HB 306-STATE ENERGY POLICY  CO-CHAIR EDGMON announced that the final order of business would be to hear public testimony on HOUSE BILL NO. 306, "An Act declaring a state energy policy." 4:20:58 PM ROBERT VENABLES, Energy Coordinator, Southeast Conference, informed the committee that Southeast Conference is a regional development organization. Its mission is to encourage activities and promote strong economies, healthy communities, and a quality environment in Southeast Alaska. Mr. Venables shared that, for the last 12 years, his organization has been working to develop the energy policies and projects that will lead to the displacement of diesel as the primary fuel for the generation of electricity in Southeast communities. He stated that Southeast Conference supports HB 306; in fact it was a member of the stakeholders group during the interim. He opined HB 306 leads the way for state investment in energy projects, economic development, and renewable energy projects in rural areas. Mr. Venables stated his organization's intent to participate with the state in on-going projects, both for the generation and the transmission of energy, and he cited the need for a higher level of planning to direct Southeast investments. He offered to lend Southeast Conference members and utilities in support of the bill. 4:23:30 PM CO-CHAIR EDGMON thanked Southeast Conference for its contributions to the plan. 4:24:53 PM JERRY MCCUTCHEON informed the committee he would send written comments to the legislature. He opined that HB 306 was "not much" and did not do anything. The state must address that which is doable, and not get tied up in illusions about what is not doable; for example, pursuing a gas line when the Lower 48 and western Canada is awash in gas. He relayed a short history of the gas line project. 4:27:04 PM DAVID LEVY stated that the Alaska Mobility Coalition represents and advocates for public and community transportation statewide. It has 76 members from Bethel to Prince of Wales Island, and its members represent public and community transportation systems that provide over 7,000,000 rides annually. Mr. Levy thanked the committee for its work and pointed out that the role of public transportation, and the energy savings and support for employment it provides, should be part of the discussion regarding energy. He informed the committee that the senate has included public transportation in its bill, and he encouraged the House Special Committee on Energy to do so. He expressed support for the amendment offered by Representative Petersen to include public transportation as part of the overall dialog. 4:29:26 PM CHRIS ROSE, Executive Director, Renewable Energy Alaska Project (REAP), said that he participated with the stakeholders group that worked on the proposed legislation. Today, however, he is representing REAP in support of the bill. A state energy policy is necessary to set the broad framework on how the state makes its energy decisions. Although there are plenty of energy programs and projects in place around the state, there needs to be a policy to provide a framework and a long-term vision. He opined the language of the bill looks at the influence on the state from around the world, such as the increasing price of fossil fuels, and the growth of the clean energy industry. Mr. Rose stressed that the emphasis on energy efficiency in the bill is very important and makes economic sense. His organization also supports the emphasis on renewable energy. Upon review of the bill by the REAP policy committee, the policy committee felt that REAP should be neutral on parts of the bill that do not support its mission- increasing the production of renewable energy and promoting energy efficiency-but other parts such as workforce development, education campaigns, and the streamlining of governmental functions, pertain to REAP's mission statement. 4:33:08 PM BILL POPP, President and CEO, Anchorage Economic Development Corporation (AEDC), said that he was a member of the stakeholders group and thanked all of those who contributed to the formation of the bill. He agreed with Mr. Rose, and added that it is vital for the state to bring forward an energy policy that addresses the basis on energy for the state in the coming decade. Without such a policy, the state will "clunk along" with some successful individual projects that may not be in line with a broader vision and a set of goals. He expressed his concern that without a basis for the process, decisions are made about the allocation of resources that may not fit the state's longer term goals, whether for renewable or nonrenewable projects. In the past, Alaska has faced challenges in choosing projects that should go forward, and others that should not. Mr. Popp opined that this policy recognizes that, although renewable energy is a part of our future and will make a difference especially in rural areas, the state economy is based on non-renewable resource extraction and will be for many decades. He strongly urged the passage of HB 306. 