Legislature(2007 - 2008)BELTZ 211
03/04/2008 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB289 | |
| SB293 | |
| HB65 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 289 | TELECONFERENCED | |
| *+ | SB 293 | TELECONFERENCED | |
| + | HB 65 | TELECONFERENCED | |
| += | SB 147 | TELECONFERENCED | |
SB 289-HOME ENERGY CONSERVATION
1:32:56 PM
CHAIR ELLIS announced SB 289 to be up for consideration.
1:34:02 PM
DR. JOHN WEISE, Staff to Senator Hoffman, sponsor of SB 289,
explained that Alaska has roughly 670,000 people who live in
260,000 - 280,000 homes; one third of them have an income under
$30,000 and it's estimated that 45,000 of those households are
eligible for low income weatherization through Alaska Housing
Finance Corporation (AHFC).
He said in developing the bill they looked for something
responsive to Alaskans impacted by high energy costs. The
proposal is a short-term fix that will update and expand the
home energy efficiency and weatherization program and the rebate
program in AHFC. Targeted improvements include insulation and
improved heater efficiencies including water heaters.
Eligibility for the weatherization program is now based on 60
percent median income; the proposal changes that to 100 percent.
Low income Alaskans will receive priority, but going to 100
percent will help even more Alaskans.
1:37:43 PM
DR. WEISE said in past years AHFC has spent $4.8 million/year
($1.8 million federal and $3 million from AHFC) to help 600
households or 1,700 people. With $48 million they can help a
little over 4,000 households and almost 12,000 people. A survey
showed that 45,000 households would meet the 60 percent median
income requirements and the sponsor felt that wasn't enough. SB
289 recommends spending $200 million to expand the program to
100 percent median income which is projected to help 17,000
households and almost 50,000 people.
1:38:32 PM
SENATOR STEVENS asked him how 60 percent of median income
translates into annual income.
DR. WEISE replied according to AHFC's figures the 60 percent
median goes from $23,887 for a family of one up to $71,660 for a
family of 14. At 100 percent it goes from $39,800 up to
$119,400.
1:39:23 PM
SENATOR HOFFMAN asked about families of 2 and 4.
DR. WEISE answered at 60 percent a family of 2 would be a little
over $31,000 and at 100 percent median at $52,000. A family of
four is at almost $46,000 at 60 percent; and a little over
$76,000 for 100 percent.
1:39:50 PM
He said the second part of the proposal funds a home energy
rating rebate program which is not income dependent. Any Alaskan
could apply for it and would have to first be accepted by AHFC,
then do an as-is and a post-energy rating on the home using an
AHFC computer program. A one star rating would equal a $2,500
rebate; each additional step would earn a $500 rebate up to a
maximum of $5,000. AHFC would expect a 30 percent reduction in
home energy costs.
1:41:40 PM
He said the cost for this portion is $100 million, but
investment would have to be made by the homeowners of $175 -
$200 million. This is a great relief program until the housing
market recovers.
1:42:50 PM
SENATOR STEVENS asked the rationale for cutting it off where
they did because people earning $50,000 are barely able to make
ends meet. The cost of living in some communities like Dutch
Harbor is more than Anchorage for instance.
1:43:55 PM
SENATOR HOFFMAN answered he did not feel comfortable going over
100 percent and realized further discussions were needed, but he
didn't have any conclusions.
SENATOR BUNDE asked why he thought this would be a temporary
program.
SENATOR HOFFMAN answered they are adding on to an existing
program because he wanted to help as many Alaskans as possible.
The program could be reevaluated in a few years.
1:47:04 PM
DR. WEISE commented that the bill cleans up language in existing
statute that removes reference to two programs, the Craftsman
Program and the Home Energy Program, that are no longer in
existence or have been privatized.
SENATOR HOFFMAN clarified that both of these programs are
existing, but have been modified in SB 289 as presented by Dr.
Weise.
1:47:54 PM
DAN FAUSKE, CEO, Alaska Housing Finance Corporation (AHFC), said
the rebate program had fallen off lately because of funding, but
he still offers interest rate reductions for energy efficiency,
which AHFC funds on a limited basis with arbitrage proceeds for
its bonding capability, but it is a finite amount of money.
