Legislature(2009 - 2010)BUTROVICH 205
03/09/2009 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB31 | |
| SB121 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 121 | TELECONFERENCED | |
| + | SB 31 | TELECONFERENCED | |
SB 121-ENERGY EFFICIENCY BLDGS/PUBLIC WORKS
4:21:57 PM
CHAIR WIELECHOWSKI announced the consideration of SB 121, which
requires the Alaska Department of Transportation and Public
Facilities (DOTPF) to assess and retrofit heated and lighted
buildings. It encourages performance-based contracting, which
has guaranteed savings. Representatives Gara and Thomas have a
similar bill in the House, and Senator Joe Thomas also has one.
The bill could save hundreds of millions of dollars over the
years in fuel costs. The state has done similar work on 24
buildings and saved $365,000 at 2006 energy rates and $557,000
at 2008 rates. They have cut natural gas use by 15 percent;
electricity by 22 percent; fuel oil by 36 percent; and they have
cut back on water usage. If the state had done 25 similar
contracts the savings would be about $13 million per year at
2008 rates. SB 121 is a job creation bill because of the
retrofitting jobs. It is a win-win bill.
4:23:43 PM
SHELLY MORGAN, Staff to Senator Bill Wielechowski, Alaska State
Legislature, said SB 121 will lower the cost of state buildings
by reducing energy use. It requires the Alaska Energy Authority
(AEA) to establish a database to identify energy consumption,
and it will use that to prioritize retrofit schedules. The
buildings that consume the most energy can be first. The bill
requires DOTPF to retrofit buildings when it will be cost
effective. Where there are no funds, this bill allows DOTPF to
use performance contracting with a qualified energy service
company so the state can achieve energy audits and efficiency
upgrades through a pay-as-you-save system. No money will be
spent out of pocket. Within 15 years or less all paybacks will
be made, and then the state will be saving large sums of money.
Beginning in 2004, DOTPF executed a performance contract for 8
facilities with Siemens Building Technologies. Siemens has
completed 16 facilities under two contracts. Each contract took
about two years to complete, and energy performance reports were
provided for the first three years. The report on the first
contract showed that the state saved $365,991.
4:26:50 PM
SENATOR HUGGINS asked about the cost of the retrofits.
MS. MORGAN said that because of the performance contracting,
there are no upfront costs. The only costs in the fiscal note
are for staffing and the database. She said DOTPF provided two
fiscal notes that were based on the original bill, not the CS.
They were based on a 10-year [pay back]. With it being 15 years,
there will be less costs per year. If the state did not use
performance contracting, it would cost about $17 million. The
fiscal note is about $363,000 for DOTPF and $100,000 for the AEA
to put together the energy index database.
4:28:31 PM
SENATOR HUGGINS asked if there is an updated code for new
construction.
MS. MORGAN said any new construction built to the most recent
international energy conservation code would be less costly than
retrofitting. The costs of retrofitting are paid by the savings.
SENATOR HUGGINS asked if new buildings have to be built under
new energy codes.
MS. MORGAN said, "If you build a new building under the
guidelines of SB 121, that new building would be required to be
built to the most recently published version of the
international energy conservation code standards, which would
bring it to what we're trying to bring these other buildings to
through retrofitting." This bill also allows for updates to be
made through utility bills. Currently it says every ten years,
but DOTPF is more interested in doing it every year. Updates can
be made every ten years or every year using utility bills. That
allows for observation of any substantial inefficiencies. When
the conservation code is updated, new buildings may not need any
retrofitting for a longer time.
4:31:01 PM
JOHN DAVIES, Research Director, Cold Climate Housing Research
Center, Fairbanks, supports SB 121. It addresses two key
recommendations that were in his group's report entitled: Alaska
Energy Efficiency Program and Policy Recommendations. The report
recommended establishing an energy-use index, which the
committee has just been discussing. It also recommended that the
governor require state agencies to reduce their energy
consumption. SB 121 addresses both recommendations.
MR. DAVIES noted that the CS has "cross talk" between the index
and the database in Section 4, subsections 1 and 2. It should be
clear that the index is the method for calculating the
efficiency of a building, and the database just collects the
information to make that calculation and report the index. The
report helps prioritize what is needed; state agencies have an
enormous number of buildings.
MR. DAVIES said that new construction goes to the international
energy conservation code, but he suggested that the standards be
made stronger. People trying to save energy would try to achieve
a higher target, or about 50 percent of the energy specified in
that standard. He supports the bill but it could be more
aggressive and save more energy.
4:34:51 PM
SENATOR HUGGINS said Mr. Davies made a comment about the
governor directing the AEA. He asked Mr. Davies if he has had
"any conversations with Mr. Haagenson or any of his subordinates
about the governor directing."
MR. DAVIES said not in recent weeks, but Mr. Haagenson is very
supportive "of this general idea." The specific recommendation
in the report was to have the governor do the directing, but as
long as it gets done it doesn't matter who does it.
