04/09/2009 03:00 PM House ENERGY

HB 191-NUCLEAR POWER PRODUCTION/WASTE TRANSPORT.                                                                              
3:53:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON announced  that the next order  of business would                                                               
be  HOUSE  BILL NO.  191,  "An  Act  relating to  nuclear  energy                                                               
production   and  transportation   of  nuclear   waste  material;                                                               
amending the  definition of  'power project'  or 'project'  as it                                                               
relates to  rural and  statewide energy  programs and  the Alaska                                                               
Energy Authority;  relating to  the alternative  energy revolving                                                               
loan  fund and  amending  the definition  of 'alternative  energy                                                               
system' as  it relates to  that fund  and to the  conservation of                                                               
energy and materials; and providing for an effective date."                                                                     
                                                                                                                                
3:53:22 PM                                                                                                                    
                                                                                                                                
JEANNE  OSTNES, Staff,  to Representative  Craig Johnson,  Alaska                                                               
State Legislature,  Presented HB 191 on  behalf of Representative                                                               
Craig Johnson,  prime sponsor of HB  191.  She explained  that HB
 would  update statutes  and level the  playing field  for all                                                               
types of energy,  including nuclear energy.  She  stated that the                                                               
Alaska statutes  and regulations do not  address alternative fuel                                                               
sources.     She  referred  to   the  dictionary   definition  of                                                               
alternative   fuel,  which   includes  energy   types  that   are                                                               
unconventional and  non-traditional such as nuclear  energy.  She                                                               
noted items  in members' packets,  including reports  prepared by                                                               
Donald Anderson,  Ph.D., and information  related to  the current                                                               
statutes,  as  well  as  comparisons between  the  bill  and  the                                                               
proposed committee  substitute.  She explained  that the Division                                                               
of Investments  indicates that Alternative Energy  loans range up                                                               
to 15  percent for those  loans.  Thus, the  rate is capped  at 8                                                               
percent, similar  to HB  196.   Additionally, she  indicated that                                                               
the sweep has been removed.                                                                                                     
                                                                                                                                
3:55:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN moved  to adopt  the proposed  committee                                                               
substitute (CS)  for HB 191, Version  25-LS0185\E, Kane, 4/07/09,                                                               
as  the work  draft.   There being  no objection,  Version E  was                                                               
before the committee.                                                                                                           
                                                                                                                                
3:55:59 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON objected for the purpose of discussion.                                                                         
                                                                                                                                
3:56:08 PM                                                                                                                    
                                                                                                                                
MS.  OSTNES stated  that the  energy  guide prepared  by the  AEA                                                               
lists nuclear energy as one of  the technologies that is good for                                                               
the state, with  Galena listed as a community that  is closest to                                                               
having  a "suitcase"  nuclear reactor  for energy.   She  further                                                               
stated   that  Dittman   Research  Association   of  Alaska,   in                                                               
Anchorage,  conducted a  poll in  March 2009,  and reported  that                                                               
respondents indicated  a preference for nuclear  energy over oil,                                                               
coal,  and tidal  power.   She mentioned  that nuclear  energy is                                                               
also becoming  safer.  She  opined that Galena is  targeting 2015                                                               
as  the   earliest  date  for   completing  the   Nuclear  Energy                                                               
Regulatory Committee process.   She reiterated that  HB 191 would                                                               
amend the statute so nuclear energy can be considered.                                                                          
                                                                                                                                
3:57:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN asked if  nuclear energy is considered an                                                               
alternative form of  energy, whether Galena or  other areas would                                                               
be able to apply for state loans and grants.                                                                                    
                                                                                                                                
3:58:14 PM                                                                                                                    
                                                                                                                                
MS. OSTNES answered yes.                                                                                                        
                                                                                                                                
3:58:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  asked what  size is  the plant  and cost                                                               
under consideration in Galena.                                                                                                  
                                                                                                                                
MS. OSTNES  answered that  the plant would  be 10  megawatts, but                                                               
she was not certain of the cost.                                                                                                
                                                                                                                                
DONALD ANDERSON, Ph.D., read a prepared statement:                                                                              
                                                                                                                                
