Legislature(2001 - 2002)
04/26/2001 08:43 PM House FIN
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* first hearing in first committee of referral
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HOUSE BILL NO. 175
An Act making an appropriation to the Alaska Industrial
Development and Export Authority for power projects;
and providing for an effective date.
HOUSE BILL NO. 238
An Act relating to the power transmission intertie fund
of the Alaska Energy Authority.
Members were provided with a proposed committee substitute,
work draft for HB 175 22-LS0705\T, Cramer 4/26/01.
Members were provided with proposed committee substitute for
HB 238, work draft 22-LS0868\F, 4/26/01 (copy on file).
MIKE TIBBLES, STAFF, REPRESENTATIVE WILLIAMS provided
information on HB 175 and HB 238. He noted that there were
previous discussions regarding where the funding source,
payment mechanism and repayment.
Vice-Chair Bunde MOVED to ADOPT proposed committee
substitute, work draft for HB 175, 22-LS0705\T, Cramer
4/26/01. There being NO OBJECTION, it was so ordered.
Mr. Tibbles explained that the proposed committee substitute
splits into two separate appropriations the amount that
would be a grant and the amount that would be a zero
interest loan. House Bill 238 creates a new fund. The
appropriation in HB 175, section 1 would be appropriated
into the new fund created in HB 238. The problem with the
previous version was that state of Alaska law required that
loans from the Alaska Industrial Development and Export
Authority (AIDEA) Revolving Loan Fund be repaid back into
the fund. Money would be appropriated to the new Power
Transmission Intertie Loan Fund and then be loaned on a zero
interest basis. The repayments would be made to the Railbelt
Energy Fund. Section 2 of HB 238 sets up the requirements
for the loan program. Subsection (e) states that the
authority shall deposit repayments of loans to the Railbelt
Energy Fund.
Representative John Davies questioned why the Railbelt
Energy Fund would be appropriate. Co-Chair Mulder explained
that when the natural gas pipeline is developed and there is
gas power there would be a need for an intertie throughout
South Central Alaska. The purpose is to assure that there
are enough funds in the Railbelt Energy Fund to intertie the
entire Railbelt.
Mr. Tibbles referred to page 2, line 14 of HB 175. He
explained that the appropriation of $2.5 million dollars to
the Matanuska Electric Association, which is contained as a
loan in section 1, should be included as a grant in section
2.
Representative Harris MOVED to ADOPT Amendment 1: change "a
no interest loan" on line 14, page 2 to "grant" and move
lines 14 - 18 into section 2. He explained that it is a
railbelt energy project and would qualify as a grant.
Representative John Davies pointed out that the funding
source is the Constitutional Budget Reserve.
Mr. Tibbles explained that the project is consistent with
the other grant projects.
Representative Croft thought that it would make more sense
to leave the project in section 1.
Representative Lancaster explained that funds were requested
from the Railbelt Energy Fund. The decision was made to take
the funds from the Constitutional Budget Reserve and put
into the Railbelt Energy Fund. Projects related to the
Railbelt would be grants; others would be made as zero
interest loans repaid to the Railbelt Energy Fund. He
stressed that all those in receipt of funds are in support.
Representative Hudson summarized that the funds from the
Constitutional Budget Reserve to Alaska Industrial
Development and Export Authority (AIDEA) would be
appropriated as loans or grants and never be paid back to
the CBR.
Representative Croft acknowledged that it is a loan from the
Constitutional Budget Reserve and pointed out that a debt is
being created in two places. He stressed the difficulty of
assessing which projects should be logically related to the
Railbelt.
Representative Lancaster explained that the grant to Copper
Valley for $500 thousand dollars is a pay back for a study
they completed for the Glennallen Intertie, which never came
to fruition. Grants to Southeast Communities are for
studies, not physical plants.
Representative Whitaker summarized that there is $101
million dollars for power transmission projects: $32.5
million dollars for non-Railbelt areas; and $60.8 million
dollars for the Railbelt. He stressed that there is $101
million dollars for power transmission projects: basic
infrastructure. Some of the money would go back into the
Railbelt Energy Fund for future use. He pointed out that 80
percent of the state's population is in the Railbelt, but
only 60 percent of the funds go to the Railbelt. He felt
that this discrepancy would be offset by building the fund
for future need. He stressed the importance of funding basic
infrastructure.
Representative Lancaster pointed out that section 3 also
funds the Power Cost Equalization FY02 shortfall.
Representative Lancaster observed that section 6 of HB 175
refers to HB 238, which is the mechanism that allows AIDEA
to receive the funding.
Representative Foster MOVED to report CSHB 175 (FIN) out of
Committee. There being NO OBJECTION, it was so ordered.
CSHB 175 (FIN) was REPORTED out of Committee with a "do
pass" recommendation.
Representative Lancaster MOVED to report CSHB 238 (FIN) out
of Committee with the accompanying fiscal note. There being
NO OBJECTION, it was so ordered.
CSHB 238 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with a new zero fiscal note by the
House Finance Committee for the Department of Community and
Economic Development.
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