Legislature(2021 - 2022)SENATE FINANCE 532
03/17/2022 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB132 | |
| SB202 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 132 | TELECONFERENCED | |
| + | SB 202 | TELECONFERENCED | |
| += | SB 81 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 202
"An Act relating to the renewable energy grant fund
and recommendation program; and providing for an
effective date."
9:54:50 AM
Co-Chair Bishop relayed that it was the first hearing of SB
202. It was the committee's intention to hear a bill
introduction and a Sectional Analysis, and to take public
testimony.
9:55:09 AM
SENATOR JOSH REVAK, SPONSOR, read from a Sponsor Statement
(copy on file):
SB 202 extends the authorization of the Renewable
Energy Grant Fund and Recommendation Program setting a
new sunset date of June 30, 2033.
The Renewable Energy Fund (REF) program was originally
established in 2008 with the passage of House Bill 152
and later received a ten-year extension in 2012, in
both cases receiving a unanimous vote of the
legislature. The REF is managed by the Alaska Energy
Authority in coordination with a nine-member Renewable
Energy Fund Advisory Committee.
Senator Revak explained that the program had an open
application process and was currently in Round 14. Each
submission was considered by its economic and technical
feasibility. The Alaska Energy Authority's (AEA)
recommendations were sent to the advisory committee, and
its final recommendations were then sent to the legislature
for approval. He noted that 39 applications were received
in the last round. He continued to read from the Sponsor
Statement:
Since its inception, the Renewable Energy Fund has
distributed over $275 million dollars in grant funds
for qualifying and competitively selected renewable
energy projects across the state.
Senator Revak detailed that $34 million had been directed
at projects on the road belt, and $248 million had been
directed to projects in rural Alaska. He continued that SB
202 amended the 2008 session law as amended in 2012 to
extend the sunset date to June 30, 2033, and also set an
immediate effective date. The bill had a $1.4 million
fiscal note for maintenance of the fund, financial
services, and oversight of existing and new grants. The
amount reflected what was budgeted for in FY 23. He
continued to address the Sponsor Statement:
These REF grants have been supplemented by both
federal and local funding to the tune of hundreds of
millions of dollars. These combined funds help to
stabilize and reduce energy costs for consumers by
supporting renewable energy projects in both urban and
rural communities across Alaska.
Senator Revak emphasized that as energy prices climbed, he
thought it was important for Alaska to take advantage of
all of its available sources of energy and heat, especially
in the state's most vulnerable communities. He summarized
that the Renewable Energy Grant Fund was an important tool
which supported Alaskan communities to meet their energy
needs.
Senator Revak explained that there was invited testimony
available to answer questions, and there was a presentation
that had been distributed to members (copy on file). He
noted that because of the REF Program, there had been 30
million gallons of diesel saved since 2008.
Senator Wilson shared that he was generally supportive of
the program and its process for selecting projects. He
included that he was currently a member of the Renewable
Energy Advisory Committee along with Senator von Imhof.
9:58:51 AM
Co-Chair Bishop OPENED public testimony.
9:59:01 AM
JERRY MEDINA, INSIDE PASSAGE ELECTRIC COOPERATIVE, JUNEAU
(via teleconference), testified in support of the bill. He
shared that the Inside Passage Electric Cooperative (IPEC)
had received two construction grants from REF. In 2015,
IPEC completed a hydroelectric project at Gartina Falls
outside of Hoonah. The REF grant amount was $6,694,000, and
the remainder was financed with a low-interest loan of $3
million. The project was completed in August 2015. He cited
the following figures since the project came online:
542,711 gallons of diesel fuel saved, $1,297,979 of diesel
fuel costs replaced, and 7,910,266 kilowatt hours of hydro-
generation.
