Legislature(2021 - 2022)SENATE FINANCE 532
03/17/2022 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB132 | |
| SB202 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 132 | TELECONFERENCED | |
| + | SB 202 | TELECONFERENCED | |
| += | SB 81 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 17, 2022
9:03 a.m.
9:03:13 AM
CALL TO ORDER
Co-Chair Bishop called the Senate Finance Committee meeting
to order at 9:03 a.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman
Senator Donny Olson
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Natasha von Imhof
ALSO PRESENT
Senator Roger Holland, Sponsor; Nikki Rose, Staff to
Senator Holland; Dr. Rachel Berngartt, Chair, Board of
Veterinary Examiners; Dr. Tracy Ward, Associate
Veterinarian, Southeast Alaska Animal Medical Center; Sara
Chambers, Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community
and Economic Development; Senator Josh Revak, Sponsor.
PRESENT VIA TELECONFERENCE
Dr. James Delker, Alaska Veterinary Association, Soldotna;
Jerry Medina, Inside Passage Electric Cooperative, Juneau;
Michael Rovito, Deputy Director, Alaska Power Association,
Anchorage; Jomo Stewart, President and CEO, Fairbanks
Economic Development Corporation, Fairbanks; Curtis Thayer,
Executive Director, Alaska Energy Authority, Anchorage.
SUMMARY
SB 132 CONTROLLED SUB. DATA: EXEMPT VETERINARIAN
SB 132 was HEARD and HELD in committee for
further consideration.
SB 202 RENEWABLE ENERGY GRANT FUND
SB 202 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 132
"An Act exempting veterinarians from the requirements
of the controlled substance prescription database."
9:04:19 AM
Co-Chair Bishop relayed that the intent of the committee
was to hear a bill introduction and sectional analysis,
take public testimony, and have a committee conversation
about the bill.
9:04:44 AM
SENATOR ROGER HOLLAND, SPONSOR, read from a Sponsor
Statement (copy on file):
Alaska's 25th legislature created the Prescription
Drug Monitoring Program (PDMP) in 2008. The
legislative intent behind the PDMP was to create a
database of prescriptions for controlled substances in
the state. The PDMP may create obstacles for
individuals seeking opioids to obtain multiple
prescriptions from registered providers and may be a
useful tool for human doctors in combating the opioid
crisis. Under the current statutory framework,
Alaska's veterinarians are required to participate in
the PDMP, despite the irreconcilable differences
between human and veterinary medical practice. PDMPs
have been implemented in all 50 states, but 34 states
have recognized the unsuitability of veterinary
participation in the PDMP and exempted veterinarians.
SB 132 would add Alaska to that list.
The majority of states exempt veterinarians from PDMP
because they have recognized that PDMPs are designed
for use in human medicine; and veterinary exclusion
from PDMPs does not increase risk to the public.
Alaska's inclusion of veterinarians in the PDMP has
produced no identifiable benefit; yet the PDMP has
created a multitude of verifiable harms to the
veterinary profession and the Alaskans they serve. The
PDMP is inappropriate and not effective for use with
animal patients, as animals do not have identifiers
such as a social security number, and veterinarians
must view human owners' private health data before
treating an animal. Veterinarians are not subject to
the Health Insurance Portability and Accountability
Act of 1996 (HIPAA) that protects patient
confidentiality does not apply to veterinarians - they
are not bound by HIPAA.
Alaska has the highest veterinary licensure cost in
the United States. Veterinary participation in the
PDMP contributes to this unnecessary financial burden
on a profession already experiencing extreme staffing
shortages, decreasing availability of veterinary
services to Alaskans. Moreso, a recent survey found
attempted veterinary doctor shopping across the entire
United States is essentially non-existent.
Veterinarians are tightly regulated by the Drug
Enforcement Agency, the Know Your Customer Act, and
the State licensing board. SB 132 seeks to correct an
expensive overreach so that Alaskans can have access
to treatment for their pets without compromising
public safety.
9:07:23 AM
NIKKI ROSE, STAFF TO SENATOR HOLLAND, read from a Sectional
Analysis (copy on file):
Sectional Analysis for version A
"An Act exempting veterinarians from the requirements
of the controlled substance prescription database."
Sec. 1 AS 17.30.200(o), relating to the controlled
substance prescription database, is amended by
deleting the Board of Veterinary Examiners from the
list of required notification by the Board of Pharmacy
when a practitioner registers with the database.
