS.  GUSTAFSON  thanked the  legislature  for  its commitment  to                                                               
energy  efficiency measures  and programs  over the  last several                                                               
years. Since the appropriation of  $360 million for existing home                                                               
weatherization and  rebate programs in  2008, she said  this body                                                               
clearly  recognized  that  efficiency  measures  result  in  much                                                               
quicker paybacks than investment in generation resources.                                                                       
                                                                                                                                
The   legislature  added   to  the   state's  energy   efficiency                                                               
commitment last year  with the passage of SB 220  - in particular                                                               
the   new  $250   million  Revolving   Loan   Fund  Program   for                                                               
retrofitting  public buildings,  which will  help the  state meet                                                               
the mandate for retrofitting 25  percent of its buildings by 2020                                                               
(in Section 17).  REAP is currently working with  AHFC to educate                                                               
public  building owners  about  the program,  which is  important                                                               
both  because it  will  bring  energy savings  to  the state  and                                                               
because it's also an innovative  way to leverage state funds that                                                               
the  state   could  potentially  use  to   finance  other  energy                                                               
infrastructure projects.                                                                                                        
                                                                                                                                
In  addition,  Sections   20-28  of  SB  220   deal  with  energy                                                               
efficiency  loans for  commercial  businesses.  However no  funds                                                               
have yet  been appropriated for  this program; it's  an important                                                               
piece that  still needs some attention.  They must find a  way to                                                               
get  commercial lending  potentially to  become more  involved in                                                               
making these  loans, whether it be  through education, incentives                                                               
or both.                                                                                                                        
                                                                                                                                
4:09:00 PM                                                                                                                    
MS. GUSTAFSON  said SB 220  has several provisions that  call for                                                               
state agencies  to collect  and/or provide  technical assistance.                                                               
These  include   sections  11,  which  requires   the  Office  of                                                               
Management  and Budget  (OMB) to  work with  various agencies  to                                                               
collect  and store  energy consumption  data;  section 16,  which                                                               
asks DOTPF to  consider converting its fleet  to alternative fuel                                                               
vehicles; section  43, which requires  the Department  of Revenue                                                               
(DOR) to make  recommendations on the feasibility  of a municipal                                                               
energy improvement  program; and  section 40, which  requires the                                                               
Governor's  Office   to  submit  a  report   to  the  legislature                                                               
describing current  energy programs  and make  recommendations on                                                               
how best to structure and coordinate them.                                                                                      
                                                                                                                                
4:09:48 PM                                                                                                                    
MS. GUSTAFSON  said she supported  the Energy  Policy Coordinator                                                               
(EPC)  position suggested  in the  Governor's report  released on                                                               
Monday. The  EPC would  be the  coordinator and  mediator between                                                               
various agencies  and corporations that deal  with energy issues,                                                               
and it  appears from the  report that  the EPC will  make further                                                               
recommendations   about   administrative   structure.   While   a                                                               
coordinator is  needed, consistency  in application the  state of                                                               
Alaska  needs  over the  long  term  will require  that  whatever                                                               
structure  is  deemed  best  be   institutionalized  so  that  it                                                               
outlives  individual administration.  It  may  be beneficial  for                                                               
this committee  to hold informational hearings  on administrative                                                               
approaches that are being successfully applied in other states.                                                                 
                                                                                                                                
