03/02/2022 03:30 PM Senate RESOURCES

                SB 202-RENEWABLE ENERGY GRANT FUND                                                                          
                                                                                                                                
3:33:27 PM                                                                                                                    
CHAIR REVAK  announced the consideration  of SENATE BILL  NO. 202                                                               
"An  Act  relating  to  the   renewable  energy  grant  fund  and                                                               
recommendation program; and providing for an effective date."                                                                   
                                                                                                                                
CHAIR REVAK noted  that this was the first hearing  for SB 202 in                                                               
this committee.                                                                                                                 
                                                                                                                                
3:34:02 PM                                                                                                                    
EMMA TORKELSON, Staff, Senator Joshua Revak, Alaska State                                                                       
Legislature, Juneau, Alaska, presented SB 202 on behalf of the                                                                  
sponsor. She spoke on the following sponsor statement:                                                                          
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     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.                                                                                            
                                                                                                                                
     Since its inception in 2008,  the Renewable Energy Fund                                                                    
     has  distributed over  $275  million  dollars in  grant                                                                    
     funds   for   qualifying   and   competitively-selected                                                                    
     renewable energy projects across the state.                                                                                
                                                                                                                                
     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.                                                                                           
                                                                                                                                
     As technology has improved  and the available renewable                                                                    
     energy sources have expanded, so  too has the number of                                                                    
     proposed projects.  In the  last application  cycle, 39                                                                    
     applications from  around the state were  submitted. As                                                                    
     energy prices climb, it is  important to take advantage                                                                    
     of  all   alternative  sources  of  energy   and  heat,                                                                    
     especially  in  our  most vulnerable  communities.  The                                                                    
     Renewable Energy Grant Fund is  an important tool which                                                                    
     supports Alaskan communities meet their energy needs.                                                                      
                                                                                                                                
     Please  join me  in supporting  SB 202  and a  ten-year                                                                    
     extension  of the  Renewable  Energy  Fund, which  will                                                                    
     continue  to support  energy  independence  in more  of                                                                    
     Alaska's communities.                                                                                                      
                                                                                                                                
MS.   TORKELSON   pointed  out   that   two   senators  and   two                                                               
representatives serve  on the  nine-member Renewable  Energy Fund                                                               
Advisory Committee  along with  appointees from  other designated                                                               
groups. SB  202 also sets  an immediate effective date.  The fund                                                               
operates by sending  out open applications in  rounds. The Alaska                                                               
Energy  Authority   (AEA)  considers  each  submission   for  its                                                               
economic  and technical  feasibility.  AEA's recommendations  are                                                               
forwarded to the advisory committee  before they are submitted to                                                               
the legislature for approval.                                                                                                   
                                                                                                                                
3:36:46 PM                                                                                                                    
SENATOR KAWASAKI asked  how many gallons of fuel  have been saved                                                               
in the past ten years.                                                                                                          
                                                                                                                                
3:37:11 PM                                                                                                                    
CURTIS  THAYER,  Executive  Director,  Alaska  Energy  Authority,                                                               
Anchorage,  Alaska,   answered  that  approximately   30  million                                                               
gallons of  diesel fuel have  been displaced  annually, primarily                                                               
by renewable energy.                                                                                                            
                                                                                                                                
CHAIR REVAK  asked former representative  Bill Thomas  to testify                                                               
on SB 202.                                                                                                                      
                                                                                                                                
3:37:55 PM                                                                                                                    
BILL THOMAS, Representing  Self, Haines, Alaska, spoke  on SB 202                                                               
as sponsor of the original  Renewable Energy Fund legislation. He                                                               
served in the House of  Representatives for eight years, and this                                                               
was  one of  his  primo bills.  He and  then  Speaker Harris  had                                                               
similar  bills. They  merged those  two bills  into one  piece of                                                               
legislation, the renewable energy grant  fund, a program aimed at                                                               
reducing  energy  costs  in rural  communities.  The  legislature                                                               
allocated  50 million  dollars per  year  for renewable  projects                                                               
years ago.  Over time  allocations are less,  but the  fund still                                                               
receives  money. The  Renewable  Energy Fund  program works.  The                                                               
fund   helped    several   Southeast   communities    switch   to                                                               
hydroelectric energy,  reducing their  energy costs  by 30  to 40                                                               
percent.  Several  communities have  a  combination  of wind  and                                                               
hydroelectric  power.  He  expressed   his  belief  that  several                                                               
communities  now have  almost 100  percent  renewable energy.  He                                                               
expressed happiness with the efforts  of groups and organizations                                                               
like the  Inside Passage Electric  Cooperative (IPEC),  which has                                                               
supported  this legislation  and has  worked with  many Southeast                                                               
villages on hydropower installations.  The program has benefitted                                                               
many communities,  and hopefully,  the legislature will  renew SB
 for ten more years.                                                                                                         
                                                                                                                                
