Legislature(2011 - 2012)SENATE FINANCE 532

02/27/2012 09:00 AM Senate FINANCE


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09:01:25 AM Start
09:02:49 AM SB170
09:17:34 AM Overview of Energy Projects
01:33:35 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 170 VOCATIONAL ED. COUNSELING IN SCHOOLS TELECONFERENCED
Heard & Held
+ Overview of Energy Projects TELECONFERENCED
Renewable Energy Grant Program - Alaska Energy
Authority
Weatherization and Energy Home Rebate Programs -
Alaska Housing Finance Corp.
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 170                                                                                                           
                                                                                                                                
     "An Act requiring vocational education counseling in                                                                       
     public schools."                                                                                                           
                                                                                                                                
9:02:49 AM                                                                                                                    
                                                                                                                                
Senator Thomas introduced SB 170.  He stated that one of the                                                                    
major  functions  of  public education  is  to  prepare  our                                                                    
future  workforce. During  their school  years young  people                                                                    
make critical  decisions which will ultimately  affect their                                                                    
choice of a  career later in life. Some young  people have a                                                                    
clear idea of  what they want to be  doing after graduation,                                                                    
but  many do  not. The  adolescent years  in particular  are                                                                    
filled with  many changes, making  it a one of  the critical                                                                    
phases of  a person's life.  If childhood is  like traveling                                                                    
down a  busy street, seventh  grade is the  junction. Recent                                                                    
research  has  specifically  targeted the  early  adolescent                                                                    
years as  a crucial point in  development.  It is  a perfect                                                                    
time to introduce realistic career  options. Senate Bill 170                                                                    
recognizes  this  junction in  a  young  person's life,  and                                                                    
provides  for   career  counseling  for  every   student  in                                                                    
seventh,  ninth  and  eleventh   grades.  Many  schools  are                                                                    
already  offering this  for all  secondary students,  but it                                                                    
should  be available  to  every student  in  our state.  The                                                                    
Department of  Education and  Early Development  already has                                                                    
resources that  can be directed toward  this important task.                                                                    
This  bill  would  not prevent  schools  or  districts  from                                                                    
providing a more comprehensive program.  It sets the minimum                                                                    
standards for  career counseling, starting at  seventh grade                                                                    
and continuing  in ninth and eleventh  grades. Seventh grade                                                                    
is when students start making  important life choices. Ninth                                                                    
grade  is  the  beginning  of high  school,  when  they  are                                                                    
choosing courses  which will affect their  readiness for the                                                                    
workforce.  In  eleventh grade  they  are  starting to  look                                                                    
ahead to  high school graduation,  and what will  come after                                                                    
commencement.                                                                                                                   
                                                                                                                                
9:06:30 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman noted the  previously published zero fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
SUZANNE  ARMSTRONG,  ASSOCIATED  BUILDERS  AND  CONTRACTORS,                                                                    
ANCHORAGE (via  teleconference), testified in support  of SB
170. She stressed that there was  a high demand in her field                                                                    
for skilled workers. She felt  that SB 170 would benefit the                                                                    
construction  industry.   She  felt  that   students  should                                                                    
receive support in pursuing specific career paths.                                                                              
                                                                                                                                
SHELLY    BERRY,    ANCHORAGE     SCHOOL    DISTRICT    (via                                                                    
teleconference),  spoke in  support  of SB  170. She  shared                                                                    
that she  has extensive  experience in  counseling students.                                                                    
She  shared  that  there  was  even  potential  for  at-risk                                                                    
students.                                                                                                                       
                                                                                                                                
BARBARA  HUFF  TUCKNESS, LEGISLATIVE  GOVERNMENT  RELATIONS,                                                                    
TEAMSTERS LOCAL  959, testified  in support  of SB  170. She                                                                    
stated that some  new students had severely  lacked the math                                                                    
skills  required for  success in  the work  field. She  felt                                                                    
that SB  170 would encourage  students who choose  to embark                                                                    
on a technical career.                                                                                                          
                                                                                                                                
Senator  Thomas  felt  the   testimony  was  important,  and                                                                    
stressed that many students did  not have enough of a narrow                                                                    
focus at the middle school  level. He remarked that students                                                                    
needed to understand  as early as possible, what  it took to                                                                    
succeed in the work force.                                                                                                      
                                                                                                                                
SB  170  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
9:15:45 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:17:21 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
^Overview of Energy Projects                                                                                                  
                                                                                                                                
9:17:34 AM                                                                                                                    
                                                                                                                                
SARAH FISHER GOAD, DIRECTOR,  ALASKA ENERGY AUTHORITY (AEA),                                                                    
presented  the  PowerPoint presentation,  "Renewable  Energy                                                                    
Fund  Program Status."  She discussed  slide 2,  "Renewables                                                                    
and other Projects 5-Year State  Funds." She stated that the                                                                    
slide represented  a five  year state  fund snapshot  of the                                                                    
renewable energy funds of $176.6  million, and 310 projects.                                                                    
She furthered  that there  were other  state funds  that had                                                                    
been appropriated for  AEA to manage projects  and grants of                                                                    
$248  million.  Although the  Renewable  Energy  Fund was  a                                                                    
significant  part  of  the AEA,  there  were  several  other                                                                    
funding sources and  projects. The energy-efficiency section                                                                    
was  represented in  the slide,  but most  of the  money for                                                                    
energy efficiency came from the federal government.                                                                             
                                                                                                                                