Suggestions:                                                                                                                    
1.  All of  these energy  programs and  initiatives get  adequate                                                               
personnel and funding to succeed.                                                                                               
2.  Develop  a  strategic  energy focus  for  meeting  goals  and                                                               
playing  to  our  strengths.  For   instance  programs  like  the                                                               
Renewable  Energy  Grant  Fund  may  benefit  from  developing  a                                                               
strategic  focus for  making grants.  The advisory  committee has                                                               
considered   developing  an   RFP  to   develop  state-of-the-art                                                               
projects  designed  for  rural   applications,  and  then  asking                                                               
applicants to  compete for grant  funds to fill them.  Using some                                                               
of  this  grant money  in  this  fashion would  drive  technology                                                               
innovation.                                                                                                                     
3.  State  should  develop  a  production-based  tax  credit  for                                                               
renewable energy  where the more  energy a project  generates the                                                               
more the developer is rewarded with a credit on its taxes.                                                                      
4. The state  is going to have to keep  investing money on energy                                                               
efficiency.  Already  it's  paying dividends.  If  Alaska  should                                                               
become the most energy efficient state  in the nation, it will in                                                               
the  process  become  one  of  the  most  attractive  places  for                                                               
companies to invest.                                                                                                            
5.  The  state  should  consider  developing  a  concurrent  loan                                                               
program for renewable  energy projects. Indeed, HB  306 names the                                                               
Power Project Loan  Fund as the vehicle to  finance projects, but                                                               
that  fund must  be  further capitalized  particularly for  large                                                               
Railbelt utilities  that have not  seen as much of  the renewable                                                               
energy   grant  funds.   Because  of   its  comparatively   lower                                                               
electricity prices, low cost or  zero interest loans for projects                                                               
would be nearly as valuable  as grants. The availability of loans                                                               
and  other  financing  mechanisms   is  going  to  be  absolutely                                                               
necessary  to develop  large-scale  hydro and  other large  scale                                                               
renewable energy projects in the state.                                                                                         
                                                                                                                                
MS. GUSTAFSON  said the bonding  mechanism that has  allowed AHFC                                                               
to set  up $250  million in  the revolving  loan fund  for energy                                                               
efficiency  retrofits is  one example  that can  be examined  for                                                               
financing other  projects. The  state needs  to continue  to fund                                                               
energy innovation  programs like  the Emerging  Energy Technology                                                               
Fund. There  is literally a  race around  the world to  find more                                                               
sustainable  energy  systems  and   Alaska  can  use  its  unique                                                               
situation to become a leader  in such innovation. Nowhere else in                                                               
the  nation  has  the  combination  of  high  energy  prices  and                                                               
abundant natural energy resources like Alaska.                                                                                  
                                                                                                                                
She said overall  there is a huge demand  from communities across                                                               
the  state  to  diversity  their   energy  portfolios  and  state                                                               
assistance is going  to play a very valuable role  in making this                                                               
happen.  Energy is  arguably  the  most important  infrastructure                                                               
investment  to make  because without  energy,  schools and  other                                                               
public infrastructure cannot function.                                                                                          
                                                                                                                                
4:15:20 PM                                                                                                                    
SARAH  FISHER-GOAD, Executive  Director, Alaska  Energy Authority                                                               
(AEA),   Department   of   Commerce,   Community   and   Economic                                                               
Development (DCCED),  provided the  committee a status  update of                                                               
their  work on  implementing  SB 220.  Later,  Peter Crimp  would                                                               
provide  an update  of  the  EETF program,  which  was the  major                                                               
program that SB 220 provided to AEA to administer.                                                                              
                                                                                                                                
Revisiting the  PCE program, the  agency is making sure  that the                                                               
utilities that are eligible for  the program use it. They provide                                                               
training  and technical  assistance  to those  utilities to  make                                                               
sure they  are able  to fill out  the necessary  paperwork. Their                                                               
operating budget  asked for a  small increment in  training funds                                                               
to  provide  extra assistance  for  utilities  that have  a  high                                                               
turnover  in clerks.  She  explained in  prior  years the  Denali                                                               
Commission  had  provided  funds  for  that  through  the  Denali                                                               
Training Fund  and that was  one program that they  hadn't funded                                                               
for a while, which is why they asked for the increment.                                                                         
                                                                                                                                
Mention  was  made  of  the data  collection  and  education  and                                                               
outreach  need. The  AEA has  been leading  an energy  efficiency                                                               
conservation working  group and has  received a US  Department of                                                               
Energy grant.                                                                                                                   
                                                                                                                                
4:18:01 PM                                                                                                                    
SENATOR STEDMAN joined the committee.                                                                                           
                                                                                                                                