4:36:15 PM REPRESENTATIVE TUCK asked whether Mr. Popp supports the workforce development portion of the bill. 4:36:31 PM MR. POPP confirmed that a strong vital workforce is necessary to support the building, operation, and maintenance of energy infrastructure of all types. In addition, a good, well-thought- out investment in energy infrastructure workforce training is very important and the policy is a first step toward gaining that investment. 4:36:57 PM CAITLIN HIGGINS, Executive Director, Alaska Conservation Alliance, stated that the Alaska Conservation Alliance and its 40 member organizations, representing 38,000 Alaskans, wishes to applaud the committee on its strong leadership and hard work on these issues. The committee's commitment to the creation of an overarching policy to guide related energy decisions is encouraging. As a member of the stakeholder group, Ms. Higgins thanked the co-chairs for the opportunity to participate in the process, and the other members for their contributions. The proposed legislation will put Alaska on an economically stable and sustainable path to the future that is supported by the conservation community. The alliance strongly supports the provisions in the bill that focus on energy efficiency first, and it encourages the establishment of statewide energy efficiency codes, decreased energy use in public buildings through efficiency, and the education of the public on energy efficiency. In fact, this support is so strong that the alliance commissioned a report that shows how the Railbelt can reach a goal for energy efficiency-perhaps as high as 50 percent-by 2025. The Railbelt Electricity Efficiency Landscape (REEL In Alaska roadmap) results will be issued soon and will support efforts to set aggressive energy efficiency goals that encourage the state and its citizens, businesses, and industry to strive to be as energy efficient as possible. Ms. Higgins recalled that everyone in the stakeholders group and the committee share an interest in promoting and incentivizing energy efficiency so that Alaska can benefit from this clean, cheap, and simple way to meet its energy needs. Although the alliance supports the inclusion of goals for energy efficiency in the proposed policy, it encouraged the committee to place these goals in codified language. She opined placing all of these goals in codified statute will increase the likelihood that the goals will be met. The alliance also supports the inclusion of provisions encouraging renewable energy development, because such development will help the state secure its energy future. Lastly, the alliance supports the provisions encouraging training and research, emerging technology research and development in the field of renewable energy, and the coordination of state entities focused on energy. On behalf of the Alaska Conservation Alliance, she encouraged the passage of HB 306 during 2010. 4:42:40 PM REPRESENTATIVE JOHANSEN observed that the Alaska Conservation Alliance has a membership of 40 groups. He asked which members were based in Southeast. 4:43:14 PM MS. HIGGINS said those groups would include the Sitka Conservation Society, Lynn Canal Conservation, the Southeast Alaska Conservation Council (SEACC), and others. In further response to Representative Johansen, she said the Tongass Conservation Society is no longer a member. 4:43:58 PM REPRESENTATIVE JOHANSEN agreed with Ms. Higgins' support of HB 306. He advised that to achieve goals that the alliance, and he, support such as the 50 percent [of electric generation from renewable energy sources by 2025], choices have to be made. For example, during construction of the intertie between Wrangell and Ketchikan, the price was accelerated by litigation brought by groups like SEACC. He remarked: I'm hoping that your organizations, at some point, are going to make a choice between litigating access corridors, because you have to cut down a renewable tree, versus cheap and affordable energy. And I hope that conversation is going on within your groups ... But it's a real challenge to transmission, and I hope we all understand that that's going to be a question that's going to come up. At what point do you make a choice between cheap and renewable energy and allowing the corridors to go through? 4:45:30 PM CO-CHAIR EDGMON closed public testimony. 4:46:35 PM REPRESENTATIVE TUCK moved to adopt Amendment 3 to HB 306. CO-CHAIR EDGMON objected for the purpose of discussion. 4:47:09 PM REPRESENTATIVE TUCK stated that the intent of the amendment is to ensure that workforce development is a priority. The amendment read: Page 3, line 2, following "programs": Insert "that will help create jobs for Alaskans and" 4:47:45 PM CO-CHAIR EDGMON removed his objection. Hearing no further objection, Amendment 3 was adopted. 4:48:06 PM REPRESENTATIVE PETERSEN moved Amendment 1. 4:48:17 PM CO-CHAIR EDGMON objected for purposes of discussion. 4:48:23 PM REPRESENTATIVE PETERSEN informed the committee that this amendment adds a new subparagraph which read: Page 2, following line 18: Insert a new subparagraph to read: "(D) encouraging the use of public transportation and assisting communities in developing public transportation options in an effort to decrease fuel usage by motor vehicles." REPRESENTATIVE PETERSEN added that this amendment would also reduce wear and tear on highways. 