9:19:10 AM                                                                                                                    
                                                                                                                                
PETER  CRIMP,  DEPUTY  DIRECTOR,  ALASKA  ENERGY  AUTHORITY,                                                                    
displayed  slide  3, "RE  Fund  Grant  Status: February  17,                                                                    
2012." The table  in the slide displayed  the statistics for                                                                    
the Renewable  Energy Fund  to date.  The grant  program was                                                                    
currently   in   its   fifth   round;   had   received   558                                                                    
applications; funded 208 of those  applications; and had 165                                                                    
grants currently in  place. Round 5 of  the Renewable Energy                                                                    
Fund was  up for consideration,  and AEA had  recommended up                                                                    
to $43.2  million. The appropriations  for round 5  were not                                                                    
established. Approximately $177 million  was the total money                                                                    
that  had  been  appropriated,  and  $81  million  had  been                                                                    
dispersed. He  pointed out the  substantial amount  of match                                                                    
money in the grants and  other contributions. He stated that                                                                    
money  that   had  not  moved   forward  was  going   to  be                                                                    
reallocated.                                                                                                                    
                                                                                                                                
Co-Chair Stedman requested  that a focus on  cost benefit to                                                                    
the states and the  individual communities be highlighted in                                                                    
the  presentation. Mr.  Crimp replied  that there  were some                                                                    
slides related  to cost  benefit for  individual communities                                                                    
later in the presentation.                                                                                                      
                                                                                                                                
Mr. Crimp discussed slide 4,  "RE Fund Drawdown Outlook." He                                                                    
stated that approximately $81 million  had moved forward out                                                                    
of  the fund.  The  graph showed  the differentiation  among                                                                    
feasibility:  reconnaissance  stage  work versus  the  final                                                                    
design. Generally, 70 to 80  percent of the funding would go                                                                    
into  construction of  the projects.  He  remarked that  the                                                                    
slope  of  the  curve   increases  during  the  construction                                                                    
season, when funds were expended more quickly.                                                                                  
                                                                                                                                
Mr. Crimp looked  at slide 5, "RE  Fund Project Completion."                                                                    
He stated that  at the end of 2011, there  were 58 completed                                                                    
projects. He  explained that the chart  showed a progression                                                                    
of the completion of the projects.                                                                                              
                                                                                                                                
Co-Chair Stedman wondered if  the department re-examined the                                                                    
projects  for future  viability. Mr.  Crimp stated  that AEA                                                                    
had a reliable metric to  determine the financial benefit of                                                                    
each project.                                                                                                                   
                                                                                                                                
Mr.  Crimp  displayed  slide 6,  "Pre-construction  Projects                                                                    
(R1-4)."  He   stated  that  the  slide   displayed  a  good                                                                    
distribution along  Southeast Alaska, with a  specific focus                                                                    
on  hydro-electric  energy  in Southeast  and  South-central                                                                    
Alaska. He  noted the chart  in the  top left corner  of the                                                                    
slide displayed the  allocation of the fund:  73 percent for                                                                    
construction, 21 percent for feasibility,  and 6 percent for                                                                    
the final design.                                                                                                               
                                                                                                                                
Mr.  Crimp discussed  slide 7,  "Construction Projects  (R1-                                                                    
4)."   He  was   willing   to  discuss   each  project,   if                                                                    
specifically requested.                                                                                                         
                                                                                                                                
9:26:56 AM                                                                                                                    
                                                                                                                                
Mr.  Crimp displayed  slide 8,  "Funding Allocation  by: PCE                                                                    
vs. Non-PCE; Heat  vs. Power." He explained  that 72 percent                                                                    
of  the funds  had been  given  to PCE  communities, and  28                                                                    
percent went to non-PCE communities.  He stated that AEA had                                                                    
sponsored  a study  related  to the  heat  and power  topic.                                                                    
Approximately 80  percent of the  energy used in  Alaska was                                                                    
used for heat. The  Renewable Energy Fund Advisory Committee                                                                    
had advised AEA to emphasize heat projects.                                                                                     
                                                                                                                                
Co-Chair Stedman  requested a definition  of PCE.  Mr. Crimp                                                                    
replied  that PCE  stood for  "Power Cost  Equalization." He                                                                    
stated that PCE communities received PCE payments.                                                                              
                                                                                                                                
Co-Chair  Stedman surmised  that homes  in communities  that                                                                    
had diesel-generated  power, were  given a state  subsidy in                                                                    
the first  thousand kilowatts. Ms. Fisher-Goad  replied that                                                                    
the definition  of the eligible  PCE utility began  in 1985,                                                                    
and  was  determined  whether  or   not  the  community  was                                                                    
generating  with diesel  in  1985. She  agreed  that it  was                                                                    
primarily  the   communities  that  generate   from  diesel,                                                                    
however  there were  still  communities  and utilities  that                                                                    
were   eligible  for   PCE,  even   though  they   may  have                                                                    
transitioned to other resources.                                                                                                
                                                                                                                                