Mr. Medina informed that IPEC had also received a grant
from REF in the amount $3,920,000, as well as a $3 million
USDA Rural Utilities Service grant for construction of the
Gunnuk Creek hydro project in Kake. Additionally, IPEC
secured a low-interest loan of $1,840,000 for a total
project cost of $8,760,000. The project was completed in
October 2020. He cited the following figures since the
project came online: 70,833 gallons of diesel fuel saved,
$165,350 of diesel fuel costs replaced, and 1,003,122
kilowatt hours of hydro-generation. He detailed that there
had been several days in Kake with 100 percent hydro-
generation, where diesel generators had been off.
Mr. Medina continued his testimony. He cited the following
figures resulting from a combination of the projects at
Gartina Falls and Gunnuk Creek: 613,544 gallons of diesel
fuel saved, resulting in $1,463,329 in savings to
customers. He summarized that REF had been instrumental in
completing two successful clean renewable energy projects
for IPEC customers. He shared that IPEC had "skin in the
game" for both projects. He emphasized that the success of
the projects would not have been possible without REF.
10:01:37 AM
Co-Chair Stedman thought there were several ways of
measuring the REF Program, one of which was fuel savings.
He wanted to know if the meter rate for the communities of
Kake and Hoonah had gone down or up since the hydro
projects had been operational.
Mr. Medina explained that IPEC had the same rate for all
four of its service areas. He discussed the fuel savings,
which was reflected in the Cost of Power Adjustment (COPA),
which was a fuel surcharge that was currently just over .15
cents per kilowatt hour. He explained that as fuel prices
fluctuated, the COPA fluctuated in the same direction. He
recalled that the latest invoice from the fuel barge
reflected $4.22 per gallon after recently being at a price
of just over $3 per gallon. He hoped that there would be a
significantly wet year to generate as much hydropower as
possible.
Co-Chair Stedman understood that the meter rate in Kake had
gone up after the hydro-project.
Mr. Medina thought Co-Chair Stedman had incorrect
information.
Co-Chair Stedman shared that his information came from
community leaders in Kake, including from city hall. He
asked Mr. Medina to get back to the committee with more
detailed information regarding historical meter rates
charged to citizens. He shared concerns regarding losing
sight of the goal of lowered rates as the state worked
towards renewable energy and moving away from the use of
diesel.
Mr. Medina reiterated that all customers paid the same
amount. He thought all of IPEC's customers benefitted from
the hydro projects.
Co-Chair Bishop asked Mr. Medina to provide the committee
with the information requested by Co-Chair Stedman.
10:04:42 AM
MICHAEL ROVITO, DEPUTY DIRECTOR, ALASKA POWER ASSOCIATION,
ANCHORAGE (via teleconference), spoke in support of the
bill. He explained that the Alaska Power Association (APA)
was a statewide trade association for electric utilities in
Alaska. He relayed that APA was in full support of the bill
and of extending the REF. He strongly urged passage of the
bill and thanked the sponsor. He asserted that many members
had received crucial funding from REF since its inception.
He continued that the funds had supported the addition of
renewable energy projects that had lowered reliance on
diesel fuel, stabilized rates, and decreased the carbon
footprint of electric generation.
Mr. Rovito continued his testimony. He cited 244 REF grants
totaling $275 million, and over 95 operating projects that
had been built using the funds to save more than 30 million
gallons of diesel each year. He asserted that REF was an
extremely valuable program that had proven itself. He
referenced numerous projects under consideration for future
rounds of grant funding through REF.
10:06:35 AM
JOMO STEWART, PRESIDENT AND CEO, FAIRBANKS ECONOMIC
DEVELOPMENT CORPORATION, FAIRBANKS (via teleconference),
testified in support of the bill. He asserted that the
Fairbanks Economic Development Corporation (FEDC) had long
supported the REF Program and any state efforts to help
communities to diversity their energy base and drive down
costs. He mentioned that much of FEDC's work pertained to
energy and the attempt to diversify energy. He though a
nice complement to the REF Program would be to identify
funding to help reactivate the Home Energy Rebate Program
that had been operated by the Alaska Housing Finance
Corporation (AHFC).
Co-Chair Bishop thanked Mr. Stewart and affirmed that the
committee was looking into the topic of the Home Energy
Rebate Program as of two weeks previously.