MS. FISHER-GOAD said with respect  to the need for capitalization                                                               
of  the  Power Project  Fund,  that  there was  legislation  that                                                               
authorized the AEA  to sell its portfolio to raise  money for new                                                               
loans,  and   the  Alaska   Industrial  Development   and  Export                                                               
Authority (AIDEA) purchased the  program and capitalized the fund                                                               
with  additional cash.  In addition,  the legislature  provided a                                                               
$10-million appropriation to  the Power Project Fund.  So, at the                                                               
moment the program  has sufficient funds to  meet current demands                                                               
for the loan program,  and it is one area she  wants to make sure                                                               
that  utilities and  eligible borrowers  know about.  Since there                                                               
are  less federals  funds for  grants,  they know  there will  be                                                               
additional demand.                                                                                                              
                                                                                                                                
4:19:17 PM                                                                                                                    
With respect  to the  Governor's report,  she reported  that some                                                               
work  had been  done  on the  Commercial  Energy Efficiency  Loan                                                               
Program.  When that  passed, AEA  had discussed  the coordination                                                               
and  implementation of  the program  with the  DCCED, and  as the                                                               
conversations progressed during the  Interim, putting this energy                                                               
program  in  the  AEA  was  discussed.  So,  they  moved  towards                                                               
developing a way in legislation  that would transfer that program                                                               
to  the  AEA. It  wasn't  just  a  clean  transfer. There  was  a                                                               
realization that some  improvements could be made  to the program                                                               
making  more  of  an  emphasis   on  energy  efficiency  for  the                                                               
commercial users.                                                                                                               
                                                                                                                                
AIDEA has  a program for  commercial lending, and they  have been                                                               
exploring  a guarantee  program  rather than  a traditional  loan                                                               
program. They were expecting at this  point to have a better idea                                                               
of what  type of legislation that  would be, but some  issues are                                                               
still being worked out.                                                                                                         
                                                                                                                                
4:21:40 PM                                                                                                                    
MS.  FISHER-GOAD  reported  that their  Commercial  Energy  Audit                                                               
Program started  with $462,000  in stimulus  funds, and  was very                                                               
successful. This  funding is expected  to provide  125-150 energy                                                               
audits for  the commercial sector.  Katie Conway,  primary energy                                                               
efficiency conservation staff, did a  phenomenal job in taking in                                                               
growing this aspect of the AEA.                                                                                                 
                                                                                                                                
SENATOR  WIELECHOWSKI  said  he appreciated  her  perspective  on                                                               
wanting to  limit the Alternative  Energy Revolving Loan  Fund to                                                               
energy  efficiency. However,  the  legislature  made a  conscious                                                               
decision  last year  to go  a little  bit beyond  that and  allow                                                               
organizations - for  commercial businesses that wanted  to put in                                                               
a  wind turbine  or underground  coil  piping to  strip out  some                                                               
heat.                                                                                                                           
                                                                                                                                
MS.  FISHER-GOAD  responded  that   she  had  conversations  with                                                               
legislative  staff, who  have reminded  them  of the  alternative                                                               
energy concept  of the program, and  they do not intend  to leave                                                               
alternative  energy  out  of  the  program,  but  they  feel  the                                                               
emphasis should be on energy  efficiency. That would be a concept                                                               
as they move towards transferring the loan program to the AEA.                                                                  
                                                                                                                                
4:24:48 PM                                                                                                                    
PETER  CRIMP,  Deputy  Director, Alternative  Energy  and  Energy                                                               
Efficiency,  Alaska  Energy  Authority, Department  of  Commerce,                                                               
Community and  Economic Development  (DCCED), provided  an update                                                               
of the  Emergency Energy  Technology Fund  (EETF). Last  year the                                                               
fund was  created by  the legislature  and it  allows the  AEA to                                                               
make  grants to  eligible applicants  for demonstration  projects                                                               
for technologies  that can be  developed within a  five-year time                                                               
frame  -  for  testing emerging  energy  technologies,  improving                                                               
existing energy  technologies or deploying a  technology that has                                                               
not been  used in Alaska before.  There is $2.4 million  in state                                                               
funds and $3.1  million in Denali Commission funds  with the idea                                                               
that $2.4 million  of that would go into the  overall "kitty" for                                                               
distribution  to  projects  that  are selected  by  the  advisory                                                               
committee and AEA.                                                                                                              
                                                                                                                                
