00 HOUSE BILL NO. 312 01 "An Act relating to a state energy policy; relating to the green energy grant fund; and 02 providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04  * Section 1. AS 38.95.430 is amended to read: 05 Sec. 38.95.430. Carbon offset revenue. Twenty percent of the revenue 06 generated from the carbon offset program shall be deposited into the green 07 [RENEWABLE] energy grant fund (AS 42.45.045). The remaining 80 percent of the 08 revenue from the carbon offset program shall be separately accounted for under 09 AS 37.05.142 and may be appropriated by the legislature. 10  * Sec. 2. AS 42.05.141 is amended by adding a new subsection to read: 11 (j) The commission shall consider the state energy policy described in 12 AS 44.99.115 in performing the duties assigned to the commission. 13  * Sec. 3. AS 42.45.010(m) is amended to read: 14 (m) A loan for a green [RENEWABLE] energy resources project in which the 01 cumulative state monetary involvement, through loans, grants, and bonds, is at least 02 $5,000,000 may not be granted for a term that exceeds 50 years and may, 03 notwithstanding (f)(2) of this section, be granted at an interest rate that is the lesser of 04 (1) three percent lower than the rate determined under (f)(2)(A) of this 05 section, but not less than one percent; or 06 (2) a rate equivalent to the rate determined under (f)(2)(B) of this 07 section. 08  * Sec. 4. AS 42.45.010(n) is amended to read: 09 (n) In (m) of this section, "green [RENEWABLE] energy resources" has the 10 meaning given in AS 42.45.045 [AS 42.45.045(l)]. 11  * Sec. 5. AS 42.45.045(a) is amended to read: 12 (a) A green [RENEWABLE] energy grant fund is established as a separate 13 fund to finance certain energy projects in the state [ALASKA]. 14  * Sec. 6. AS 42.45.045(d) is amended to read: 15 (d) The authority shall, in consultation with the advisory committee 16 established under (i) of this section and the Department of Natural Resources, 17 (1) develop a methodology for determining the order of projects that 18 may receive assistance, including separate requirements for grant eligibility, and adopt 19 regulations identifying criteria to evaluate the benefit and feasibility of projects for 20 which an applicant applies for support from the legislature, with the most weight being 21 given to projects that serve any area in which the average cost of energy to each 22 resident of the area exceeds the average cost to each resident of other areas of the 23 state, and significant weight being given to a statewide balance of grant funds and to 24 the amount of matching funds an applicant is able to make available; 25 (2) make recommendations to the legislature for green 26 [RENEWABLE] power production reimbursement grants; and 27 (3) not later than 10 days after the first day of each regular legislative 28 session, submit to the legislature a report summarizing and reviewing each grant 29 application submitted under this section and a recommended priority for awarding 30 grants. 31  * Sec. 7. AS 42.45.045(e) is amended to read: 01 (e) In consultation with the advisory committee established in (i) of this 02 section, the authority shall make recommendations to the legislature regarding eligible 03 applicants' projects that finance feasibility studies, reconnaissance studies, energy 04 resource monitoring, and construction of green [RENEWABLE] energy projects [, 05 NATURAL GAS PROJECTS,] or transmission or distribution infrastructure located in 06 Alaska that meet the requirements of (f), (g), or (h) of this section, as applicable, and 07 shall, at least once each year, solicit from the advisory committee funding 08 recommendations for all grants. 09  * Sec. 8. AS 42.45.045(f) is amended to read: 10 (f) For a renewable energy project to qualify for a grant recommendation 11 under (e) of this section, the project must 12 (1) be a new project not in operation on August 20, 2008 or an addition 13 to an existing project made after August 20, 2008; and 14 (2) be a 15 (A) hydroelectric facility; 16 (B) direct use of green [RENEWABLE] energy resources; 17 (C) facility that generates electricity from fuel cells that use 18 hydrogen from green [RENEWABLE] energy resources [OR NATURAL 19 GAS]; or 20 (D) facility that generates energy from green [RENEWABLE] 21 energy resources. 22  * Sec. 9. AS 42.45.045(h) is amended to read: 23 (h) To qualify for a grant recommendation under (e) of this section, 24 transmission or distribution infrastructure must link a green [RENEWABLE] energy 25 project [OR NATURAL GAS PROJECT] to the transmission or distribution 26 infrastructure. A grant may be recommended under this subsection even if the grant 27 applicant is not itself financing the construction of the green [RENEWABLE] energy 28 project [OR NATURAL GAS PROJECT]. 