     I  am  testifying  today as  a  citizen  interested  in                                                                    
     energy  production,  but  with  no  fiduciary  interest                                                                    
     beyond that  of the regular  household consumer.   I am                                                                    
     not a nuclear engineer,  although my education included                                                                    
     some coursework in that area.   I am here to ask you to                                                                    
     support  HB 191.   I  consider this  bill a  cleanup of                                                                    
     state statutes, and it is  designed to level the energy                                                                    
     production  playing  field.   We  badly  need to  allow                                                                    
     Alaskans  to choose  their generating  technology based                                                                    
     on economic, safety,  health, and reliability criteria.                                                                    
     Under current  law what may  be the best  technology in                                                                    
     some cases is not under active consideration.                                                                              
                                                                                                                                
     Specifically, use of nuclear  energy as the heat source                                                                    
     to   drive  generating   turbines  has   some  specific                                                                    
     advantages for  locations where fuel  transportation is                                                                    
     costly  or  sporadic.    It  also  provides  a  steady,                                                                    
     reliable  source of  baseload  power,  unlike wind,  or                                                                    
     tides, or the  sun.  Nuclear power plants  cost a great                                                                    
     deal, but fuel costs are  very low.  The energy density                                                                    
     of the fuel is 2.7 million  times as much as coal.  The                                                                    
     resulting  overall costs  are about  the same  as coal.                                                                    
     The resulting overall costs are  about the same as coal                                                                    
     fired  power,  and  much  lower  than  liquid  fuel  or                                                                    
     natural gas, although these are location dependent.                                                                        
                                                                                                                                
     At present  the smallest reactor design  being prepared                                                                    
     for  licensing is  the 10  megawatt  unit proposed  for                                                                    
     Galena.  This is far  larger than needed by the smaller                                                                    
     Alaskan  villages,   but  these  small  units   may  be                                                                    
     appropriate  in many  locations around  the state  such                                                                    
     as:   Bethel  or  Copper  Valley, Cordova,  Dillingham,                                                                    
     Galena,   Kodiak,   Kotzebue,    Naknek,   Nome,   Tok,                                                                    
     Unalakleet, Unalaska, and Yakatat.                                                                                         
                                                                                                                                
     Jeanne Ostnes  has been kind  enough to  duplicate some                                                                    
     material I  have written,  so it  could be  included in                                                                    
     your packets.   Although I doubt you have  time to read                                                                    
     much before  the end  of the session,  you might  put a                                                                    
     check mark  on the  paper I prepared  for the  board of                                                                    
     Chugach Electric giving some  history and background on                                                                    
     nuclear power  and a paper  I prepared on  the disposal                                                                    
     of high-level nuclear waste.                                                                                               
                                                                                                                                
     I  hope you  will promptly  move HB  191 forward.   The                                                                    
     lack of a full range  of energy options means plans may                                                                    
     be delayed, unnecessarily expensive,  or less safe than                                                                    
     they otherwise  would be.   Thanks for  your attention.                                                                    
     I'll answer any questions to the extent I can do so.                                                                       
                                                                                                                                
4:02:21 PM                                                                                                                    
                                                                                                                                
MARVIN  YODER, stated  that he  previously lived  in Galena,  and                                                               
requested  the bill  in  order to  add options  for  Alaska.   He                                                               
characterized Alaska  as a  diverse state  and noted  that Galena                                                               
looked at  options, but cannot  use wind or  hydroelectric power.                                                               
He explained that the U.S.  Department of Energy prepared a study                                                               
that  evaluated options  and suggested  nuclear power  as a  cost                                                               
effective  measure for  Galena.   He related  the purpose  of the                                                               
bill is to level the playing  field and make sure all options are                                                               
available.  He  clarified that other options may  be available to                                                               
other  communities.    He  provided   details,  such  that  three                                                               
companies offer  small nuclear  reactors.   He compared  the main                                                               
nuclear  plants  being built  in  the  U.S.  which are  about  15                                                               
megawatts,  with   the  current   Railbelt  needs  at   only  800                                                               
megawatts.   He offered  that Galena is  not considering  a large                                                               
scale  nuclear project  but rather  the projects  would be  small                                                               
regional ones that may connect some  villages to small grids.  He                                                               
reiterated  the  purpose  is  to reduce  energy  costs  to  small                                                               
villages and as an alternative.                                                                                                 
                                                                                                                                
4:04:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM  asked for clarification that  this bill                                                               
was at his request.                                                                                                             
                                                                                                                                
MR. YODER answered  that last year he reviewed  the statutes that                                                               
pertained  to  nuclear  energy.    He  discovered  Representative                                                               
Johnson introduced  a bill  and joined  his efforts  in progress.                                                               
In  further  response  to  Representative  Dahlstrom,  Mr.  Yoder                                                               
explained that Mr. Don Anderson and he had worked on this issue.                                                                
                                                                                                                                