MR. CRIMP said  the program has been staffed  by Barbara Triplet,                                                               
a   mechanical  engineer   with   15  years   of  experience   at                                                               
ConocoPhillips and other oil companies.  The first thing AEA did,                                                               
working  with  ACEP,  was to  research  other  energy  technology                                                               
development   programs  in   the  country;   the  Arctic   Energy                                                               
Technology  Development  Laboratory  and the  Denali  Commission,                                                               
which   has  conducted   similar   solicitations.  The   Governor                                                               
appointed  the  advisory committee  in  early  November 2010  and                                                               
those  members are:  Erik Ericson  with  AEL&P (utilities),  Carl                                                               
Raisha  from AIDEA,  Brent Pitrie  with  Alaska Village  Electric                                                               
Cooperative  (renewable energy  sector), Joel  Niemeyer with  the                                                               
Denali Commission, Steven Trimble  with MWH Americas (fossil fuel                                                               
energy sector),  Brent Sheets  with the  Arctic Energy  Office of                                                               
National Energy  Technology Lab (fossil  lab), and  Bryant Hirsch                                                               
with National Renewable Energy Laboratory.                                                                                      
                                                                                                                                
They  released a  solicitation on  January 6,  and the  materials                                                               
included  a request  for  application,  sample grant  agreements,                                                               
scoring guidelines, et cetera. That RFA is due on March 2.                                                                      
                                                                                                                                
4:29:34 PM                                                                                                                    
RON  KREHER,  Acting  Director, Division  of  Public  Assistance,                                                               
Department  of Health  and Social  Services (DHSS),  said he  was                                                               
here  to  talk  about  the  Alaska  Portable  Heating  Assistance                                                               
Program.  He  introduced   Susan  Marshal,  Program  Coordinator,                                                               
Heating Assistance Programs.  He said SB 220 was  signed into law                                                               
in June  2010 and by October  1, 2010 Ms. Marshal  had managed to                                                               
get  the regulations  drafted, made  necessary  changes to  their                                                               
system that  generates heating assistance benefits,  made changes                                                               
to  their application  as  well as  getting  ready for  extensive                                                               
outreach about  the new program. So  that on October 1  they were                                                               
able  to start  the  program.  To date  they  have provided  home                                                               
heating assistance supplements to over 1200 low-income families.                                                                
                                                                                                                                
He  explained  that  the  Alaska  Affordable  Heating  Assistance                                                               
Program (AHAP) was designed to  very closely mirror the federally                                                               
funded Low Income Heating and  Energy Assistance Program (LIHEAP)                                                               
with two  major differences.  One is that  the income  limits for                                                               
the  Affordable  Heating  Program  are from  151-225  percent  of                                                               
poverty with  a provision that  the income  limit could go  up to                                                               
250 percent  of poverty. But  probably the most  significant part                                                               
of it is that the amount of  money they pay to households is tied                                                               
to the average price of a  barrel of North Slope crude during the                                                               
prior fiscal  year. The  statutes mandate how  much they  have to                                                               
pay households based on the price  of oil. This year, because the                                                               
price of  oil last year was  $75.20, they are making  payments of                                                               
$140 for both programs.                                                                                                         
                                                                                                                                
Last year  they served  well over  19,000 households  between the                                                               
state program  and the tribal  programs. To date, they  are about                                                               
30 percent  over where  they were  this time  last year  with the                                                               
state  funded program.  They have  served  1200-plus families  to                                                               
date.  Last year  about  this  time, under  what  was the  Alaska                                                               
Heating Assistance  Program, they  had only served  900 families.                                                               
This is because  of Ms. Marshal's excellent  outreach efforts and                                                               
because  of interest  in  the  new program.  Even  with this  new                                                               
program, they are still serving  the most needy families in those                                                               
income  brackets. A  majority of  the folks  are between  151-175                                                               
percent of  poverty. They anticipate  it will be very  similar to                                                               
their  federally  funded  program  where  60-70  percent  of  the                                                               
households served  are going  to be  households with  elders over                                                               
the age of 60, individuals  with disabilities and households with                                                               
children under the age of 5. "So,  while the AHAP is a very small                                                               
part of  a very significant bill,  it is making a  big difference                                                               
in the  lives of many,  many Alaskans."  They are pleased  to say                                                               
the program  is "moving apace  - meeting the needs  of households                                                               
in Alaska."                                                                                                                     
                                                                                                                                