SENATOR HUGGINS asked if the energy index is a major new task
for the AEA.
MR. DAVIES said it is neither major nor trivial. It would cost
about $50,000 to hire a consultant to get the database up and
running with an easy way to enter data. The basic information
that will be entered into the index is fuel bills and square
footage of the building. The database needs to be maintained,
and that may require a quarter of a person's time.
4:37:41 PM
STEVE HAAGENSON, Executive Director, Alaska Energy Authority
(AEA), Anchorage, said the AEA will measure the total energy
going into buildings on a BTU basis, and then it will divide by
occupancy or square footage to get an index. There will be a
database that will do a lot of the math and be a repository.
Once the data is there, there won't be a need to redo the math
until the buildings have been modified. AEA will then work with
DOTPF to put regulations in place.
4:39:21 PM
SENATOR HUGGINS asked if AEA had the time to do this.
MR. HAAGENSON said he hired someone three weeks ago who is all
charged up, and that person will do the work.
SENATOR HUGGINS said, "We continue to get way ahead of ourselves
as far as having a state energy policy, and we're cramming
square pegs in square holes and sometimes round pegs in square
holes. Does that make you uncomfortable?"
MR. HAAGENSON said not at all. There are energy policies and
plans, but a large component is conservation and efficiency.
Retention of heat in a building is one of the smartest things to
do, and this is a great step in that direction.
4:41:33 PM
RANDY VIRGIN, Director, Sustainability and Efficiency Projects,
Municipality of Anchorage, said SB 121 is a win-win bill. Alaska
is one of two states in the country without an efficiency
policy. It is high time. Buildings account for 39 percent of
total energy use and 72 percent of electricity use in the United
States. Efficiency programs can achieve measurable results.
California has the nation's leading efficiency effort and has
kept its per capita energy use flat since 1974, and the rest of
the nation has gone up around 50 percent. Anchorage has had
success in outdoor lighting by installing over 4,000 high-
efficiency LED fixtures that led to a 56 percent reduction in
energy use. The payback on the capital investment is six years,
and that assumes today's prices. The bulbs last five times as
long, so they reduce the labor to change bulbs. This investment
in efficiency is beating the market. It is a guaranteed return.
If that money had been put into the market, it would be doing a
lot worse. The bill sets out a goal of reducing energy use in
buildings by 20 percent, but that could be easily doubled to 40
percent without trying. Mr. Virgin said the facility managers
could reach a little, and the bar could be set at 60 percent.
4:44:39 PM
MR. VIRGIN said the bill allows the department to determine that
a retrofit is not cost effective. He urged the committee to set
an objective standard to determine if a retrofit is feasible,
and that could be done by setting a timeframe for the return on
investment. If the return is 15 years or less, then the facility
must do it. That will set the proper balance with the
expenditures on the front end. Thirdly, the bill allows the
department to not comply fully with ASHRAE [Heating,
Refrigeration, Air Conditioning Engineering] standards if there
are specific climate [issues], and he thinks that language could
be made into a more objective standard.
4:46:10 PM
CHRIS HODGIN, Project Manager, Department of Transportation and
Public Facilities (DOTPF), Anchorage, said DOTPF supports the
bill but has concerns with the 20 percent goal. It is a goal,
not a mandate, but he wants it to be clear that it doesn't mean
that 20 percent can be attained. Some buildings can save more
and some less. Rather than updating the energy use index in only
specific circumstances, he suggested continuous updates annually
to allow managers to evaluate their buildings "using the same
average of annual periods". That gives an apples-to-apples
comparison that won't miss inefficiencies. Even though the
capital costs are paid for through the realized energy savings,
there will be increased work for managers and administrators.
4:48:47 PM
CAITLIN HIGGINS, Outreach Organizer, Alaska Conservation
Alliance (ACA), Anchorage, said ACA is a coalition of 40 Alaska
conservation organizations with over 38,000 Alaskans. The bill
is critical because it addresses the demand side of energy; it
will result in instant savings for public facilities; and it
will better position Alaska to receive federal stimulus money
for efficiency. ACA has been very pleased with the legislature's
work on supply-side renewable energy, but it is equally
important to address the demand for energy. The cheapest energy
is the energy we don't have to use. SB 121 will result in real
savings for the state and a reduction in the impacts of
greenhouse gases. Public dollars will no longer be wasted by
inefficient lighting and drafty windows. The federal stimulus
package has $3.2 billion to help local governments implement
energy efficiency programs in a block grant program that seeks
to decrease energy consumption and fossil fuel emissions. It can
be used for energy audits; loan, rebate, and incentive programs;
grants for retrofits by nonprofits; and developing programs to
conserve energy and transportation. There is another $4 billion
for bonds that states and municipalities can issue to finance
renewable energy and efficiency projects. The bonds carry a low
interest rate and the bond holder receives federal credits in
lieu of interest. The bill appropriates $3.1 billion for the
state energy program, which provides grants and other funding to
state energy offices for energy efficiency and renewable energy.