Co-Chair  Stedman wondered  if  PCE was  the first  thousand                                                                    
kilowatts. Ms.  Fisher-Goad replied  that PCE was  the first                                                                    
500 kilowatts.                                                                                                                  
                                                                                                                                
Senator Thomas  queried the statistic related  to heat being                                                                    
80 percent  of the issue.  Mr. Crimp replied that  the value                                                                    
of electric energy  was higher than other  factors, but heat                                                                    
was the most important sector.                                                                                                  
                                                                                                                                
Senator Thomas stressed that there  was a major issue in the                                                                    
interior,  and  felt that  there  needed  to be  a  stronger                                                                    
emphasis on the heat problem.                                                                                                   
                                                                                                                                
9:32:46 AM                                                                                                                    
                                                                                                                                
Mr. Crimp discussed  slide 9, "Annual Fuel  Savings - Actual                                                                    
and Projected." He stated that  the fuel saving from 2009 to                                                                    
2011  displayed the  actual figures.  He apologized  for not                                                                    
providing the total  of the three years  combined. He shared                                                                    
that  the  value  from  2009  to  2011  approximately  $11.7                                                                    
million.  He explained  that fuel  savings was  used as  the                                                                    
broadest metric  for the Renewable Energy  Fund. He stressed                                                                    
that  the  most important  factor  was  saving to  the  rate                                                                    
payers  and customers.  However, in  order to  have a  broad                                                                    
metric  that   was  not   subject  to   the  year   to  year                                                                    
variability, the chart was very  useful. He remarked that he                                                                    
would be  discussing the savings  per kilowatt hour  for the                                                                    
projects in individual communities.                                                                                             
                                                                                                                                
Co-Chair Stedman requested further  examination of a way for                                                                    
the  state to  obtain the  savings. Mr.  Crimp replied  that                                                                    
there  was a  slide  later in  the  presentation that  would                                                                    
highlight that request.                                                                                                         
                                                                                                                                
Senator  Thomas  looked  at  years  2014  to  2017,  and  he                                                                    
wondered what  accounted for the flattening  out of biomass,                                                                    
geothermal, and  heat recovery. Mr.  Crimp replied  that the                                                                    
projects were built out, so  there were no new projects. The                                                                    
fuel would  be displaced at  an annual basis, and  the graph                                                                    
displayed the diesel displacement per gallon per year.                                                                          
                                                                                                                                
Senator  Thomas surmised  that only  the projects  listed on                                                                    
slide 2 were represented in slide 9. Mr. Crimp agreed.                                                                          
                                                                                                                                
Mr.   Crimp  looked   at  slide   10,  "Cost   of  Scheduled                                                                    
Construction  Projects, Rounds  1-4." He  stated that  there                                                                    
was  a significant  non-state and  local match,  compared to                                                                    
the Renewable Energy Fund dollars.                                                                                              
                                                                                                                                
9:37:32 AM                                                                                                                    
                                                                                                                                
Mr. Crimp discussed slide 11,  "Energy production and diesel                                                                    
cost savings-2011."  He stated that the  slide displayed the                                                                    
projects  that  had  been  in  operation,  at  least  before                                                                    
January 1  2011. The table  displayed the  energy production                                                                    
and cost savings  in 2011, for the projects  for which there                                                                    
was a full  year's worth of data. There  were no projections                                                                    
or   major  assumptions,   and  the   table  was   simply  a                                                                    
representation of the products of the projects.                                                                                 
                                                                                                                                
Co-Chair Stedman  wondered if  the goal  was to  save diesel                                                                    
fuel. Mr. Crimp replied that the  goal was to bring down the                                                                    
cost to the communities.                                                                                                        
                                                                                                                                
Co-Chair  Stedman wondered  if that  was represented  in the                                                                    
presentation. Mr.  Crimp referenced  a report  from November                                                                    
2011, and agreed to update the  report and provide it to the                                                                    
committee.                                                                                                                      
                                                                                                                                
Co-Chair Stedman  felt that  the cost  benefit to  the State                                                                    
was more complex than saving  diesel fuel. Mr. Crimp replied                                                                    
that Wrangell  paid $.08 per  kilowatt hour. He  stated that                                                                    
the  spread  was  approximately   $61,000  to  Wrangell.  He                                                                    
stressed that there was a  diminishing amount of hydro power                                                                    
in  Southeast Alaska.  He pointed  out that  the project  in                                                                    
Wrangell was recommended for funding in 2009.                                                                                   
                                                                                                                                
9:45:47 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman would like to  see an analysis before a net                                                                    
savings  could  be  determined.  Mr.  Crimp  felt  that  the                                                                    
Wrangell boilers would  be looked at, and  AEA would provide                                                                    
the  net savings  after  the cost  of  electricity had  been                                                                    
analyzed.                                                                                                                       
                                                                                                                                
