03/31/2009 03:00 PM House ENERGY

HB 166-SOUTHEAST ENERGY FUND                                                                                                  
                                                                                                                                
CO-CHAIR EDGMON announced  that the next order  of business would                                                               
be HOUSE BILL  NO. 166, "An Act relating to  the Southeast energy                                                               
fund."                                                                                                                          
                                                                                                                                
3:26:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BILL THOMAS,  Alaska State  Legislature, speaking                                                               
as the sponsor of HB  166, paraphrased from the following written                                                               
sponsor statement:                                                                                                              
                                                                                                                                
     In 1993  the Alaska  State Legislature  established the                                                                    
     Southeast Energy Fund as a  holding tank for money that                                                                    
     could then later  be used and appropriated  to the Swan                                                                    
     Lake-Tyee Hydroelectric Project.   Since then, the need                                                                    
     and fervor for hydroelectric  power in Southeast Alaska                                                                    
     has  grown.   Hydroelectric power  is the  most readily                                                                    
     available  source  of  renewable energy  in  Southeast.                                                                    
     Some people refer  to Southeast as the  Saudi Arabia of                                                                    
     renewable.   However, despite this source  of renewable                                                                    
     energy,  most communities  in  Southeast Alaska  remain                                                                    
     heavily dependent upon diesel generated electricity.                                                                       
                                                                                                                                
REPRESENTATIVE THOMAS  related the  highest rate  for electricity                                                               
is $.83 per kilowatt, before  Power Cost Equalization (PCE), with                                                               
an average  of $.58 per  kilowatt.   He  opined the high  cost of                                                               
electricity has  crippled communities.   House Bill  166 broadens                                                               
the authority of  the Southeast Energy Fund to  include all power                                                               
projects  within Southeast  Alaska.   In  fact; it  allows for  a                                                               
funding  mechanism  for  the  construction  of  power  generation                                                               
projects  in Southeast  and for  the completion  of the  regional                                                               
electrical intertie.   Representative  Thomas pointed  out Haines                                                               
has an  intertie with  Skagway; however, there  is a  3-5 percent                                                               
growth in the demand for  electricity each year.  He acknowledged                                                               
that regions  of the  state compete for  funds and  stressed that                                                               
regional pools of funds are best.                                                                                               
                                                                                                                                
3:31:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK called  attention to page 1, line  12, of the                                                               
bill  and asked  for  an  explanation of  the  reference to  "the                                                               
authority."                                                                                                                     
                                                                                                                                
3:31:44 PM                                                                                                                    
                                                                                                                                
KACI  SCHROEDER-HOTCH,  Staff   to  Representative  Bill  Thomas,                                                               
Alaska State  Legislature, informed  the committee  the authority                                                               
referred to is the Alaska Energy Authority (AEA).                                                                               
                                                                                                                                
3:32:20 PM                                                                                                                    
                                                                                                                                
ROBERT  VENABLES,   Energy  Coordinator,   Southeast  Conference,                                                               
related his organization's support for HB  166, as it is a timely                                                               
bill  that  will continue  the  progress  in the  development  of                                                               
natural  resources in  Southeast Alaska.   He  compared the  bill                                                               
with  the Railbelt  Energy Fund  and  said the  bill would  catch                                                               
Southeast Alaska up  with the Railbelt.  Mr.  Venables noted that                                                               
the  projects in  the region  will be  costly, regardless  of the                                                               
investments that  have been made  in renewable energy.   With the                                                               
Congressional authorization  of $384 million, there  are vehicles                                                               
that may bring funding into Southeast  Alaska thus the need for a                                                               
funding mechanism.   He opined  the needs  of the system  are for                                                               
transmission  lines  for the  intertie,  and  the development  of                                                               
capacity  of other  facilities along  the intertie  system.   The                                                               
total estimated  cost for the  planned projects in the  region is                                                               
in excess of $1 billion.   He concluded the funding mechanism for                                                               
these projects  has always eluded  his organization, and  that is                                                               
one  reason  Southeast  Alaska  is   not  ready  when  funds  are                                                               
available.   Mr.  Venables continued  to  explain that  Southeast                                                               
communities have  worked together  to forge  a vision  to develop                                                               
their renewable resources into a  regional electrical system, and                                                               
HB  166  could  be  the  mechanism  that  could  facilitate  this                                                               
mission.                                                                                                                        
                                                                                                                                
3:36:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOHANSEN   asked   whether  the   reference   to                                                               
hydroelectric  projects on  page 1,  line  14, of  the bill  also                                                               
includes interties.                                                                                                             
                                                                                                                                
MS. SCHROEDER-HOTCH  understood interties are  included; however,                                                               
if not, interties would be included in paragraph (2).                                                                           
                                                                                                                                
3:37:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  confirmed that  the bill allows  options for                                                               
other funds  to enter the fund,  and that the [AEA]  will be able                                                               
to administer  the funds as  needed.  Furthermore, the  funds can                                                               
be invested in other projects in the region.                                                                                    
                                                                                                                                
MS. SCHROEDER-HOTCH concurred.                                                                                                  
                                                                                                                                
3:38:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON, upon determining no  one else wished to testify,                                                               
closed public testimony.                                                                                                        
                                                                                                                                
3:38:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN moved to  report HB 166, 26-LS0689\R, out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying zero  fiscal notes.   There  being no  objection, HB
 was reported from the House Special Committee on Energy.                                                                    
                                                                                                                                
3:39:20 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:39 p.m. to 3:40 p.m.                                                                       
                                                                                                                                
3:40:58 PM