Legislature(2023 - 2024)BARNES 124
02/16/2023 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| HB62 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 62 | TELECONFERENCED | |
HB 62-RENEWABLE ENERGY GRANT FUND
10:17:58 AM
CHAIR RAUSCHER announced that the only order of business would
be HOUSE BILL NO. 62, "An Act relating to the renewable energy
grant fund and recommendation program; and providing for an
effective date."
10:18:20 AM
REPRESENTATIVE BRYCE EDGMON, Alaska State Legislature, as prime
sponsor, presented HB 62. He stated that the bill would extend
the authorization of the renewable energy grant fund for another
ten years. The grant was created in 2008, at a time when oil
prices were high, to expand the usage of Alaska's natural
resources. He said that the reason for extending the grant
another ten years rather than more standard three years is
because he believes that the grant has been successful enough to
warrant such a lengthy extension.
10:22:48 AM
LAIB ALLENSWORTH, Staff, Representative Edgmon, gave the
sectional analysis for HB 62 on behalf of Representative Edgmon,
prime sponsor. He stated that Section 1 would extend the repeal
date from June 30, 2023, to June 30, 2033; Section 2 would make
the bill retroactive; and Section 3 set an immediate effective
date. He explained that the retroactivity of Section 2 would be
to ensure continuous authorization if the bill was not passed
before June 30, 2023.
10:24:30 AM
MR. ALLENSWORTH gave a brief history of the renewable energy
grant fund. He reiterated that the fund was created in 2008,
and said it received a 10-year extension in 2012, passing
unanimously both times. The fund has given $299 million in
grants for renewable energy. He added that there was an initial
investment of $100 million in the fund and that the amount
contributed since then has varied from year to year based on the
current fiscal situation of the state. The $1.4 million fiscal
note was for the maintenance and support of the current grants.
He concluded that the bill does not obligate any particular
amount to be appropriated for the fund.
10:27:27 AM
CHAIR RAUSCHER asked if there was any money left over from last
year's $15 million appropriation.
REPRESENTATIVE EDGMON answered that the legislature created an
endowment in 2016 that among other things, would contribute to
the renewable energy grant fund in years of high revenue. He
added that Governor Mike Dunleavy is proposing $7.5 million for
the 2024 fiscal year budget.
10:29:05 AM
REPRESENTATIVE PATKOTAK asked if the $7.5 million was in
addition to the $1.4 given in the fiscal note.
MR. ALLENSWORTH answered that it would be in addition to the
fiscal note.
10:29:36 AM
REPRESENTATIVE PRAX asked what the return on investment was for
rural areas investing in alternative energy.
REPRESENTATIVE EDGMON answered that the Alaska Energy Authority
(AEA) has numbers on the amount of diesel fuel saved by
investing in renewable energy in rural areas.
10:32:19 AM
REPRESENTATIVE SCHRAGE asked if there was ever a time in which a
full $50 million every year for five years was contributed
towards the renewable energy fund, and what the health of the
fund is currently.
MR. ALLENSWORTH answered that between 2008 and 2014, $20-30
million was contributed each year, which he described as a
"healthy" amount. He said that the fund is working as it should
in delivering grants for renewable energy projects.
10:35:05 AM
REPRESENTATIVE SCHRAGE asked whether more funding is necessary
to keep the fund working properly.
10:35:51 AM
CURTIS THAYER, Executive Director, Alaska Energy Authority,
answered that there is not meant to be a fund balance, as the
money appropriated for the fund goes towards renewable energy
projects through a grant process. He added that if projects
were finished under budget, the legislature could reappropriate
the remaining funds to contribute towards other projects.
10:38:02 AM
REPRESENTATIVE SCHRAGE asked what the average amount of money
contributed toward the renewable energy grant fund has been over
the course of the last five rounds.
MR. THAYER answered that it is possible for the fund to receive
no money in certain years and most of the $19.2 million that has
been appropriated in the last five years came in the last two.