10:08:04 AM
Co-Chair Bishop CLOSED public testimony.
10:08:06 AM
AT EASE
10:09:17 AM
RECONVENED
Senator Wielechowski asked if Mr. Thayer had a sense of how
many successful REF projects there were as compared to the
number of abandoned projects.
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY,
ANCHORAGE (via teleconference), cited that there were 99
operational projects, with 38 in development and 240 total.
There had been a little less than 100 projects that had not
gone forward, part of which was due to the economics of the
projects or future funding for the costs of the projects.
He added that there were a few projects currently seeking
additional funding, primarily through the federal
infrastructure bill or other means. He discussed
feasibility work, which had to be complete in order to move
projects forward. He noted that early in the program itself
there was more funding available, while currently there was
the ongoing challenge of a $1 million funding cap.
Senator Wielechowski inquired about the 100 projects that
had not gone forward and asked what percentage had been
abandoned versus projects still in development.
Mr. Thayer did not have the information at hand. He offered
to send the committee a complete list of projects and
project status.
Senator Wielechowski expressed his continued support of the
REF Program and thought it had been very successful. He
wanted to get a sense of if there was something to be
improved if the state had invested in projects that had not
gone forward.
Senator Wielechowski asked if the REF funds were sweepable.
Mr. Thayer stated that there were usually no funds left to
sweep because projects were already encumbered by the end
of the fiscal year. He noted that the $4.75 million for
Round 13 (completed in August) had been encumbered.
Currently AEA was on Round 14 and had approximately $15
million if the legislature approved the funding, with 39
applications for a total request of $19.2 million in REF
funds. He identified that there were some projects that
would be disqualified based on economics or technical
viability. The funds had not been swept in the past because
from the time AEA moved a project forward and received
legislative approval, the funding was encumbered within a
few months.
10:12:44 AM
Senator Olson asked if the funds were sweepable if there
were funds left in the account.
Mr. Thayer thought the funds were sweepable. He noted that
Round 10, 11, and 12 had no funding by the legislature for
the program. The previous year REF had received $4.7
million, and currently there was a request for $15 million.
He reiterated that there had been no money in the fund to
sweep.
Senator Hoffman thought the REF was a great program. He
thought that the largest benefit was that grantees funded
for hydro or wind power receive stabilized rates. He
thought people using diesel would have seen rates double in
the last few years. He thought energy costs continued to be
the largest expenditure for individuals in rural Alaska,
whether on heating, electricity, or fuel. He was greatly
supportive of the program because it stabilized individual
rates and the lives of those that benefited were greatly
improved.
Senator Revak thanked the committee for hearing the bill.
Co-Chair Bishop set the bill aside.
SB 202 was HEARD and HELD in committee for further
consideration.
Co-Chair Bishop discussed the agenda for the afternoon.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 132 Sectional Analysis.pdf |
SFIN 3/17/2022 9:00:00 AM SHSS 2/3/2022 1:30:00 PM |
SB 132 |
| SB 132 Sponsor Statement.pdf |
SFIN 3/17/2022 9:00:00 AM SHSS 2/3/2022 1:30:00 PM |
SB 132 |
| SB 132 Final Version-Finance Committee 3.15.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 132 |
| SB 132 - PHA Bd Letter of Support - 2.25.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 132 |
| SB 202 Sectional Analysis 2.26.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 202 Support Docs REF Projects By Region 4.14.2021.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 202 Sponsor Statement 2.26.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 202 Support Docs Renewable Energy Fund Fact Sheet 2.11.2022.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 202 Support Letter APA 2.25.22.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |
| SB 132 Letter of Opposition Veterinarians Exempt PDMP.pdf |
SFIN 3/17/2022 9:00:00 AM |
SB 132 |
| SB 202 AEA REF_PROJECTS_BY_ENERGY_REGION_AND_RD14_SUMMARY.xlsx |
SFIN 3/17/2022 9:00:00 AM |
SB 202 |