Legislature(2017 - 2018)CAPITOL 17
02/02/2017 11:00 AM House ENERGY
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB80 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 80 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 80-MUNI ENERGY IMPROVEMNT:ASSESSMNTS/BONDS
11:10:56 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."
CHAIR WOOL clarified that the proposed bill would allow
municipalities and boroughs to pay for the program using the
existing property tax system to incentivize energy efficiency
improvements to commercial buildings.
11:11:19 AM
REPRESENTATIVE JOHNSTON asked if the proposed bill allowed for
any power generation, and, if so, were there any caveats to the
size of power generation.
11:11:50 AM
SEAN SKALING, Assistant Executive Director, Energy Policy
Director, Alaska Energy Authority, in response, explained that
the proposed bill did allow for alternative energy being added
to a building, as long as it was a permanent fixture. He
offered an example of heat pumps and solar.
REPRESENTATIVE JOHNSTON expressed her concern for the addition
of a gas generator.
MR. SKALING offered his belief that the language would be
specific to the municipality which adopted this in the
community. He pointed out that the proposed legislation allowed
for alternative energy to happen, whereas sideboards could be
added at the municipal level.
REPRESENTATIVE JOHNSTON stated that, as the program was already
in place, public buildings could have their own gas turbines.
MR. SKALING replied, yes.
11:13:50 AM
CHAIR WOOL opened public testimony.
11:14:19 AM
REPRESENTATIVE SPOHNHOLZ moved to adopt Amendment J.1, labeled
30-LS0337\J.1, Shutts, 2/1/17, which read:
Page 7, lines 25 - 30:
Delete all material and insert:
"Sec. 29.55.120. Review required. The record
owner of eligible property shall obtain from an
independent third party the following:
(1) for each proposed qualified project,
(A) a review of the energy or emissions
baseline conditions, as appropriate; and
(B) the projected reduction in energy
costs, energy consumption or demand, or emissions
affecting local air quality, as appropriate; and
(2) for each completed qualified project,
verification that the qualified project was properly
completed and is operating as intended."
Page 9, following line 22:
Insert a new paragraph to read:
"(4) reduction of emissions affecting local
air quality;"
Renumber the following paragraphs accordingly.
Page 10, line 16:
Delete "decrease energy consumption or demand,
including"
Insert "reduce energy consumption or demand,
energy costs, or emissions affecting local air
quality, and includes"
CHAIR WOOL objected for the purpose of discussion.
11:14:46 AM
ROB EARL, Staff, Representative Adam Wool, Alaska State
Legislature, explained that the proposed amendment addressed the
concerns that a property owner could not retrofit to a cleaner,
though not cheaper, energy source and utilize the program, and
would now allow a municipality or borough to use the PACE
(Property Assessed Clean Energy) program to finance projects to
improve air quality, even if the project did not decrease energy
costs. He directed attention to the Explanation of Amendment
[Included in members' packets] and referred to page 7, lines 25
- 31 of the proposed bill. The proposed amendment clarified
that the commercial property owner was responsible for hiring
the pre and post PACE project reviews, and it added that the
criteria for the initial assessment could include a projected
reduction in emissions. He moved on to page 9, line 22, of the
proposed bill, and noted that the proposed amendment added a
criteria for meeting the public purpose for the issue of bonds
and notes that it can include a reduction of emissions affecting
local air quality. He referenced page 10, line 16, of the
proposed bill, and stated that the proposed amendment added to
the definition of "qualified improvement" as an improvement
intended to reduce emissions affecting local air quality.
CHAIR WOOL clarified that this amendment allowed that
application for a PACE loan could include an improvement to a
structure for either efficiency or improvement to the quality of
the exhaust.
11:17:17 AM
CHAIR WOOL removed his objection. There being no further
objection to the proposed Amendment J.1, it was so ordered.
REPRESENTATIVE JOHNSTON opined that the amendment seemed to take
away from the argument that the loan was being paid for by
savings from energy efficiency.
