CS FOR SENATE BILL NO. 220(FIN) "An Act relating to energy efficiency, energy conservation, and alternative energy, to an emerging energy technology fund, to the lease of state land to a public electric utility, to the Alaska heating assistance program, to state energy use data, to the Southeast energy fund, to nuclear energy production and facilities, to the definition of 'power project' or 'project' as it relates to rural and statewide energy programs and the Alaska Energy Authority, and to the definition of 'alternative energy system'; establishing an Alaska energy efficiency revolving loan fund; directing the Department of Transportation and Public Facilities to prepare a report on the feasibility of using compressed natural gas to power vehicles in the state, including vehicles owned or operated by the state, and including in that study, if warranted, a pilot program proposal for powering some vehicles owned or operated by the state with compressed natural gas; authorizing and relating to the issuance of bonds by the Alaska Housing Finance Corporation; relating to a report regarding a municipal energy improvements financing program and to an energy report by the Office of the Governor; and providing for an effective date." 8:08:49 PM MIKE POWLOWSKI, STAFF, SENATOR LESIL MCGUIRE, introduced himself for the record. 8:09:58 PM AT EASE 8:11:15 PM RECONVIENE Co-Chair Stoltze solicited discussion of the proposed amendments. SENATOR BILL WEILECHOWSKI, SPONSOR, communicated that he had no objection to the proposed amendments. SENATOR LESIL MCGUIRE noted no objection to the proposed amendments. Vice-Chair Thomas MOVED Amendment 1, 26-LS1197\Y.6, Kane, 4/13/10: Page 11, line 11: Delete "or" Insert "and 42.45.310," Page 11, line 12, following "AS 10.25": Insert "or another electric utility holding certificate of public convenience and necessity under AS 42.05" Co-Chair Stoltze OBJECTED for the purpose of discussion. Mr. Powlowski stated that the amendment 1 made an important change to the recipients who were eligible to receive grants from the southeast energy fund that had been re- enacted and modified within SB 220. The amendment added electric utilities holding a certificate of public convenience or necessity, to the list of entities that could receive grants under the legislation. Co-Chair Stoltze WITHDREW his OBJECTION to Amendment 1. There being no further OBJECTION, Amendment 1 was ADOPTED. Representative Kelly Moved Amendment 2, 26-LS1197\Y.7, Kane, 4/15/10: Page 18, lines 15-16: Delete "with a catalytic converter or a catalytic converter for a wood stove" Insert "that complies with the provision of 40 C.F.R. 60.530 [WITH A CATLYTIC CONVERTER OR A CATALYTIC CONVERTER FOR A WOOD STOVE}" Page 18, line 21: Delete "wood, coal," Insert "coal [WOOD,COAL,]" Co-Chair Stoltze OBJECTED for the purpose of discussion. Mr. Powlowski explained that a simple wood or pellet grain stove would not work appropriately under 40 C.F.R 60.530, which established the admissions criteria determined by the Environmental Protection Agency (EPA). Co-Chair Stoltze WITHDREW his OBJECTION to Amendment 2.There being no further OBJECTION, Amendment 2 was ADOPTED. Representative Gara WITHDREW Amendment 3. 8:17:41 PM Representative Gara MOVED Amendment 4, 26-LS1197\Y.4, Kane, 4/14/10: Page 15, following line 24: Insert a new bill section to read:    "* Sec. 17. AS 44.42 is amended by adding a new section to read: Sec. 44.42.067. Retrofits and new construction  for energy efficiency; energy efficiency report. (a) Not later than January 1, 2020, the department shall work with other state agencies to retrofit at least 25 percent of all public facilities, starting with those it determines are the least energy efficient, if the department determines that retrofitting the public facilities will result in a net savings in energy costs to the state within 15 years after completion of the retrofits for a public facility and if funding for the retrofits is available. (b) A retrofit or deferred maintenance of a public facility performed under this section, to the extent feasible, shall meet or exceed the most recently published edition of the ASHRAE/IESNA Standard 90.1, Energy Standard for Buildings Except for Low-Rise Residential Buildings, as published by the American Society of Heating, Refrigerating and Air-Conditioning Engineers. (c) New construction of a public facility under this section shall meet or exceed the most recently published edition of the ASHRAE/IESNA