Legislature(2021 - 2022)BELTZ 105 (TSBldg)

03/30/2021 03:30 PM COMMUNITY & REGIONAL AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 72 SEC. SCHOOL CIVICS EDUCATION TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= SB 17 ENERGY EFFICIENCY & POLICY: PUB. BLDGS TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
          SB 17-ENERGY EFFICIENCY & POLICY: PUB. BLDGS                                                                      
                                                                                                                                
4:17:18 PM                                                                                                                    
CHAIR HUGHES announced  the consideration of SENATE  BILL NO. 17,                                                               
"An  Act   relating  to  the   retrofitting  of   certain  public                                                               
facilities and community facilities;  relating to the performance                                                               
of energy  audits on schools  and community  facilities; relating                                                               
to  the duties  of the  Alaska  Energy Authority  and the  Alaska                                                               
Housing Finance  Corporation; creating a rapid  economic recovery                                                               
office   in  the   Alaska  Industrial   Development  and   Export                                                               
Authority; and  relating to  the state  energy policy  and energy                                                               
source reporting by state agencies."                                                                                            
                                                                                                                                
She said  the committee  first heard  Senate Bill  17 (SB  17) on                                                               
February 25.                                                                                                                    
                                                                                                                                
She noted the  committee has a committee substitute  (CS) for the                                                               
bill.                                                                                                                           
                                                                                                                                
4:17:37 PM                                                                                                                    
SENATOR MYERS moved that CS for  SB 17, work order 32-LS0187\B be                                                               
adopted as the working document.                                                                                                
                                                                                                                                
4:17:52 PM                                                                                                                    
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
4:18:05 PM                                                                                                                    
SENATOR  TOM BEGICH,  Alaska State  Legislature, Juneau,  Alaska,                                                               
sponsor  of   SB  17,  said  Connor   OwensSenator   Ted  Stevens                                                               
Legislative Internship Program participantwill address the CS.                                                                  
                                                                                                                                
4:18:32 PM                                                                                                                    
CONNOR OWENS,  Intern, Senator Begich, Alaska  State Legislature,                                                               
Juneau, Alaska, detailed  the CS summary of  changes from version                                                               
A to version B for SB 17 as follows:                                                                                            
                                                                                                                                
     Page 2, Lines 20-23:                                                                                                     
     This change clarifies that the  energy audits the State                                                                    
     will perform under this legislation  aren't going to be                                                                    
     large investment-grade audits.  Instead, the audits are                                                                    
     meant  to be  minimal, level-one  [American Society  of                                                                    
     Heating, Refrigerating  and Air-Conditioning Engineers]                                                                    
     (ASHRAE) audits that can be  performed either in person                                                                    
     or  virtually.  The idea  is  that  these more  minimal                                                                    
     audits will  reduce the fiscal  notes of this  bill but                                                                    
     still  allow  the  State  to  determine  if  there  are                                                                    
     potential projects for energy savings.                                                                                     
                                                                                                                                
SENATOR BEGICH explained  the change was specifically  one of the                                                               
requests  that  came  from the  testifiers  during  the  previous                                                               
committee  meeting  for  a preliminary  [Reporting  and  Planning                                                               
System] (RAPS) virtual or other  audit and the companies would do                                                               
the real intensive audits once a need was determined.                                                                           
                                                                                                                                
4:19:37 PM                                                                                                                    
MR. OWENS continued to summarize the CS for SB 17 as follows:                                                                   
                                                                                                                                
     Page 4, line 13:                                                                                                         
     Clarifies the  new office being established,  the Rapid                                                                    
     Economic  Recovery   Office,  is   meant  to   use  its                                                                    
     expertise  to support  and contract  for these  bundled                                                                    
     projects so that facilities don't  have to navigate the                                                                    
     retrofitting  process  on  their   own.  This  will  be                                                                    
     especially  helpful for  facilities with  lower numbers                                                                    
     of employees and rural facilities.  So, this just makes                                                                    
     it clear that  the new office is there  to leverage its                                                                    
     expertise  to  help   communities  and  facilities  and                                                                    
     projects.                                                                                                                  
                                                                                                                                
     Page 4, lines 17-26:                                                                                                     
     This change  aligns terminology with  existing statute,                                                                    
     it  replaces  "clean  energy" with  the  definition  of                                                                    
     "renewable energy."  This is  meant so  that we  do not                                                                    
     have  to create  a new  definition for  energy sources.                                                                    
      This bill addresses and allows us to stay consistent                                                                      
     with previous state statute.                                                                                               
                                                                                                                                
SENATOR BEGICH  noted he  had inadvertently  transferred language                                                               
from  the Lower  48  to  the bill  and  admitted  he should  have                                                               
checked the statutes to see what the definitions were.                                                                          
                                                                                                                                
4:21:52 PM                                                                                                                    
SENATOR  MYERS stated  he understands  the idea  behind the  bill                                                               
that spending a little money now  saves more money later. He said                                                               
what  he  is concerned  about  is  the diminishing  returns.  For                                                               
example,   retrofitting   a   50-year-old   building   with   the                                                               
expectation for  quite a  bit of savings,  but retrofitting  a 5-                                                               
year-old building is another thing.                                                                                             
                                                                                                                                
He explained what  he is concerned about is some  of the language                                                               
in  the bill  regarding the  number of  buildings and  the dollar                                                               
figure. He  noted the previous presentation  addressed the number                                                               
of retrofits and the annual  dollar savings. However, his concern                                                               
is the possibility for spending more and getting less.                                                                          
                                                                                                                                