Co-Chair  Stedman  was very  familiar  with  the process  in                                                                    
determining  the benefit  of  hydroelectricity. He  stressed                                                                    
that there  needed to be  an examination of  alternatives in                                                                    
order to complete the goals  of the goals. He understood the                                                                    
concern of the communities, especially  when the cost of oil                                                                    
reached  $100 a  barrel. He  felt that  the State  needed to                                                                    
maintain focus on the net savings.                                                                                              
                                                                                                                                
Ms.  Crimp   stressed  that  the  projects   displayed  only                                                                    
reflected  one  year of  data.  She  added that  there  were                                                                    
issues that  required attention,  and agreed that  there was                                                                    
an issue of heat requirements across the state                                                                                  
                                                                                                                                
9:50:35 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman noted  that the  cost of  hydroelectricity                                                                    
was  not necessarily  lower than  other power  source costs,                                                                    
specifically oil.                                                                                                               
                                                                                                                                
Co-Chair Stedman  looked at the  geo-thermal project  at the                                                                    
Juneau Airport.  He would like  to see a detailed  report on                                                                    
that project  and also the  new swimming pool in  Juneau. He                                                                    
felt  that  there  could  be  a  benefit,  if  the  projects                                                                    
actually work  and had  a positive  cost benefit.  Mr. Crimp                                                                    
replied that  Juneau had released  a report stated  that the                                                                    
geo  thermal  airport  project were  highly  successful  and                                                                    
released  more  energy  than  was  expected.  He  agreed  to                                                                    
provide that  report to the  committee. He added  that there                                                                    
was no report yet on the new swimming pool in Juneau.                                                                           
                                                                                                                                
Co-Chair Stedman requested  data on the heat  pump. He noted                                                                    
that there  could be different  objectives between  the City                                                                    
of Juneau and the State. He  felt that there needed to be an                                                                    
examination  of  the  financial  success,  rather  than  the                                                                    
mechanical  success.  Mr.  Crimp   agreed  to  provide  that                                                                    
information.                                                                                                                    
                                                                                                                                
9:56:27 AM                                                                                                                    
                                                                                                                                
Mr. Crimp  highlighted each project  displayed on  slide 11.                                                                    
He stated that  the economic performance was  poor, but that                                                                    
there would be more typical numbers  by the end of the year.                                                                    
He looked  at the  wood processor  in Cordova,  and remarked                                                                    
that  project  was highly  successful.  He  stated that  the                                                                    
Gulkana  Central  Wood  Heating  was poor.  The  North  Pole                                                                    
heating recovering project was  going excellent and had very                                                                    
low operation and maintenance costs.                                                                                            
                                                                                                                                
Co-Chair  Stedman  stated that  every  project  was a  "good                                                                    
project with  someone else's money.  He stressed  that there                                                                    
needed  to be  a  more appropriate  analysis  from AEA.  Mr.                                                                    
Crimp agreed.                                                                                                                   
                                                                                                                                
Senator  Olson  wondered how  much  of  the private  venture                                                                    
affected  the project.  Mr. Crimp  replied that  it was  too                                                                    
difficult to assess  the project in terms of  the benefit of                                                                    
the public dollars versus private dollars.                                                                                      
                                                                                                                                
10:07:12 AM                                                                                                                   
                                                                                                                                
Senator Olson  stressed felt  that there  was no  savings to                                                                    
the State  in the  Nome Utilities project  on the  list. Co-                                                                    
Chair  Stedman   would  like  Mr.   Crimp  to   provide  the                                                                    
information  that Senator  Olson  had  requested. Mr.  Crimp                                                                    
agreed to provide that information.                                                                                             
                                                                                                                                
Mr. Crimp  looked at the  Toksook Wind Farm. He  stated that                                                                    
he  did  not have  the  detailed  information, because  that                                                                    
information  was  not  available  in 2011.  He  stated  that                                                                    
Unalakleet Wind  Farm was generating  approximately slightly                                                                    
below the goal.  Whether or not the dollars  were paid back,                                                                    
the savings was 3.4 cents per kilowatt hour before PCE.                                                                         
                                                                                                                                
Senator  Thomas   requested  an  overall  analysis   of  the                                                                    
maintenance and savings. He would  like energy efficiency to                                                                    
be a part  of the discussion and analysis.  Mr. Crimp agreed                                                                    
that  energy efficiency  should be  the priority,  and would                                                                    
provide the requested information.                                                                                              
                                                                                                                                
Co-Chair  Stedman  understood  that  there  was  a  profound                                                                    
workload  on  AEA,  and  stressed  that  the  committee  was                                                                    
aggressively addressing the situation.                                                                                          
                                                                                                                                
10:14:44 AM                                                                                                                   
                                                                                                                                
Ms.       Fisher-Goad        displayed       slide       12,                                                                    
"Challenges/Opportunities."                                                                                                     
                                                                                                                                
     Focus on the entire energy system                                                                                          
     -Reliable, efficient diesel systems first                                                                                  
     -Reduce demand through EE                                                                                                  
                                                                                                                                
     Deliverables                                                                                                               
     -Reduce and stabilize costs to residents                                                                                   
     -Displace diesel                                                                                                           
     -Assist in project development                                                                                             
                                                                                                                                