Standard 90.1, Energy Standard for Buildings Except for Low-Rise Residential Buildings, as published by the American Society of Heating, Refrigerating and Air-Conditioning Engineers. (d) Not later than January 1 of each year, the department, in consultation with the Department of Administration, shall submit a report to the legislature detailing the department's progress in meeting the requirements of this section to reduce state energy consumption and costs and carrying out the duties listed in AS 44.42.020 as they relate to energy use. The department shall include in the report an analysis of the consumption and expense data recorded by the office of management and budget under AS 37.07.040, comparing energy consumption levels in each year with past years to determine if reductions are being achieved. (e) In this section, "public facility" means a facility owned and controlled by the state for government or public use that is 10,000 square feet or more and is not a legislative building or court building." Renumber the following bill sections accordingly. Page 26, line 18: Delete "secs. 27 - 34" Insert "secs. 28 - 35" Page 26, line 20: Delete "secs. 27 - 34" Insert "secs. 28 - 35" Page 26, line 21: Delete "secs. 27 - 34" Insert "secs. 28 - 35" Page 27, line 1: Delete "secs. 27 - 34" Insert "secs. 28 - 35"- Page 27, following line 1: Insert a new bill section to read:  "* Sec. 45. The uncodified law of the State of Alaska is amended by adding a new section to read: DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES. Not later than one year after the effective date of this section, the Department of Transportation and Public Facilities, in consultation with the Alaska Energy Authority, shall adopt and implement a systematic process for prioritizing the retrofitting of state facilities for a long-term increase in energy efficiency and reduction of energy costs." Renumber the following bill sections accordingly. Page 27, line 9: Delete "Section 42(b)" Insert "Section 43(b)" Co-Chair Stoltze OBJECTED for the purpose of discussion. Representative Gara explained that the amendment would require major retrofits and new construction to certain state buildings in order to meet energy efficiency standards. He added that not only would the efficiency standards be met, but the cost of bringing the DOT managed buildings up to standard would be reimbursed within 15 years. Representative Fairclough asked what the life expectancy of a boiler system was, and the cost of maintenance relative to the life expectancy. She expressed concern that 15 years may not allow for reimbursement of all expected upgrades. Co-Chair Hawker articulated his unease was that the amendment would codify the most recently published edition of the American Society of Heating, Refrigerating and Air Conditioning Engineers/Illuminating Engineering Society of North America (ASHRAE/IESNA) Standard 90.1 Energy Standard for Buildings Except for Low-Rise Residential Buildings, as Published by the American Society of Heating, Refrigerating and Air Conditioning Engineers. He believed that the amendment should be scrutinized by an energy committee that was more familiar with terms of art pertaining to energy issues and codes. Representative Fairclough agreed that the amendment needed more work in order to be codified into state statute. 8:21:51 PM Senator Weilechowski stated that the ASHRAE standards were currently being adhered to by the Department of Transportation and that monetary saving had been experienced by DOT in the retrofitting of buildings using language similar to that found in the amendment. The sponsors had worked closely with the department to craft the amendment language. He said that 8 buildings had been retrofitted so far, with an average savings of $570,000 per year. The estimated savings under the provision was $2.75 million per year. Senator McGuire stated that she wanted to see the bill passed adding that, "the possible is better than the perfect". She furthered that the code was already being applied by the department. 