He asked him what he expects to be the end result.                                                                              
                                                                                                                                
4:23:05 PM                                                                                                                    
SENATOR BEGICH  replied he  brought up  the perfect  question. He                                                               
noted there were two issues that  came up in the previous hearing                                                               
for the  bill, one was a  suggestion from a testifier  to address                                                               
50 percent of the buildings that  are 5000 square foot or greater                                                               
as opposed  to a 25 percent.  Part of the reason  why he rejected                                                               
the  suggestion is  because the  number needs  to be  at a  lower                                                               
percentage  precisely  because  of diminishing  returns  for  the                                                               
reason of  not wanting to  over extend  the State in  any regard.                                                               
However, the  second thingand  more  importantlythat  is  why the                                                               
program is a public-private partnership in the bill.                                                                            
                                                                                                                                
He detailed  the way [Energy  Service Companies] (ESCOs)  work is                                                               
you have to  have a saleable product, so the  initial work of the                                                               
virtual  auditor  the  audit  that was  described  by Mr.  Owens                                                                
allows for taking  a look at the structures to  first see if they                                                               
are  even relevant  in terms  of  a retrofit  or a  quality-grade                                                               
investment. The  second step after retrofitting  determination is                                                               
to bundle that  to see if there is private  entity interest; that                                                               
is the  whole point,  no private  company is  going to  invest in                                                               
something with diminishing returns.                                                                                             
                                                                                                                                
He  explained the  guarantee  in the  bill is  that  half of  the                                                               
[energy savings],  25 percent of  the overall bill, would  be for                                                               
the reduction  of energy priceswhich   is where you would  get to                                                               
that $40 million  savings mark over timeand  25  percent would go                                                               
to covering the initial loan.  The [Alaska Industrial Development                                                               
and  Export Authority]  (AIDEA) only  serves  as a  vehicle in  a                                                               
sense  for managing  the  loan. The  whole  process protects  the                                                               
State from exactly what Senator  Myers addressed. The State would                                                               
not  find itself  in  a  situation where  the  investment is  not                                                               
attractive  for   a  return  and  guaranteed   savings  for  loan                                                               
development.                                                                                                                    
                                                                                                                                
SENATOR  BEGICH noted  Mr.  Hodgininvited  testifiermay   provide                                                               
more detail.  He said  Mr. Hodgin has  been actively  involved in                                                               
how the State did  the ESCOs via the bill in  2010. The State has                                                               
realized-roughly  over  a  decade$40    million  in  energy  cost                                                               
savings.  The real  key  is  private entities  are  not going  to                                                               
invest in  a product  that does  not give them  a return  and the                                                               
State is  guaranteed a return as  part of that process.  The bill                                                               
only targets 25  percent of those buildings that  are 5000 square                                                               
feet or greater.                                                                                                                
                                                                                                                                
CHAIR HUGHES asked Mr. Hodgin to provide his prospective.                                                                       
                                                                                                                                
4:26:05 PM                                                                                                                    
CHRISTOPHER HODGIN, Engineer and  Architect, Alaska Department of                                                               
Transportation  and Public  Facilities, Anchorage,  Alaska, asked                                                               
Senator Myers  to confirm that  his question pertains to  the age                                                               
and  quantities  of  buildings,   and  program  effectiveness  on                                                               
relatively new buildings versus older buildings.                                                                                
                                                                                                                                
SENATOR MYERS answered yes.                                                                                                     
                                                                                                                                
MR. HODGIN  noted one  of the  interesting things  the department                                                               
has seen  when retrofitting  older and  newer buildings  over the                                                               
last decade is  that building technology is  getting more complex                                                               
and  that  results  in  desynchronization  where  new  pieces  of                                                               
technology  are  not  optimized.  The department  has  seen  some                                                               
significant  opportunity  to  improve complex  systems  in  newer                                                               
buildings.                                                                                                                      
                                                                                                                                
4:28:00 PM                                                                                                                    
CHAIR HUGHES removed her objection to the CS.                                                                                   
                                                                                                                                
She announced  the CS is adopted  as the working document  for SB
17.                                                                                                                             
                                                                                                                                
4:28:15 PM                                                                                                                    
CHAIR HUGHES opened public testimony.                                                                                           
                                                                                                                                
4:29:03 PM                                                                                                                    
CHAIR HUGHES closed public testimony.                                                                                           
                                                                                                                                
4:29:14 PM                                                                                                                    
CHAIR HUGHES held SB 17 in committee.                                                                                           

Document Name Date/Time Subjects
SB 72 v. I Sectional Analysis.pdf SCRA 3/30/2021 3:30:00 PM
SB 72
SB 72 v. I Supporting Document-Civics Research AK-Gov Citizenship Standards 2006.pdf SCRA 3/30/2021 3:30:00 PM
SB 72
SB 72 Sponsor Statement Feb 2021.pdf SCRA 3/30/2021 3:30:00 PM
SB 72
SB 72 Summary of Changes Version A to I.pdf SCRA 3/30/2021 3:30:00 PM
SB 72
SB 17 v. B Summary of Changes 3.26.2021.pdf SCRA 3/30/2021 3:30:00 PM
SB 17
SB 17 v. B Legislation.pdf SCRA 3/30/2021 3:30:00 PM
SB 17
SB 72 v. I Legislation.PDF SCRA 3/30/2021 3:30:00 PM
SB 72
SB 72 Fiscal Note DEED 3.19.21.pdf SCRA 3/30/2021 3:30:00 PM
SB 72