HB 191-NUCLEAR POWER PRODUCTION/WASTE TRANSPORT. 3:53:15 PM CO-CHAIR EDGMON announced that the next order of business would be HOUSE BILL NO. 191, "An Act relating to nuclear energy production and transportation of nuclear waste material; amending the definition of 'power project' or 'project' as it relates to rural and statewide energy programs and the Alaska Energy Authority; relating to the alternative energy revolving loan fund and amending the definition of 'alternative energy system' as it relates to that fund and to the conservation of energy and materials; and providing for an effective date." 3:53:22 PM JEANNE OSTNES, Staff, to Representative Craig Johnson, Alaska State Legislature, Presented HB 191 on behalf of Representative Craig Johnson, prime sponsor of HB 191. She explained that HB 191 would update statutes and level the playing field for all types of energy, including nuclear energy. She stated that the Alaska statutes and regulations do not address alternative fuel sources. She referred to the dictionary definition of alternative fuel, which includes energy types that are unconventional and non-traditional such as nuclear energy. She noted items in members' packets, including reports prepared by Donald Anderson, Ph.D., and information related to the current statutes, as well as comparisons between the bill and the proposed committee substitute. She explained that the Division of Investments indicates that Alternative Energy loans range up to 15 percent for those loans. Thus, the rate is capped at 8 percent, similar to HB 196. Additionally, she indicated that the sweep has been removed. 3:55:44 PM REPRESENTATIVE JOHANSEN moved to adopt the proposed committee substitute (CS) for HB 191, Version 25-LS0185\E, Kane, 4/07/09, as the work draft. There being no objection, Version E was before the committee. 3:55:59 PM CO-CHAIR EDGMON objected for the purpose of discussion. 3:56:08 PM MS. OSTNES stated that the energy guide prepared by the AEA lists nuclear energy as one of the technologies that is good for the state, with Galena listed as a community that is closest to having a "suitcase" nuclear reactor for energy. She further stated that Dittman Research Association of Alaska, in Anchorage, conducted a poll in March 2009, and reported that respondents indicated a preference for nuclear energy over oil, coal, and tidal power. She mentioned that nuclear energy is also becoming safer. She opined that Galena is targeting 2015 as the earliest date for completing the Nuclear Energy Regulatory Committee process. She reiterated that HB 191 would amend the statute so nuclear energy can be considered. 3:57:42 PM REPRESENTATIVE PETERSEN asked if nuclear energy is considered an alternative form of energy, whether Galena or other areas would be able to apply for state loans and grants. 3:58:14 PM MS. OSTNES answered yes. 3:58:22 PM REPRESENTATIVE PETERSEN asked what size is the plant and cost under consideration in Galena. MS. OSTNES answered that the plant would be 10 megawatts, but she was not certain of the cost. DONALD ANDERSON, Ph.D., read a prepared statement: I am testifying today as a citizen interested in energy production, but with no fiduciary interest beyond that of the regular household consumer. I am not a nuclear engineer, although my education included some coursework in that area. I am here to ask you to support HB 191. I consider this bill a cleanup of state statutes, and it is designed to level the energy production playing field. We badly need to allow Alaskans to choose their generating technology based on economic, safety, health, and reliability criteria. Under current law what may be the best technology in some cases is not under active consideration. Specifically, use of nuclear energy as the heat source to drive generating turbines has some specific advantages for locations where fuel transportation is costly or sporadic. It also provides a steady, reliable source of baseload power, unlike wind, or tides, or the sun. Nuclear power plants cost a great deal, but fuel costs are very low. The energy density of the fuel is 2.7 million times as much as coal. The resulting overall costs are about the same as coal. The resulting overall costs are about the same as coal fired power, and much lower than liquid fuel or natural gas, although these are location dependent. At present the smallest reactor design being prepared for licensing is the 10 megawatt unit proposed for Galena. This is far larger than needed by the smaller Alaskan villages, but these small units may be appropriate in many locations around the state such as: Bethel or Copper Valley, Cordova, Dillingham, Galena, Kodiak, Kotzebue, Naknek, Nome, Tok, Unalakleet, Unalaska, and Yakatat. Jeanne Ostnes has been kind enough to duplicate some material I have written, so it could be included in your packets. Although I doubt you have time to read much before the end of the session, you might put a check mark on the paper I prepared for the board of Chugach Electric giving some history and background on nuclear power and a paper I prepared on the disposal