MR.  CRIMP said  that  7  out of  their  11  tribal programs  are                                                               
operating  regional affordable  heating  assistance programs  for                                                               
those areas the state is not providing services for.                                                                            
                                                                                                                                
4:34:17 PM                                                                                                                    
JOEL ST.  AUBIN, Chief,  Statewide Public  Facilities, Department                                                               
of  Transportation and  Public Facilities  (DOTPF), said  that SB
220 required DOTPF to work  with other state agencies to retrofit                                                               
at least 25  percent of state buildings, using a  nexus of 10,000                                                               
sq. ft., by no later than  January 1, 2020. To begin this effort,                                                               
the department gathered  utilities bills from the  past two years                                                               
for  all facilities  that are  over 10,000  sq. ft.  Most of  the                                                               
agencies have  provided the information  and they  are generating                                                               
energy-use indexes in order to  prioritize the buildings from the                                                               
least  to the  most  energy-efficient. This  will  be an  ongoing                                                               
process  and   will  use  the   information  gathered   from  the                                                               
implementation   of  the   standardized  methodology   for  state                                                               
agencies  to collect  and store  energy  consumption and  expense                                                               
data.                                                                                                                           
                                                                                                                                
He said the department has worked  with the AEA to collaborate on                                                               
this approach  to prioritizing the  facilities as required  by SB
220.   Additionally,  in   implementing  this,   they  anticipate                                                               
grouping  projects  together  by   location  that  will  expedite                                                               
project completion, reduce project  costs and maximize resources.                                                               
Therefore, it may  mean that one group of  facilities may include                                                               
multiple  departments  and  multiple funding  sources,  and  that                                                               
energy retrofits to  facilities may not be complete  in the exact                                                               
order  that their  energy-use index  may indicate.  Concurrently,                                                               
they have  issued an RFP  for energy performance  contracting and                                                               
are negotiating  with three energy  service companies  to provide                                                               
services  under   that  agreement.  They  anticipate   the  three                                                               
contracts will be  awarded this month and that  audits will begin                                                               
in March  and implementation of  energy efficiency  projects will                                                               
start this summer.                                                                                                              
                                                                                                                                
MR.  ST. AUBIN  said initial  funding for  the Energy  Efficiency                                                               
Retrofit Projects  will come  from a  grant through  the American                                                               
Recovery  and  Reinvestment Act  (ARRA).  AHFC  has received  $40                                                               
million from  the US Department  of Energy, $10 million  of which                                                               
has  been allocated  to  state buildings.  This  funding must  be                                                               
expended by March 2012 under the  terms of ARRA. Once those funds                                                               
are committed,  the funding of  energy retrofit projects  will be                                                               
through  the AEERF.  It is  possible that  projects they  do this                                                               
summer will  be combined  ARRA and loan  funding if  the projects                                                               
exceed available ARRA funding for an individual department.                                                                     
                                                                                                                                
He  said prior  to SB  220, the  department had  completed energy                                                               
retrofit  projects   under  two  phases  of   energy  performance                                                               
contracting; the first  phase was completed in  2006 and resulted                                                               
in  energy cost  avoidance of  $366,000  in its  first year;  the                                                               
second phase completed  in 2009 has resulted in  $793,000 of cost                                                               
avoidance in  its first year.  In all,  16 facilities (5  for the                                                               
Department of Administration, 3  for Department of Transportation                                                               
and Public Facilities,  and 8 for the  Department of Corrections)                                                               
have been  made more energy  efficient through this program  - or                                                               
10 percent of state facilities that are over 10,000 sq. ft.                                                                     
                                                                                                                                
4:39:41 PM                                                                                                                    
SENATOR WIELECHOWSKI asked how soon the loans will be paid off.                                                                 
                                                                                                                                
MR.  ST.  AUBIN  replied  that   the  work  done  to  date  under                                                               
performance  contracting  has   different  financing  terms;  the                                                               
shortest term is 10 years and the longest is 15.                                                                                
                                                                                                                                