4:05:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  EDGMON  asked for  capital  costs  for smaller  nuclear                                                               
facilities that range approximately 10 megawatts.                                                                               
                                                                                                                                
4:05:38 PM                                                                                                                    
                                                                                                                                
MR.  YODER  answered  that Toshiba  is  currently  revising  cost                                                               
estimates,  but he  recalled  some  years ago  that  a  10 or  50                                                               
megawatt facility would be amortized over  30 years for a cost of                                                               
6  or 7  cents a  kilowatt.   He  projected  the costs  for a  10                                                               
megawatt  facility would  be about  three times  that due  to the                                                               
economies of  scale.  He  advised he  requested an update  on the                                                               
two  year   old  figures,  but  estimated   that  amortizing  the                                                               
operating and capital  costs over 30 years would be  20 cents and                                                               
the 50 megawatt under 10 cents per kilowatt hour (Kwh).                                                                         
                                                                                                                                
4:06:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON further  asked for the bricks  and mortar capital                                                               
costs associated with the 10 megawatt facility.                                                                                 
                                                                                                                                
4:06:55 PM                                                                                                                    
                                                                                                                                
MR. YODER  answered the original  estimate came in at  $2,500 per                                                               
kilowatt  for the  50 megawatt  unit, calculated  as part  of the                                                               
whole  project.   In  further response  to  Co-Chair Edgmon,  Mr.                                                               
Yoder clarified  that a 50  megawatt unit at $2,500  per kilowatt                                                               
would cost $125  million.  He speculated the  overall costs would                                                               
probably range from $150 to $200 million by project completion.                                                                 
                                                                                                                                
4:07:24 PM                                                                                                                    
                                                                                                                                
MS. OSTNES offered that Galena  currently pays about 70 cents per                                                               
Kwh.   She  explained  that  the federal  stimulus  funds may  be                                                               
available  for alternative  energy, and  Alaska could  qualify if                                                               
nuclear is identified as an alternative  fuel.  She referred to a                                                               
letter  of support  in  members' packets  from  the Alaska  Power                                                               
Association (APA),  which is the statewide  trade association for                                                               
the  electric utilities  that supply  power to  many communities.                                                               
She  mentioned that  APA outlined  that the  statutes need  to be                                                               
updated or  "contemporized," and  it recognizes  that communities                                                               
need to have flexibility to choose what works best for them.                                                                    
                                                                                                                                
4:08:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN asked  what the  plan is  for the  spent                                                               
nuclear waste or rods.                                                                                                          
                                                                                                                                
MR.  YODER  answered  that  according  to  Toshiba,  the  nuclear                                                               
component  and sodium  coolant would  be sealed  in a  container.                                                               
Thus,  the plan  would be  to send  the sealed  container outside                                                               
Alaska at the end of 30 years.                                                                                                  
                                                                                                                                
4:09:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN pointed out that  he was not aware of any                                                               
location currently for  disposal of nuclear waste.   He expressed                                                               
concern that if the  facility was built and at the  end of the 30                                                               
year period  no disposal site  was identified, that  Alaska would                                                               
have to dispose of the nuclear waste in-state.                                                                                  
                                                                                                                                
4:10:14 PM                                                                                                                    
                                                                                                                                
MR.  YODER agreed.   He  understood that  nuclear waste  disposal                                                               
presents a  problem.   He further understood  that a  program has                                                               
been initiated to  recycle nuclear waste, which he  supports.  He                                                               
opined  that  such   a  program  would  reduce   the  volume  and                                                               
radioactivity by  90 percent.   He pointed out that  the proposed                                                               
nuclear  facility  would  have  the  capacity  to  burn  recycled                                                               
nuclear fuel.   He offered  his belief that some  other countries                                                               
currently are successfully reducing  waste.  He acknowledged that                                                               
the United States  has a problem, but the U.S.  has been charging                                                               
each nuclear plant  "backend" fees so the  federal government has                                                               
$5 billion to  sort out the issue of nuclear  waste disposal, but                                                               
has not done so due to political reasons.                                                                                       
                                                                                                                                
4:11:10 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  EDGMON held  over HB  191 for  further discussion.   He                                                               
reiterated that  he previously removed  his objection and  the CS                                                               
Version 25-LS0185\E, Kane, 4/07/09, is before the committee.