of high-level nuclear waste. I hope you will promptly move HB 191 forward. The lack of a full range of energy options means plans may be delayed, unnecessarily expensive, or less safe than they otherwise would be. Thanks for your attention. I'll answer any questions to the extent I can do so. 4:02:21 PM MARVIN YODER, stated that he previously lived in Galena, and requested the bill in order to add options for Alaska. He characterized Alaska as a diverse state and noted that Galena looked at options, but cannot use wind or hydroelectric power. He explained that the U.S. Department of Energy prepared a study that evaluated options and suggested nuclear power as a cost effective measure for Galena. He related the purpose of the bill is to level the playing field and make sure all options are available. He clarified that other options may be available to other communities. He provided details, such that three companies offer small nuclear reactors. He compared the main nuclear plants being built in the U.S. which are about 15 megawatts, with the current Railbelt needs at only 800 megawatts. He offered that Galena is not considering a large scale nuclear project but rather the projects would be small regional ones that may connect some villages to small grids. He reiterated the purpose is to reduce energy costs to small villages and as an alternative. 4:04:27 PM REPRESENTATIVE DAHLSTROM asked for clarification that this bill was at his request. MR. YODER answered that last year he reviewed the statutes that pertained to nuclear energy. He discovered Representative Johnson introduced a bill and joined his efforts in progress. In further response to Representative Dahlstrom, Mr. Yoder explained that Mr. Don Anderson and he had worked on this issue. 4:05:30 PM CO-CHAIR EDGMON asked for capital costs for smaller nuclear facilities that range approximately 10 megawatts. 4:05:38 PM MR. YODER answered that Toshiba is currently revising cost estimates, but he recalled some years ago that a 10 or 50 megawatt facility would be amortized over 30 years for a cost of 6 or 7 cents a kilowatt. He projected the costs for a 10 megawatt facility would be about three times that due to the economies of scale. He advised he requested an update on the two year old figures, but estimated that amortizing the operating and capital costs over 30 years would be 20 cents and the 50 megawatt under 10 cents per kilowatt hour (Kwh). 4:06:49 PM CO-CHAIR EDGMON further asked for the bricks and mortar capital costs associated with the 10 megawatt facility. 4:06:55 PM MR. YODER answered the original estimate came in at $2,500 per kilowatt for the 50 megawatt unit, calculated as part of the whole project. In further response to Co-Chair Edgmon, Mr. Yoder clarified that a 50 megawatt unit at $2,500 per kilowatt would cost $125 million. He speculated the overall costs would probably range from $150 to $200 million by project completion. 4:07:24 PM MS. OSTNES offered that Galena currently pays about 70 cents per Kwh. She explained that the federal stimulus funds may be available for alternative energy, and Alaska could qualify if nuclear is identified as an alternative fuel. She referred to a letter of support in members' packets from the Alaska Power Association (APA), which is the statewide trade association for the electric utilities that supply power to many communities. She mentioned that APA outlined that the statutes need to be updated or "contemporized," and it recognizes that communities need to have flexibility to choose what works best for them. 4:08:44 PM REPRESENTATIVE PETERSEN asked what the plan is for the spent nuclear waste or rods. MR. YODER answered that according to Toshiba, the nuclear component and sodium coolant would be sealed in a container. Thus, the plan would be to send the sealed container outside Alaska at the end of 30 years. 4:09:58 PM REPRESENTATIVE PETERSEN pointed out that he was not aware of any location currently for disposal of nuclear waste. He expressed concern that if the facility was built and at the end of the 30 year period no disposal site was identified, that Alaska would have to dispose of the nuclear waste in-state. 4:10:14 PM MR. YODER agreed. He understood that nuclear waste disposal presents a problem. He further understood that a program has been initiated to recycle nuclear waste, which he supports. He opined that such a program would reduce the volume and radioactivity by 90 percent. He pointed out that the proposed nuclear facility would have the capacity to burn recycled nuclear fuel. He offered his belief that some other countries currently are successfully reducing waste. He acknowledged that the United States has a problem, but the U.S. has been charging each nuclear plant "backend" fees so the federal government has $5 billion to sort out the issue of nuclear waste disposal, but has not done so due to political reasons. 4:11:10 PM CO-CHAIR EDGMON held over HB 191 for further discussion. He reiterated that he previously removed his objection and the CS Version 25-LS0185\E, Kane, 4/07/09, is before the committee.