Sec. 2 Adds veterinarians to the list of practitioners
not required to comply with the controlled substance
prescription database under AS 17.30.200(t).
Sec. 3 Adds a definition of "practitioner" to AS
17.30.200(u)
Sec. 4 Repeals AS 08.98.050(a)(10), which obligates
the board of veterinary examiners to require licensees
to register with the controlled substance prescription
database.
9:09:08 AM
DR. RACHEL BERNGARTT, CHAIR, BOARD OF VETERINARY EXAMINERS,
introduced herself and relayed that she had been with the
board for almost 20 years. She had a wide variety of
veterinary experience, including dog and cat medicine,
marine mammal research, and shelter medicine. She urged the
committee to support the bill.
9:09:41 AM
DR. TRACY WARD, ASSOCIATE VETERINARIAN, SOUTHEAST ALASKA
ANIMAL MEDICAL CENTER, introduced herself and relayed that
she was the current president of the Alaska Veterinarian
Medical Association (AVMA).
Dr. Ward discussed the presentation "Why It makes Sense to
Exempt Veterinarians from the Prescription Drug Monitoring
Program" (copy on file).
Dr. Ward addressed slide 2:
SB 132: AN ACT EXEMPTING VETERINARIANS FROM THE
REQUIREMENTS OF THE CONTROLLED SUBSTANCE PRESCRIPTION
DATABASE.
Supported By
Alaska State Veterinary Medical Association
Alaska Board of Veterinary Examiners
Alaska Board of Pharmacy
Dr. Ward spoke to slide 3, "Background of Controlled
Substance Prescription Database":
Referred to as PDMP
• Veterinarians (with a Drug Enforcement Agency
permit) required to participate in the PDMP since
2017
• Participation involves both querying and reporting
into the PDMP database (under certain circumstances)
for some categories of controlled substances.
• The PDMP was intended to be a secure online database
to improve public health and to allow practitioners
to look for duplicate prescribing, possible misuse,
drug interactions, and potential concerns related to
the overuse of opioids.
Dr. Ward thought it was important to recognize that that
the PDMP did not prevent diversion, where practitioners
such as doctors or veterinarians purchased controlled
products to sell "out the back door," because the drugs
were not prescribed nor entered into the system. She
asserted that the PDMP was to primarily prevent "doctor
shopping."
9:12:03 AM
Dr. Ward addressed slide 4, "Our Objective Today is to
Discuss":
Ineffective Tool ? Why the PDMP doesn't work in
veterinary medicine
Privacy Issues ? Privacy and liability issues
Low Opioid Risk ? Low use of opioids in veterinary
medicine
Costly Oversight ? Large PDMP investigative costs with
no shown benefit
Business Burden Business Burden ? Onerous to comply
Staff Shortages High Licensing Fees
Dr. Ward expanded that veterinarians saw human private
information when accessing the PDMP, and veterinarians were
not trained in pharmacology for humans. Conversely, medical
doctors were not trained in the use of drug choices or
treatment of animals. She summarized that veterinarians
were viewing data in the PDMP that they could not
interpret. She discussed the privacy and liability issues
related to veterinarians not being subject to the Health
Insurance Portability and Accountability Act (HIPAA). She
cited that veterinarians accounted for .3 to 1 percent of
all opioid prescriptions generated in the United States and
in Alaska.
Dr. Ward relayed that veterinarians did not use the opioids
of primary concern in the opioid crisis and the drugs that
were primarily abused such as Oxycontin and Vicodin. She
described that fentanyl was rarely used and only in a
clinical setting. She emphasized that veterinarians
represented a very low risk to the population with the
drugs they prescribed. Over two thirds of states had
exempted veterinarians from PDMPs. She summarized that the
result of the PDMP in Alaska had been costly oversight,
investigative, and business burdens to veterinarian
practitioners in the state.
9:16:13 AM
Senator Wilson thanked the testifiers. He relayed that he
had heard the bill in a previous committee where a question
came up about opioids used during surgeries in veterinary
facilities. He referenced break-ins at veterinary clinics
and thought the PDMP would not prevent break-ins.
Dr. Ward asked if Senator Wilson's was related to the PDMP.
Senator Wilson asked if the PDMP would stop a person
breaking into a veterinary facility.
Dr. Ward answered in the negative. She explained that the
PDMP was only relevant to drugs that were prescribed. She
detailed that veterinarians were required by the Drug
Enforcement Agency (DEA) to have all controlled substances
under double lock and key. She explained that her clinic
had controlled substances in a gun safe behind a locked
door, and the possibility of a person being able to break
in and obtain the drugs was very low. She asserted that the
PDMP had no bearing on the situation.