11:17:47 AM
GENE THERRIAULT, Energy Policy Assistant, Alaska Energy
Authority, said that the remainder of the bill still sought
enough energy savings to cover the costs of the improvement and
that the addition of the amendment did not short circuit this.
He directed attention to a graph from the House Special
Committee on Energy meeting on January 26, 2017, which showed
that the improvements offered enough savings for the amortized
payment, and was either cash positive or cash neutral. The
amendment acknowledged that the achievement for a reduction of
emissions was also a desirable goal of the enterprise. He
offered an example of multiple projects to save money, stating
that there was not encouragement for anything that "ultimately
drives their cost up."
11:19:26 AM
CHAIR WOOL stated that an auditor could be hired for a study to
ensure that costs would not increase.
MR. THERRIAULT expressed his agreement, and reported that part
of the required review was for a recommendation on "the sensible
things to do" with an estimation for whether it was the
economically smart thing to do, and a follow-up to ensure the
application was done correctly.
11:20:07 AM
REPRESENTATIVE SPOHNHOLZ asked to clarify that this gave
potential borrowers the opportunity to make the improvements,
but it did not require anyone to do anything that was not cost
neutral.
MR. THERRIAULT offered his agreement, and stated that the
proposed legislation offered a mechanism which allowed for a
local government to voluntarily decide whether it made sense
within its jurisdiction, and then, it was up to the individual
property owner.
REPRESENTATIVE SPOHNHOLZ asked if there were any federal tax
savings which a business could realize by making this decision
to reduce emissions.
MR. THERRIAULT replied that although there could be, he was not
aware if there were still any incentives. He allowed that any
incentives could be taken into consideration for savings.
11:21:53 AM
REPRESENTATIVE JOHNSON asked how this program would work in an
unorganized area or borough.
MR. THERRIAULT explained that the mechanism gave permission to a
local government which exercised its property tax authority.
Therefore, this could be used as a collection tool for any
obligations.
REPRESENTATIVE JOHNSON asked how much area of the state was
covered.
MR. THERRIAULT replied that, although he did not know the
acreage, the majority of the state population lived in areas
where property taxes were levied.
[indisc]
REPRESENTATIVE RAUSCHER asked for clarification that people in
unorganized areas of the state would not be able to take
advantage of this program.
MR. THERRIAULT expressed his agreement, as the program was only
available in areas with a local government which issued property
tax.
REPRESENTATIVE RAUSCHER asked whether property owners were the
only ones making payments.
MR. THERRIAULT explained that, unlike water and sewer
assessments that applied to an entire geographic area, this
mechanism only applied to individual property, so the individual
property owner decided for his property only.
11:24:38 AM
REPRESENTATIVE WESTLAKE asked for clarification that [in]
organized boroughs, rather than paying a borough tax,
improvements could be made for efficiencies or air quality and
payments were made for these improvements.
MR. THERRIAULT reiterated that the proposed legislation only
applied to commercial properties, or multi-unit residential
properties of four or more. The property owner decided whether
the improvements would make sense and save enough, and this loan
would be re-paid through an assessment which was included on the
property tax bill. He explained that this was not part of the
property tax, but was a flat amount per year for a stated number
of years that was contractually agreed upon between the property
owner and the local government.
CHAIR WOOL stated that the billing mechanism was a line item on
the property tax, in addition to the property tax, and if either
item was not paid, this would be a default of the property tax.
MR. THERRIAULT expressed his agreement, and said that the local
government had the ability to collect the obligation along with
the property tax and any other assessment. As the local
government collected this, the PACE obligation default rate was
less than 1 percent.
11:27:48 AM
BRITTANY SMART testified in support of the amendment and stated
that it was an energy saving [indisc].
[Public testimony was closed]
11:28:35 AM
REPRESENTATIVE SPOHNHOLZ moved to report HB 80, Version 30-
LS0337\J, as amended, out of committee with individual
recommendations and the accompanying zero fiscal note. There
being no objection, CSHB 80(ENE) was moved from the House
Special Committee on Energy.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 80 - Amendment J.1.pdf |
HENE 2/2/2017 11:00:00 AM |
HB 80 |