Legislature(2021 - 2022)ADAMS 519
05/13/2022 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB131 | |
| SB173 | |
| SB20 | |
| SB243 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 131 | TELECONFERENCED | |
| += | SB 173 | TELECONFERENCED | |
| += | SB 20 | TELECONFERENCED | |
| += | SB 243 | TELECONFERENCED | |
CS FOR SENATE BILL NO. 243(FIN)
"An Act relating to the power cost equalization
endowment fund; relating to power cost equalization;
and providing for an effective date."
3:19:25 PM
Co-Chair Merrick indicated the bill had last been heard on
May 9.
3:19:39 PM
Representative Thompson MOVED to ADOPT Amendment 1, 32-
LS1573\I.1, (Nauman/Klein, 5/7/22)(copy on file):
Page 2, following line 6:
Insert a new bill section to read:
"* Sec. 2. AS 42.45.085(d) is amended to read:
(d) If the earnings of the fund for the previous
closed fiscal year, as calculated under AS
42.45.080(c)(2), exceed the appropriation under (a) of
this section for the current fiscal year, the
legislature may appropriate 70 percent of the
difference between the earnings of the fund for the
previous closed fiscal year, as calculated under AS
42.45.080(c)(2), and the appropriation made under (a)
of this section for the current fiscal year as
follows:
(1) if the amount calculated under this subsection is
less than $30,000,000, that amount to a community
revenue sharing or community assistance
fund; or more,
(2) if the amount calculated under this subsection is
$30,000,000 or
(A) $30,000,000 to a community revenue sharing or
community assistance fund; and
(B) the remaining amount, not to exceed $25,000,000,
to the renewable energy grant fund established under
AS 42.45.045, to the bulk fuel revolving loan fund
established under AS 42.45.250, [OR] for rural power
system upgrades, for bulk fuel upgrades, or to a
combination of the funds or purposes listed in this
subparagraph."
Renumber the following bill sections accordingly.
Co-Chair Merrick OBJECTED for discussion.
Representative Thompson explained that the amendment added
bulk fuel upgrades to a list of types of projects that AS
42.45.085(d) may fund. The list currently included the
renewable energy fund, the bulk fuel revolving loan fund,
and rural power system upgrades. He stated that adding bulk
fuel upgrades to the list allowed the Alaska Energy
Authority (AEA) to capture federal funds on a one-to-one
basis if it undertook any bulk fuel upgrades. He invited
Mr. Thayer to comment.
3:20:30 PM
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY,
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT
(via teleconference), elaborated on the amendment. He
explained there was a cascading waterfall of funds
available depending on when the fund reached a certain
level of earnings. He elaborated that the first $30 million
or so would go to the Power Cost Equalization (PCE)
payments, the next $30 million would go to the community
assistance program, and up to $25 million could be used
into the three programs mentioned by Representative
Thompson (renewable energy fund, the bulk fuel revolving
loan fund, and power houses). He explained that the
amendment added bulk fuel as one of the choices. For
example, power houses had been included for $10 million in
the current year, which had received a $10 million match.
He expounded that if bulk fuel had been included in the
category, AEA could put any available dollar amount into
bulk fuel and receive a federal match one for one.
Mr. Thayer relayed there was currently $300 million in
deferred maintenance on power houses and $800 million
deferred maintenance in bulk fuel. He explained the
amendment would be another mechanism to help with deferred
maintenance if the earnings of the endowments supported the
cascades.
3:22:35 PM
Co-Chair Foster asked to hear from the bill sponsor or his
staff on the amendment.
TIM GRUSSENDORF, STAFF, SENATOR LYMAN HOFFMANN, stated that
the Senate Finance Committee would prefer no amendments. He
relayed there were already three competing entities for the
$25 million if the cascades got to that point. The fourth
entity would compete with the first three. He noted that
the legislature selected where the $25 million would go and
could split the funds how they chose. He believed when the
renewable energy source had been added, there was an effort
to move away from fossil fuels and work towards renewable
energy sources. He suggested that the legislature could
provide a separate appropriation for bulk fuel. He remarked
the match for bulk fuel would not be consistent because of
market fluctuations.
3:24:32 PM
Representative Josephson asked what a bulk fuel upgrade
looked like.
Mr. Thayer deferred the question to a colleague.
TIM SANDSTROM, CHIEF OPERATING OFFICER, ALASKA ENERGY
AUTHORITY (via teleconference), responded that a typical
rural bulk fuel system consisted of vertical or horizontal
tanks with secondary containment built into the tank system
and sometimes as a dike around the system. There were
approximately 400 rural facilities, several in each
community that were owned by school districts, Native
corporations, or other entities. He explained the
facilities were in a continued state of disrepair with
approximately $800 million in deferred maintenance. The
tanks often had a great deal of corrosion and sometimes the
secondary containment was compromised, which was the type
of project the possible funding would meet.