Co-Chair Bishop wanted to follow up on Senator Wilson's
session. He wondered if there were many break-ins in
veterinary clinics in the state. He had not heard of any.
Dr. Ward was not aware of any such break-ins but was merely
speaking to the possibility. She thought that since the
onset of the opioid crisis, most practices kept minimal
amounts of the drugs on site for use during surgery and the
post-operative periods. She noted that most practices would
prescribe the drugs to be dispensed from a pharmacy.
9:19:02 AM
Dr. Berngartt advanced to slide 5, "Why It Makes Sense to
Exempt":
Costly Oversight
The unwieldy PDMP leads to costly oversight with no
shown benefit.
Costly and onerous requirements for monitoring
veterinarians have been placed on the board of
veterinary examiners (BOVE).
Alaska veterinarians have the highest licensing fee in
the country
Dr. Berngartt stated that the Board of Veterinary Examiners
had experienced investigative costs rise exponentially
since 2017. There had been an increase in referrals from
the PDMP program. The situations involved technical
violations in a system that was not usable by
veterinarians. She reminded of the lack of a numerical
identifier for animals such as a social security number.
She emphasized there were technical violations but there
had not been a single incidence of veterinary doctor-
shopping or poor practice behavior.
Dr. Berngartt continued to address slide 5. She reminded
that the board was self-supporting. She noted that there
was grant funding available for PDMP cost and
administrations, but the grants covered the PDMP side of
investigations rather than the board's costs for
investigations. She noted that veterinarians in Alaska had
the highest licensing fees in the country.
Dr. Berngartt discussed slide 6, "Why It Makes Sense to
Exempt":
Business Burden
The PDMP has increased business burdens for
Veterinarians.
? Charging veterinarians for the cost of enforcement
of an unusable PDMP system that provides no
identifiable benefit is not responsible stewardship of
resources.
o Widespread shortage of veterinary professionals in
Alaska
o Time spent on the PDMP lessens productivity for
patient care
o Higher business costs = higher fees for services
Dr. Berngartt explained that veterinarians could only
delegate the task of reporting to the PDMP to another
licensee, which was a veterinary technician. She cited that
there were about 430 licensed veterinarians and about 270
licensed veterinary technicians in the state, making it
difficult to delegate. She discussed the time and cost
burden of using the PDMP and mentioned the veterinary
shortage in the state. She cited identifiable harm through
increased client cost and decreased veterinary time for
care.
9:24:02 AM
Senator Wilson asked if it was possible for veterinarians
to use human pharmacies to get pet medication so the burden
of PDMP use would be shifted.
Dr. Berngartt stated that it was possible for veterinarians
to use outside pharmacies to dispense medication, but as
the statutes was written it required use of the PDMP
through the act of prescribing the medication.
Co-Chair Bishop asked about quantifying the veterinarian
shortage.
Dr. Berngartt did not have a certain number to describe the
need for veterinarians, but qualified that a fairly large
percentage of licensed veterinarians in Alaska did not live
and practice in the state. She cited that Juneau used to
have about 12 veterinarians, while currently there were 4
practicing doctors in clinics and Dr. Ward practiced at the
Humane Society. She noted that the veterinary shortage was
a nation-wide program. She explained that many people had
acquired pets during the pandemic.
Co-Chair Bishop thought there was no analytical evidence of
the shortage. He was curious if the PDMP was an impediment
to new veterinarians coming into the state, and whether
there was any evidence of stronger numbers in states that
had repealed the requirement.
9:27:41 AM
Dr. Ward did not think there was hard evidence that the
PDMP was an impediment. She recounted that when she came to
Alaska, she did not delve into the details enough to
understand the requirement of participating in the PDMP.
She thought the point Dr. Berngartt was making was more
about making the most efficient use of time for practicing
veterinarians. She knew there were waiting lists in every
practice in the state and considered time spent on the
database to be time that could be spent treating patients.
Dr. Berngartt added to Dr. Ward's remarks and suggested
that along with the concern of veterinary retention, it was
important to consider recruitment of new veterinary
graduates. She explained that veterinary salaries did not
necessarily start high to offset education and licensing
costs. She thought Alaska's high licensing costs could
affect potential recruitment.