     Monitor technical and economic performance                                                                                 
                                                                                                                                
Ms.  Fisher-Goad   stated  that  there  was   a  significant                                                                    
pressure  to move  the projects  forward. She  stressed that                                                                    
there was an analysis to  determine which projects should go                                                                    
forward, there were  few projects that had  obtained data to                                                                    
determine  viability. There  needed  to be  a  focus on  the                                                                    
entire  energy system,  in order  make  energy efficiency  a                                                                    
priority. She stated that there  were some issues related to                                                                    
addressing small  communities to update the  energy systems.                                                                    
She appreciated the comments  related to diesel displacement                                                                    
and cost feasibility,  and remarked that long  term data was                                                                    
essential, so  projects needed to continually  be evaluated.                                                                    
She   added  that   technical  performance   monitoring  and                                                                    
technical assistance was essential to the success of AEA.                                                                       
                                                                                                                                
Co-Chair  Stedman  requested   information  related  to  the                                                                    
Emerging  Technology  Fund. Ms.  Goad  stated  that AEA  was                                                                    
currently   soliciting   applications   for   the   Emerging                                                                    
Technology Fund.                                                                                                                
                                                                                                                                
10:19:24 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:25:05 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Stedman welcomed the presenters.                                                                                       
                                                                                                                                
BOB BREAN, DIRECTOR, RESEARCH  AND RURAL DEVELOPMENT, ALASKA                                                                    
HOUSING  FINANCE  CORPORATION, discussed  the  presentation,                                                                    
"Alaska Housing  Finance Corporation (AHFC)  Energy Programs                                                                    
Update,"                                                                                                                        
                                                                                                                                
Mr. Brean displayed slide 2, "Weatherization Program."                                                                          
                                                                                                                                
     -Assisting homeowners for 30 years                                                                                         
     -Income based                                                                                                              
     -Homeowners and renters may apply                                                                                          
     -Services provided at no cost by 17 providers                                                                              
     -Strong history of performance                                                                                             
                                                                                                                                
10:27:41 AM                                                                                                                   
                                                                                                                                
Mr. Brean  looked at slide  2, "Weatherization  Program." He                                                                    
explained  that  the  slide represented  the  funding  level                                                                    
prior to and after FY  08 appropriation. The average expense                                                                    
per  unit for  the road  and marine  highway had  grown from                                                                    
$7,000 to  $11,000; for  air only,  the average  expense per                                                                    
unit had risen from $18,000 to $30,000.                                                                                         
                                                                                                                                
Senator  Egan felt  that weatherization  in Angoon  was much                                                                    
different  than  other  parts  of  the  state.  He  did  not                                                                    
understand why  the road and marine  highways were combined.                                                                    
Mr.  Brean looked  at  the  cost of  freight  in the  Alaska                                                                    
Marine Highway system, and felt  that the amount worked well                                                                    
in  Southeast Alaska.  He added  that  the contractors  were                                                                    
comfortable with  the freight reduction costs  on the marine                                                                    
highway system.                                                                                                                 
                                                                                                                                
Senator Egan  surmised that there  was freight  reduction on                                                                    
the marine  highway system. Mr.  Brean stated that  the cost                                                                    
was  less  for  those  communities  on  the  marine  highway                                                                    
system, than for communities on the road system.                                                                                
                                                                                                                                
Mr. Brean discussed slide 4,  "FY 2012 100 percent of Median                                                                    
Income  Limits  for  Alaska."  He   stated  that  the  graph                                                                    
displayed  a snapshot  of a  policy decision  that was  made                                                                    
after  receiving an  infusion  of funds.  The median  income                                                                    
level was moved from 80 percent to 100 percent.                                                                                 
                                                                                                                                
Co-Chair Stedman requested a definition  of "DOE." Mr. Brean                                                                    
replied that DOE  stood for the United  States Department of                                                                    
Energy.                                                                                                                         
                                                                                                                                
Mr. Brean  looked at slide 5,  "Weatherization Program." The                                                                    
slide  showed  the  number   of  communities  that  received                                                                    
weatherization  service. In  2008  to  2010, AHFC  conducted                                                                    
residential  weatherization training.  The contractors  were                                                                    
instructed  to bring  in individuals  from  the league,  and                                                                    
then hire local people.  He stressed that the weatherization                                                                    
program  provided jobs  in communities  where  there may  be                                                                    
limited employment. He felt  that the weatherization program                                                                    
had the same value as a jobs program.                                                                                           
                                                                                                                                
10:32:58 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman asked  for a description of  the wait times                                                                    
that  people  encountered  when  they  were  placed  on  the                                                                    
weatherization waiting list. Mr.  Brean replied that someone                                                                    
would  address  that issue  later  in  the presentation.  He                                                                    
furthered  that  the  individual contractors  conducted  the                                                                    
intake  surveys  in  the spring.  Typically,  there  was  no                                                                    
problem filling the waiting list  or finding people who were                                                                    
eligible for  the program. Because  the program  was income-                                                                    
based,  there was  no difficulty  in getting  people on  the                                                                    
wait-list.  He stressed  that income-eligible  families were                                                                    
out-pacing   the   rate   at  which   AHFC   could   conduct                                                                    
weatherization  around the  state. In  2008, when  funds had                                                                    
been  infused  in  the  program, only  ten  percent  of  the                                                                    
current need and eligible homes would be weatherized.                                                                           
                                                                                                                                