3:40:46 PM                                                                                                                    
CHAIR REVAK opened public testimony on SB 202.                                                                                  
                                                                                                                                
3:41:15 PM                                                                                                                    
MICHAEL ROVITO, Deputy Director,  Alaska Power Association (APA),                                                               
Anchorage, Alaska,  testified in support  of SB 202,  stating APA                                                               
is  a  statewide  trade association  for  electric  utilities  in                                                               
Alaska. APA  members provide  power to more  than half  a million                                                               
Alaskans from Utqiagvik to Unalaska,  throughout the Interior and                                                               
Southcentral,  and  down the  Inside  Passage.  APA thanks  Chair                                                               
Revak for sponsoring this bill,  supports extending the renewable                                                               
energy  grant fund,  and urges  passage of  SB 202  this session.                                                               
Many APA  electric utility members have  received crucial funding                                                               
from  REF since  its inception.  These funds  have supported  the                                                               
addition of  REF projects that  lowered reliance on  diesel fuel,                                                               
stabilized rates, and decreased  the carbon footprint of electric                                                               
generation.  The Renewable  Energy  Fund contributed  to over  95                                                               
operating projects,  totaling 244  grants and $275  million since                                                               
its inception,  resulting in savings  of over 30  million gallons                                                               
of  diesel  fuel each  year.  So,  it is  clear  that  REF is  an                                                               
extremely valuable  program that  has proven worthy  of continued                                                               
operation. Also, numerous projects  are still under consideration                                                               
for  future  grant  funding rounds.  These  projects,  like  past                                                               
projects, will be  chosen through a deliberative  AEA process and                                                               
reviewed by  the Renewable Fund Advisory  Committee. By extending                                                               
the sunset  date of the  program, electrical utilities  in Alaska                                                               
will have  certainty that REF will  be available as long  as they                                                               
continue innovating power systems.                                                                                              
                                                                                                                                
3:43:18 PM                                                                                                                    
MR. THAYER  spoke in support  of SB 202, providing  the committee                                                               
with  a  brief  REF  financial  overview. To  date,  REF  has  95                                                               
operational projects, 38 are in  development; REF contributed $34                                                               
million to  Railbelt Projects and  $248 million to  rural Alaska,                                                               
and  REF  brought   in  $138  million  in   matching  funds.  The                                                               
legislature approved  11 projects  in rural Alaska  totaling $4.7                                                               
million last year.                                                                                                              
                                                                                                                                
MR.  THAYER  said that  this  year's  funding mechanism  includes                                                               
excess earnings  from the Power Cost  Equalization (PCE) program,                                                               
the PCE endowment, and community  assistance. $25 million will be                                                               
divided between rural powerhouses,  capitalizing on the revolving                                                               
loan  fund for  bulk fuel  and  the REF  program. The  governor's                                                               
proposed budget designated $15 of the  $25 million to REF and $10                                                               
million  to powerhouses.  REF application  round  14 received  39                                                               
applications  totaling  $19.2  million.   The  number  of  viable                                                               
applications  will  drop  as  AEA  goes  through  the  evaluation                                                               
process. AEA's  goal is to  submit $15  million in FY  23 project                                                               
recommendations to the legislature in April.                                                                                    
                                                                                                                                
MR. THAYER  pointed out  that the Renewable  Energy Fund  did not                                                               
receive funding for five fiscal  years and only recently received                                                               
funding for FY 22  and 23 and a little bit in  FY 19. Despite the                                                               
lean past  years, the  program put $15  million in  earnings into                                                               
the budget.                                                                                                                     
                                                                                                                                
3:46:19 PM                                                                                                                    
SENATOR KAWASAKI asked what happens when a project fails.                                                                       
                                                                                                                                
MR. THAYER  answered that when  a project fails, the  funds lapse                                                               
back  into the  program. Round  13  funded 11  projects in  rural                                                               
Alaska,  totaling $4.7  million,  through closed-out  outstanding                                                               
grants,  unexpended  money, and  canceled  projects;  this was  a                                                               
first  in  the  program's  history.  AEA  tries  to  recycle  the                                                               
program's money.                                                                                                                
                                                                                                                                
3:47:39 PM                                                                                                                    
CHAIR  REVAK  found  no  further   witnesses  and  closed  public                                                               
testimony  on SB  202.  He  reiterated that  SB  202 extends  the                                                               
sunset ten years.                                                                                                               
                                                                                                                                
3:48:04 PM                                                                                                                    
SENATOR KIEHL  moved to  report SB  202, work  order 32-LS1522\A,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
CHAIR REVAK found  no objection and SB 202 was  reported from the                                                               
Senate Resources Standing Committee.