HB 305-OMNIBUS ENERGY BILL    3:14:16 PM CO-CHAIR MILLETT announced that the first order of business would be HOUSE BILL NO. 305, "An Act relating to energy; relating to the board of directors of the Alaska Energy Authority; amending the size and composition of the board of directors of the Alaska Energy Authority by removing the members of the Alaska Industrial Development and Export Authority as directors of the Alaska Energy Authority and providing for designation or appointment of other members; amending the quorum requirement for the board of directors of the Alaska Energy Authority; and relating to nuclear waste material." 3:15:07 PM CO-CHAIR EDGMON moved to adopt the Committee Substitute for HB 305, version E, as the working document. There being no objection, it was so ordered. 3:15:45 PM ADAM BERG, Staff, Representative Bryce Edgmon, Alaska State Legislature, introduced the committee substitute to HB 305, version E. Mr. Berg said the first major change to HB 305 was to remove sections referring to the energy use index database, audits of public facilities, and any reports or tasks associated with the aforementioned. Also deleted was the section that required agencies requesting a capital project costing over $1 million to attach energy audits, cost savings analyses, and proposals for energy efficiency improvements. Regarding the Department of Education and Early Development (EDD) and schools, specific codes, such as the International Energy Conservation Code (IECC), were deleted, and new language leaves the selection of codes up to the department of EDD. Mr. Berg opined the original intent of those sections was preserved by adding operations and maintenance cost report language that would enable school districts to take future energy costs into consideration. He turned to the subject of tax credits, and said changes in that section of the bill mirror the language in SB 220, version K. In addition, changes were made to the technical language in the nuclear power section of HB 305 wherein language was clarified, but the intent is unchanged. Also, the name of the alternative energy revolving loan fund was changed to apply strictly to commercial buildings, and the maximum loan was increased from $30,000 to $50,000. He pointed out that technical language changes to the renewable energy fund section do not affect the intent of that section. Finally, there were no changes to the department of energy section, or the emerging technology fund. Mr. Berg advised that amendments to the bill will be offered to the committee for voting when the bill is again before the committee. Items under consideration for amendments include issues related to compressed natural gas for state vehicles, the Low Income Home Energy Assistance Program (LIHEAP), a wood stove program, the bulk fuel revolving loan fund, the bridge loan program, fuel co-operative language, and an energy efficiency public relations campaign. 3:20:02 PM CO-CHAIR MILLETT asked committee members to submit amendments prior to the 3/16/10 meeting. 3:20:30 PM REPRESENTATIVE RAMRAS appreciated the work of the committee and staff. He expressed his concern regarding the creation of a department of energy. Representative Ramras asked for the theory behind the department of energy, and for its possible effect on all of the present state energy advisors and directors. The availability of a fiscal note concluded his interrogative. 3:22:28 PM CO-CHAIR MILLETT asked a representative of the U.S. Department of Energy (DOE) in Washington, D.C., whether Alaska is unique in having DOE funds disbursed to the Alaska Housing Finance Corporation (AHFC). She was told "we are the only state that is so discombobulated that we have a housing corporation in charge of our energy program money." She opined that Gene Therriault is in the cabinet level position for energy, and Steve Haagenson "has direct contact with the third floor;" however, without a formal directive, who manages what program is unknown and frustrating. Although there is a fiscal note attached to HB 305, Co-Chair Millett questioned its accuracy. She acknowledged that there is not a lot of support from the administration for the department of energy, but stressed that the idea is to streamline government, and to have a one-stop shop for all energy issues. She observed that the new administration has not warmed to the possibility that there is "a fundamental flaw in our administration when it comes to energy." 3:25:20 PM REPRESENTATIVE JOHANSEN agreed that representatives of the DOE do not know with whom to talk in Alaska; in fact, his impression is that there is no central point for contact. 3:27:18 PM REPRESENTATIVE RAMRAS suggested the committee should hear testimony from Mr. Therriault, as he is the administration's senior energy policy person. He stated the benefit to the committee from hearing Mr. Therriault articulate the administration's position on the department of energy. 3:29:00 PM CO-CHAIR EDGMON agreed with Co-Chair Millett and Representative Ramras. He also noted the absence of Mr. Therriault at the Alaska Federation of Natives (AFN) convention, although many other representatives from the administration were there. He pointed out that Mr. Therriault could explain to the committee how the administration plans to consolidate, and align, all of the various elements of energy in a master plan. 3:29:55 PM CO-CHAIR MILLETT observed that Gene Therriault's title is: Senior Policy Advisor for In-state Energy. She said the co- chairs will extend an invitation to him, and to the Alaska Energy Authority (AEA), to testify on 3/16/10. 3:30:42 PM REPRESENTATIVE JOHANSEN concurred. CO-CHAIR EDGMON concurred. 3:30:56 PM REPRESENTATIVE PETERSEN agreed. 3:31:19 PM REPRESENTATIVE RAMRAS encouraged the committee to request that Mr. Therriault present an organization chart, and that Jerry Gallagher, Legislative and Communications Director, present a fiscal note illustrating the costs of the fractured department of energy that already exists. He concluded that a reorganization and consolidation of the existing de facto department of energy is the intent of the committee, and of the portion of HB 305 that relates to the establishment of a new department of energy. 3:33:40 PM CO-CHAIR EDGMON recalled hearing from constituents and entities that there is no coordination or centralization of energy offices within the state; however, representatives of state agencies maintain that there is no problem. The messages are on two different tracks, and he supported asking Mr. Therriault to provide the answer to why consolidation is not needed. 3:34:47 PM REPRESENTATIVE RAMRAS observed that the argument against establishing a new department of energy is the budget increment it creates. He expressed his interest in seeing a "de- constructed organization chart" with the costs of the various energy functions pulled out of different departments, and consolidated. If the resulting consolidation is revenue- neutral, it would demonstrate support for reorganization. For those who are resistant to growing government, it is important to see that the increment for the creation of a new department is equal to the decrements in existing departments. Representative Ramras cautioned that "fiscal notes [can] reflect that degree of resistance." 3:37:58 PM CO-CHAIR MILLETT assured the committee that the creation of a new department of energy is an opportunity to streamline government, not to grow government. She said she will work with the administration in order to have information prepared for the 3/16/10 meeting. [Although not formally stated, HB 305 was held.]