03/31/2016 03:30 PM Senate SPECIAL CMTE ON ENERGY

           HB 143-AIDEA BONDS, LOANS, FUND; AEA LOAN                                                                        
                                                                                                                                
3:38:18 PM                                                                                                                    
CO-CHAIR  MICCICHE announced  the  consideration of  HB 143,  the                                                               
companion  bill to  SB  193. He  specified  that [CSHB  143(FIN),                                                               
version: 29-LS0599\S] was before the committee.                                                                                 
                                                                                                                                
REPRESENTATIVE  CATHY MUNOZ,  Alaska  State Legislature,  Juneau,                                                               
Alaska,  explained that  the bill  would allow  Alaska Industrial                                                               
Development  and Export  Authority (AIDEA)  to consider  conduit-                                                               
financing  of up  to $120  million, and  conduit-bonding for  the                                                               
Sweetheart Lake Hydroelectric Project (SLHP).                                                                                   
                                                                                                                                
REPRESENTATIVE MUNOZ detailed SLHP as follows:                                                                                  
                                                                                                                                
   · 43 miles south of Juneau.                                                                                                  
   · Ties into the Snettisham powerline and brings power to                                                                     
     Juneau.                                                                                                                    
   · Increases Juneau's power capacity by 20 percent.                                                                           
   · 60 percent of SLHP's power would go to the Kensington Mine.                                                                
   · SLHP would allow the Kensington Mine to displace between                                                                   
     7,000 to 9,000 gallons of diesel fuel per day.                                                                             
   · SLHP would power the Juneau District Heating Project                                                                       
     (JDHP).                                                                                                                    
                                                                                                                                
She noted  that SLHP was in  its final stages of  permitting. She                                                               
specified  that  permits  from   the  Federal  Energy  Regulatory                                                               
Commission  (FERC),   US  Army   Corps  of  Engineers,   and  the                                                               
Environmental Impact  Statement (EIS) were  due in the  summer of                                                               
2016.                                                                                                                           
                                                                                                                                
3:40:04 PM                                                                                                                    
TERRY   HARVEY,  Staff,   Representative   Munoz,  Alaska   State                                                               
Legislature, Juneau,  Alaska, stated  that he  would go  over the                                                               
changes  made  in  House  Finance   to  HB  143  and  detail  the                                                               
differences with its companion bill, SB 193.                                                                                    
                                                                                                                                
MR.  HARVEY  explained that  Section  1  was amended  to  specify                                                               
exactly  the type  of bonding  that would  be used  by AIDEA.  He                                                               
specified that  conduit-issuance bonds would be  used, also known                                                               
as pass-through  or standalone bonds.  He pointed out  that AIDEA                                                               
and  the State  of Alaska  would not  be exposed  to any  further                                                               
debt.  He added  that  conduit-issuance bonding  would not  count                                                               
against Alaska's annual bonding cap of $400 million.                                                                            
                                                                                                                                
He said Section 2 addressed  the Lynn Canal transmission line, an                                                               
important component  to the project.  He disclosed that  the bill                                                               
originally  proposed bonding  for the  transmission line  through                                                               
the Power  Project Loan Fund  (PPF) that was administered  by the                                                               
[Alaska Energy  Authority (AEA).] He  explained that the  PPF was                                                               
determined to  not be appropriately  capitalized for  the project                                                               
and other  means of  financing would be  used. He  specified that                                                               
accessing the PPF was removed from the bill.                                                                                    
                                                                                                                                
He explained that  a third change was made where  the repeal date                                                               
was extended from June 30, 2019 to June 30, 2020.                                                                               
                                                                                                                                
3:44:07 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
3:44:14 PM                                                                                                                    
CO-CHAIR  MICCICHE  called  the   committee  back  to  order.  He                                                               
announced that public testimony was open.                                                                                       
                                                                                                                                
KEITH  COMSTOCK,  CEO  and President,  Juneau  Hydropower,  Inc.,                                                               
Juneau,  Alaska,  stated that  HB  143  was important  to  Juneau                                                               
Hydropower. He  detailed that Juneau  Hydropower started  SLHP in                                                               
2009, most of  the environmental aspects had  been addressed, and                                                               
the hope was for the project's  construction to start in 2016. He                                                               
conceded that  further due  diligence would  be required  and the                                                               
bill was for the possibility of funding, not a commitment.                                                                      
                                                                                                                                
CO-CHAIR MICCICHE  closed public testimony. He  announced that HB
 would be held in committee.                                                                                                 
                                                                                                                                
3:46:08 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
3:48:38 PM                                                                                                                    
CO-CHAIR  MICCICHE  called  the   committee  back  to  order.  He                                                               
announced that  the committee meeting  was the second  hearing on                                                               
HB 143  and the changes to  the bill were minimal.  He summarized                                                               
that  Section 1  was  amended  to specify  the  type of  bonding,                                                               
Section  2  eliminated the  Lynn  Canal  project, and  Section  3                                                               
extended the [repeal] date by one year.                                                                                         
                                                                                                                                
CO-CHAIR  BISHOP moved  to report  CSHB  143(FIN), [version:  29-                                                               
LS0599\S],  from committee  with  individual recommendations  and                                                               
attached zero-fiscal note from DCCED.                                                                                           
                                                                                                                                
CO-CHAIR  MICCICHE  announced  that seeing  no  objections,  CSHB
(FIN) passed from committee.