Senator  Olson wondered  if the  map  on the  slide was  all                                                                    
inclusive.  Mr. Brean  said it  was not  all inclusive,  and                                                                    
furthered  that  the  map's intent  was  mostly  for  visual                                                                    
effect.                                                                                                                         
                                                                                                                                
Mr. Brean  discussed slide  6, "Weatherization  Program." He                                                                    
stated that  in FY 2008  the program received  $200 million,                                                                    
and in  FY 2011 the  program received $64  million, totaling                                                                    
$264 million.                                                                                                                   
                                                                                                                                
Mr.  Brean  displayed   slide  7,  "Weatherization  Program:                                                                    
Update." He  stated that $144.6  million had  been expended,                                                                    
and  5,649 units  were complete.  The project  totals as  of                                                                    
March  31,  2012 was  $164.2  million  expended, with  7,681                                                                    
units  complete;  and  as  of  Mar 31  2013  $245  would  be                                                                    
expended with 10,500 units complete.                                                                                            
                                                                                                                                
10:39:06 AM                                                                                                                   
                                                                                                                                
Mr.  Brean  looked  at  slide  8,  "Weatherization  Program:                                                                    
Benefits."  He stated  that the  benefits included  resident                                                                    
health  and safety;  fire safety'  improves building  stock;                                                                    
job  creation;  invests  in local  communities;  and  energy                                                                    
savings. He  stated that the  program created jobs,  and the                                                                    
program  allowed  for  workers  to apply  their  trades  and                                                                    
continue  working. He  stated that  utility bills  were more                                                                    
manageable and  consumption of fuel was  lowered, because of                                                                    
the  weatherization  program.  He stressed  that  there  was                                                                    
reduced  carbon  dioxide  emissions, and  pointed  out  that                                                                    
there was an  average of about 30-33 percent  savings to the                                                                    
consumer. He used an example  of the Aleutian Island Housing                                                                    
Authority, and noted that there  was data collected in 2008,                                                                    
2009, and  2011, and  had recorded  43 percent  energy usage                                                                    
reduction.                                                                                                                      
                                                                                                                                
Mr. Brean  emphasized that there  was a reduction  of energy                                                                    
costs  of 30  percent  due to  the  weatherization and  home                                                                    
energy rebate programs.                                                                                                         
                                                                                                                                
10:44:37 AM                                                                                                                   
                                                                                                                                
Senator Thomas  wondered if the  focus was net  savings, and                                                                    
was  simplified. Mr.  Brean stated  that based  on utilities                                                                    
and overall performance, that number was consistent.                                                                            
                                                                                                                                
Senator  McGuire surmised  that  the weatherization  program                                                                    
was  100   percent  rebate,  and  income-based.   Mr.  Brean                                                                    
affirmed.                                                                                                                       
                                                                                                                                
Senator McGuire  noted that there  were some  proposals, and                                                                    
she  recommended adding  money  to this  program. She  noted                                                                    
that there was  no backlog, and wondered if there  was a way                                                                    
to  enhance the  program. Mr.  Brean replied  that there  as                                                                    
currently a ramp up to  distribute $100 billion annually. He                                                                    
stated that the program  should focus on residential benefit                                                                    
based on the individual home.                                                                                                   
                                                                                                                                
Senator McGuire looked  at point 3 of slide  2, and wondered                                                                    
there were  some renters who  were not the  beneficiaries of                                                                    
the program. Mr. Brean stated  that renters were eligible to                                                                    
apply based  on income, and  was required to agree  with the                                                                    
landlords.                                                                                                                      
                                                                                                                                
10:50:35 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
1:01:52 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
1:02:33 PM                                                                                                                    
                                                                                                                                
JOHN  ANDERSON, WEATHERIZATION  AND PROJECT  OFFICER, ALASKA                                                                    
HOUSING AND  FINANCE CORPORATION,  discussed slide  9, "Home                                                                    
Energy Rebate Program."                                                                                                         
                                                                                                                                
     -Open to all Alaskans not participating in the                                                                             
     Weatherization program                                                                                                     
     -No income requirements                                                                                                    
     -Owner-occupied, year-round residences                                                                                     
     -Homeowners pay upfront and are then rebated                                                                               
     -"As-Is & Post" energy ratings                                                                                             
                                                                                                                                
Mr.  Anderson  looked  at  slide  10,  "Home  Energy  Rebate                                                                    
Program: State  Funding Levels." In  FY 02, the  funding was                                                                    
$100 million; in FY 09, it was  $60 million; in FY 11 in was                                                                    
37.5 million; with a total of $197.5 million.                                                                                   
                                                                                                                                
