03/13/2012 03:00 PM House ENERGY

            HB 357-AIDEA SUSTAINABLE ENERGY PROGRAM                                                                         
                                                                                                                                
3:12:03 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER announced  that the next order  of business would                                                               
be  HOUSE BILL  NO.  357, "An  Act  establishing the  sustainable                                                               
energy transmission and supply development  program in the Alaska                                                               
Industrial Development and Export Authority."                                                                                   
                                                                                                                                
3:12:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER moved  to  adopt  the proposed  committee                                                               
substitute (CS)  for HB 357,  Version 27-LS1402\M as  the working                                                               
document.  There being no objection, Version M was adopted.                                                                     
                                                                                                                                
3:12:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER moved to  adopt the fiscal note identified                                                               
as  HB357-DCCED-AIDEA-03-02-12.   There being  no objection,  the                                                               
fiscal note was adopted.                                                                                                        
                                                                                                                                
3:13:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LANCE PRUITT, Alaska State  Legislature, speaking as the                                                               
prime sponsor, introduced HB 357,  saying the bill is a companion                                                               
bill to SB 25 - sponsored  by Senator Lesil McGuire - and ensures                                                               
that  credit is  available  by empowering  the Alaska  Industrial                                                               
Development &  Export Authority (AIDEA), Department  of Commerce,                                                               
Community &  Economic Development, to finance,  or facilitate the                                                               
financing  of, energy  projects  through  the Sustainable  Energy                                                               
Transmission  and Supply  (SETS)  development fund.   Relying  on                                                               
credit ensures  project sponsors  have a  stake in  the project's                                                               
success  or  failure.    Moreover,  it  would  keep  the  state's                                                               
investments in  Alaska growing the economy.   Currently, Alaska's                                                               
savings  are invested  in stocks  and bonds  that drive  economic                                                               
activity  outside of  Alaska;  however, HB  357  proposes that  a                                                               
portion of those  savings are invested in Alaska  - through AIDEA                                                               
- as loans  for energy infrastructure.   As  each loan is repaid,                                                               
the  capital  becomes  available  for new  loans  that  could  be                                                               
offered, for example, for financing  energy infrastructure in the                                                               
Railbelt.   Without this legislation, debt  interest repayment by                                                               
Alaska utilities  will continue  to leave  the state.   Dividends                                                               
paid by AIDEA  are between $20 million and $30  million per year,                                                               
but a  larger balance sheet  would increase AIDEA's  earnings and                                                               
its  dividends to  the state.    Representative Pruitt  concluded                                                               
that  HB   357  will   put  local  assets   to  work   to  create                                                               
opportunities,  develop  resources,   and  create  a  sustainable                                                               
economy for the future.                                                                                                         
                                                                                                                                
3:15:48 PM                                                                                                                    
                                                                                                                                
DIRK CRAFT,  staff to Representative  Lance Pruitt,  Alaska State                                                               
Legislature,  speaking   on  behalf  of   Representative  Pruitt,                                                               
sponsor, presented  a sectional analysis  of the proposed  CS for                                                               
HB 357.  He began with section 1,  which is the short title:  the                                                               
Alaska Sustainable  Strategy for  Energy Transmission  and Supply                                                               
(ASSETS)  Act.    Section  2 states  the  legislative  intent  to                                                               
appropriate in  future years.   Section 3 amends  the legislative                                                               
findings  and  policy  that  created   AIDEA  to  include  energy                                                               
enterprises, and  amends the following language  for consistency.                                                               
Section 4 adds  "energy" to the list of enterprises  in the AIDEA                                                               
policy  declaration.   Section 5  replaces "a  power transmission                                                               
intertie"  with "an  energy project,"  and  amends the  following                                                               
language  for   consistency.    Section   6  replaces   "a  power                                                               
transmission intertie" with "an  energy project," and adds "loans                                                               
for  improvements and  energy efficiency"  to the  list of  loans                                                               
that may  be purchased  by AIDEA.   Section  7 replaces  "a power                                                               
transmission intertie"  with "an energy project."   Sections 8-12                                                               
clarify that interest rates apply to  the new fund created by the                                                               
bill,  and ensure  that the  interest rates  are consistent  with                                                               
current practice  and that  AIDEA is  collecting interest  on its                                                               
investments.  These  sections also ensure that the  loans made by                                                               
AIDEA conform to the private  sector.  Section 13 adds "renewable                                                               
energy  development"  to  the  list of  types  of  projects  that                                                               
qualify  for   loan  participation.    Section   14  creates  the                                                               
Sustainable Energy  Transmission and Supply program.   Section 15                                                               
defines  "development fund"  and  "energy project."   Section  16                                                               
instructs the revisor of statutes.                                                                                              
                                                                                                                                
3:18:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN   asked  whether  adding   "energy"  and                                                               
removing "power transmission intertie"  means that an intertie no                                                               
longer qualifies for financing from AIDEA.                                                                                      
                                                                                                                                
MR. CRAFT advised  that the new language includes both,  and is a                                                               
broader definition.                                                                                                             
                                                                                                                                
3:19:29 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT added  that the definition of  energy projects is                                                               
found on page 11, lines 3-11, of the bill.                                                                                      
                                                                                                                                
CO-CHAIR FOSTER held over HB 357.                                                                                               
                                                                                                                                
3:19:32 PM