02/15/2022 10:15 AM House ENERGY

              HB 247-POWER COST EQUALIZATION FUND                                                                           
                                                                                                                                
10:26:17 AM                                                                                                                   
                                                                                                                                
CHAIR SCHRAGE  announced that the  first order of  business would                                                               
be  HOUSE BILL  NO.  247,  "An Act  relating  to  the power  cost                                                               
equalization endowment fund."                                                                                                   
                                                                                                                                
10:26:52 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  CLAMAN  moved  to adopt  the  proposed  committee                                                               
substitute (CS)  for HB 247, Version  32-LS1301\I, Marx, 1/26/22,                                                               
as a working document.                                                                                                          
                                                                                                                                
10:27:03 AM                                                                                                                   
                                                                                                                                
CHAIR SCHRAGE objected for the purpose of discussion.                                                                           
                                                                                                                                
10:27:14 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STEVE  THOMPSON,  Alaska  State  Legislature,  as                                                               
prime sponsor, stated that the proposed  CS for HB 247 would help                                                               
reduce  energy costs  for communities  receiving  funds from  the                                                               
Power  Cost Equalization  Program  (PCEP).   He  stated that  the                                                               
proposed legislation  would do  two things:  it would  remove the                                                               
$25 million  cap for funds  going into the Renewable  Energy Fund                                                               
(REF),  and it  would  add  bulk fuel  upgrades,  which could  be                                                               
funded through the  REF.  He expressed the hope  that these steps                                                               
would reduce  the number of  PCEP participants.  With  this goal,                                                               
he   stated,  if   renewable   energy   sources  are   installed,                                                               
communities  would  no  longer require  power  cost  equalization                                                               
(PCE), leaving more funds available to be put into the REF.                                                                     
                                                                                                                                
10:29:01 AM                                                                                                                   
                                                                                                                                
TOM WRIGHT,  Staff, Representative  Steve Thompson,  Alaska State                                                               
Legislature,   on  behalf   of  Representative   Thompson,  prime                                                               
sponsor, read the  explanation of changes for the  proposed CS to                                                               
HB  247, Version  I, [included  in the  committee packet],  which                                                               
read as follows [original punctuation provided]:                                                                                
                                                                                                                                
     Section  1: Removes  all references  to subsection  (e)                                                                  
     which is deleted  in the I version within  section 2 of                                                                    
     the original bill.                                                                                                         
                                                                                                                                
     The $30 million to a  community or revenue sharing fund                                                                    
     is not changed in the I  version. It was relegated to a                                                                    
     lower position  in the  priorities for  use of  the PCE                                                                    
     funding in the B draft.                                                                                                    
                                                                                                                                
MR.  WRIGHT interjected  that after  discussions with  the Alaska                                                               
Energy  Authority  (AEA),  Adult  Public  Assistance,  and  other                                                               
stakeholders, it  was decided  that the  distribution of  the PCE                                                               
fund earnings would  not change in Version I.   He continued with                                                               
the  explanation  of changes,  which  read  as follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Version  I   removes  the  $25  million   cap  that  is                                                                    
     currently  in statute  and adds  bulk fuel  upgrades to                                                                    
     the list of items that  can be funded via the Renewable                                                                    
     Energy Fund.                                                                                                               
                                                                                                                                
     Section  2:  The I  version  deletes  all the  language                                                                  
     found in Section 2 of the  B draft. Version B moved the                                                                    
     priority  of  the  community assistance  funding  to  a                                                                    
     lower priority.                                                                                                            
                                                                                                                                
     Deletes subsection (f) that  required the Alaska Energy                                                                    
     Authority  to develop  a  methodology for  prioritizing                                                                    
     Renewable Energy  Fund grant applicants.  The Authority                                                                    
     already has  developed a methodology that  is currently                                                                    
     being used to rank projects.                                                                                               
                                                                                                                                
10:30:51 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KAUFMAN requested  clarification regarding  "bulk                                                               
fuel upgrades" in respect to renewable energy.                                                                                  
                                                                                                                                
MR. WRIGHT responded  that AEA requested this be  included in the                                                               
language for  the REF.   Referencing the deteriorating  bulk fuel                                                               
systems in communities,  he said that some of  these systems will                                                               
need to  be replaced or  restored.   He explained that  the large                                                               
capacity  systems would  allow communities  to  last through  the                                                               
winter without relying  on a fuel shipment, and buying  fuel on a                                                               
larger scale would help reduce energy costs.                                                                                    
                                                                                                                                
10:32:00 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  THOMPSON, in  response to  Representative Claman,                                                               
confirmed  that   the  bill  would   have  nothing  to   do  with                                                               
"sweepability."                                                                                                                 
                                                                                                                                
10:32:25 AM                                                                                                                   
                                                                                                                                
CHAIR SCHRAGE  removed his objection  to the motion to  adopt the                                                               
proposed CS for HB 247,  Version 32-LS1301\I, Marx, 1/26/22, as a                                                               
working document.   There being  no further objection,  Version I                                                               
was before the committee.                                                                                                       
                                                                                                                                
10:32:38 AM                                                                                                                   
                                                                                                                                
CHAIR SCHRAGE announced HB 247 was held over.