4:49:01 PM CO-CHAIR MILLETT recalled previous discussion in the stakeholders group on this issue. Because the proposed legislation is statewide policy, participants did not feel it was appropriate as public transportation is not relevant to rural communities. She expressed her opposition to Amendment 1. 4:50:00 PM REPRESENTATIVE DAHLSTROM surmised that "assisting communities" would obligate the state to fund assistance. 4:5:25 PM REPRESENTATIVE PETERSEN relayed that in other states public transportation usually needs a public subsidy until it turns a profit; for example, in New Mexico the state built a commuter rail. Public transportation has also been successful in Seattle and Portland. He pointed out that the proposed policy is a long-term view of the future and a comprehensive-type of bill, and encouraged the inclusion of the amendment. 4:52:05 PM REPRESENTATIVE DAHLSTROM stated that because HB 306 is comprehensive and statewide, she was reluctant to "give the perception that we are interested in developing ... public transportation statewide." She expressed her opposition to Amendment 1. 4:52:52 PM REPRESENTATIVE PETERSEN commented that the Alaska Marine Highway System (AMHS) is subsidized by the state budget every year and is a form of public transportation. 4:53:09 PM REPRESENTATIVE JOHANSEN pointed out that the AMHS is the only transportation system with a fare box; on the other hand, every road in Alaska is completely subsidized. 4:53:39 PM REPRESENTATIVE RAMRAS recalled remarks he heard by rural legislators about inequities and the lack of parity in the governor's proposed scholarship program; in truth, the lack of parity between rural and urban regions of the state can be offensive. He said: I think [the amendment's] inclusion, frankly even a vote on amendment 1, incurs the same offense by not recognizing some of the limitations that we have in rural Alaska. 4:55:11 PM CO-CHAIR EDGMON stated his understanding from the stakeholders group discussions that the policy must be general, statewide, and uniform in application. He suggested that the amendment is more appropriate to a plan of action rather than to the overarching policy. 4:56:07 PM REPRESENTATIVE TUCK agreed that mass transportation can conserve energy, as the policy seeks to do; however, the committee does not want to isolate rural Alaskans, but to provide energy opportunities for them as well, and he agreed that the amendment would benefit urban areas. 4:57:44 PM REPRESENTATIVE PETERSEN withdrew amendment 1. 4:58:12 PM REPRESENTATIVE PETERSEN moved Amendment 2 which read: Page 1, line 13, following "projects": Insert "; (5) the state remain a leader in petroleum and natural gas production and become a leader in renewable energy development; (6) consumer fuel and electricity prices in the state be comparable to those prices in other leading energy producing regions" CO-CHAIR EDGMON objected for purposes of discussion. 4:58:57 PM REPRESENTATIVE RAMRAS offered an amendment to Amendment 2, which was the deletion of lines 5 and 6. 4:59:21 PM CO-CHAIR EDGMON confirmed that the amendment removed item (6) of Amendment 2. 4:59:53 PM CO-CHAIR MILLETT supported lines 3 and 4 of Amendment 2. 5:00:22 PM REPRESENTATIVE JOHANSEN objected to the amendment to Amendment 2, and stated his support of the amendment to Amendment 2. 5:00:34 PM REPRESENTATIVE TUCK explained that the purpose of item (6) is to ensure that the state, with renewable projects, is not "going backwards in energy savings and cost due the ratepayers, in exchange of trying to hit some of our targets." As the state moves to reach its renewable goals, it must not be at the cost of ratepayers along the way. 5:01:17 PM CO-CHAIR EDGMON re-stated the efforts of the stakeholders group to not incorporate statements of subjectivity. He opined lines 5 and 6 of Amendment 2 have an element of interpretation that is not in alignment with the spirit of the legislation. He indicated his support for the amendment to Amendment 2. 5:02:07 PM REPRESENTATIVE JOHANSEN removed his objection to the amendment to Amendment 2. 5:02:19 PM CO-CHAIR EDGMON announced that the amendment to Amendment 2 is adopted. 5:02:25 PM REPRESENTATIVE RAMRAS concluded that the maker of Amendment 2, as amended, has captured the intent of much of HB 306. 5:03:38 PM CO-CHAIR EDGMON removed his objection. Hearing no further objection, Amendment 2, as amended, was adopted. 5:04:16 PM CO-CHAIR MILLETT moved Amendment 4. 5:04:21 PM CO-CHAIR EDGMON objected for purposes of discussion. 5:04:22 PM CO-CHAIR MILLETT explained Amendment 4 is a technical amendment to page 3, line 10, deleting "review" and inserting "regulation". 5:04:48 PM CO-CHAIR EDGMON removed his objection. Hearing no further objection, Amendment 4 was adopted. 5:05:13 PM REPRESENTATIVE JOHANSEN said he is working on an amendment. 5:05:45 PM CO-CHAIR EDGMON announced HB 306 was held in committee.