Legislature(2007 - 2008)HOUSE FINANCE 519
03/05/2008 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB336 | |
| HB359 | |
| HB373 | |
| HB344 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 344 | TELECONFERENCED | |
| + | HB 348 | TELECONFERENCED | |
| *+ | HB 373 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 336 | TELECONFERENCED | |
| += | HB 359 | TELECONFERENCED | |
HOUSE BILL NO. 336
"An Act directing the Alaska Energy Authority to
conduct a study of and to prepare a proposal for an
appropriately sized Susitna River hydroelectric power
project; and providing for an effective date."
Representative Kelly introduced Steve Haagenson, the newly
appointed Energy Coordinator for Alaska Energy Authority
(AEA).
JEAN OSTNES, STAFF, REPRESENTATIVE CRAIG JOHNSON (SPONSOR),
explained HB 336, which authorizes AEA to conduct a study of
the Susitna River hydroelectric power project. She referred
to previous studies done in 1982 and 1983. The current
fiscal note for $1 million is intended for the first phase
of the current study, Task Force 1.
1:46:39 PM
Co-Chair Meyer wanted to know if AEA was already using an
$880,000 allocation to study energy issues in the Railbelt
region. Ms. Ostnes thought that report would meld with the
study proposed by HB 336. There are engineers on contract
who can immediately go to work. Co-Chair Meyer asked if AEA
would still need $1 million in addition to the nearly $1
million already set aside. He asked if the intent was to
also use Railbelt energy fund money for the Susitna study.
Ms. Ostnes replied that the Sponsor wanted capital money but
the source was not yet identified.
Representative Joule supported energy projects for Alaska.
His concern about the Railbelt project is that there are
other parts of the state that need alternative energy. He
does not want the State to postpone looking at other regions
and would prefer to have AEA look at energy alternatives
that might impact places with higher energy costs.
1:49:27 PM
Ms. Ostnes believed that the Sponsor is interested in
looking at the issue state-wide and hoped that the project
would affect the rest of the state.
Representative Gara voiced concerns about building a
hydroelectric project only to find out later that online
energy was cheaper. He referred to the five-phase study
("Estimate for Susitna Hydro-electric Feasibility Study,"
Copy on File), anticipated to cost a total of $2,750.000.
Ms. Ostnes replied the Sponsor felt $1 million would help
the project move forward.
Vice-Chair Stoltze wondered how much of the work done
through past studies is still relevant. Ms. Ostnes referred
to a 1986 report by Gordon Harrison (Copy on File) that
addresses the financial plan and why it didn't work. She
referred to extensive work that had been done that needs
updating. Vice-Chair Stoltze had concerns about costs of the
study.
1:54:50 PM
STEVE HAAGENSON, ENERGY COORDINATOR, ALASKA ENERGY
AUTHORITY, spoke in support of HB 336. He defined
hydroelectric projects as stable-priced power. He said
sizing is critical and also having the right water resources
to run the project. He thought hydroelectric would be
cleaner and cheaper. The bill will allow the State to
evaluate the project to the next level in order to determine
whether to go further. He felt the people of Alaska deserve
to evaluate hydroelectric and compare it with other
available technologies.
Vice-Chair Stoltze asked what percentage of the population
would be affected by the project. Mr. Hagensom said a
significant portion of the population.
Representative Joule asserted the need to look at all
alternatives for energy in order to strategically develop
Alaska's resources. He wondered if there were alternatives
outside the Railbelt.
Mr. Haagenson anticipated that his general approach would be
to meet with all Alaskans and ask them what they think the
solutions are for technology and fuel source. He would try
to quantify the demand for power that would be used for
electricity, transportation and heating, and then determine
the best options for each area of the state.
REPRESENTATIVE CRAIG JOHNSON, SPONSOR, added that Susitna is
not the final answer, but one of the pieces of the puzzle.
He has been in contact with developers of mining projects
whose most glaring need is electricity. He cited examples of
plans the Susitna project would affect.
There was a discussion about energy rates and funding
options.
2:08:08 PM
Representative Gara suggested that the study include a
comparison of the price of power under the Susitna project
with the price of power under a gas line project. He asked
about the difference between the $1 million on the fiscal
note and the $2,750,000 cost for the total study.
Representative Johnson clarified that the study was meant to
be done in phases. The first phase, which would cost
approximately $1 million, would determine the feasibility of
continuing the project.
2:12:03 PM
SARA FISHER-GOAD, DEPUTY DIRECTOR OF OPERATIONS, ALASKA
ENERGY AUTHORITY, viewed HB 336 as a specific study of
Susitna and explained the costs of the phases of the study.
She referred to Co-Chair Meyer question about the earlier
$800,000 study. She mentioned alternative energy projects in
rural Alaska.
2:15:05 PM
Representative Gara restated his question about comparing
the prices of different types of power. Ms. Fisher-Goad
agreed those comparisons need to be done. She said the $1
million fiscal note responds to the structure of HB 336. A
Senate bill has a different approach. If the Committee chose
to amend to include a broader study, the fiscal note would
follow.
JIM HEMSATH, DEPUTY DIRECTOR, DEVELOPMENT, ALASKA ENERGY
AUTHORITY (Testified via teleconference), explained that the
$1 million for Task Force 1 would accomplish a review of
existing information, including an engineering analysis of
what has already been done. This stage of the study would
also look for flaws, update the estimates, and update the
costs in order to understand what the cost of power would
be. Task Force 1 will be able to determine if the Susitna
project is feasible. If the project is feasible, then a
comparative study of different forms of energy would be
done. The goal is to be as focused as possible to minimize
capital expenditure.
2:18:50 PM
Representative Gara asked if part of the goal of the study
is to update past estimates to today's dollars. Mr. Hemsath
answered in the affirmative, but added that the study would
also explore changes in technology and code over the last
twenty years, and take a critical look at the engineering
assumptions of the first studies.
Representative Hawker referred to the fiscal note and asked
for a budget analysis of who will be used in the study and
how much they would be paid.
2:22:18 PM
Mr. Hemsath responded that the million dollar figure is a
cap. His experience leads him to believe a lot can be
accomplished for that amount of money. At AEA there are a
number of term contracts put in place specifically for
analysis of energy needs, so they have the capacity to
efficiently develop the engineering estimate in-house. The
million dollars would evaluate what has been done and review
it for changes in technology and code that were not known in
1983, including seismic activity.
Ms. Fisher-Goad assured the Committee that in the past, AEA
has used appropriations appropriately and with fiscal
responsibility.
2:26:29 PM
Co-Chair Meyer also wanted a better breakdown of the
expenses and costs of the proposed project.
ERIC YOULD, ENERGY CONSULTANT, WOOD CANYON GROUP (Testified
via teleconference), spoke in support of HB 336. He had
worked on the Susitna project in the 1980s. He thought a new
cost estimate is important. In addition, the State needs to
look at other energy projects that could provide energy to
the Railbelt, specifically coal, natural gas, other
hydropower projects, geothermal, wind and tidal options. In
his opinion, the alternative assessment is critical to the
success of the Susitna project. He pointed out that the
Federal Energy Regulatory Commission will require a study of
alternatives in order to get a license. The National
Environmental Protection Act also requires a study of
alternatives. Susitna was withdrawn by the governor in 1985
because of the costs of oil, which undermined the economics
of Susitna and dried up excess revenue that could have come
to the State.
2:32:38 PM
Representative Gara wanted information on the fisheries
impact of the project. Mr. Yould replied that extensive
fisheries studies had been done.
2:34:00 PM
MIKE WRIGHT, GOLDEN VALLEY ELECTRIC ASSOCIATION (Testified
via teleconference), spoke in support of HB 336. Railbelt
utilities rely heavily on fossil fuels for electric
generation. The volatile price of oil has a significant
2
impact on the cost of electricity. COemissions from burning
fossil fuels are also a consideration.
TOM STAUDENMAIER, EAGLE RIVER (Testified via
teleconference), advised consolidating all the management
systems, tying the grid together, and eliminating debt.
2:39:24 PM
JERRY MCCUTCHEON, ANCHORAGE (Testified via teleconference),
spoke in opposition of HB 336. He listed some of the
problems with past projects. He thought the re-study should
be done by the Army Corps of Engineers.
2:45:10 PM
BRADLEY EVANS, ACTING CHIEF EXECUTIVE OFFICER, CHUGACH
ELECTRIC ASSOCIATION, INC. (Testified via teleconference),
testified in support of HB 336. He was concerned about
dependence on natural gas and thought the current system
could not continue to handle energy needs in the Railbelt.
He supported doing a study to find the right answers for
diverse energy sources. Chugach has conducted many studies
regarding alternative energy that they would be glad to
share with AEA.
2:49:13 PM
UWE KALENKA, CHUGACH ELECTRIC ASSOCIATION, INC. (Testified
via teleconference), testified in support of the bill. He
was concerned about heavy dependence on natural gas for
energy. He wanted the range of energy alternatives studied,
including the Susitna hydroelectric project. He maintained
that the project is overdue.
2:52:50 PM
PAUL D. KENDALL, ANCHORAGE (Testified via teleconference),
spoke in favor of the Susitna hydroelectric project. He
suggested holding a hearing to educate the public on energy
issues. Energy is a vitally important issue. Leadership sets
the tone. He recommended an incremental expansion design for
Susitna.
3:01:16 PM
PUBLIC TESTIMONY CLOSED.
HB 336 was HEARD and HELD for further consideration.
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