MR. FAUSKE said people could make improvements to their homes
that they won't have to make in the near future - simple things
like re-insulating an attic and caulking windows and door seals.
The energy savings used to be recouped in 6 to 7 years, but now
with oil being $100/barrel, it's 1.5 - 2 years.
He said there is a slowdown from the house building peaks of a
few years ago, and while he didn't view it as a downturn, this
is work that can be taken up by those homebuilders as well as
the homeowner himself. He said the legislature and AHFC
developed the rating software years ago, and it gets updated on
a regular basis; it's known throughout the state and is easily
used and quite accurate.
1:52:35 PM
BRIAN BUTCHER, Public Affairs Director, AHFC, explained that an
energy rater rates the house (one to five stars) and lists what
needs to be done. The more that gets done, the more the rebate.
The rater would come back in and rate it again. Home
construction has slowed and those folks are excited about
getting involved in this program.
1:53:40 PM
MR. FAUSKE said he had seen numerous cases where a couple
thousand dollar investment generates $300 to $500/mo. in
savings; quality of life improves while reducing the demand for
energy. He emphasized that this is an ongoing program so they
would not be reinventing the wheel.
1:55:33 PM
SENATOR HOFFMAN asked how long ago the graduated $2,500 - $5,000
rates for the rebate program were set because construction costs
have risen substantially in the last few years.
MR. BUTCHER replied those are estimates of what they thought
reasonable costs would be right now.
SENATOR BUNDE asked if this program applies to existing homes or
to homes that will be built.
MR. BUTCHER replied that it would apply to new homes, but most
new homes are being built with a 4 and 5 star energy rating and
this would probably apply mostly to older homes.
MR. FAUSKE added that combining this program with AHFC's
existing program will deliver a double bang for their bucks.
1:57:53 PM
BOB BREAN, Director, Research and Rural Development, AHFC
supported SB 289. He echoed comments made by Mr. Fauske and Mr.
Butcher. These kinds of programs have a great payback. The
opportunities for savings are greater in retrofitting existing
houses, but they can make energy efficiency recommendations for
new housing as well.
SCOTT WATERMAN, Energy Specialist II, AHFC, supported what
previous comments on SB 289.
MR. FAUSKE added that the AHFC's existing program can't purchase
mortgages on homes that don't meet a certain standard by state
law.
1:59:55 PM
SENATOR BUNDE said the existing program was aimed at low income
people, but this expands it to middle income people.
MR. FAUSKE agreed that it is an all-inclusive program that was
designed to reach out across the state, and it could be changed.
He said $76,000/year sounds like a lot, but it depends on where
you live. Some people in Fairbanks pay a couple thousand dollars
a month for energy. This proposal is targeted specifically to
affect the energy efficiency of homes, not to add solariums.
SENATOR STEVENS said he was thinking about a worker and spouse
both working in a cannery in Kodiak and $52,000 could be their
annual income. They would be hard pressed to pay for
weatherization themselves.
MR. FAUSKE agreed and said they should have frequent targeted
reports. "It's our goal, if we are given the responsibility and
privilege to do this, to make it work and do it right."
MR. BUTCHER said they are already talking with legislators about
raising the current 60 percent, because it is clear that people
in the over 60 percent category also don't have the means. The
priority is and will continue to always be the lowest income and
work up from there.
2:05:02 PM
PAUL KENDALL, representing himself, Anchorage, opposed SB 289.
He said because it continues to fund the fossil fuel
distribution network, it is a distraction to what needs to be
done. He said 1 megawatt of wind covers 250-300 homes and taking
that original $500 million and putting it into a wind farm would
generate electricity for 75,000 homes and would last over a 25-
year period. This would not only move the technology forward,
but it would begin to replace the gas that could be sold on the
open market, which would generate more revenue for the state.
MR. KENDALL said that people in Las Vegas did a lot of energy
conservation, but it was for nothing because programs like this
come along and enable them to continue using that energy. He
advised "You have to find a formula that says we all are
accountable to each other for reasonable prices of energy and
reasonable availability." That would exclude distribution and
maintenance of lines. He said conservation is a big mistake and
that big companies are already investing in alternative
technologies. He called it a habit and a form of economic
subjugation.
CHAIR ELLIS said SB 289 would be held for another hearing.
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