04/16/2011 10:00 AM Senate FINANCE

SENATE BILL NO. 42                                                                                                            
                                                                                                                                
     "An  Act  relating  to  the  procurement  of  supplies,                                                                    
     services, professional  services, and  construction for                                                                    
     the  Alaska Energy  Authority; establishing  the Alaska                                                                    
     Railbelt  energy   fund  and  relating  to   the  fund;                                                                    
     relating  to and  repealing the  Railbelt energy  fund;                                                                    
     relating  to the  quorum  of the  board  of the  Alaska                                                                    
     Energy Authority; relating to  the powers of the Alaska                                                                    
     Energy Authority  regarding employees and  the transfer                                                                    
     of   certain  employees   of   the  Alaska   Industrial                                                                    
     Development  Export  Authority  to  the  Alaska  Energy                                                                    
     Authority;  relating   to  acquiring   or  constructing                                                                    
     certain  projects  by   the  Alaska  Energy  Authority;                                                                    
     relating to  the definition  of 'feasibility  study' in                                                                    
     the Alaska  Energy Authority Act; and  providing for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
10:46:14 AM                                                                                                                   
                                                                                                                                
Co-Chair Hoffman  proposed committee substitute,  work draft                                                                    
#27-GS1822/E, Kane, 4/15/11.                                                                                                    
                                                                                                                                
Co-Chair Stedman OBJECTED.                                                                                                      
                                                                                                                                
10:46:41 AM                                                                                                                   
                                                                                                                                
DARWIN PETERSON, STAFF,  SENATE FINANCE COMMITTEE, explained                                                                    
the CS. He stated that Sections  1, 3, 12, 16, and 17, which                                                                    
would  have created  the Alaska  Railbelt Energy  Fund, were                                                                    
removed from the  previous CS. He noted that  Sections 2 and                                                                    
5 were also  removed. The sections would  have permitted the                                                                    
Alaska Energy  Authority (AEA) to  hire their  own employees                                                                    
and  advisors  in  the exempt  service.  He  continued  that                                                                    
previous Sections  14 and  15 were  also removed.  He stated                                                                    
that previous Sections 7, 8,  10, and 13 were removed. Those                                                                    
sections would  have empowered  AEA to  establish subsidiary                                                                    
corporations  to  support   the  acquisition,  construction,                                                                    
ownership, and  operation of any  power projects.  Section 2                                                                    
was  amended,  which  allows  AEA  legislative  approval  to                                                                    
acquire  a   Susitna  River  project.   A  new   section  of                                                                    
uncodified  law was  added  beginning on  Page  4, Line  21,                                                                    
Subsection (a), which provided  legislative approval for AEA                                                                    
to loan  up to $11 million  from the power project  fund for                                                                    
the  Reynolds Creek  hydro-project. Subsection  (b) provided                                                                    
legislative approval for  AEA to loan up to  $5 million from                                                                    
the  power  project  fund  for  the  Humpback  Creek  hydro-                                                                    
project.                                                                                                                        
                                                                                                                                
Co-Chair  Stedman  mentioned  two   fiscal  notes  from  the                                                                    
Department of Commerce,  Community and Economic Development.                                                                    
One  fiscal  note  originated  from  the  Alaska  Industrial                                                                    
Development  Export  Authority  (AIDEA)  for  $1,125,000  in                                                                    
interagency  receipts  for  eight  staff  positions  in  the                                                                    
Susitna project office. One fiscal  note originated from AEA                                                                    
for  $1,763,000   in  Capital  Improvement   Projects  (CIP)                                                                    
receipts.                                                                                                                       
                                                                                                                                
10:48:45 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman WITHDREW his OBJECTION.                                                                                        
                                                                                                                                
There being NO  OBJECTION, it was so ordered.  Version E was                                                                    
adopted.                                                                                                                        
                                                                                                                                
SARAH   FISHER-GOAD,  EXECUTIVE   DIRECTOR,  ALASKA   ENERGY                                                                    
AUTHORITY,  discussed  the  CS.  She  mentioned  the  policy                                                                    
target to reach 50 percent  of renewable energy by 2025. She                                                                    
noted  that  in November  of  2010,  AEA declared  that  the                                                                    
Susitna River  Project was  best suited  to meet  the policy                                                                    
target. She  explained that the legislation  allowed the AEA                                                                    
to   construct  the   project.  She   stated  that   pending                                                                    
legislation,  AEA   will  file  a   preliminary  application                                                                    
document with  the Federal Energy Regulatory  Commission. An                                                                    
additional  provision  was  the  correction of  a  Board  of                                                                    
Directors quorum from four to seven members.                                                                                    
                                                                                                                                
Co-Chair  Stedman  asked if  she  was  comfortable with  the                                                                    
bill's version.                                                                                                                 
                                                                                                                                
Ms.  Fisher-Goad  responded  that the  original  intent  was                                                                    
broader  in scope  to allow  AEA  to construct  and own  new                                                                    
projects and to  hire new employees. She  commented that the                                                                    
legislation allowed for the new hydro-project.                                                                                  
                                                                                                                                
10:52:24 AM                                                                                                                   
                                                                                                                                
Senator  Olson  asked  about the  employees  hired  for  the                                                                    
extensive hydro-project.                                                                                                        
                                                                                                                                
Ms.   Fisher-Goad   responded    that   the   Bradley   Lake                                                                    
Hydroelectric  project was  exhibited as  a model  endeavor.                                                                    
She expected that  the employees would be  hired specific to                                                                    
the development  of the project  and would  work short-term.                                                                    
She   stated  that   the   operation   mode  would   include                                                                    
contracting   with   the   private  sector   for   long-term                                                                    
employees.                                                                                                                      
                                                                                                                                
10:53:45 AM                                                                                                                   
                                                                                                                                
Senator McGuire applauded Ms. Fisher-Goad  for her work. She                                                                    
thanked Senator  Thomas for  his leadership  championing the                                                                    
project  and the  legislation. She  expressed  pride in  Co-                                                                    
Chair Hoffman  and the governor  for their  contributions as                                                                    
well. She stated that the day was monumental for Alaska.                                                                        
                                                                                                                                
10:55:05 AM                                                                                                                   
                                                                                                                                
RICH  WILSON, PRESIDENT,  ALASKA RATEPAYER  ASSOCIATION (via                                                                    
teleconference), testified  in favor of the  legislation. He                                                                    
applauded the  leadership responsible for their  work on the                                                                    
legislation. He emphasized the  importance of the successful                                                                    
hydroelectric energy.  He mentioned  various members  of his                                                                    
organization.                                                                                                                   
                                                                                                                                
10:56:55 AM                                                                                                                   
                                                                                                                                
RICH   WILSON,   PRESIDENT,    ALASKA   RATE   PAYERS   (via                                                                    
teleconference),  testified in  support of  the legislation.                                                                    
He  thanked the  committee for  their leadership.  He stated                                                                    
that the  lowest rates to  the rate payer would  be achieved                                                                    
by a well-organized and efficient entity.                                                                                       
                                                                                                                                
FRANK  MIELKE, testified  in favor  of  the legislation.  He                                                                    
spoke about  the power  of eminent  domain, which  he opined                                                                    
contributed greatly to the timeliness of a project.                                                                             
                                                                                                                                
Ms.  Fisher-Goad commented  on the  testimony provided.  She                                                                    
mentioned  a  provision  stating   that  AEA  will  exercise                                                                    
eminent domain.                                                                                                                 
                                                                                                                                
CSSB  42  was  HEARD  and  HELD  in  Committee  for  further                                                                    
consideration.