1993-02-19                     Senate Journal                      Page 0414
SB 125                                                                       
SENATE BILL NO. 125 by the Senate Rules Committee by request                   
of the Governor, entitled:                                                     
                                                                               
"An Act making appropriations to the energy                                   
authority revolving fund; and providing for an                                 
effective date."                                                               
                                                                               
was read the first time and referred to the Labor and Commerce and             
Finance Committees.                                                            
                                                                               
Governor's transmittal letter dated February 19:                               
                                                                               
Dear Mr. President:                                                            
                                                                               
Under the authority of art. III, sec. 18, of the Alaska Constitution,          
I am transmitting a bill making an appropriation to capitalize the             
energy authority revolving fund.  This appropriation bill is a                 
companion to a bill that I am transmitting relating to the financial           
restructuring of the Alaska Energy Authority (AEA) and the creation            
of the energy authority revolving fund.                                        
                                                                               
This bill appropriates to the energy authority revolving fund the              
balance in the Railbelt intertie reserve and the Railbelt energy fund,         
surplus money from the Bradley Lake Hydroelectric Project, and the             
portfolios, interest, and security agreements of several AEA loan              
programs.  These  appropriations  will  provide a funding source for           

1993-02-19                     Senate Journal                      Page 0415
SB 125                                                                       
energy projects, including electrical transmission interties from              
Anchorage to the Kenai Peninsula and from Healy to Fairbanks.  It              
is anticipated that, in the future, revenue from these appropriations          
will allow for funding and financing of energy projects such as                
interties for the Copper River area and Southeast Alaska and the               
funding of power cost equalization.                                            
                                                                               
The amount appropriated from the Railbelt intertie reserve by sec.1            
of the bill is expected to be $118,900,000 on June 30, 1993.  The              
unencumbered balance of the Railbelt energy fund (AS37.05.520),                
appropriated by sec. 2 of the bill, is expected to be $2,462,000 on            
June 30, 1993.  The surplus state money that was committed to the              
Bradley Lake Hydroelectric Project, appropriated by sec. 3 of the              
bill, is estimated to be $11,000,000 on June 30, 1993.                         
                                                                               
Section 4 of the bill appropriates to the new energy authority                 
revolving fund the portfolios, interest, and security agreements of            
several AEA loan programs.  The unpaid principal of the loans of               
all programs listed in sec. 4 are estimated to be approximately                
$220,000,000 on June 30, 1993.  The amount generated from the                  
appropriation of the power development revolving loan fund is                  
expected to total $10,396,000 annually, with an increase to                    
$12,000,000 annually in the year 2004.  The amount generated from              
the appropriation of all other loan funds is expected initially to total       
$2,413,000 annually and then decline each year as loans mature and             
are paid off.                                                                  
                                                                               
I urge your prompt consideration and passage of this important                 
legislation.                                                                   
                                                                               
      Sincerely,                                                               
      /s/                                                                      
      Walter J. Hickel                                                         
      Governor