8:23:57 PM MARY SIROKY, SPECIAL ASSISTANT TO THE COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, stated that the ASHRAE standard was used as the baseline upon which the architectural engineering community designed facilities in Alaska. The code focused on commercial buildings, and was the national standard used by many states. She understood that the code was being used, and would continue to be used, despite the passage of the amendment. Co-Chair Hawker clarified that the standard was being used without being codified and made a mandate, it was used a matter of policy and practice. Ms. Siroky replied yes. Co- Chair Hawker asked if DOT was currently engaged in the retrofitting of 25 different buildings. Ms. Siroky responded that the department had not received additional funding for the retrofits needed on all 25 buildings. She shared that the department had written a fiscal note that would add an additional body to oversee the necessary retrofits. She stated that four facilities per year would be necessary to meet the mandate of completing 25 percent by 2020. Co-Chair Hawker reiterated his unease with the codification and mandating of the language as statute. 8:26:44 PM Representative Gara emphasized that the amendment was the result of 2 years of work by the Senate Energy Committee, which had worked with the department and the engineering community. He stated that the amendment did not limit the amount of reimbursement to the state. The legislation asked the department to focus on the projects that would create a rapid return. The department supported the amendment and the energy committee had vetted it and worked to craft language that was adoptable as a standard. Representative Fairclough asked if the provision had been included in the legislation when it was passed on the floor of the other body. Representative Gara stated that it was inserted by the Senate Energy Committee after spending 2 years traveling the state and gathering research. The members of the Senate Finance Committee had voiced no objection to the addition of the amendment to the legislation. Co-Chair Stoltze asked if a similar amendment had been offered on the senate floor. Representative Fairclough said that the bill had passed the senate without the amendment in it. Co-Chair Stoltze rebutted that that information should not guide the committee's decisions now. Representative Fairclough agreed. She commented that when the committee attached itself to a national standard, adopted in a different committee, mistakes could be made. Co-Chair Stoltze asked if the administration supported the amendment. Ms. Siroky stated that the department was ambivalent. Co-Chair Stoltze MAINTAINED his OBJECTION. Representative Gara commented that the provisions of the national standard that did not make money for the state would not be followed. A roll call vote was taken on the motion. IN FAVOR: Thomas, Doogan, Foster, Gara, Joule, Salmon OPPOSED: Austerman, Fairclough, Kelly, Stoltze, Hawker The MOTION PASSED (6-5). 8:32:36 PM Representative Gara MOVED to ADOPT Amendment 5. Page 15 following line 24: Insert "*Sec. 17. AS 44.83.080 is amended by adding a new paragraph to read: (17) to promote energy conservation, energy efficiency, and alternative energy through training and public education." Renumber the following bill sections accordingly. Page 26, line 18, following "secs.": Insert "28-35" Delete "27-34" Page 26, line 20, following "secs.": Insert "28-35" Delete "27-34" Page 26, line 21, following "secs,": Insert "28-35" Delete "27-34" Page 27, line 1, following "secs.": Insert "28-35" Delete "27-34" Page 27, line 1, following "Section": Insert "43(b)" Delete "42(b)" Representative Gara noted that the amendment would allow the Alaska Energy Authority (AEA) the authority to promote energy efficiency and conservation, and help the legislature move forward with the deployment of energy efficiency where it would save the state money and benefit communities. He added that if an education campaign was thought to be beneficial it could be included as a mandate. Co-Chair Hawker stated that the amendment was well crafted and recommended it receive full support of the committee. Co-Chair Stoltze REMOVED his OBJECTION. There being no further OBJECTION the motion was ADOPTED. 8:35:12 PM Co-Chair Hawker stated that the bill had been extremely well crafted and that he was comfortable with the fiscal notes. Vice- Chair Thomas MOVED to report HCS CS SB 220(FIN) out of Committee with individual recommendations and the accompanying fiscal notes. HCS CS SB 220(FIN) was REPORTED out of Committee with a "do pass" recommendation and with attached new fiscal impact note by the Department of Revenue, new zero note by the Department of Transportation and Public Facilities, and previously published fiscal notes: FN3 (DEC), FN 6 (DHS), FN7 (CED), FN8 (CED, FN9 (REV), and FN11 (ADM). 8:37:01 PM AT EASE 8:50:46 PM RECONVENE