Dr. Berngartt spoke to slide 7, "Why It Makes Sense to
Exempt":
Oversight in Place
Veterinarians are monitored by the Drug Enforcement
Agency and must adhere to controlled substance
regulations.
? Veterinarians who prescribe or dispense controlled
substances are licensed through Drug Enforcement
Agency (DEA).
? Significant level of accountability, record keeping,
and medication storage requirements for veterinarians.
Distributors of controlled substances monitor
utilization patterns of veterinarians.
o Suspicious Order Monitoring System is in place
and data is gathered by distribution companies
o Required by DEA to monitor and report unusual
purchase patterns of a veterinarian
o Required to flag purchases that fall outside of
norms for either previous purchase history or
norms for practices of similar size/type
? DEA oversight is to control/prevent diversion from
licensed professionals to drug dealers and users.
Dr. Berngartt discussed required stringent record keeping
for veterinary drugs.
9:31:27 AM
Dr. Berngartt showed slide 8, "Why Invest?":
Valuable resources into a problem, that doesn't
benefit the problem?
It Makes Sense to Exempt Veterinarians from the PDMP
Dr. Berngartt thought the presentation had shown that the
PDMP was an ineffective tool for veterinarians. She
mentioned the disadvantage of comingling human and
veterinary data, privacy issues, costly oversight, business
burdens, and the low opioid risk posed by veterinarians.
Dr. Berngartt showed slide 9, "Urge YES VOTE on SB 132":
Supported By:
Alaska State Veterinary Medical Association
Board of Veterinary Examiners
Board of Pharmacy
Senator Olson asked if all veterinarians had a Drug
Enforcement Agency (DEA) number.
Dr. Berngartt answered "no." She qualified that only those
veterinarians who had a DEA number that were required to
participate in the PDMP.
Senator Olson asked how often veterinarians prescribed
Schedule 2 and Schedule 3 drugs.
Dr. Berngartt thought Senator Olson's question was broad
and was dependent upon the veterinary practice. She
discussed different veterinary practices ranging from home
health visits to emergency practice, which would have a
very different opioid practice.
Senator Olson asked when the last time Dr. Berngartt had
prescribed a Schedule 2 or Schedule 3 drug.
Dr. Berngartt relayed that she had recently graduated from
law school and was not in full time veterinary practice.
She estimated that she had not prescribed the drugs since
2019.
Senator Olson asked Dr. Ward when the last time she
prescribed Schedule 2 or Schedule 3 drugs.
Dr. Ward relayed that she had used the drugs within the
clinic the week previously.
Senator Olson asked if the practice was standard for
veterinarians throughout the state.
Dr. Ward could not speak to a standard because different
types of practice would use the drugs less frequently. She
cited that the practice where she worked did not dispense
any prescribed substances, and the drugs were sent through
a pharmacy. She mentioned the prescription of two drugs
that were frequently prescribed.
9:35:18 AM
Senator Olson asked about the high license fees and asked
if the cost had been driven up by the self-funded
investigations by the state board.
Dr. Berngartt affirmed that it was the boards impression
that fees were driven up by investigations. She highlighted
that she participated in national conferences, and thought
Alaska had veterinarians that practiced high-quality
medicine with a low level of complaints. She had not seen
an increase of people alleging negligence in practice, but
she had seen a significant increase in investigations
related to PDMP technical violations. Each time one of the
violations was sent over, an investigation was required.
Senator Olson asked if the board had its own investigator.
Dr. Berngartt relayed that the board shared an investigator
with other boards.
Senator Olson referenced the shortage of veterinarians in
the state. He asked if Alaska had reciprocity with other
licensed veterinarians.
Dr. Berngartt relayed that the University of Alaska
Fairbanks had a veterinary program. Students in the program
attended at UAF for the first two years, with the latter
two years at Colorado State University. She could not
quantify how many program participants returned to the
state. She speculated that Alaska did not have reciprocity
with other states.
Senator Olson shared that his most concerning question had
to do with disciplinary actions related to controlled
substances. There had been a veterinarian in his district
which had taken the medicine from his practice.
Dr. Berngartt was aware of the scenario described by
Senator Olson. She thought it was important to remember
that the PDMP was but one tool in the toolbox for
addressing opioid addiction. She contended that if a doctor
was impaired, they would not be entering the information
into the PDMP. She mentioned other ways of demonstrating
that the PDMP did not catch bad actor doctors or impaired
doctors.
9:40:01 AM
Dr. Berngartt continued her remarks. She thought it was
erroneous to say that that veterinary participation in the
PDMP would have helped the situation in Senator Olson's
district, because the drugs would have never been entered
in the PDMP as they were not prescribed drugs.
