Legislature(1993 - 1994)
04/13/1993 03:00 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 50 AUTHORIZING POWER TRANSMISSION INTERTIES HB 51 APPROP: POWER TRANSMISSION INTERTIES REPRESENTATIVE RAMONA BARNES, SPEAKER OF THE HOUSE, spoke on behalf of HB 50 and HB 51 and gave the following summary of the history of the energy fund: "In 1981, SB 25 and 26 created the energy plan for Alaska. This plan included the 4 Dam Pool, Power Cost Equalization and a clause that was known as the blackmail clause. This clause in essence said that the grants that were given to the 4 Dam Pool would be paid back to the state, plus interest, if by the year 1991 there was less than $1 billion to construct Susitna/Watana Dam and an intertie system for the railbelt. "In 1984, the representatives of the 4 Dam Pool came back to Juneau seeking to have the blackmail clause removed from the statutes due to cost overruns that would require additional funds. Their claim was that unless the state gave them another outlay of cash they would not be able to bond at a favorable rate due to the existence of the blackmail clause in statute. "The Railbelt then gave up the blackmail clause with the understanding that in exchange there would be $200 million per year appropriated in the same manner as the Senior Citizens Longevity Bonus, as an example. In addition to that appropriation, there was to be $100 million deposited into the Bradley Lake Dam account. At that time, we also increased the per kilowatt amount to be subsidized by Power Cost Equalization. "This then, became law. Although this continuing appropriation was no different from any other that is required annually, the environmental community took it to court and a ruling was made that one legislature could not bind another, even though it was no different than numerous other annual appropriations. That first $200 million plus the $100 million for Bradley Lake Dam were the only funds ever deposited into the energy account. "In 1990, a deal was cut to raid the fund, and approximately $123 million was spent on various capital projects, very few of which had anything to do with energy. There is currently $123 million in an intertie reserve account. These two bills contain funding for a Northern and Southern intertie at $55 million for one and $40 million for the other, which only pays for 1/2 of each project. The utilities themselves would bond for the other half of the money. "We must look to the needs of the whole state. HB 50 and 51 contain not only the Northern and Southern interties, but funding for Tyee, Swan Lake, and Sutton to Glennallen. "There is a portion of the bill that has an ongoing appropriation of $800,000 to the Alaska Energy Authority. The Speaker suggests that the Alaska Energy Authority has outlived its usefulness, and that when the bills finally get to the floor, that the appropriation to the AEA be deleted and the money to go directly to the utilities involved." Number 190 SPEAKER BARNES also suggested that Power Cost Equalization be addressed under the Department of Community and Regional Affairs. The Speaker believed that the Department of Community and Regional Affairs better knows the needs of rural Alaska and that the money saved by not funding the energy authority could be used by the rural communities. Number 210 MIKE KELLEY, GENERAL MANAGER, GOLDEN VALLEY ELECTRIC ASSOCIATION, testified that the previous speaker gave an excellent history of the railbelt fund. MR. KELLEY asked that the committee pass HB 50 and HB 51 out to Finance to be fine-tuned and eventually passed into law. Number 222 CLAYTON HURLISS, GENERAL MANAGER, COPPER VALLEY ELECTRIC, stated that his organization was very pleased that these bills were going forward and would work together with the members of the legislature to make sure these bills go through in the best form possible. MR. HURLISS stated that his group was concerned about the order of priorities. Mr. Hurliss said that projects ought to be considered and funded on the basis of whether they are ready and to go and if there is enough time to build them. Number 240 REP. MACKIE asked Speaker Barnes if she had problems with Tyee and Swan Lake being in the bill. SPEAKER BARNES responded that she supports Tyee and Swan Lake, as well as the Sutton to Glennallen interties. Number 250 REP. MACKIE stated that the legislature should look at these projects with a statewide prospective, which also includes Power Cost Equalization. Number 264 REP. PORTER stated that he would be supportive of moving the bills out of committee. Number 285 SPEAKER BARNES asked the record to reflect that it is true that one legislature cannot bind the next and that there are many new people in the legislature, but that she has been in the legislature all the years referred to above. Speaker Barnes added that the agreements she made in previous years that relate to the energy package before this committee has borne out her support for Power Cost Equalization. Number 295 REP. GREEN inquired about the funding sources for these projects. SPEAKER BARNES responded that each of the interties will be bonded separately. Number 324 SPEAKER BARNES stated that the difference between HB 50 and HB 51 and the proposal the Alaska Energy Authority came up with is that their bill would have used all the Railbelt energy money. Number 350 REP. MACKIE clarified his position on this issue. Rep. Mackie stated that it was his view that Power Cost Equalization not be tinkered with and that the energy needs of Southeast Alaska be included in the statewide perspective of this bill. Number 368 SENATOR ROBIN TAYLOR echoed Speaker Barnes' comments and added that these bills are the culmination of a lengthy and arduous process over many years. Sen. Taylor believes that we are now in a place where we can put our differences aside and put forth a bill that would put some good projects on line. SEN. TAYLOR stated he believes the state will eventually be relieved of the burden of Power Cost Equalization when all these projects come on line. Number 408 THOMAS STEVENSON, MANAGER, KETCHIKAN PUBLIC UTILITIES, testified that HB 50 and HB 51 are necessary ingredients for the economic development of the state. Number 429 REP. MACKIE moved HB 50 and HB 51 with individual recommendations. No objections were heard; it was so ordered.
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