"The normal matching requirements under the program do not apply
to the funding provided by the bill." Alaska should receive some
of these funds. States with an energy efficiency plan in place
will be higher on the list for receiving federal funds. This
bill will send a clear signal that Alaska is ready to use
federal dollars for efficiency upgrades.
4:52:26 PM
STEVE ASH, Sitka Climate Action Plan Task Force, Sitka, said
Sitka has already begun a process very similar to SB 121. It
joined the International Council for Local Environmental Issues
about one year ago. The first thing the task force did was
established an energy use index, and it is called a carbon
emissions inventory. It includes transportation, public and
private buildings, boats, and everything that consumes energy.
The task force focused on transportation and municipal
buildings. The group set a goal of a 25 percent reduction in
carbon emissions by 2020. There was a 2003 inventory, and in
2008 there was already a 10 percent reduction in emissions. This
was achieved by updating an oil burning furnace in Sitka's
middle school. This job will be easier than they thought.
Another school furnace can be upgraded. At $3.00 per gallon for
heating fuel, it will save over $250,000 per year for Sitka. By
2020, fuel will likely be more than $3.00 a gallon.
4:55:38 PM
MARCUS WALKER, Student, University of Alaska, Anchorage, said he
is a member of the Alaska Conservation Alliance and Alaska
Conservation Voters. He supports SB 121. He has been studying
how much energy Anchorage is using. He is working for Randy
Virgin on an energy index. Anchorage buildings are using immense
amounts of energy, and simple measures can significantly reduce
this. SB 121 can save an enormous amount of money for Alaska.
Some cities have been doing this work from the ground up, so it
is time to help push everyone in the right direction. There are
retrofitting programs in the villages, and just by replacing
light bulbs brought a 60-percent savings, which is important
since diesel costs so much.
4:57:33 PM
SENATOR HUGGINS said the Dena'ina Center is wonderful, but he
has heard people say they would hate to heat that place.
MR. WALKER said "Unfortunately with no standards that building
was built incredibly inefficient ... and Anchorage has to pay
for the electricity for a long time." This bill could help
retrofit it to save money.
CHRIS ROSE, Executive Director, Renewable Energy Alaska Project,
Anchorage, thanked the committee for the bill and said it will
stimulate the economy by creating jobs. Performance contracting
is proven, and more contractors might come into the state. The
nine recommendations from the Cold Climate Research Center
report included state leadership, and this is important state
leadership by focusing on state buildings. "Hopefully that will
lead to more public awareness of this issue."
SENATOR HUGGINS asked about expanding this bill to qualify for
more federal grants.
MR. ROSE said that if Alaska has this program, "we are least in
line." Without any program it is difficult for Alaska to apply.
5:00:55 PM
KEN BAUER, Performance Contract Salesman, Siemens Building
Technologies, Inc., Issaquah WA, said he doesn't have a lot to
add because other testifiers pointed out the benefits of the
bill. The best use of state funds is for projects that can be
done without using millions of dollars. There are some upfront
costs, but it is a very good investment and a way to reduce
energy without incurring huge expenses. The upgrades create
efficient buildings that are likely healthier buildings, and the
workforce will be more productive. It will also increase jobs in
designing, engineering, and building.
TOM LAKOSH, Anchorage, said he supports the bill, and it should
be combined with SB 119: efficiency standards for new
construction. There is overlap and conflict with SB 119.
Moreover, in order to get in line for the state's energy block
grants, Alaska needs to comply with section 4.10 of the stimulus
bill. It requires commercial and residential building codes that
Alaska doesn't have. "We need a real comprehensive conservation
bill for retrofit, new construction, commercial and residential
building codes." The residential building code has to meet the
international energy conservation code, and commercial codes
need to meet the ASHRAE standard. He would support the bill on
its own, but in order to get the stimulus money, "you need to
sit down, combine this with 119 and add the residential and
commercial building codes." Everyone in the state is so touchy
about building codes...
CHAIR WIELECHOWSKI said [the legislature] is working on building
codes so Alaska will be eligible for the stimulus funds.
MR. LAKOSH suggested putting that with SB 121 and SB 119. There
are conflicts between SB 121 and SB 119 that need to be worked
out. He supports having a 15-year payback period as the standard
for what will be done. That is critical because it goes far
beyond any of the standards and makes the most economical sense.
It is somewhat addressed in SB 119, but it is not clearly
spelled out. "Randy's language is the best on that." Get the
governor to sign one combined bill so Alaska can get the funds
and pay for all these energy savings that it really needs.
SB 121 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 31 Bill Packet.pdf |
SRES 3/9/2009 3:30:00 PM SRES 3/13/2009 3:30:00 PM |
SB 31 |
| SB 121 Bill Packet.pdf |
SRES 3/9/2009 3:30:00 PM SRES 3/13/2009 3:30:00 PM |
SB 121 |