01/26/2017 11:00 AM House ENERGY

         HB  80-MUNI ENERGY IMPROVEMNT:ASSESSMNTS/BONDS                                                                     
HB 80-MUNI ENERGY IMPROVEMNT:ASSESSMNTS/BONDS                                                                               
                                                                                                                                
11:10:05 AM                                                                                                                   
                                                                                                                                
CHAIR WOOL  announced that  the only order  of business  would be                                                               
HOUSE  BILL  NO. 80,  "An  Act  adopting the  Municipal  Property                                                               
Assessed   Clean  Energy   Act;  authorizing   municipalities  to                                                               
establish programs to impose  assessments for energy improvements                                                               
in  regions  designated  by municipalities;  imposing  fees;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
11:10:39 AM                                                                                                                   
                                                                                                                                
ROB  EARL,   Staff,  Representative   Adam  Wool,   Alaska  State                                                               
Legislature, clarified that  HB 80, with a zero  fiscal note, was                                                               
also known as PACE, the  Municipal Property Assessed Clean Energy                                                               
Act, which  would allow local  municipal governments to  create a                                                               
property  assessed   clean  energy   financing  mechanism.     He                                                               
explained  that local  PACE  financing  would incentivize  energy                                                               
efficiency  improvements to  commercial  buildings,  as it  would                                                               
allow use of the existing  property tax collection mechanism as a                                                               
means of  servicing loans for energy  efficiency improvements and                                                               
alternate energy installation on  commercial property.  He stated                                                               
that  local  governments  would  work  with  interested  business                                                               
owners to  identify energy improvements  under the  PACE program.                                                               
He  reported that  the  PACE financing  resulted  in low  default                                                               
rates,  which  facilitated  low  interest  lending,  allowed  for                                                               
longer  financing periods,  and offered  seamless transferability                                                               
with sale of the property.                                                                                                      
                                                                                                                                
[HB 80 was taken up later in the meeting.]                                                                                      
         HB  80-MUNI ENERGY IMPROVEMNT:ASSESSMNTS/BONDS                                                                     
                                                                                                                                
11:46:44 AM                                                                                                                   
                                                                                                                                
CHAIR WOOL  announced the committee  would open  public testimony                                                               
on HB 80.                                                                                                                       
                                                                                                                                
11:47:02 AM                                                                                                                   
                                                                                                                                
CHRIS ROSE,  Executive Director, Renewable Energy  Alaska Project                                                               
(REAP), reported  that REAP was a  statewide non-profit coalition                                                               
comprised  of about  80  organizations,  which included  electric                                                               
utilities, developers,  and independent businesses.   He referred                                                               
to  the  written testimony  previously  submitted.   He  declared                                                               
support for  HB 80 and  PACE legislation.  He  emphasized support                                                               
for  state  supported   weatherization  programs  which  provided                                                               
savings  from energy  efficiency.    He stated  that  PACE was  a                                                               
financing  tool to  allow the  money  necessary for  a return  on                                                               
investment,  adding  that  it  was a  voluntary  program  and  an                                                               
opportunity for  business owners.   He declared that  the program                                                               
would keep  money in the  community and  would add many  jobs for                                                               
qualified workers.   He reiterated  his support for  the proposed                                                               
bill.                                                                                                                           
                                                                                                                                
11:50:46 AM                                                                                                                   
                                                                                                                                
KATHIE  WASSERMAN, Executive  Director, Alaska  Municipal League,                                                               
declared  that the  Alaska Municipal  League (AML)  had supported                                                               
previous iterations of  the proposed bill, and  she expressed her                                                               
surprise that the proposed bill had  not been passed sooner.  She                                                               
stated that  it was not  a mandate,  as the commercial  owner and                                                               
the municipalities could  opt in if they so choose.   It provided                                                               
protections for  the public as  the municipality was  required to                                                               
have a resolution of intent,  with boundaries identified, and the                                                               
public  would  be  aware  of   the  program.    She  opined  that                                                               
municipalities would get support from  its residents.  She stated                                                               
that, as  energy issues were some  of the most difficult  for the                                                               
state,  the  proposed  bill  was  a tool  to  help  overcome  the                                                               
deficit.   She declared that the  members of AML were  in support                                                               
of HB 80.                                                                                                                       
                                                                                                                                
11:52:55 AM                                                                                                                   
                                                                                                                                
JIM   DODSON,    President,   Fairbanks    Economic   Development                                                               
Corporation  (FEDC),  stated that  this  was  the right  type  of                                                               
legislation for the  new economic era in Alaska.   He pointed out                                                               
that it  was voluntary  for the  municipality, the  borrower, and                                                               
the lender, and that it gave  the community a tool to effectively                                                               
contribute to  lowering the cost  of energy.  He  reiterated that                                                               
the cost  of energy  was a  barrier to growth  of the  economy in                                                               
Alaska.  He encouraged support for the proposed bill.                                                                           
                                                                                                                                
11:54:21 AM                                                                                                                   
                                                                                                                                
BRITTANY  SMART, Spokesperson,  Office  of  the Mayor,  Fairbanks                                                               
North  Star  Borough  (FNSB),  declared  that  this  was  a  very                                                               
important  piece of  legislation, especially  with regard  to its                                                               
air quality issues.                                                                                                             
                                                                                                                                
CHAIR  WOOL asked  if there  was concern  for any  administrative                                                               
burden or costs.                                                                                                                
                                                                                                                                
MS. SMART  acknowledged that  there were  questions for  the best                                                               
path  to implementation  of the  program,  although the  proposed                                                               
bill did offer risk protections.                                                                                                
                                                                                                                                
11:55:45 AM                                                                                                                   
                                                                                                                                
JACK  WILBUR,  Vice-Chair,  Board   of  Directors,  Interior  Gas                                                               
Utility  (IGU),  stated  support  of   the  proposed  bill.    He                                                               
explained  that the  Interior  Gas Utility  had  been created  to                                                               
bring low cost energy in the  form of liquefied natural gas (LNG)                                                               
to  the Fairbanks  North Star  Borough,  as it  was important  to                                                               
reduce  the  current air  pollution  issues.   He  reported  that                                                               
Alaska Industrial  Development and  Export Authority  (AIDEA) had                                                               
purchased Pentax  Assets, which included a  liquefaction facility                                                               
in  Southcentral  Alaska,  as  well  as a  fleet  of  trucks  and                                                               
trailers to bring  the LNG to Fairbanks.  He  shared that funding                                                               
appropriated  through the  Alaska State  Legislature had  allowed                                                               
IGU  to  install  a  distribution   system  in  North  Pole  with                                                               
subsequent distribution  in the City  of Fairbanks.   He declared                                                               
that  IGU was  ready  to continue  with additional  improvements,                                                               
including  storage  facilities  and   further  expansion  of  the                                                               
distribution  system.    He  shared  that  a  key  to  additional                                                               
expansion was for  customers to be connected  to the distribution                                                               
system and to  generate revenue to pay off the  loans and finance                                                               
further expansion.   He  acknowledged that  it was  difficult for                                                               
businesses to  come up  with the  capital for  these conversions.                                                               
He pointed  out that  the PACE legislation  allowed for  low cost                                                               
financing for  energy cost saving measures  and would incentivize                                                               
commercial conversions to LNG.                                                                                                  
                                                                                                                                
11:58:41 AM                                                                                                                   
                                                                                                                                
CHAIR WOOL closed  public testimony on HB 80.   He announced that                                                               
HB 80 would be held over.