Representative Josephson asked for verification there was
currently $800 million in need for the tanks.
Mr. Sandstrom responded affirmatively.
Representative Josephson saw the environmental benefit;
however, he would be concerned that when a legislator
offered an undesignated general fund (UGF) amendment on
bulk fuel that a counter argument would be the amendment
was unnecessary because bulk fuel could participate in
specific program (as proposed in Amendment 1). He remarked
that the funds were merely incremental whereas an $800
million problem existed. He did not see the amendment as a
great way to get there.
3:27:05 PM
Representative Wool remarked that he believed the proposed
addition would be competing with renewable energy fund
dollars. He thought the goal should be to replace diesel
fuel demand with other energy sources sooner rather than
later. He thought $800 million [in deferred maintenance]
was a significant amount of money. He would be opposing the
amendment. He thought UGF may be a better approach.
Vice-Chair Ortiz asked for the name of the three entities
currently competing for the funding.
Mr. Grussendorf responded that the three entities included
the bulk fuel revolving loan fund, the rural power systems
upgrade, and the renewable energy fund.
3:28:45 PM
Representative Carpenter asked how many individual tanks
the $800 million price tag represented.
Mr. Sandstorm responded that there were 400 facilities,
which typically had between two and ten bulk fuel tanks
comprising a system.
Representative Carpenter asked if any of the tanks had
regulatory inspection requirements that resulted in
required system upgrades.
Mr. Sandstrom answered affirmatively. He detailed there
were two primary regulatory bodies responsible for tank
inspections including the U.S. Coast Guard and the
Department of Environmental Conservation. He highlighted
the concern that the regulatory agencies had not been very
active in enforcing and doing monetary finds in the past;
however, they were beginning to do so as of the current
year. One of AEA's primary efforts was to mitigate the
effects and keep the facilities co-compliant and safe.
Representative Carpenter asked how many facilities were
currently known to be out of compliance.
Mr. Sandstrom responded that AEA was currently undertaking
an inventory assessment that was anticipated to be complete
by the end of the year. Anecdotally about 75 percent of the
facilities had some regulatory violations of varying
significance.
Representative Carpenter asked if there were any facilities
with leaks needing immediate repairs.
Mr. Sandstrom replied there were none at the current time.
3:31:05 PM
Representative Thompson noted that earlier in the year
there had been an effort to remove the $25 million cap
related to available funds; however, the effort had not
been successful. He commented that many of the small
communities had old degrading tanks. He stated it had been
the purpose of the proposed amendment. He could see the
amendment was taking up a significant amount of the
committee's time.
Representative Thompson WITHDREW Amendment 1.
Representative Wool stated he had an amendment that he did
not offer which was to lower the amount from 750kWh to
650kWh. He wanted to have a discussion about the topic. He
believed there was scarcity of data in terms of what people
were using. He was amenable to the increase. He had written
to a couple of utilities including one in Fairbanks and
Mat-Su Electric. The monthly consumption average by a home
in Fairbanks was 568kWh per month and the average in Mat-Su
was around 604kWh. He had not seen any data on PCE
communities. He spoke about increased costs. He considered
whether some homes would even need the increase. He
believed some people could expand their consumption through
space heaters, especially if diesel costs were high. He
spoke about the desire for energy efficiency to heat homes.
He suggested heat pumps could be used in some areas. He
would like to see more data on consumption and need from
AEA.
3:35:28 PM
Co-Chair Foster MOVED to report CSSB 243(FIN) out of
Committee with individual recommendations and the
accompanying fiscal note
There being NO OBJECTION, it was so ordered.
CSSB 243(FIN) was REPORTED out of committee with five "do
pass" recommendations and five "no recommendation"
recommendations and with one previously published fiscal
impact note: FN1 (CED).
Co-Chair Merrick reviewed the meeting schedule for the
following day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 131 Public Testimony Rec'd by 051222.pdf |
HFIN 5/13/2022 1:30:00 PM |
SB 131 |
| SB 243 Amendment 1 Thompson 051322.pdf |
HFIN 5/13/2022 1:30:00 PM |
SB 243 |
| SB 20 Amendment 1 Thompson w Legal Memo 051322.pdf |
HFIN 5/13/2022 1:30:00 PM |
SB 20 |
| SB 131 Amendment Pkt 051322.pdf |
HFIN 5/13/2022 1:30:00 PM |
SB 131 |
| SB 20 DEED Response 20220516 - Count of longterm subs by district and state.pdf |
HFIN 5/13/2022 1:30:00 PM |
SB 20 |
| SB 20 5.13.2022 (H) FIN Hearing SB20 DEED Follow-Up.pdf |
HFIN 5/13/2022 1:30:00 PM |
SB 20 |