29  * Sec. 10. AS 42.45.045(l)(5) is amended to read: 30 (5) "green [RENEWABLE] energy resources" means 31 (A) wind, solar, geothermal, wasteheat recovery, hydrothermal, 01 wave, tidal, river in-stream, or hydropower; 02 (B) low-emission nontoxic biomass based on solid or liquid 03 organic fuels from wood, forest and field residues, or animal or fish products; 04 (C) dedicated energy crops available on a renewable basis; 05 [OR] 06 (D) landfill gas and digester gas;  07 (E) nuclear reactors;  08 (F) natural gas extracted and processed in the state; or  09 (G) any other energy resource that when used to generate  10 energy releases  11 (i) emissions equivalent to or lower than energy  12 generated from pipeline-quality natural gas; and  13 (ii) less air pollution than energy generated, without  14 the use of clean coal technology, from coal that is mined and  15 processed in the state. 16  * Sec. 11. AS 42.45.045(l) is amended by adding a new paragraph to read: 17 (6) "clean coal technology" means a method or system for deriving 18 energy from coal that 19 (A) captures at least 90 percent of carbon dioxide emissions 20 through carbon capture utilization or storage; and 21 (B) reduces sulfur dioxide, nitrogen oxide, and particulate 22 matter emissions to levels below current federal standards. 23  * Sec. 12. AS 42.45.085(d) is amended to read: 24 (d) If the earnings of the fund for the previous closed fiscal year, as calculated 25 under AS 42.45.080(c)(2), exceed the appropriation under (a) of this section for the 26 current fiscal year, the legislature may appropriate 70 percent of the difference 27 between the earnings of the fund for the previous closed fiscal year, as calculated 28 under AS 42.45.080(c)(2), and the appropriation made under (a) of this section for the 29 current fiscal year as follows: 30 (1) if the amount calculated under this subsection is less than 31 $30,000,000, that amount to a community revenue sharing or community assistance 01 fund; or 02 (2) if the amount calculated under this subsection is $30,000,000 or 03 more, 04 (A) $30,000,000 to a community revenue sharing or 05 community assistance fund; and 06 (B) the remaining amount, not to exceed $25,000,000, to the 07 green [RENEWABLE] energy grant fund established under AS 42.45.045, to 08 the bulk fuel revolving loan fund established under AS 42.45.250, or for rural 09 power system upgrades or to a combination of the funds or purposes listed in 10 this subparagraph. 11  * Sec. 13. AS 44.83.080 is amended by adding a new subsection to read: 12 (b) The authority shall consider the state energy policy described in 13 AS 44.99.115 in performing the duties assigned to the authority. 14  * Sec. 14. AS 44.99.115 is amended to read: 15 Sec. 44.99.115. Declaration of state energy policy. The State of Alaska 16 recognizes that the state's economic prosperity is dependent on available, reliable, and 17 affordable residential, commercial, and industrial energy to supply the state's electric, 18 heating, and transportation needs. The state also recognizes that worldwide supply and 19 demand for fossil fuels and concerns about global climate change will affect the price 20 of fossil fuels consumed by Alaskans and exported from the state to other markets. In 21 establishing a state energy policy, the state further recognizes the immense diversity of 22 the state's geography, cultures, and resource availability. Therefore, it is the policy of 23 the state to 24 (1) institute a comprehensive and coordinated approach to supporting 25 energy efficiency and conservation by 26 (A) encouraging statewide energy efficiency codes for new and 27 renovated residential, commercial, and public buildings; 28 (B) decreasing public building energy consumption through 29 conservation measures and energy-efficient technologies; and 30 (C) initiating and supporting a program to educate state 31 residents on the benefits of energy efficiency and conservation, including 01 dissemination of information on state and federal programs that reward energy 02 efficiency; 03 (2) encourage economic development by 04 (A) promoting the development of renewable, green, or [AND] 05 alternative energy resources, including geothermal, wind, solar, hydroelectric, 06 hydrokinetic, tidal, and biomass energy, for use by Alaskans; 07 (B) promoting the