Legislature(2007 - 2008)SENATE FINANCE 532
03/27/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB152 | |
| HB13 | |
| HB315 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 13 | TELECONFERENCED | |
| + | HB 315 | TELECONFERENCED | |
| + | HB 233 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 152 | ||
CS FOR HOUSE BILL NO. 152(FIN)
"An Act establishing a renewable energy project account
and a renewable energy fund and describing their uses
and purposes."
SARAH FISHER-GOAD, DEPUTY DIRECTOR, OPERATIONS, ALASKA
INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY (AIDEA) AND
ALASKA ENERGY AUTHORITY (AEA), DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, reported that the
Administration does support the establishment of the fund;
Governor Palin stated support for a $250 million
appropriation. Ms. Fisher-Goad said that Steve Haagenson,
Executive Director of the Alaska Energy Authority, is in the
process of working on developing the state energy plan,
which would emphasize regional planning for rural areas.
Ms. Fisher-Goad noted that several recommendations for
changes from the Senate Resources Committee's version of the
bill have been submitted. She reported some concern
regarding the appropriation process as the projects move
forward.
She referred to a handout in the members' packets entitled
"Alternative Energy RFP - Eligible and Complete Applications
Preconstruction." She reported that AEA, with the Denali
Commission, solicited alternative energy projects. The list
of the projects is unranked. There was $4 million from the
Denali Commission and $1 million in state funds for this
RFP. There are more projects than funding available at this
time.
9:17:37 AM
PETER CRIMP, PROGRAM MANAGER, ALASKA INDUSTRIAL DEVELOPMENT
AND EXPORT AUTHORITY AND ALASKA ENERGY AUTHORITY, DEPARTMENT
OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, observed
that there is a lot of demand for alternative energy
projects.
Senator Huggins thought it was important for the state to
have goals regarding alternative energy. Ms. Fisher-Goad
commented on projects that address the goals of the state
energy plan.
Senator Thomas suggested that there were already a number of
projects in place in the state, and he thought there should
be coordination between existing and new projects.
Ms. Fisher-Goad thought it was an excellent point. AEA
provides consultation and technical assistance regarding
effective projects.
9:22:18 AM
Senator Elton referred to Section 2, the responsibilities of
the authority. He concluded that the only involvement the
legislature has, according to Section 2, is to set up the
account. He opined that the legislature cedes authority to
make a loan or grant. Ms. Fisher-Goad reported that Section
2 was an amendment to the AEA Existing Power Project Fund.
It emphasizes the grant portion of the program. The section
that deals with the legislature's role is on page 4,
paragraph (i). She pointed out that it where it says
"fiscal year may be used for grants" should say "fiscal year
may be appropriated for grants."
Co-Chair Stedman asked why the projects are not ranked and
do not use annual appropriations. Ms. Fisher-Goad thought
it was a timing issue. It depends on how the legislature
wants the structure.
9:26:57 AM
Co-Chair Hoffman reported that fuel costs are adjusted after
the barge gets to Bethel and will soon be $7 per gallon. He
thought the passage of this bill assumes that it addresses
the high cost of energy. He thought the state should be
looking at viable, renewable projects that provide immediate
effects. He referred to the list of $1.2 billion potential
projects. He thought there was a need for a more aggressive
approach in order to bring rural costs down. He requested a
plan from ASA to address that issue.
Ms. Fisher-Goad related the number one concern, the cost of
energy in rural communities. She reported that Mr.
Haagenson was in Bethel to meet about with a housing group
in order to find rural solutions to energy issues. Co-Chair
Hoffman asked when a concrete plan might be in place. Ms.
Fisher-Goad thought by December 2008. She termed it a very
aggressive approach.
9:31:45 AM
Senator Dyson identified with Co-Chair Hoffman's comments.
He thought that on page 2, line 20, coal should be added
along with natural gas. He noted that on page 3, line 27,
the list should also include clean coal.
Ms. Fisher-Goad responded that it is a matter of renewal
energy vs. alternative energy development and what the fund
should be used for. The focus of the fund is on renewable
energy. Senator Dyson maintained that if natural gas is
considered, only after the renewables are considered, coal
should likewise be considered. Ms. Fisher-Goad reiterated
that the fund is for renewable sources. She questioned if
natural gas should be in the bill. She said AEA is not
taking a position on that.
9:35:42 AM
Senator Dyson referred to page 2. He repeated his argument
that if clean coal is available, it should be included. Ms.
Fisher-Goad thought the policymakers should look at that
issue. The bill emphasizes a clean fuel, a renewable
resource.
Senator Dyson asked about page 4, line 15. He questioned
why a community the size of Juneau could not be included.
He wondered if the Administration is in favor of the 10,000
population cut off. Ms. Fisher-Goad said Juneau has
renewable resources. Senator Dyson wondered if any larger
communities should be included.
Mr. Crimp addressed the coal vs. renewable resources
question. He related that there are many ways, in addition
to renewable energy, to get to the goal of displacing the
use of diesel fuel. He listed several methods of energy
conservation. The emphasis of the bill is renewable energy.
Senator Dyson inferred that the fund could not be used to
develop a non-renewable energy like fish waste or logging
slashings.
9:40:57 AM
Co-Chair Stedman related that on the list of submitted
projects there is only one geothermal project. He wondered
why there seems to be a lack of interest in this area. He
also thought communities that could not get natural gas
should be given priority. Mr. Crimp replied that AEA is
reacting to the proposals that have been submitted. He said
there is another group that looks at helping communities
develop projects and there should be more in the future.
Co-Chair Hoffman reported that Naknek Cooperative has been
trying to drill for a geothermal source. He said that AEA
has not been supportive of this endeavor because of a fear
that no thermal energies would be found. He argued that the
attempt should be made. He questioned AEA's decision. Mr.
Crimp replied that AEA has not responded to any funding
request from Naknek. Co-Chair Hoffman argued that the
process needs to go forward and should be supported by AEA.
9:46:03 AM
Senator Elton summarized that any waste from a resource that
is managed on a sustained yield basis would be eligible for
this loan fund. Mr. Crimp said that interpretation is
correct. He listed the energy sources that the bill would
address such as logging slash, sawmill waste, paper from
municipal waste, and other biomass resources. Senator Elton
added fish oil to the list.
MIKE NOTAR, IBEW LOCAL 1547, JUNEAU, spoke in support of HB
152 because it helps to address lower energy costs by
utilizing renewable energy sources and provides
opportunities for training and work opportunities for
Alaskan electrical workers.
9:48:57 AM
MEERA KOHLER, PRESIDENT, CEO, ALASKA VILLAGE ELECTRIC
COOPERATIVE, testified in support of HB 152. She discussed
pioneer wind projects and the difference they are making in
rural Alaska. She explained the potential for wind energy
in rural Alaska and the need for additional funds.
Co-Chair Hoffman said it seems as though, with the continued
escalation in fuel costs, there needs to be a more active
role in trying to address energy problems. The wind
projects are a significant advancement in reducing
dependence on fossil fuels, especially in rural areas. He
wondered how much the wind projects cost. Ms. Kohler said
about $3 million. The $20 million could be used to leverage
other federal dollars. She explained that there is a
practical limit to how many wind turbans can be constructed
each year. She campaigned for a reliable funding program.
Co-Chair Hoffman said that the solution will have to be
stretched out for many years at $20 million funding. He
maintained that more effort and funding must be provided now
in order to solve high energy costs problems. He thought
AEA and the Administration should take the lead.
JOHN BITNEY, STAFF, REPRESENTATIVE JOHN HARRIS, pointed out
that there could be some modifications to the bill that
would address some of the questions posed today, such as
clarifying that the funds are subject to appropriation. He
addressed Senator Dyson's concerns about the exclusion of
coal. He said he would check into expanding the options to
include coal. The intent of the bill is not to try to limit
access to energy, but to try to expand it.
9:56:16 AM
Senator Dyson suggested other types of fuel that should not
be excluded: logging slashing, fish oil, fish waste, and
farm waste.
Senator Thomas asked if the sponsor would be moving forward
quickly on this legislation. Mr. Bitney commented that the
bill should be viewed as long term. He spoke positively
about trying to address energy cost needs in a timely
manner.
Senator Elton voiced concern about the Administration's
reimbursable services agreement for funding of AEA's
executive director's salary, since the Governor appoints
every member of the authority. He worried that it would
become a political actor's fund. Mr. Bitney said the
sponsor was trying to identify a process of getting
previously evaluated projects to the legislature. He
assured that the legislature would be included in the
appropriation process.
Senator Huggins noted that the Railbelt Energy Fund is a
political animal. He wanted assurance that this bill would
not become the same. Mr. Bitney thought there were several
ways to address energy needs in Alaska. He pointed out that
this bill deals with smaller renewable energy projects,
unlike the Railbelt Fund, which is at a larger, more
expensive level.
Senator Huggins compared this fund to the Railbelt Energy
Fund and the potential for abuse. He wished to see a
viable, functional, long-term, time-tested approach that
will not fall victim to "how we see the Railbelt Energy
Fund".
10:03:36 AM
Senator Olson asked Ms. Kohler about the expense of energy
in rural Alaska and how to facilitate the cooperation
between the renewable energy fund, AEA, and power producers.
Ms. Kohler responded that that could be achieved through
this legislation with the impartial advisory board
mechanism. She thought that was the difference between the
Railbelt Energy Fund and this fund. Senator Olson commented
on the frustrations in Naknek possibly being alleviated by
such a process.
AT-EASE: 10:05:56 AM
RECONVENED: 10:12:29 AM
HB 152 was heard and HELD in Committee for further
consideration.
AT-EASE: 10:13:24 AM
RECONVENE: 10:13:54 AM
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