9:40:27 AM
Co-Chair Bishop asked why all vets were not enrolled with
the DEA.
Dr. Berngartt spoke to differences in veterinary practice,
and used the example of Dr. Sarah Coburn, who was a state
veterinarian involved in biosecurity but not in practice.
She mentioned a veterinarian pathologist in the state that
had no need for a DEA license. The different types of
practices accounted for whether a DEA license was required.
Senator Wilson stated that he had a question for the
Division of Corporations, Business and Professional
Licensing, Department of Commerce, Community and Economic
Development.
Co-Chair Bishop thanked the testifiers for their work on
behalf of the states animals.
Senator Wilson wanted a clarification regarding the
veterinarians using the PDMP and catching bad actors. He
thought the PDMP sent out report cards and asked if the
information was reviewed by law enforcement or anyone that
could identify an outlier.
9:42:39 AM
SARA CHAMBERS, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, affirmed that Senator
Wilson was correct in that there were a variety of
reporting metrics utilized by the PDMP. The prescriber
report card was a tool to help a prescriber to identify if
they were an outlying prescriber. She detailed that the
division was working with the software vendor to refine the
process so there could be greater oversight by the boards.
The report card was just educational for the prescriber,
which she thought went back to the legislative intent of
the law.
Senator Olson asked Ms. Chambers if the passage of the bill
would have an effect on the Division of Corporations,
Business and Professional Licensing (CBPL) and the high
license fees.
Ms. Chambers thought many members of the committee had
heard about the high license fees and understood CBPL
performed a complex analysis. She explained that the board
had seen a dramatic uptick in investigative costs directly
related to the PDMP, because there had been some confusion
amongst veterinarians with regard to whether registration
was required. There had been a compliance problem and CBPL
was duty-bound to look into the matter. She thought that if
veterinarians were to continue in the PDMP without the laws
being changed, she anticipated continued confusion and
frustration for veterinarians, which would lead to
investigative costs.
Ms. Chambers continued her testimony. She explained that
fees were high because of the economy of scale. Per capita,
Alaska did things more expensively. She pointed out that
every license fee was the highest in the country because
the state was required to have the same legal,
investigative, and administrative oversight as every other
state, not because of the PDMP. She cited that even though
the program had received $10,000 in Unrestricted General
Funds (UGF) the previous year and was slated to receive
$50,000 in UGF in the current year to offset the fees, the
license fees would likely to continue to increase as a
result of the investigations. She summarized that if
veterinarians were taken out of the PDMP, it was likely the
fees would increase at a lower rate.
9:46:22 AM
Senator Olson asked if the department was supportive of the
bill.
Ms. CHambers relayed that the administration had not taken
a position on the bill. She continued that the department
had taken a position in all things that it was bound to
follow the law as dictated by the legislature. She
qualified that the administration saw all sides of the
arguments for and against the bill.
Senator Olson commented that after seeing the PDMP coming
to fruition and deal with its guidelines, he was fully in
support of the bill because of the extra burden imposed by
the PDMP.
Senator Wielechowski asked if there had been complaints
about opioid abuse or drug abuse in any of the
investigations.
Ms. Chambers relayed that there had not been any
substantiated issues with veterinarians that had been
related to the PDMP. There had been a lot of complaints of
non-compliance, but no complaints of veterinarian
wrongdoing as a result of the PDMP.
9:48:05 AM
Co-Chair Bishop OPENED public testimony.
9:48:20 AM
DR. JAMES DELKER, ALASKA VETERINARY ASSOCIATION, SOLDOTNA
(via teleconference), spoke in support of the bill. He and
his wife had been practicing veterinary medicine for over
25 years and he had owned a private practice in Soldotna
for 19 years. He detailed that he had served as an unpaid
volunteer on the AVMA Board since 2010, and the board had
no paid lobbyist. He had been involved with the veterinary
PDMP issue since it came to the attention of the board in
2013. He recounted trying to share the identified problems
with the PDMP staff and Board of Pharmacy, but the problems
had not been resolved.
Mr. Delker emphasized that there had not been a single case
of doctor shopping or diversion to a veterinarian
identified by the PDMP in the last five years, yet the
board had spent $160,000 on investigations of around 56
veterinarians. Essentially all the investigations had been
related to PDMP non-compliance rather than opioid diversion
or abuse. He asserted that the cost of the program to
taxpayers and veterinarians was excessive and unwarranted.
Mr. Delker commented on the shortage of veterinarians in
the state. He had recently hired a veterinarian after about
two and a half years spent trying to fill the position. He
mentioned other clinics in the area that had not been able
to fill veterinarian positions. He discussed licensing
costs and identified that it was becoming a deterrent for
recruiting new doctors to Alaska. He mentioned a shortage
of licensed veterinary technicians. He discussed types of
medications prescribed by veterinarians, and cited that in
25 years of practice he had never prescribed Oxycontin,
Vicodin, or Methadone. He and other veterinarians
prescribed medications with low abuse potential such as
Phenobarbital. He noted that 34 other states had exempted
veterinarians for PDMP programs. He emphasized that
veterinarians were happy to support efforts to decrease the
opioid epidemic but asked that efforts result in measurable
benefits. He thought with consideration of the facts, the
legislature would support the bill, as did the Board of
Pharmacy.
9:52:10 AM
Co-Chair Bishop CLOSED public testimony.
Senator Olson asked Dr. Delker what he used for an anti-
pertussive when dealing with an animal.
Dr. Delker relayed he typically used over-the-counter
medication such as Robitussen. He continued that if the
case progressed, he would occasionally use liquid
Hydrocodone, although he could not recall the last time he
had prescribed it.
Senator Olson asked if Dr. Delker used codeine for animal
patients.
Dr. Delker could not recall ever using codeine in his
practice of 25 years.
Co-Chair Bishop relayed an amendment deadline of Monday,
March 21 at noon.
SB 132 was HEARD and HELD in committee for further
consideration.
9:53:45 AM
AT EASE
9:54:45 AM
RECONVENED
SENATE BILL NO. 202
"An Act relating to the renewable energy grant fund
and recommendation program; and providing for an
effective date."
9:54:50 AM
Co-Chair Bishop relayed that it was the first hearing of SB
202. It was the committee's intention to hear a bill
introduction and a Sectional Analysis, and to take public
testimony.
9:55:09 AM
SENATOR JOSH REVAK, SPONSOR, read from a Sponsor Statement
(copy on file):
SB 202 extends the authorization of the Renewable
Energy Grant Fund and Recommendation Program setting a
new sunset date of June 30, 2033.
The Renewable Energy Fund (REF) program was originally
established in 2008 with the passage of House Bill 152
and later received a ten-year extension in 2012, in
both cases receiving a unanimous vote of the
legislature. The REF is managed by the Alaska Energy
Authority in coordination with a nine-member Renewable
Energy Fund Advisory Committee.
Senator Revak explained that the program had an open
application process and was currently in Round 14. Each
submission was considered by its economic and technical
feasibility. The Alaska Energy Authority's (AEA)
recommendations were sent to the advisory committee, and
its final recommendations were then sent to the legislature
for approval. He noted that 39 applications were received
in the last round. He continued to read from the Sponsor
Statement:
Since its inception, the Renewable Energy Fund has
distributed over $275 million dollars in grant funds
for qualifying and competitively selected renewable
energy projects across the state.
Senator Revak detailed that $34 million had been directed
at projects on the road belt, and $248 million had been
directed to projects in rural Alaska. He continued that SB
202 amended the 2008 session law as amended in 2012 to
extend the sunset date to June 30, 2033, and also set an
immediate effective date. The bill had a $1.4 million
fiscal note for maintenance of the fund, financial
services, and oversight of existing and new grants. The
amount reflected what was budgeted for in FY 23. He
continued to address the Sponsor Statement:
These REF grants have been supplemented by both
federal and local funding to the tune of hundreds of
millions of dollars. These combined funds help to
stabilize and reduce energy costs for consumers by
supporting renewable energy projects in both urban and
rural communities across Alaska.
Senator Revak emphasized that as energy prices climbed, he
thought it was important for Alaska to take advantage of
all of its available sources of energy and heat, especially
in the state's most vulnerable communities. He summarized
that the Renewable Energy Grant Fund was an important tool
which supported Alaskan communities to meet their energy
needs.
Senator Revak explained that there was invited testimony
available to answer questions, and there was a presentation
that had been distributed to members (copy on file). He
noted that because of the REF Program, there had been 30
million gallons of diesel saved since 2008.
Senator Wilson shared that he was generally supportive of
the program and its process for selecting projects. He
included that he was currently a member of the Renewable
Energy Advisory Committee along with Senator von Imhof.
