03/13/2009 11:00 AM Senate ENERGY

           SB  71-ALTERNATIVE ENERGY FOR PUBLIC WORKS                                                                       
                                                                                                                                
12:12:17 PM                                                                                                                   
CHAIR MCGUIRE announced the consideration of SB 71.                                                                             
                                                                                                                                
DAVE STANCLIFF, Staff  to Senator Gene Therriault,  sponsor of SB
, said  this bill is simply  a piece of legislation  to prepare                                                               
Alaska for  the alternative energy  resources that  are happening                                                               
everywhere  around  the  state.  Everyone is  familiar  with  the                                                               
Alaska Energy Authority (AEA) report,  and Senator Therriault has                                                               
several  communities   in  his  district  that   are  looking  at                                                               
something other than fossil fuels  to provide energy and heat for                                                               
buildings.                                                                                                                      
                                                                                                                                
The state has a tremendous  number of public facilities and DOTPF                                                               
involves itself in the designing  process of building them. SB 71                                                               
suggests that DOTPF, as they  consider the design of these public                                                               
facilities, look at what may be  coming on line and if they think                                                               
those resources could  play a part in solving some  of the energy                                                               
problems   they  could   incorporate  accommodations   for  those                                                               
facilities  in their  designs. A  good example  of that  would be                                                               
biomass as people from Southeast  and Interior Alaska are working                                                               
on producing wood  biomass to heat public  facilities - something                                                               
that is occurring in the Lower 48 as well.                                                                                      
                                                                                                                                
MR. STANCLIFF  reasoned if a  facility is designed with  only one                                                               
small boiler  room and  one boiler  and it  happens to  be fossil                                                               
fuel,  and along  comes a  biomass source  of energy,  a retrofit                                                               
will  be costly  and time  consuming.  Whereas if  they had  just                                                               
increased the size  to allow for a secondary fuel  source such as                                                               
biomass  to be  used, there  will  be tremendous  savings to  the                                                               
state. This does  not require DOTPF to make  those decisions, but                                                               
simply  requires  them  to  do   an  assessment  and  to  make  a                                                               
determination, hopefully in concert with  AEA and other folks, as                                                               
to what may be coming down the line in terms of energy.                                                                         
                                                                                                                                
In  closing he  said Senator  Therriault has  had him  working on                                                               
alternative energies issues.  The Tok school was about  to put in                                                               
the  first  biomass heating  system  that  is estimated  to  save                                                               
$80,000 to  $100,000 per year  with fuel  prices at $3/gal  - and                                                               
they were $5/gal last year. When  folks came out to look at their                                                               
utility  room, the  comment  from  the AEA  engineer  is if  this                                                               
building  were just  six feet  wider  and four  feet longer  they                                                               
wouldn't have to add on to accommodate the new facility.                                                                        
                                                                                                                                
12:16:01 PM                                                                                                                   
CHIRISTOPHER    HODGIN,    Project   Manager,    Department    of                                                               
Transportation  and  Public  Facilities (DOTPF),  explained  that                                                               
when they implement a retrofit  for any viable alternative energy                                                               
systems,  they  would  be  able  to  prepare  for  the  costs  to                                                               
implement them.  They won't  be able  to totally  eliminate retro                                                               
fit  costs,  but   this  bill  will  help   minimize  them.  When                                                               
determining a  viable energy alternative system,  they would also                                                               
like to be able to consider  maintenance costs so that the entire                                                               
life cycle  costs of  that alternative  can be  evaluated overall                                                               
with the building when it's constructed.                                                                                        
                                                                                                                                
12:17:54 PM                                                                                                                   
JEFF  HERMANS,   Forester,  Tok   area,  Division   of  Forestry,                                                               
Department of  Natural Resources (DNR),  said he was  involved in                                                               
the Tok school project that was  just funded by AEA. That project                                                               
provides four  full time jobs  in Tok,  a special benefit  to the                                                               
community and the state.                                                                                                        
                                                                                                                                
He said  that right now  diesel is $3.80  per gallon in  Tok, its                                                               
unemployment is 40  percent and in the outside  villages it's 70-                                                               
80  percent.  Tok has  the  school,  DOTPF, low  income  housing,                                                               
senior citizens, Head Start building,  DNR Forestry, Troopers and                                                               
the  Courthouse -  all state  buildings  - and  they use  100,000                                                               
gallons of  fuel oil  per year.  In ten  years that's  $2 million                                                               
that leaves Tok and goes to the oil companies!                                                                                  
                                                                                                                                
A  local   contractor  already  makes   pellets,  and   if  those                                                               
facilities  used renewable  resources  such  as pellet  furnaces,                                                               
they could  have a  bulk fuel  pellet contract  with them.  For a                                                               
small business to  have a contract for $200,000  of their product                                                               
every year  would be a  substantial benefit. The State  of Alaska                                                               
says  they want  to  do renewable  energy, and  the  best way  to                                                               
promote the  use of it is  to practice it themselves.  The amount                                                               
of fuel  oil being burned  by public facilities across  the state                                                               
is overwhelming.                                                                                                                
                                                                                                                                
MR.  HERMANS suggested  that if  the state  did start  doing this                                                               
that it look at public  facilities per region instead of "shotgun                                                               
effect" over  the entire state,  because they  have to get  to an                                                               
economy of scale.                                                                                                               
                                                                                                                                
12:20:58 PM                                                                                                                   
DANA OLSON, representing herself, said  she faxed testimony on SB
.  She just  became aware  of an  Alaska Energy  Authority book                                                               
through the Legislative  Information Office, and there  are a lot                                                               
of  bills passing.  Maybe they  should reconsider  some of  those                                                               
bills  because  they  are  on documents  that  are  not  publicly                                                               
available.                                                                                                                      
                                                                                                                                
12:23:31 PM                                                                                                                   
MR. STANCLIFF  reminded people that  the AEA report  is available                                                               
on the Governor's website.                                                                                                      
                                                                                                                                
SENATOR THERRIAULT,  sponsor of SB  71, said with the  passage of                                                               
the  alternative  funding  mechanism  last  year,  the  state  is                                                               
helping with  the supply side  of alternative energy  sources. If                                                               
the state builds into the state's  facilities the ability to be a                                                               
consumer,  then  it  can  help   on  the  demand  side,  too.  In                                                               
communities like  Tok or Glennallen,  if there  is a garage  or a                                                               
trooper facility  that has the  capability of providing  heat for                                                               
the facility, that provides a  base demand in the community which                                                               
allows the fixed cost for the  pellets to be spread over a larger                                                               
demand and lowers the cost for all the private consumers, too.                                                                  
                                                                                                                                
12:25:11 PM                                                                                                                   
SENATOR WIELECHOWSKI  moved to report  SB 71 from  committee with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being no objection, the motion carried.