10:40:11 AM
REPRESENTATIVE PRAX asked what the outlook for the power cost
equalization fund looks like.
Mr. Thayer answered that the two funds largely remain separate,
although it is possible for leftover funds from the power cost
equalization fund to "waterfall" into the renewable energy grant
fund, as the purpose is to lower power cost for rural Alaska.
Most of the funds distributed as part of the renewable energy
grant fund have come from the State of Alaska General Fund.
10:43:48 AM
REPRESENTATIVE PRAX asked if the Department of Revenue would be
able to inform the legislature on the future potential of funds
that could go from the power cost equalization fund to the
renewable energy grant fund to give it a better idea of how much
funding the legislature should contribute to renewable energy
projects.
MR. THAYER answered that the Department of Revenue manages funds
for AEA.
REPRESENTATIVE EDGMON added that during the previous year's
session, SB 243 was passed, which increased the residential cap
for subsidization. The bill also allowed the Power Cost
Equalization Fund to be managed in such a way that its
investments would receive larger returns.
10:46:22 AM
REPRESENTATIVE PATKOTAK asked what types of things are taken
into consideration when deciding which projects will receive
funding through the renewable energy grant fund.
10:46:43 AM
CONNOR ERICKSON, Director of Planning, Alaska Energy Authority
answered there is a four-step review process for all projects
applying for the fund that starts with a review of an
application's eligibility and continues with the technical and
economical feasibility of the project. The third step is
continued economic review, including looking at potential
matching opportunities. He said that the final step is a
presentation and final ranking of the projects. The finalists
are presented to the Renewable Energy Fund Advisory Committee,
made up of four legislators and five members of the public, and
its recommendations are forwarded to the legislature for
consideration.
10:49:28 AM
REPRESENTATIVE SCHRAGE asked for clarification on the amount of
money for proposed projects this year.
MR. THAYER answered that there are currently 31 proposals that
would amount to $33 million, and it is likely that some of those
applicants will not make it through the entire process. He
added that the $7.5 million figure given by the governor is a
placeholder until a final request is determined. In response to
a follow-up question, he stated that it was difficult to
determine exactly how much the number of applicants would change
from round to round, although there is a cap of $2 million for
any given project.
10:52:34 AM
REPRESENTATIVE CARRICK asked how much money AEA would need to
fund all viable projects if the legislature had the ability to
fund all of them.
MR. THAYER answered that he was unsure what that amount would
ultimately be. He added that the fund's purpose is to help with
the early development of the projects being funded and has been
beneficial across the state.
10:55:28 AM
CHAIR RAUSCHER opened public testimony on HB 62.
10:55:51 AM
DOUG WOODBY, Co-Chair, 350 Juneau, testified in support of the
renewable energy grant fund. He stated that the renewable
energy grant fund has been a helpful tool for rural communities
to save money on utility bills. He added that he believes that
investing more in renewable energy will help fight climate
change.
10:57:53 AM
MATTHEW JACKSON, Southeast Alaska Conservation Council, stated
that the AEA estimates that the projects funded by the renewable
energy grant fund save a total of approximately 30 million
gallons of diesel each year, saving rural Alaskans significant
amounts of money. He said that he believes greater investment
in the fund would provide encouragement to those looking to
create renewable energy projects and thus cause there to be more
applicants for the grants.
10:59:59 AM
MICHAEL ROVITO, Deputy Director, Alaska Power Association,
testified in support of HB 62. He stated that the Alaska Power
Association supports the bill on behalf of its electric utility
members. He said that the fund has reduced carbon emissions and
electric rates for its members. Extending the sunset date of
the renewable energy grant fund gives electric utilities
certainty that the fund will be there so that they can continue
to invest in renewable energy.