9:58:51 AM
Co-Chair Bishop OPENED public testimony.
9:59:01 AM
JERRY MEDINA, INSIDE PASSAGE ELECTRIC COOPERATIVE, JUNEAU
(via teleconference), testified in support of the bill. He
shared that the Inside Passage Electric Cooperative (IPEC)
had received two construction grants from REF. In 2015,
IPEC completed a hydroelectric project at Gartina Falls
outside of Hoonah. The REF grant amount was $6,694,000, and
the remainder was financed with a low-interest loan of $3
million. The project was completed in August 2015. He cited
the following figures since the project came online:
542,711 gallons of diesel fuel saved, $1,297,979 of diesel
fuel costs replaced, and 7,910,266 kilowatt hours of hydro-
generation.
Mr. Medina informed that IPEC had also received a grant
from REF in the amount $3,920,000, as well as a $3 million
USDA Rural Utilities Service grant for construction of the
Gunnuk Creek hydro project in Kake. Additionally, IPEC
secured a low-interest loan of $1,840,000 for a total
project cost of $8,760,000. The project was completed in
October 2020. He cited the following figures since the
project came online: 70,833 gallons of diesel fuel saved,
$165,350 of diesel fuel costs replaced, and 1,003,122
kilowatt hours of hydro-generation. He detailed that there
had been several days in Kake with 100 percent hydro-
generation, where diesel generators had been off.
Mr. Medina continued his testimony. He cited the following
figures resulting from a combination of the projects at
Gartina Falls and Gunnuk Creek: 613,544 gallons of diesel
fuel saved, resulting in $1,463,329 in savings to
customers. He summarized that REF had been instrumental in
completing two successful clean renewable energy projects
for IPEC customers. He shared that IPEC had "skin in the
game" for both projects. He emphasized that the success of
the projects would not have been possible without REF.
10:01:37 AM
Co-Chair Stedman thought there were several ways of
measuring the REF Program, one of which was fuel savings.
He wanted to know if the meter rate for the communities of
Kake and Hoonah had gone down or up since the hydro
projects had been operational.
Mr. Medina explained that IPEC had the same rate for all
four of its service areas. He discussed the fuel savings,
which was reflected in the Cost of Power Adjustment (COPA),
which was a fuel surcharge that was currently just over .15
cents per kilowatt hour. He explained that as fuel prices
fluctuated, the COPA fluctuated in the same direction. He
recalled that the latest invoice from the fuel barge
reflected $4.22 per gallon after recently being at a price
of just over $3 per gallon. He hoped that there would be a
significantly wet year to generate as much hydropower as
possible.
Co-Chair Stedman understood that the meter rate in Kake had
gone up after the hydro-project.
Mr. Medina thought Co-Chair Stedman had incorrect
information.
Co-Chair Stedman shared that his information came from
community leaders in Kake, including from city hall. He
asked Mr. Medina to get back to the committee with more
detailed information regarding historical meter rates
charged to citizens. He shared concerns regarding losing
sight of the goal of lowered rates as the state worked
towards renewable energy and moving away from the use of
diesel.
Mr. Medina reiterated that all customers paid the same
amount. He thought all of IPEC's customers benefitted from
the hydro projects.
Co-Chair Bishop asked Mr. Medina to provide the committee
with the information requested by Co-Chair Stedman.
10:04:42 AM
MICHAEL ROVITO, DEPUTY DIRECTOR, ALASKA POWER ASSOCIATION,
ANCHORAGE (via teleconference), spoke in support of the
bill. He explained that the Alaska Power Association (APA)
was a statewide trade association for electric utilities in
Alaska. He relayed that APA was in full support of the bill
and of extending the REF. He strongly urged passage of the
bill and thanked the sponsor. He asserted that many members
had received crucial funding from REF since its inception.
He continued that the funds had supported the addition of
renewable energy projects that had lowered reliance on
diesel fuel, stabilized rates, and decreased the carbon
footprint of electric generation.
Mr. Rovito continued his testimony. He cited 244 REF grants
totaling $275 million, and over 95 operating projects that
had been built using the funds to save more than 30 million
gallons of diesel each year. He asserted that REF was an
extremely valuable program that had proven itself. He
referenced numerous projects under consideration for future
rounds of grant funding through REF.
