Legislature(1993 - 1994)
04/15/1993 07:07 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 126:
An Act making special appropriations for design and
construction of power transmission interties between
Anchorage and the Kenai Peninsula, between Healy and
Fairbanks, and between the Swan Lake and Tyee Lake
hydroelectric projects; and providing for an effective
date.
Co-chair Pearce announced that CSSB 126(FIN) "B" work draft
was before the committee. Senator Sharp MOVED for adoption
of the "B" version of CSSB 126(FIN). Hearing no objections,
IT WAS SO ORDERED.
Senator Sharp MOVED for adoption of amendment 1 deleting
Sec. 8 (copy on file). Co-chair Pearce OBJECTED for
discussion purposes. Senator Sharp said that the CSSB
126(FIN) assumed an additional $9,300.0 was needed to fund
the new revolving fund so that it could accomplish the
intent of $1.1 that stated as far as the financing over the
twenty year period. That appropriation from the general
fund is no longer required. Co-chair Pearce REMOVED her
objection. Hearing no other objections, amendment 1 was
ADOPTED.
Senator Sharp spoke to each of the sections of CSSB
126(FIN).
Co-chair Pearce announced that amendment 2 (copy on file)
was before the committee and invited Cam Toohey, staff to
Senator Sharp, prime sponsor of SB 126 and Brent Petrie,
Manager/Planning & Project Development, Alaska Energy
Authority to join the committee at the table to speak to
amendment 2. Co-chair Pearce spoke to amendment 2 and said
that the amount that was in the Governor's request to the
legislature had been reduced by about 40 percent.
Senator Kelly OBJECTED, and asked for an explanation of the
last two sections on page of 2 of amendment 2. BRENT PETRIE
said that the requests in the last two sections of amendment
2 were prior requests made under the normal budget process
and had been approved by the Governor's office and were to
be requested by AEA as program receipt authority. In the
case of the first section, AEA has received monies from
utilities and other parties over time to blend with other
monies that have been appropriated for AEA to complete a
project. He explained that sometimes it is necessary to
cost-share a project. The way the revolving fund
legislation is written if money came into the fund, AEA can
receive it but the legislature must authorize AEA to expend
it. This section gives the authority to expend such funds.
In answer to Co-chair Pearce, Mr. Petrie said that it was
standard practice that every couple of years, this authority
was requested from the legislature.
Senator Rieger asked if the $4.3M was appropriated from the
general fund. He also asked if the numbers were in the
Governor's capital budget request. Co-chair Pearce answered
affirmatively that higher numbers were in the Governor's
capital request. Senator Rieger asked if those requests
were appropriated to the Alaska Energy Revolving fund in the
Governor's request. Mr. Petrie said that the original
capital budget requested a significant amount of those funds
come from the power development revolving loan fund which
was reporting of quote receipts. With CSSB 126, it was felt
that about $2.1M could come from the revolving fund and the
other amounts although worthy projects, would have to come
from the general fund as a supplement to the revolving fund.
Senator Rieger said that a lot of money was put into the
energy authority and it looked as if even more funds were
going into the energy equation. Mr. Petrie agreed that
these amounts would be general funds going into the
revolving fund. Mr. Petrie said that he and Ron Garzini,
Executive Director, AEA, were trying to come up with some
kind of transitional effort during the first year if this
legislation passes. Senator Rieger said that there had not
been enough time to sort through what the AEA has done with
their own money. Senator Rieger questioned the wisdom of
transferring a funding source to the general fund when the
general fund is already under so much pressure for capital.
It would seem to put more burden on the general fund.
Senator Sharp felt that in future years everyone would be
funded out of the new account that is being set up and these
amounts requested by AEA was originally $12M. The amount
had now been reduced to $4M for the transition.
Mr. Petrie said that in an earlier version of SB 126, an
estimated $10M from the general fund might be required to
make the revolving fund work. This is substantially less
than that amount. Discussion followed between Senator Kelly
and Co-chair Pearce regarding the additional projects added
to SB 126.
Senator Kelly asked who was going to do the bulk fuel system
upgrade -- the Coast Guard, DEC, or DC&RA. He asked if it
was an AEA project. Mr. Petrie said that about two years
ago regulations mandated that fuel deliveries could not be
made to a number of rural communities and a bulk fuel
assessment was initiated through the Energy Authority for
many rural communities. Since last year funds were
appropriated for AEA to do repairs and upgrades for these
systems, a part of small diesel systems in villages. It is
not something new that AEA is doing but felt that it should
be elevated in importance. DEC is involved in the
regulatory because of the statutory arrangement - they
regulate the larger tanks. The Coast Guard is involved in
regulating any fuel facility where fuel deliveries come by
vessel. The AEA has no regulatory authority but they have
some technical abilities to make the corrections that are
necessary.
Senator Rieger asked if the $4.3M would be appropriated into
the Alaska Energy Revolving Fund and appropriated back out
to the projects as outlined, basically capital
appropriations except that the funding source has changed.
Mr. Petrie said that the money would be allocated and money
would drawn from those funds for those projects up to the
maximum limit authorized by the legislation. The Governor's
budget there were over $3.5M in general fund requests for
capital projects for the AEA.
Co-chair Pearce invited Mark Hickey, Contract Lobbyist for
the city of King Cove, to join the committee at the table.
Mark Hickey said that $250.0 was not adequate to complete
the King Cove hydroelectric project, and that $500.0 was
needed to complete the budget which would bring the state's
contribution to $3M, half of which was funded last year.
That amount is being matched by approximately the same
amount, $2.7M (a loan of $2M, $250.0 cash contributions from
the Aleutians East Borough and $450.0 cash contribution from
the city of King Cove). $500,000 is the remaining amount
needed. He said that $3M was the amount that the state
expected to spend when the study was first done for this
facility.
Co-chair Pearce announced that CSSB 126(FIN) would be held
and brought up again later in the meeting.
Note: The following section for CSSB 126(FIN) was moved so
that the minutes for CSSB 126(FIN) are in the one place.
Senator Sharp MOVED to amend amendment 2 by reducing (1)
Rural Power Systems Upgrade to $650,000, (6) Alternative and
Applied Energy Technology Development to $350,000, and
increase (7) King Cove Hydroelectric Project to $500,000.
Senator Kelly withdrew his objection to the amended
amendment. No other objections being heard, amendment 2 was
ADOPTED.
Senator Sharp MOVED for passage of CSSB 126(FIN) as amended
from committee with individual recommendations. No
objections being heard, CSSB 126(FIN) was REPORTED OUT of
committee with a "do pass". Co-chairs Pearce and Frank,
Senators Kelly, Sharp, and Jacko signed "do pass." Senator
Rieger signed "no recommendation." Senator Kerttula was not
present at the meeting and did not sign.
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