SENATOR  WIELECHOWSKI estimated  about  $1 million  in savings  a                                                               
year  on those  16 buildings,  and asked  how quickly  the amount                                                               
that has been spent will be made up through the savings.                                                                        
                                                                                                                                
MR. ST.  AUBIN answered  their savings  are exceeding  what their                                                               
loan  payments are,  so  the initial  amount  should be  recouped                                                               
closer to  8 years  for the  first projects  and closer  to 10-12                                                               
years for the second group of 15-year contracts.                                                                                
                                                                                                                                
4:41:10 PM                                                                                                                    
DIANA   ROTKIS,   Statewide    Fleet   Manager,   Department   of                                                               
Transportation  and  Public  Facilities   (DOTPF),  said  SB  220                                                               
required the DOTPF  State Equipment Fleet to prepare  a report on                                                               
the  feasibility  of  using  compressed   natural  gas  to  power                                                               
vehicles  in  the  state  and  also  make  a  recommendation  and                                                               
proposal for a pilot program if  it was found to be feasible. The                                                               
final report produced  by Mercury and Associates  was released on                                                               
January  31.  It  concluded  that compressed  natural  gas  is  a                                                               
feasible fuel  for certain  Alaskan fleets  and expansion  of the                                                               
program  would  be   beneficial  toward  Alaska's  sustainability                                                               
efforts. The pilot program that  is recommended would enhance the                                                               
existing  compressed  natural  gas fuel  infrastructure  that  is                                                               
located within the  Anchorage Bowl. It would  increase the number                                                               
of vehicles and equipment using  compressed natural gas including                                                               
new  state  light-duty  vehicles,   four  school  buses  for  the                                                               
Anchorage  School  district,  four  solid waste  trucks  and  two                                                               
transit buses for the Municipality of Anchorage.                                                                                
                                                                                                                                
It would also establish a  fuel management system for the state's                                                               
bulk fuel  tanks to manage  existing fuel use and  future program                                                               
savings   and  also   designate   an  intergovernmental   program                                                               
coordinator  who would  be responsible  for facilitating  finding                                                               
external financial  support such as  federal grants to  allow the                                                               
state  to  move to  the  next  phase.  They  will work  with  the                                                               
Municipality  of Anchorage  to acquire  clean city  status, which                                                               
also opens  doors for federal  grants and to get  significant buy                                                               
in   from   the  public   and   private   sector  for   long-term                                                               
sustainability of the projects.                                                                                                 
                                                                                                                                
4:43:19 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked what  policy recommendations  she had                                                               
to implement this program.                                                                                                      
                                                                                                                                
MS. ROTKIS answered they just  received the report on January 31;                                                               
the department  is going  through it and  fine-tuning all  of the                                                               
recommendations.                                                                                                                
                                                                                                                                
SENATOR MCGUIRE  commented that  she has a  bill that  provides a                                                               
state tax  incentive for hybrid, electric,  or compressed natural                                                               
gas  vehicles,  and  she  asked  her to  take  into  account  the                                                               
hypothetical passage of that bill and  what it might do to reduce                                                               
the  numbers for  department's purchase  of a  fleet. She  didn't                                                               
know  if the  department was  exempt from  paying state  taxes on                                                               
vehicles.                                                                                                                       
                                                                                                                                
MS. ROTKIS  answered the department  is exempt from  paying state                                                               
taxes, and that she had been provided a copy of the bill.                                                                       
                                                                                                                                
4:45:33 PM                                                                                                                    
JERRY  BURNETT,  Deputy  Commissioner,  Treasury,  Department  of                                                               
Revenue  (DOR), said  the DOR  was tasked  with a  report to  the                                                               
legislature   on   the   feasibility  of   a   municipal   energy                                                               
improvements financing program.  They did such a  report that was                                                               
submitted on  January 31, and  they should  all have a  copy. The                                                               
tax assessed property financing for  energy improvements is a new                                                               
concept that was created in  2008 in California, he explained. It                                                               
is  not  dissimilar from  the  way  municipalities finance  local                                                               
improvement  districts for  water, sewer,  sidewalks and  paving,                                                               
but  it  is  a  voluntary priority  lien  against  the  property.                                                               
Subsequent  to  the  passage  of  SB  220,  the  Federal  Housing                                                               
Financing Agency  issued a statement  that urged state  and local                                                               
governments to  reconsider such programs  and called for  a pause                                                               
in such programs  so concerns could be addressed.  He quoted from                                                               
the  statement:  "First liens  for  such  loans represent  a  key                                                               
alteration  of  traditional  mortgage lending  practice,  present                                                               
significant risk  to lenders and secondary  mortgage entities and                                                               
may alter  valuations for mortgage-backed securities  and are not                                                               
essential for successful programs to spur energy conservation."                                                                 
                                                                                                                                
He said  20 states have such  programs and they are  working with                                                               
the Federal  Housing Financing  Agency to  resolve some  of those                                                               
issues.                                                                                                                         
                                                                                                                                
MR. BURNETT said  he had some recommendations  specific to Alaska                                                               
that  has  162 local  government  entities  that would  have  the                                                               
authority to do  property tax assessments, 38  of which currently                                                               
do  them. If  they could  work with  the Federal  Housing Finance                                                               
Agency  and  establish  that  this   type  of  program  could  be                                                               
constructive  and  conform  with national  mortgage  underwriting                                                               
standards,  then   it  would  be   a  practical   program.  Local                                                               
governments would  have to  be allowed to  create what  they call                                                               
"PACE districts"  or property assessment, clean  energy financing                                                               
districts.  Local governments  would have  ongoing administration                                                               
for  the property  tax collection  and  lien implementation,  but                                                               
there would  have to be  a statewide  issuer of bonds  to provide                                                               
for  local government  financing need  ensuring accessibility  to                                                               
smaller   communities  and   efficiency  and   uniform  statewide                                                               
standards -  like those used by  AHFC for the home  energy rebate                                                               
program for  determining energy savings at  allowable costs under                                                               
the program.                                                                                                                    
                                                                                                                                
If creating a  PACE program is a priority,  he said consideration                                                               
should  be  given to  providing  a  capital appropriation  for  a                                                               
revolving loan  fund eliminating the  need to borrow  from third-                                                               
parties in  the short term.  That loan fund  could be used  to do                                                               
the refinance  and provide  additional capital  once a  stream of                                                               
payments was coming from the local government entities.                                                                         
                                                                                                                                
In writing the report, Mr. Burnett  said he looked at the savings                                                               
generated from  the Home  Energy Rebate Program  at AHFC,  and of                                                               
those that  had been  paid, so  far, with  a little  over $10,000                                                               
average outlay,  there is  a little over  $1580 in  annual energy                                                               
savings. So, it  would appear those same repairs  could have been                                                               
paid with a loan  program of this type over a  period of 10 years                                                               
or  less. It's  a  matter  of working  with  the Federal  Housing                                                               
Finance Authority and getting national standards in place.                                                                      
                                                                                                                                
CHAIR PASKVAN asked if it's safe to say it's working.                                                                           
                                                                                                                                
MR. BURNETT  replied it's safe  to say it's not  working anywhere                                                               
right  now;  it  would  work,  though.  California  actually  has                                                               
litigation  with the  Federal Housing  Finance Authority  because                                                               
they have a number of programs. Twenty states have these                                                                        
programs that work.                                                                                                             
                                                                                                                                
4:50:48 PM                                                                                                                    
SENATOR MCGUIRE asked him to tell her and Senator Wielechowski                                                                  
what can be done to help him with this endeavor. They don't want                                                                
to end up in litigation.                                                                                                        
                                                                                                                                
4:52:22 PM                                                                                                                    
CO-CHAIR PASKVAN said that concludes the presentations on SB 220                                                                
and finding no further business to come before the committee, he                                                                
adjourned the meeting at 4:52 p.m.                                                                                              
                                                                                                                                

Document Name Date/Time Subjects
SRES SB220 DOTPF Legislature Report Final Jan2011.pdf SRES 2/2/2011 3:30:00 PM
SB 220
SB 220 Requirements of Administration.docx SRES 2/2/2011 3:30:00 PM
SB 220
S RES_-_Alaska_Sustainable_Energy_Act_Presentation_to_Senate_Finance_3-25-10[1].pptx SRES 2/2/2011 3:30:00 PM