2000-04-12                     Senate Journal                      Page 3029
SB 306                                                                       
SENATE BILL NO. 306 BY THE SENATE RULES COMMITTEE                              
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act establishing and relating to the power cost                            
equalization endowment fund; relating to the power                             
cost equalization and rural electric capitalization                            
fund; authorizing and relating to the sale of the four                         
dam pool hydroelectric project; establishing and                               
relating to joint action agencies created to purchase                          
power projects; and providing for an effective date.                           
                                                                               
was read the first time and referred to the Community and Regional             
Affairs and Finance Committees.                                                
                                                                               
Fiscal note published today from Department of Community and                   
Economic Development.                                                          
                                                                               
Governors transmittal letter dated April 11:                                   
                                                                               
Dear President Pearce:                                                         
                                                                               
This bill I am introducing today implements the terms of a                     
Memorandum of Understanding (MOU) between the Alaska Energy                    
Authority (AEA) and several Alaska communities and utilities served            
by the Four Dam Pool projects for the sale of those hydroelectric              
facilities. This sale represents years of hard work by AEA and the             
local utilities and meets the three principles essential to a successful       
agreement:                                                                     
	1.The sale must return fair value to the state for its                       
assets and meet sound business practices as judged                             
by the AEA;                                                                    
                                                                               
                                                                               

2000-04-12                     Senate Journal                      Page 3030
SB 306                                                                       
	2.The sale must benefit Alaska communities and their                         
ratepayers through local control and economic                                  
development opportunities;                                                     
	3.Proceeds from the sale must be used to provide                             
long-term funding of the Power Cost Equalization                               
(PCE) program.                                                                 
                                                                               
This bill authorizes the sale of the Four Dam Pool to the purchasing           
utilities pursuant to the MOU. The Alaska Industrial Development &             
Export Authority (AIDEA) is authorized to provide financing for the            
sale, not to exceed $110 million. It also authorizes a joint action            
agency to enable the new utility pool to operate and issue bonds.              
                                                                               
To receive the sale proceeds for long-term PCE funding, an                     
endowment fund is established under the management of the                      
Department of Revenue. Seven percent of endowment earnings will                
be used annually to fund the PCE program. Other funds, such as the             
securing of federal funds, may also be placed in the endowment.                
                                                                               
Any shortfall in funding the $15.7 million PCE program from                    
endowment earnings would be met through a portion of the AIDEA                 
annual dividend, not to exceed $9 million annually.                            
                                                                               
Although time in this session may be short, the opportunity to                 
culminate years of negotiations, to provide financial benefit to the           
state and local communities, and to create a mechanism for long-term           
funding of PCE cannot be lost. I urge your prompt consideration of             
this landmark piece of legislation.                                            
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor