03/21/2011 03:30 PM Senate RESOURCES

         SB  42-POWER PROJECT; ALASKA ENERGY AUTHORITY                                                                      
                                                                                                                                
3:32:43 PM                                                                                                                    
CO-CHAIR  PASKVAN announced  SB  42 to  be  up for  consideration                                                               
[CSSB 42 (RES),  27-GS1822\D, was before the  committee]. He said                                                               
the  title is  changed to  conform with  changes to  the original                                                               
bill. In  the original  version the Senate  sought to  modify the                                                               
state's procurement code. This  committee substitute (CS) deletes                                                               
that language so that there  are no statutory changes relating to                                                               
the Alaska  Energy Authority (AEA)  and procurement. The  CS also                                                               
makes changes to the Alaska  Railbelt Energy Fund, preserving the                                                               
legislature's   authority  to   appropriate.  Finally   and  most                                                               
significant, the  CS makes  changes relating  to the  creation of                                                               
subsidiaries  and  this  is  found   on  page  6;  it  makes  the                                                               
subsidiary  created by  this legislation  specific to  the Watana                                                               
Hydroelectric Power Project on the Susitna River.                                                                               
                                                                                                                                
He said  the fiscal  note for  SB 42  is not  impacted by  any of                                                               
these  changes  and will  remain  the  same. These  changes  were                                                               
considered  after   going  through  the  committee   process  and                                                               
incorporating language advanced by  Mr. Brian Bjorkquist from the                                                               
Alaska Department of Law.                                                                                                       
                                                                                                                                
3:34:30 PM                                                                                                                    
SENATOR MCGUIRE joined the committee.                                                                                           
                                                                                                                                
3:35:01 PM                                                                                                                    
SENATOR  STEDMAN   moved  to  adopt  Amendment   1,  labeled  27-                                                               
GS1822\D.11, as follows:                                                                                                        
                                                27-GS1822\D.11                                                                  
                                                        Kane                                                                    
                                                      3/21/11                                                                   
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
     OFFERED IN THE SENATE                   BY SENATOR STEDMAN                                                                 
     TO:  CSSB 42(RES), Draft Version "D"                                                                                       
                                                                                                                                
     Page 1, lines 1 - 10:                                                                                                      
          Delete all material.                                                                                                  
          Insert "An Act relating to a Susitna River                                                                          
      hydroelectric project and to the power of the Alaska                                                                    
      Energy Authority to apply for permits, licences, and                                                                    
     approvals; and providing for an effective date."                                                                         
                                                                                                                                