Mr.  Anderson  discussed  slide   11,  "Home  Energy  Rebate                                                                    
Program: Results."  To date, the rebate  program distributed                                                                    
16,098  rebates, which  totaled  $102.6  million. He  stated                                                                    
that 28,365 rebates were distributed  as of January 30 2012,                                                                    
totaling  $9.2 million;  16,158 post-rebates,  totaling $2.8                                                                    
million;  and 1,317  five star  plus rebates,  totaling $9.9                                                                    
million.  The  total  money expended  for  the  program  was                                                                    
$130.5 million.                                                                                                                 
                                                                                                                                
Senator  Ellis   wondered  how  the  five   star  components                                                                    
compared with  the Alaska Craftsman Home  Standards Program.                                                                    
Mr.  Anderson stated  that the  standards for  both programs                                                                    
were AHFC standards.                                                                                                            
                                                                                                                                
Co-Chair  Stedman  requested further  information  regarding                                                                    
how standards were determined.  Mr. Anderson reiterated that                                                                    
all of  the standard, were  AHFC standards. Mr.  Brean added                                                                    
that the determination software  was developed with the help                                                                    
from the Alaska Craftsman.                                                                                                      
                                                                                                                                
Senator Ellis surmised the five  star program met or exceeds                                                                    
the  Alaska  Craftsman  Home Standards  Program.  Mr.  Brean                                                                    
indicated to the affirmative.                                                                                                   
                                                                                                                                
Mr.  Anderson  displayed  slide   12,  "Home  Energy  Rebate                                                                    
Program."  Currently,   there  were   1,746  homes   on  the                                                                    
waitlist, and 500 homes were dispatched a month.                                                                                
                                                                                                                                
1:07:37 PM                                                                                                                    
                                                                                                                                
Mr.  Anderson  looked  at  slide  13,  "Home  Energy  Rebate                                                                    
Program:  Program  Snapshot."  He stated  that  the  average                                                                    
income costs of 15,906  homeowners were displayed. He stated                                                                    
that the homeowner average investment was $4,134.                                                                               
                                                                                                                                
Mr.  Anderson  displayed  slide   14,  "Home  Energy  Rebate                                                                    
Program:  Savings."  He  stated  that  the  Alaska  Retrofit                                                                    
Information  System was  used to  determine the  savings. He                                                                    
stated that the average home  energy savings was 33 percent,                                                                    
and the average home cost savings was $1,297 per year.                                                                          
                                                                                                                                
Co-Chair Stedman wondered if there  was a difference between                                                                    
the  hydro and  non-hydro areas.  Mr. Anderson  replied that                                                                    
the investment  average was the  same across the  state, but                                                                    
Southeast  Alaska  showed  more   cost  savings  than  other                                                                    
regions in the state.                                                                                                           
                                                                                                                                
Senator Egan  surmised that climate  was also a  factor. Mr.                                                                    
Brean   agreed  with   that  assumption.   Co-Chair  Stedman                                                                    
stressed  that there  was a  significant difference  between                                                                    
Southeast and the rest of  Alaska. Mr. Brean agreed. Senator                                                                    
Egan assumed that  the same formula was used  for the entire                                                                    
state  when  determining  the  average  numbers.  Mr.  Brean                                                                    
affirmed that assumption.                                                                                                       
                                                                                                                                
1:12:46 PM                                                                                                                    
                                                                                                                                
Mr.  Anderson  discussed  slide   15,  "Home  Energy  Rebate                                                                    
Program Statewide  Annual Outcome Estimates as  of 9/30/11."                                                                    
He  explained that  there was  an estimation  of savings  of                                                                    
$1.649 million BTUs, with a  net reduction of carbon dioxide                                                                    
of over 100,000 tons. There was  an average of 33 percent of                                                                    
energy savings. The as is rating  in the increase of a home,                                                                    
was  rising from  a below  standard rating  of 2  star to  a                                                                    
minimum standard of a 4 star rating.                                                                                            
                                                                                                                                
Mr. Brean hoped to add  more numbers with the weatherization                                                                    
program  as  well. He  hoped  to  provide numbers  for  both                                                                    
programs.                                                                                                                       
                                                                                                                                
Co-Chair  Stedman   requested  information  from   the  fuel                                                                    
distributors  and  the fuel  savings.  Mr.  Brean agreed  to                                                                    
provide that information.                                                                                                       
                                                                                                                                
Senator Egan queried the benefit  for older homes. Mr. Brean                                                                    
stressed that the  older homes had the  opportunity for gain                                                                    
and fixes.  He added that  the rebate was predicated  on the                                                                    
differences between the before and after conditions.                                                                            
                                                                                                                                
1:17:28 PM                                                                                                                    
                                                                                                                                
Mr. Anderson stated  that fuel vendors were  not a regulated                                                                    
entity, so it was difficult to obtain their numbers.                                                                            
                                                                                                                                
Co-Chair Stedman pointed  out that he thought  it was normal                                                                    
in Southeast  Alaska to have  ice on the inside  of windows,                                                                    
and was relieved  to know that it was not  normal for ice to                                                                    
form indoors.                                                                                                                   
                                                                                                                                