10:06:35 AM
JOMO STEWART, PRESIDENT AND CEO, FAIRBANKS ECONOMIC
DEVELOPMENT CORPORATION, FAIRBANKS (via teleconference),
testified in support of the bill. He asserted that the
Fairbanks Economic Development Corporation (FEDC) had long
supported the REF Program and any state efforts to help
communities to diversity their energy base and drive down
costs. He mentioned that much of FEDC's work pertained to
energy and the attempt to diversify energy. He though a
nice complement to the REF Program would be to identify
funding to help reactivate the Home Energy Rebate Program
that had been operated by the Alaska Housing Finance
Corporation (AHFC).
Co-Chair Bishop thanked Mr. Stewart and affirmed that the
committee was looking into the topic of the Home Energy
Rebate Program as of two weeks previously.
10:08:04 AM
Co-Chair Bishop CLOSED public testimony.
10:08:06 AM
AT EASE
10:09:17 AM
RECONVENED
Senator Wielechowski asked if Mr. Thayer had a sense of how
many successful REF projects there were as compared to the
number of abandoned projects.
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY,
ANCHORAGE (via teleconference), cited that there were 99
operational projects, with 38 in development and 240 total.
There had been a little less than 100 projects that had not
gone forward, part of which was due to the economics of the
projects or future funding for the costs of the projects.
He added that there were a few projects currently seeking
additional funding, primarily through the federal
infrastructure bill or other means. He discussed
feasibility work, which had to be complete in order to move
projects forward. He noted that early in the program itself
there was more funding available, while currently there was
the ongoing challenge of a $1 million funding cap.
Senator Wielechowski inquired about the 100 projects that
had not gone forward and asked what percentage had been
abandoned versus projects still in development.
Mr. Thayer did not have the information at hand. He offered
to send the committee a complete list of projects and
project status.
Senator Wielechowski expressed his continued support of the
REF Program and thought it had been very successful. He
wanted to get a sense of if there was something to be
improved if the state had invested in projects that had not
gone forward.
Senator Wielechowski asked if the REF funds were sweepable.
Mr. Thayer stated that there were usually no funds left to
sweep because projects were already encumbered by the end
of the fiscal year. He noted that the $4.75 million for
Round 13 (completed in August) had been encumbered.
Currently AEA was on Round 14 and had approximately $15
million if the legislature approved the funding, with 39
applications for a total request of $19.2 million in REF
funds. He identified that there were some projects that
would be disqualified based on economics or technical
viability. The funds had not been swept in the past because
from the time AEA moved a project forward and received
legislative approval, the funding was encumbered within a
few months.
10:12:44 AM
Senator Olson asked if the funds were sweepable if there
were funds left in the account.
Mr. Thayer thought the funds were sweepable. He noted that
Round 10, 11, and 12 had no funding by the legislature for
the program. The previous year REF had received $4.7
million, and currently there was a request for $15 million.
He reiterated that there had been no money in the fund to
sweep.
Senator Hoffman thought the REF was a great program. He
thought that the largest benefit was that grantees funded
for hydro or wind power receive stabilized rates. He
thought people using diesel would have seen rates double in
the last few years. He thought energy costs continued to be
the largest expenditure for individuals in rural Alaska,
whether on heating, electricity, or fuel. He was greatly
supportive of the program because it stabilized individual
rates and the lives of those that benefited were greatly
improved.
Senator Revak thanked the committee for hearing the bill.
Co-Chair Bishop set the bill aside.
SB 202 was HEARD and HELD in committee for further
consideration.
Co-Chair Bishop discussed the agenda for the afternoon.
ADJOURNMENT
10:15:13 AM
The meeting was adjourned at 10:15 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 132 Sectional Analysis.pdf |
SFIN 3/17/2022 9:00:00 AM SHSS 2/3/2022 1:30:00 PM |
SB 132 |
| SB 132 Sponsor Statement.pdf |
SFIN 3/17/2022 9:00:00 AM SHSS 2/3/2022 1:30:00 PM |
SB 132 |
| SB 132 Final Version-Finance Committee 3.15.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 132 |
| SB 132 - PHA Bd Letter of Support - 2.25.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 132 |
| SB 202 Sectional Analysis 2.26.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 202 Support Docs REF Projects By Region 4.14.2021.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 202 Sponsor Statement 2.26.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 202 Support Docs Renewable Energy Fund Fact Sheet 2.11.2022.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 202 Support Letter APA 2.25.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 132 Letter of Opposition Veterinarians Exempt PDMP.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 132 |
| SB 202 AEA REF_PROJECTS_BY_ENERGY_REGION_AND_RD14_SUMMARY.xlsx |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |