Legislature(2023 - 2024)BARNES 124
04/13/2023 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| HB154 | |
| Presentation: Railbelt Energy Security- Wind Power Projects in Active Development | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 154 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 154-AK HOUSING FINANCE CORP: SUSTAIN ENERGY
10:17:44 AM
CHAIR RAUSCHER announced that the first order of business would
be HB 154, "An Act relating to subsidiary corporations of the
Alaska Housing Finance Corporation; and establishing the Alaska
energy independence fund."
10:19:00 AM
BRYAN BUTCHER, Chief Executive Officer and Executive Director,
Alaska Housing Finance Corporation, Department of Revenue, on
behalf of the prime sponsor, House Rules by request of the
governor, co-presented a PowerPoint presentation, titled "House
Bill 154: Alaska's Energy Independence Fund" [hard copy included
in the committee packet]. Moving from slide 2 to slide 4, he
gave a brief overview of the presentation and the presenters.
He said that the presenters would discuss the role and policy
objectives of the Alaska Housing Finance Corporation (AHFC) and
the Alaska Energy Authority (AEA). He stated that both
organizations seek to establish the Alaska Energy Independence
Fund (AEIF) to help Alaskans become more energy resilient.
10:21:35 AM
MR. BUTCHER continued to slide 5 and slide 6, stating that the
AEIF would spur energy innovation and be consistent with the
governor's energy objectives put forth when he created the
Office of Energy Innovation and the Alaska Energy Security Task
Force. He stated that AEIF would draw federal and private
capital to invest in energy independence for Alaskan homes and
businesses. Creating the AEIF would give Alaska an opportunity
to apply for a grant with the U.S. Environmental Protection
Agency's Greenhouse Gas Reduction Fund, which has a pool of $27
billion. This opportunity stacks with limited time energy tax
credits.
10:25:22 AM
MR. BUTCHER continued to slide 7 and slide 8, stating that the
main policy objective of AEIF is to increase Alaskan energy
independence and reduce energy costs for Alaskans. He advised
that the creation of the fund would make Alaska competitive for
a once in a generation opportunity for this federal funding. He
stated that AHFC has a long history of managing programs,
focusing on energy challenges facing homeowners and communities.
10:28:57 AM
MR. BUTCHER moved from slide 9 to slide 12, stating that AHFC
offers interest rate reductions when financing new or existing
energy efficient homes, or when borrowers make energy
improvements to an existing home. He advised that it offers
loans which will improve the value of a home. He offered that
AHFC has financed 338 renovation loans for just under $100
million since fiscal year 2020. He said that AHFC manages the
federal and state weatherization programs in Alaska, which are
meant to provide upgrades for homes to be more energy efficient
by protecting them from certain weather conditions. It also
manages the statistical database for energy audits. He
reiterated that AHFC has a history of working with Alaskans to
meet their energy needs, and it works with other agencies and
organizations.
10:34:39 AM
CURTIS THAYER, Executive Director, Alaska Energy Authority,
Department of Commerce, Community, and Economic Development, on
behalf of the prime sponsor, House Rules by request of the
governor, co-presented a PowerPoint presentation titled "House
Bill 154: Alaska's Energy Independence Fund." He began on slide
13 and slide 14, giving a brief overview of AEA's work in the
state. He pointed out that AEA works to reduce the cost of
energy in the state by addressing the resiliency, reliability,
and redundancy of Alaska's energy portfolio. He stated that AEA
owns different sources of energy around the state, using both
renewable energy and fossil fuels. He stated that AEA manages
the Power Cost Equalization fund. This fund subsidizes and
reduces energy costs for rural Alaskans. He added that AEA
provides loans and grants to local utilities, governments, and
independent power producers (IPPs) to construct and upgrade
energy and power generation facilities. He said that AEA
continues to work with local and regional partners to develop
and plan for cost effective energy infrastructure. He displayed
a map showing the different projects and services managed by
AEA.
10:39:06 AM
AKIS GIALOPSOS, Deputy Executive Director, Alaska Housing
Finance Corporation, Department of Revenue, on behalf of the
prime sponsor, House Rules by request of the governor, concluded
the PowerPoint presentation titled "House Bill 154: Alaska's
Energy Independence Fund." He began on slide 15 and slide 16,
stating that HB 154 would empower AHFC and AEA to work together
on developing sustainable energy development tools. This would
include the establishment of nonprofit subsidiary corporations
and AEIF, which would be managed by AHFC's nonprofit subsidiary
corporation. The fund would gain capital through the general
fund and federal receipt authority. He displayed a list of the
steps to be followed, if HB 154 were passed.
10:45:12 AM
MR. BUTCHER, in response to a question from Representative
Schrage, stated that AEIF would have its own board.
10:46:09 AM
MR. GIALOPSOS commented that the proposed committee substitute
would not make substantial changes and would conform the
proposed legislation to the legislative drafting manual. He
presented the sectional analysis of the proposed committee
substitute (CS) for HB 154 [copy included in the committee
packet], which read as follows [original punctuation provided]:
Section 1: Adds a new subsection (AS 18.56.010(h))
acknowledging the public benefit of a subsidiary
corporation in Alaska Housing Finance Corporation
(AHFC) to assist in financing sustainable energy
development.
Section 2: Amends existing AHFC statutes (AS
18.56.086(a)) to authorize creation of a subsidiary
corporation for the purpose of sustainable energy
development.
Section 3: Amends AHFC's statutes (AS 18.56.090(e))
to, in cooperation with the Alaska Energy Authority,
create or work with public, quasi-public or nonprofit
organizations that provide financial assistance for
sustainable energy projects.
10:49:19 AM
Section 4: Adds a new section to AHFC's statutes (AS
18.56.870) establishing the Alaska Energy Independence
Fund (the Fund) and its operations.
(a) Creates the Fund within AHFC and describes
what moneys and assets would go into the Fund.
(b) Outlines how the money within the Fund can be
used, including for issuing loans and financing
sustainable energy development projects, and for
paying the costs of administering the Fund and
enforcing the terms of its loans
(c) Names AHFC as the fiduciary of the Fund, and
allows deviation from the prudent investor rule
to promote sustainable energy development in the
state. Allows AHFC to disburse money from the
Fund according to established laws governing the
procedure. Requires AHFC to adhere to annual
reporting according to Generally Accepted
Accounting Principles (GAAP) (d) Requires AHFC to
establish the financial terms of loans made from
the Fund, and requires consideration of costs to
the Fund and AHFC in the process.
10:54:43 AM
REPRESENTATIVE PRAX asked how the public purpose was determined.
MR. GIALOPSOS answered that creating a subsidiary corporation
would give AHFC the ability to determine which energy projects
would serve the public purpose.
MR. BUTCHER added AHFC would give an annual report to the
legislature.
REPRESENTATIVE PRAX asked how one project would be compared to
another.
MR. BUTCHER answered that certain funding would be awarded for
specific purposes by the federal government.
10:58:27 AM
REPRESENTATIVE SCHRAGE asked why the prudent investor rule
should be removed.
MR. BUTCHER answered that it would provide flexibility to pursue
certain projects that may not always be considered prudent, even
if there was a federal incentive attached.
11:00:48 AM
MR. GIALOPSOS continued with the sectional analysis of the
proposed CS for HB 154, which read as follows [original
punctuation provided]:
(e) Allows AHFC to require deeds of trust on
buildings subject to loans from the Fund as well
as its real estate.
(f) Allows AHFC to contract with the Alaska
Energy Authority for technical expertise when
evaluating sustainable energy development loans.
(g) Restricts AHFC to loan guarantees without
legislative approval to an amount less than $20
million.
(h) Requires AHFC to consider the State of Alaska
energy policy when managing the Fund, and
prioritizing sustainable energy development on
energy efficiency and renewable energy for
residential, commercial, and community buildings.
(i) Requires AHFC to administer the Fund
according to regulations adopted for the Fund's
management.
(j) Explicitly states nothing in Section 4
creates a dedicated fund.
Section 5: Amends the general provisions' portion of
AHFC's statutes (AS 18.56.900) by adding a definition
of sustainable energy development.
Section 6: Provides an immediate effective date.
11:06:22 AM
REPRESENTATIVE CARRICK asked if the federal funding for these
types of projects can be expected in the long term.
MR. BUTCHER answered that establishing a green bank would open
the door to private sector investment. In response to a follow-
up question, he said that just under half of the states in the
U.S. have some type of green bank, most of which started with
public dollars.
11:09:33 AM
REPRESENTATIVE PRAX asked whether the subsidiary corporations
are expected to continue after the end of federal funding.
MR. BUTCHER answered that it would be determined by necessity.
11:11:20 AM
REPRESENTATIVE SCHRAGE asked what type of projects would be
considered by the fund.
MR. BUTCHER answered that one example is the building of energy
efficient housing units.
MR. THAYER added that the size of projects would be limited by
megawatts (MWs), but the fund would increase opportunities for
renewable energy projects. He added that there have been no
defaults on loans given to renewable energy projects.
11:15:12 AM
REPRESENTATIVE SCHRAGE questioned whether the projects which
could use the fund are ordered or on a general list.
MR. GIALOPSOS answered that it is a general list.
11:18:42 AM
REPRESENTATIVE CARRICK asked what types of entities the fund
would work with.
MR. BUTCHER answered that it depends on the size of the
projects. Nonprofit organizations and homeowners would both be
part of the equation.
11:21:55 AM
REPRESENTATIVE MCKAY moved to adopt the proposed CS for HB 154,
labeled, 33-GH1074\B, Dunmire, 4/11/23, ("Version B") as a
working document. There being no objection, Version B was
before the committee.
[HB 154 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB154 AHFC-AEA Presentation to H.ENE 04.13.23.pdf |
HENE 4/13/2023 10:15:00 AM |
HB 154 |
| AlaskaRenewables-House Energy Committee.pdf |
HENE 4/13/2023 10:15:00 AM |
Alaska Renewables |
| HB0154B.pdf |
HENE 4/13/2023 10:15:00 AM |
HB 154 |