Mr. Anderson looked  at slide 16, "Five State  Plus New Home                                                                    
Rebate."                                                                                                                        
                                                                                                                                
     AHFC provides a $7,500 rebate for new 5 Star Plus                                                                          
     homes.                                                                                                                     
     -Not more than one year old                                                                                                
     -For original owner                                                                                                        
    -Must meet all AHFC property financing requirements                                                                         
     -5 Star Plus energy rating                                                                                                 
                                                                                                                                
     Rebates: 1,317                                                                                                             
     Total Expended: $9.9 million                                                                                               
                                                                                                                                
Mr. Anderson discussed slide 17,  "Second Mortgage or Energy                                                                    
Conservation."                                                                                                                  
                                                                                                                                
     -Second mortgage up to $30,000                                                                                             
     -15 Year Loan at the Taxable Rate                                                                                          
     -Active Loans: 77                                                                                                          
     -Loans Paid Off: 59                                                                                                        
                                                                                                                                
Mr. Braun  noted that there  were some  inquiries pertaining                                                                    
to  additional interest  in the  program. He  explained that                                                                    
there   were  some   conversations   regarding  a   possible                                                                    
adjustment to the program.                                                                                                      
                                                                                                                                
Mr. Anderson  presented slide 18, "Alaska  Energy Efficiency                                                                    
Revolving Loan  Fund (AEERLF)." He stated  that this program                                                                    
was a  new program. He  explained that the program  would be                                                                    
available for  schools, state facilities, the  University of                                                                    
Alaska, and  municipal facilities. He stated  that there was                                                                    
$8  million available  to benchmark  as  many facilities  as                                                                    
they  could.   There  were   350  investment   grade  audits                                                                    
currently occurring.                                                                                                            
                                                                                                                                
1:22:50 PM                                                                                                                    
                                                                                                                                
Mr.  Braun  explained  that a  key  element  of  performance                                                                    
contract was  essential to the  AEERLF program.  He stressed                                                                    
that  if  the  repairs  were made,  then  the  auditors  and                                                                    
assessors could be held accountable.                                                                                            
                                                                                                                                
Senator  McGuire felt  that the  program was  pertinent, but                                                                    
she was frustrated  because schools often were  not aware of                                                                    
the program.  She wondered  if there  were plans  to provide                                                                    
more  information to  the  schools  and municipalities.  Mr.                                                                    
Anderson stressed that  it was a new program,  and felt that                                                                    
there  was an  aggressive campaign  to inform  the potential                                                                    
participants.                                                                                                                   
                                                                                                                                
Mr. Brean  stated that the  municipalities were  involved in                                                                    
the  audits, and  that  was a  major  positive step  towards                                                                    
gaining participants in the program.                                                                                            
                                                                                                                                
1:27:14 PM                                                                                                                    
                                                                                                                                
Senator  Egan felt  that there  needed to  be more  outreach                                                                    
than what  had been discussed.  He stressed a focus  on each                                                                    
individual  school districts  and municipalities.  Mr. Brean                                                                    
agreed with  Senator Egan.  He added that  the cost  of fuel                                                                    
was high,  and many  municipalities were struggling  just to                                                                    
meet their fuel costs.                                                                                                          
                                                                                                                                
Mr.   Anderson  displayed   slide  20,   "Energy  Efficiency                                                                    
Benefits."  The   energy  efficiency  benefits   included  a                                                                    
reduction  in  energy  costs  and   usage;  an  increase  in                                                                    
economic  activity;  an  increase  in quality  of  life  and                                                                    
safety;  and  enhancement of  durability  and  value of  the                                                                    
home;   and  other   environmental,  social,   and  economic                                                                    
benefits.                                                                                                                       
                                                                                                                                
Co-Chair  Stedman wondered  if any  money was  requested for                                                                    
this new  program. Mr. Anderson  stressed that  there needed                                                                    
to  be  money for  the  outreach,  but  there was  no  money                                                                    
requested for outreach.                                                                                                         
                                                                                                                                
Co-Chair Hoffman wondered  if there was a  completion of the                                                                    
headquarters. Mr. Anderson commented  that their heating and                                                                    
ventilation was currently being updated.                                                                                        
                                                                                                                                
Senator  McGuire  wondered  what   barriers  AHFC  faced  in                                                                    
integrating  this new  program.  Mr.  Anderson replied  that                                                                    
there were not many barriers.                                                                                                   
                                                                                                                                
Co-Chair Stedman discussed the following day's agenda.                                                                          
                                                                                                                                

Document Name Date/Time Subjects
SB 170 Sponsor Statement.dot SFIN 2/27/2012 9:00:00 AM
SB 170
SB 170 CareerDevelopment abstract.pdf SFIN 2/27/2012 9:00:00 AM
SB 170
022712 Department of Labor Green Jobs.pdf SFIN 2/27/2012 9:00:00 AM
AEA Overview
Energy Projects AEA 022712 SFIN.pptx SFIN 2/27/2012 9:00:00 AM
Overview AEA
AHFC 2.27.12 FY13 Overview.pdf SFIN 2/27/2012 9:00:00 AM
Overview AHFC