Legislature(2011 - 2012)BELTZ 105 (TSBldg)
03/24/2011 02:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Economic Security for Women in Alaska by Portia Wu | |
| SB32 | |
| HB28 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 32 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 28 | TELECONFERENCED | |
SB 32-APPROP: ALTERNATIVE ENERGY REV. LOAN FUND
2:27:15 PM
CHAIR EGAN announced SB 32 to be up for consideration.
2:27:44 PM
MICHELLE SYDEMAN, staff to Senator Wielechowski, sponsor of SB
32, said that this measure would capitalize an existing loan
fund designed to provide loans to businesses and Alaska non-
profits interested in upgrading the energy efficiency of their
buildings or installing alternative energy systems. This fund
was originally created in 1978 to provide loans to homeowners
for renewable energy systems. It was capitalized with $18
million and almost 3,000 loans were made. However, in 1986 the
legislature started taking money out of the fund and the program
became inactive soon thereafter. Since then, the Alaska Housing
Finance Corporation (AHFC) has initiated two very popular
programs, weatherization and home energy rebates, to help
Alaskans keep their homes more efficiently and inexpensively.
AHFC also offers residential loans to homeowners for efficiency
upgrades. Through these programs the state is helping many
Alaskans reduce their home heating costs. Yet, little is being
done to help small Alaskan businesses and non-profits struggling
with the same high fuel costs.
Last year, when the Senate was crafting its omnibus Energy bill,
many debated what could be done to ease the burden skyrocketing
energy costs were imposing on businesses and non-profits across
the state. The solution they arrived at was to expand the
purposes of the Alternative Energy Loan Fund to enable
businesses and non-profits to borrow money at a reasonable
interest rate to pay for energy conservation improvements shown
to reduce costs over the long run. SB 222, passed unanimously by
the legislature last session, did just that.
MS. SYDEMAN said they were here now to ensure that the fund
created last year is capitalized. The purpose, of course, is to
help Alaskan-owned businesses and non-profits to become stronger
and in the case of businesses, more profitable. The second
purpose is to enable the state to fulfill the goals of the
energy policy the legislature adopted last year, one of which
was to achieve a 15 percent increase in energy efficiency on a
per capita basis by 2020. The achievement of that goal becomes
even more important as the state contemplates substantial
investments in energy production, transportation and cost
equalization, such as construction of a bullet line, the Watana
Dam or power cost equalization (PCE) program.
She said there is high demand within the commercial sector for a
loan fund of this sort. On February 15, the Alaska Energy
Authority (AEA) closed the application period for its new
Commercial Energy Audit Program funded with federal stimulus
funds. There was a five-week application period and over 135
businesses applied for subsidized audits under this program.
Participating businesses offered to voluntarily implement wide-
ranging efficiency measures in exchange for acceptance,
indicating a high level of need and commitment to saving energy
and money.
MS. SYDEMAN said that Alaskan businesses are hit not only by
high fuel costs, but they also use twice the energy of
businesses nation-wide. Businesses applying for AEA's commercial
energy audit program reported average energy costs of $2.35 sq.
ft. when it's $1.19 sq. ft. nation-wide. This difference puts
Alaskan businesses at a disadvantage.
There is ample evidence that investments in energy efficiency
pay off quickly. For instance, in 2007, an Anchorage company
invested $30,000 in energy efficiency improvements at its 21,000
sq. ft. building. The return on this investment has been 27
percent per year, far beyond the normal rate of return on many
other investments. However, this substantial rate of return is
consistent with what they have seen with residential energy
efficiency investments. AHFC's Home Energy Rebate Program has
reduced energy use by an average of 33 percent for almost 10,000
homes, saving each household an average of $1,535 annually. For
every dollar spent on energy efficiency through both home energy
rebates and weatherization, $.24 is saved annually. Comparable
savings could be expected for businesses through this loan fund
making them more profitable and competitive.
This program would also create jobs. AHFC estimates 2,500 jobs
were created from the Home Energy Rebate and Weatherization
programs. Similar job trends could be expected from this loan
fund.
2:33:25 PM
MS. SYDEMAN said this bill proposes an initial capitalization of
$10 million, which would enable the state to lend $30,000 to
approximately 85 businesses each year on a revolving basis. It
will be up to the Finance Committee to ultimately decide what
rate of capitalization is appropriate and affordable given other
state commitments and needs.
2:34:10 PM
SENATOR BILL WIELECHOWSKI, sponsor of SB 32, said this bill
attempts to close what is seen as a gap in energy assistance
funding. Energy assistance funding exists for governments and
individuals and they are simply trying to close the gap by
including businesses.
2:35:10 PM
MARY WALKER, Executive Director, Stewards of Creation,
Fairbanks, said they are the only faith-based environmental
stewardship non-profit in the state. She reported that 14
churches and 1 synagogue applied to the AEA's Energy Audit
Program under the commercial side. She said a lot of
congregations are spending a lot of money on energy. For
instance, the University Presbyterian in Fairbanks is spending
$32,000 a year for fuel and $18,000 in electricity and it is a
congregation of 100 people. She said she liked this loan piece
because it's not a handout, but rather a hand up.
2:37:11 PM
DENNIS SWIDERSKI, owner, Orca Island Cabins, Seward, said he
supported SB 32, because small businesses like his can benefit
from funding earmarked for the development of alternative
energy. He explained that his business is part of the ecotourism
industry in Alaska. Because they are off the grid, they use
solar power to provide the limited electricity on their one-acre
island close to Seward. They carry their water to the island
from the small boat harbor in Seward and pump it to the holding
tanks under each cabin and use propane as fuel for the cabin
heaters, on-demand hot water, kitchen ranges, et cetera. Their
costs are quite large, but they are eco-friendly and many of
their guests have expressed appreciation for that approach.
MR. SWIDERSKI said they are at a financial crossroads, because
the Department of Natural Resources (DNR) has authorized them to
build an 80-foot pedestrian foot bridge connecting them with the
mainland to build additional cabins there. They will need
funding and a large part of that will be to enhance the solar
system that they now use; a desalinator would be nice as well.
CHAIR EGAN handed that gavel over to Vice Chair Paskvan saying
he had to go to a budget close-out.
2:41:42 PM
MARK MASTELLER, State Director, Cascadia Green Building Council,
said they are a non-profit group and part of the U.S. Green
Building Council that does education, training and promotion of
high performance buildings in primarily the commercial and
public sector. He said he supported SB 32 especially since it
included measures to promote conservation efficiency in
businesses and non-profits. These are the critical first steps
that need to be taken before thinking about energy systems. "We
don't want to waste any energy, whether it's fossil energy or
renewable energy; so conservation and efficiency has to be done
first." This funding will allow that to happen in the loan
program. It will clear the way for the eventual use of renewable
energy systems.
MR. MASTELLER suggested it would be nice if this loan program
required conservation and efficiency measures first, because
that is what is the best return on investment and it's the best
step to a world where everything can be powered on renewable
energy.
2:44:07 PM
DAVID LESH, owner, Gustavus Inn, Gustavus, Alaska, said this
revolving loan fund is an important step for the state to help
rural businesses adapt to rising energy prices and the need to
keep costs low to compete with tourist destinations throughout
the world. He said his family's business has been operating
since 1965 and they have seen many changes regarding
availability and cost of energy in their community. Currently
they are paying in excess of $.30 kwh and over $4 gallon for
heating oil. Some improvements have been relatively easy to do
such as improving insulation; but he has more extensive
improvements planned that require more time and money than he
has available.
MR. LESH said he is currently participating in the AEA's new
commercial energy audit grant program and has agreed to
implement energy improvements with a seven-year payback. The
revolving loan fund is designed to work in conjunction with
professional energy audits to ensure that money is being spent
on responsible projects at responsible businesses. Access to low
interest monies would make it much easier and more likely for
him to finish the improvements identified in the audit.
2:45:54 PM
JOHN WEDDLETON, representing himself, said he owns a small
business in Anchorage with 20 employees. He said he also
supported SB 32. He said his business is pretty typical of
Anchorage businesses that are in fairly inefficient buildings.
He related how a couple of years ago he substantially reduced
his energy usage in his 5,000 sq. ft. concrete block warehouse.
He prioritized his work based on an audit by Andy Baker. At the
time, his warehouse was mostly empty and he was lucky to have
the money to do the work. In 2008, he insulated the exterior
walls, added ceiling fans, insulated an overhead door, added
programable thermostats, did weather stripping, put thermal
blinds on the windows and sealed cracks. He converted all the
lights to T5 or T8s. The insulation cost about $9,500 and the
lights about $3,500. As a result of these improvements, in the
peak months there was a 20-25 percent reduction in both gas and
the electric use. Before he did the work the warehouse was used
mostly for storage and after he did that work he got four
employees in there working regular business hours. The lights
were on a lot more and it was kept quite a bit warmer. So the
reduction was fairly substantial. At this point, there is a lot
more to do, but it gets into a lot more money and longer payback
times.
He said if gas and electric went up 20 percent or more he would
look for ways to cut those costs again. He said he was lucky to
have a good cash flow when he needed to do the work, but a lot
of businesses don't have the extra dollars. It's still a
sensible thing for them to do.
He said the quality of life in his warehouse has been improved
substantially and that leads to better employee productivity,
something that is hard to put a dollar value on.
VICE-CHAIR PASKVAN said he had two dozen letters from individual
Alaskan businesses supporting SB 32 and finding no further
comments closed public testimony.
[SB 32 was held in committee.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 28 Sen L&C CS v G.pdf |
SL&C 3/24/2011 2:00:00 PM |
HB 28 |
| HB 28 History.pdf |
SL&C 3/24/2011 2:00:00 PM |
HB 28 |
| HB 28 Sen L&C CS Changes.pdf |
SL&C 3/24/2011 2:00:00 PM |
HB 28 |
| SB 32 Cash Flow Analysis at 10 M Earnings.pdf |
SL&C 3/24/2011 2:00:00 PM |
SB 32 |
| SB 32 Session Laws 2010.PDF |
SL&C 3/24/2011 2:00:00 PM |
SB 32 |
| SB 32 Cash flow Analysis at 10 M 3-26-10.pdf |
SL&C 3/24/2011 2:00:00 PM |
SB 32 |
| SB 32 Fact Sheet.pdf |
SL&C 3/24/2011 2:00:00 PM |
SB 32 |
| SB 32 Sponsor Statement.PDF |
SL&C 3/24/2011 2:00:00 PM |
SB 32 |