11:01:57 AM
GARY HENNIGH, Administrator, City of King Cove, testified in
support of HB 62. He stated that he is in his thirty-third year
as the city administrator of King Cove, Alaska. He said that
King Cove has two river hydro facilities that have allowed the
community to rely on renewable energy for 90 percent of their
energy needs. The renewable energy grant fund is what allowed
the city to invest in and build those projects. He added that
the way the power cost equalization program is set up creates a
disincentive for communities wanting to take advantage of the
renewable energy grant fund and he gave the example that king
cove is not benefitting from the power cost equalization program
because its energy costs are already lower due to its renewable
energy projects.
11:06:33 AM
CHAIR RAUSCHER, after ascertaining there was no one else who
wished to testify, closed public testimony on HB 62.
11:06:45 AM
REPRESENTATIVE PRAX asked whether it is accurate to say that
investing in renewable energy projects reduces the cost to the
state for the power cost equalization program.
MR. THAYER answered that the power cost equalization program is
a program for rural communities to be subsidized for high energy
costs, whereas funds from the power cost equalization program
can be used to benefit urban Alaska communities, making it
difficult to create a proper comparison. he added that the
power cost equalization fund is meant to provide a subsidy to
rural Alaska communities to equalize their energy costs with
urban Alaska. in response to a follow-up comment, he said that
the power cost equalization fund was a response to "even things
out" between rural and urban Alaska due to the state spending
more money on infrastructure in urban parts of the state. he
added that some areas of the state have less access to renewable
energy, so they rely more on cost equalization.
REPRESENTATIVE PRAX commented that people in urban parts of
Alaska have "forgotten" the reasoning for the power cost
equalization fund and asked if there were numbers showing a how
the infrastructure built in those areas is saving money for the
people living there.
MR. THAYER answered that the Railbelt intertie has saved the
people of Fairbanks an average of $40 million a year in power
costs since it was built.
11:14:51 AM
REPRESENTATIVE MCKAY asked for clarification on the amount of
money HB 62 would commit future legislatures to provide for the
renewable energy grant fund.
REPRESENTATIVE EDGMON answered that HB 62 reauthorizes the fund
for the next ten years, but only appropriates funding of $1.4
million this year, leaving the funding for future years for that
year's legislature to decide. In response to a follow-up
question, he stated that the $1.4 million is the cost to run the
program, whereas the $7.5 million is an amount requested for the
distribution of grants.
11:17:18 AM
CHAIR RAUSCHER asked if it was correct to say that a vote for HB
62 is a vote to continue the program but not provide any
specific amount of funding for it.
REPRESENTATIVE EDGMON answered that HB 62 would only provide
funding to run the program, but not any specific amount to be
given out in grants. He added that Governor Dunleavy had
already assumed the $1.4 million as part of the budget.
11:18:47 AM
REPRESENTATIVE PATKOTAK added that the $1.4 million is a fiscal
note for the purpose of appropriating the cost of running the
program for the next year.
11:20:34 AM
REPRESENTATIVE PATKOTAK moved to report HB 62 out of committee
with individual recommendations and the accompanying fiscal
notes.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 62 Sponsor Statement Version A.pdf |
HENE 2/16/2023 10:15:00 AM SFIN 3/28/2023 9:00:00 AM |
HB 62 |
| HB 62 Sectional Analysis Version A.pdf |
HENE 2/16/2023 10:15:00 AM SFIN 3/28/2023 9:00:00 AM |
HB 62 |
| HB 62 REF Update Letter to Legislature 2023.01.26.pdf |
HENE 2/16/2023 10:15:00 AM |
HB 62 |
| HB 62 -APA Support 2.10.pdf |
HENE 2/16/2023 10:15:00 AM |
HB 62 |
| HB 62 REF Projects by Energy Region 02.07.2023.pdf |
HENE 2/16/2023 10:15:00 AM |
HB 62 |
| HB 62 REF Round 14 Status Report 04.01.2022.pdf |
HENE 2/16/2023 10:15:00 AM |
HB 62 |
| HB62 REF Fact Sheet 2.7.23.pdf |
HENE 2/16/2023 10:15:00 AM |
HB 62 |
| HB 62 Fiscal Note.pdf |
HENE 2/16/2023 10:15:00 AM |
HB 62 |