development, transport, and efficient use of 08 nonrenewable, green, or [AND] alternative energy resources, including natural 09 gas, coal, oil, gas hydrates, heavy oil, and nuclear energy, for use by Alaskans 10 and for export; 11 (C) working to identify and assist with development of the 12 most cost-effective, long-term sources of energy for each community 13 statewide; 14 (D) creating and maintaining a state fiscal regime and 15 permitting and regulatory processes that encourage private sector development 16 of the state's energy resources; and 17 (E) promoting the efficiency of energy used for transportation; 18 (3) support energy research, education, and workforce development by 19 investing in 20 (A) training and education programs that will help create jobs 21 for Alaskans and that address energy conservation, efficiency, and availability, 22 including programs that address workforce development and workforce 23 transition; and 24 (B) applied energy research and development of alternative and 25 emerging technologies, including university programs, to achieve reductions in 26 state energy costs and stimulate industry investment in the state; 27 (4) coordinate governmental functions 28 (A) by reviewing and streamlining regulatory processes and 29 balancing the economic costs of review with the level of regulation necessary 30 to protect the public interest; 31 (B) by using one office or agency, as may be specified by law, 01 to serve as a clearinghouse in managing the state's energy-related functions to 02 avoid fragmentation and duplication and to increase effectiveness; and 03 (C) by actively collaborating with federal agencies to achieve 04 the state's energy goals and to meet emissions, renewable, green, or [AND] 05 alternative energy, and energy production targets. 06  * Sec. 15. AS 44.99.115 is amended by adding new subsections to read: 07 (b) The State of Alaska recognizes the need to improve energy grid security in 08 the state by minimizing the reliance on foreign nations and mainland United States 09 sources for critical materials and fuel delivery. The state also recognizes that the Jones 10 Act (P.L. 66-261) imposes significant restrictions on vessels that may transport energy 11 commodities by water between United States' ports, including from mainland United 12 States to the state. Therefore, to promote state energy grid security, it is the policy of 13 the state to prioritize 14 (1) local fuel sources that are primarily produced in the state, including 15 natural gas from the North Slope and Cook Inlet, coal from the Interior region of the 16 state, and nuclear materials processed or deployed by projects based in the state; 17 (2) affordable energy sources that 18 (A) provide cost-effective means of heating, cooling, and 19 generating electricity, with an average cost for each unit of energy output not 20 exceeding rates for comparable sources over the past five years; 21 (B) have stable, predictable costs and consider life-cycle 22 expenses including transportation, storage, and emissions control in the state's 23 Arctic and rural conditions; and 24 (C) deliver substantial savings to homes, businesses, and 25 communities compared to other sources; 26 (3) reliable energy sources that 27 (A) are readily available to meet the demands of residents at all 28 times of day and during all seasons of the year with minimal interruptions 29 during high-usage periods, including peak heating demands in subzero 30 temperatures; 31 (B) include energy generated by hydrocarbons, which may 01 include natural gas, and clean coal technologies sourced and processed in the 02 state; and 03 (C) for power generation, have a minimum capacity factor of at 04 least 50 percent, continuously dispatchable electricity output, the capability to 05 ramp up or down electricity generation within one hour to stabilize the 06 electrical grid, and the ability to complement and provide backup to renewable 07 energy sources during periods of low availability, which may include periods 08 when less energy is generated from wind or solar during winter months; 09 (4) development of infrastructure necessary to deliver local, affordable, 10 and reliable energy sources to residents, including in-state pipelines, liquefied natural 11 gas terminals, coal-to-liquid facilities, and microgrids for remote communities. 12 (c) In this section, "green energy resource" has the meaning given in 13 AS 42.45.045.  14  * Sec. 16. AS 42.45.045(g) and 42.45.045(l)(4) are repealed. 15  * Sec. 17. This Act takes effect immediately under AS 01.10.070(c).