     Page 1, line 12, through page 7, line 19:                                                                                  
          Delete all material and insert:                                                                                       
        "* Section 1. AS 44.83.080 is amended to read:                                                                      
          Sec. 44.83.080. Powers of the authority. In                                                                         
     furtherance  of its  corporate purposes,  the authority                                                                    
     has  the  following powers  in  addition  to its  other                                                                    
     powers:                                                                                                                    
               (1)  to sue and be sued;                                                                                         
               (2)    to  have  a   seal  and  alter  it  at                                                                    
     pleasure;                                                                                                                  
               (3)    to  make  and  alter  bylaws  for  its                                                                    
     organization and internal management;                                                                                      
               (4)    to  adopt  regulations  governing  the                                                                    
     exercise of its corporate powers;                                                                                          
               (5)     to   improve,  equip,   operate,  and                                                                    
     maintain power  projects and  bulk fuel,  waste energy,                                                                    
     energy    conservation,    energy    efficiency,    and                                                                    
     alternative energy facilities and equipment;                                                                               
               (6)  to  issue bonds to carry out  any of its                                                                    
     corporate   purposes   and    powers,   including   the                                                                    
     establishment or  increase of reserves to  secure or to                                                                    
     pay the bonds  or interest on them, and  the payment of                                                                    
     all other  costs or expenses of  the authority incident                                                                    
     to  and  necessary  or  convenient  to  carry  out  its                                                                    
     corporate purposes and powers;                                                                                             
               (7)   to  sell,  lease as  lessor or  lessee,                                                                    
     exchange, donate, convey, or  encumber in any manner by                                                                    
     mortgage  or   by  creation   of  any   other  security                                                                    
     interest, real or personal property  owned by it, or in                                                                    
     which it has an interest,  when, in the judgment of the                                                                    
     authority,  the   action  is  in  furtherance   of  its                                                                    
     corporate purposes;                                                                                                        
               (8)  to accept gifts,  grants, or loans from,                                                                    
     and   enter  into   contracts  or   other  transactions                                                                    
     regarding them, with any person;                                                                                           
               (9)  to deposit  or invest its funds, subject                                                                    
     to agreements with bondholders;                                                                                            
               (10)    to  enter  into  contracts  with  the                                                                    
     United States  or any person  and, subject to  the laws                                                                    
     of the United States and  subject to concurrence of the                                                                    
     legislature, with  a foreign  country or  its agencies,                                                                    
     for   the  construction,   financing,  operation,   and                                                                    
     maintenance of  all or any  part of a power  project or                                                                    
     bulk  fuel, waste  energy, energy  conservation, energy                                                                    
     efficiency,   or  alternative   energy  facilities   or                                                                    
     equipment, either inside or outside  the state, and for                                                                    
     the sale  or transmission  of power  from a  project or                                                                    
     any right to the capacity of  it or for the security of                                                                    
     any bonds of  the authority issued or to  be issued for                                                                    
     the project;                                                                                                               
               (11)    to  enter  into  contracts  with  any                                                                    
     person and with  the United States [,]  and, subject to                                                                    
     the  laws  of the  United  States  and subject  to  the                                                                    
     concurrence of the legislature,  with a foreign country                                                                    
     or  its  agencies  for the  purchase,  sale,  exchange,                                                                    
     transmission, or  use of power  from a project,  or any                                                                    
     right to the capacity of it;                                                                                               
               (12)   to apply  to the  appropriate agencies                                                                    
     of the state, the United  States, and a foreign country                                                                    
     and any other proper  agency for the permits, licenses,                                                                    
     or approvals  as may be  necessary, to  maintain, [AND]                                                                
     operate,  acquire,  or   construct  power  projects  in                                                                
     accordance  with  the  licenses   or  permits,  and  to                                                                    
     obtain, hold, and  use the licenses and  permits in the                                                                    
     same manner as any other person or operating unit;                                                                         
               (13)   to enter into contracts  or agreements                                                                    
     with respect to the exercise  of any of its powers, and                                                                    
     do all things necessary or  convenient to carry out its                                                                    
     corporate purposes  and exercise the powers  granted in                                                                    
     this chapter;                                                                                                              
               (14)  to recommend to the legislature                                                                            
               (A)   the pledge of  the credit of  the state                                                                    
     to  guarantee  repayment  of  all  or  any  portion  of                                                                    
     revenue  bonds  issued  to assist  in  construction  of                                                                    
     power projects;                                                                                                            
               (B)  an appropriation from the general fund                                                                      
               (i)    for debt  service  on  bonds or  other                                                                    
     project purposes; or                                                                                                       
               (ii)  to reduce  the amount of debt financing                                                                    
     for the project;                                                                                                           
               (15)   to  carry  out the  powers and  duties                                                                    
     assigned to it under AS 42.45;                                                                                             
               (16)  to  make grants or loans  to any person                                                                    
     and   enter  into   contracts  or   other  transactions                                                                    
     regarding the grants or loans;                                                                                             
               (17)  to  promote energy conservation, energy                                                                    
     efficiency,  and  alternative energy  through  training                                                                    
     and public education;                                                                                                  
               (18)    to  acquire  a  Susitna  River  power                                                                
     project,  whether by  construction, purchase,  gift, or                                                                
     lease;                                                                                                                 
               (19)    to  perform feasibility  studies  and                                                                
     engineering and design with respect  to a Susitna River                                                                
     power project.                                                                                                         
        * Sec. 2. AS 44.83.396(a) is amended to read:                                                                         
          (a)  A power project that was acquired or                                                                             
      constructed under AS 44.83.080(18) or as part of the                                                                  
      former energy program for Alaska is owned, and shall                                                                      
     be administered, by the authority.                                                                                         
       * Sec. 3. This Act takes effect immediately under                                                                      
     AS 01.10.070(c)."                                                                                                          
                                                                                                                                
CO-CHAIR PASKVAN objected for purposes of discussion.                                                                           
                                                                                                                                
SENATOR STEDMAN said  he has a lot of concerns  with the bill and                                                               
how  it interrelates  with  the other  utilities  in other  areas                                                               
around  the  state even  though  he  supports moving  ahead  with                                                               
Watana.  This amendment  removes  the split  of  AEA with  Alaska                                                               
Industrial  Development and  Energy Authority  (AIDEA). It  would                                                               
also  remove the  authorization  for AEA  to create  subsidiaries                                                               
(except for  the issue of  moving forward with Watana).  It would                                                               
create  a  new Alaska  Railbelt  Energy  Fund and  authorize  its                                                               
capitalization  and  it  would   remove  conditional  effects  in                                                               
notification language.  So, the  bill would  change its  focus on                                                               
planning  and  funding  for  large-scale  Railbelt  hydroelectric                                                               
projects and it  would allow the project to move  forward and the                                                               
legislature to work with the  administration to address secondary                                                               
issues  in the  future. He  said he  believed this  was the  best                                                               
approach  to moving  Watana forward  so they  are focused  on the                                                               
large  hydroelectric  project  for  the Railbelt  and  don't  get                                                               
derailed "into a litany of  other issues around the state dealing                                                               
with other smaller utilities and impacts on other communities."                                                                 
                                                                                                                                
SENATOR STEDMAN then withdrew Amendment 1.                                                                                      
                                                                                                                                
CO-CHAIR PASKVAN stated that they  now have CSSB 42(RES), version                                                               
D, before them.                                                                                                                 
                                                                                                                                
SENATOR WIELECHOWSKI  said didn't know  that it was  necessary to                                                               
have administrative  clerks, for instance, in  the exempt status,                                                               
but he  had decided to  not offer an  amendment at this  time and                                                               
would rather probably talk to the co-chair of Finance about it.                                                                 
                                                                                                                                
CO-CHAIR  PASKVAN  found no  further  comments  and said  he  was                                                               
satisfied with the work this committee has done on this bill.                                                                   
                                                                                                                                
CO-CHAIR  WAGONER moved  to report  CSSB  42(RES) from  committee                                                               
with  individual  recommendations  and attached  fiscal  note(s).                                                               
There were no objections and it was so ordered.                                                                                 
                                                                                                                                
3:39:22 PM                                                                                                                    
At ease from 3:39:22 PM to 3:42:15 PM.