Legislature(2009 - 2010)BUTROVICH 205
01/20/2010 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Overview: Omnibus Energy Policy Recommendations Alaska Sustainable Energy Act | |
| SB220 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| * | SB 220 | ||
SB 220-ENERGY EFFICIENCY/ ALTERNATIVE ENERGY
3:36:53 PM
CO-CHAIR MCGUIRE announced the consideration of SB 220 and asked
Ms. Sydeman to lead the committee through the draft of SB 220.
MICHELLE SYDEMAN, Staff to Senator Wielechowski, said she helped
support the work of the combined Resources and Energy committees
as they sought to find ways to lower energy costs and provide
more reliable and sustainable sources of energy to Alaskans.
MS. SYDEMAN paid tribute to all the members of this committee
who played a key role in developing the proposed Alaska
Sustainable Energy Act. She said that Senator Stedman expressed
his desire to see the full range of energy bills before moving
any one bill. Senator McGuire heard his call and committed to
holding field hearings around the state to collect Alaskans best
ideas about how it can move towards greater energy independence.
She said her energy in coming up with and fleshing out new ideas
was unparalleled; many of the ideas in this bill came from her
and her staff.
MS. SYDEMAN said that Senator Stevens hosted the joint committee
in Kodiak and Ousinkie where they saw new wind turbines reducing
reliance on high-cost diesel, heard from fish processors who
were turning fish waste into biodiesel, and learned just how
much rural energy costs can be reduced when community generators
are made to be more efficient. He made sure the committee had
the funds to do a credible job in the Interim.
She said that Senators French and Wagoner each participated in
the field hearings. Senator Wagoner brought his extensive
knowledge of energy issues and interest in finding practical
solutions to Alaska's energy challenges. Senator French brought
an eagerness to learn more, critical analysis of the ideas they
heard, and openness to the broad range of recommendations they
received. Senator Huggins' schedule precluded him from attending
many of the field hearings, but his focus on developing long
term reliable sources of energy for Alaskans is clear to
everyone. "He is a rock on which resource policies can be
debated in a cool, thoughtful and informed manner."
Lastly, she said, Senator Wielechowski's interest in developing
an energy plan forced them to look critically at Alaska's energy
challenges and identifying changes in statute or program funding
levels that would make life better for Alaskan families and
businesses. "He was resolute in his desire that we look broadly
and methodically at what the legislature could do to help the
average Alaskan."
3:40:29 PM
MS. SYDEMAN said this plan is the product of his insistence and
Senator McGuire's passion and persistence. She recognized that
the House Energy Committee, co-chaired by Representatives Edgmon
and Millet, has been engaged in a similar effort over the
Interim, and their excellent work is seen in their draft state
energy policy, which they are all proposing be adopted into
statute. She thanked Adam Berg and Jeff Turner, staff to the
House Energy Committee, for sharing that with Senate staff. She
hoped to continue sharing ideas and collaborate as House and
Senate bills move through the legislative process.
She said the bill before them today is a starting point for
discussion. SB 220 is a compilation of bills that were heard
last year as well as new ideas from the Interim; she knew that
additional concepts would be added before it leaves the
Resources Committee. She then presented an overview of its
components.
CO-CHAIR MCGUIRE thanked Ms. Sydeman for devoting a year of her
life to this project.
3:43:26 PM
MS. SYDEMAN said this bill drew from at least eight other bills.
Intent language is included stipulating that Alaska will achieve
a 15-percent increase in energy efficiency per capita by 2020
and meet 50 percent of its electrical needs through renewable
energy by 2025.
SB 121 was included; it was introduced by Senator Wielechowski
and calls for the state to focus more attention on insuring that
its own facilities are energy efficient and that it is spending
as little money as it can on energy. The state owns about 1,800
public facilities and eight buildings have been retrofitted by
the Department of Transportation (DOTPF). In these buildings
electrical use was cut by 22 percent, natural gas use by 15
percent and fuel oil by 36 percent. So, retrofitting buildings
makes sense and that is called for in SB 220.
3:44:43 PM
The second part of SB 220 is SB 31, a renewable energy
production tax credit that was introduced by Senator McGuire
last year. Across the nation, production incentives were being
introduced last year to encourage more development of renewable
energy resources and 25 states have some sort of renewable
energy corporate tax credit. So Alaska would be joining that
list.
Another bill, SB 150, is included and that was also introduced
by Senator McGuire. It would create an Emerging Technology Fund.
Ms. Sydeman mentioned that Gwen Holdman, Alaska Center for
Energy and Power, is a "spark plug" for new energy innovations
in the state. Currently, little or no state funds are available
for research and development of new energy technologies, and
this fund would provide a place to put them in the future so
that they could go to the University and others that are pushing
the envelopes and not just getting off-the-shelf technologies,
which is what the Renewable Energy Fund is directed to do.
3:46:18 PM
She said that SB 186 is about the Renewable Energy Fund, and it
requires that projects funded through it have a verifiable
financial benefit that exceeds the amount of grant monies
received to make sure of "getting a good bang for out buck." HB
196 revives and amends some terms in the Alternative Energy Loan
Fund that was enacted in the 1980s to purchase, construct and
install small-scale alternative energy systems.
3:47:17 PM
SB 71 was introduced by Senator Therriault last year; it asks
the state to incorporate viable renewable energy systems into
any new public works projects if it makes economic sense to do
so. And SB 220 directs the administration to always look at
renewables when building new public facilities. Finally, one
section of the bill has to do with the State of Alaska leading
by example, and it would require the executive branch to set
energy efficiency targets for all state agencies, to use energy
efficient equipment and vehicles when it's cost effective to do
so, and for the Alaska Energy Authority (AEA) to establish a
statewide fuel-buying cooperative.
She elaborated that plenty of evidence indicates that energy
star appliances conserve upwards of 60 percent, and vehicles
that are even 10 percent more efficient than the current state
fleet could save the state nearly a half million dollars
annually.
MS. SYDEMAN explained that a fuel-buying cooperative is good
especially for rural Alaska because it would allow rural
residents to buy fuel in greater quantities and get a better
price; schools, local governments and the public would all
benefit.
3:49:15 PM
MS. SYDEMAN said a proposed amendment includes a bill introduced
by Senator Stedman to expand the purposes of the Southeast
Energy Fund.
Finding no questions or comments, Ms. Sydeman continued with a
sectional analysis as follows:
3:50:09 PM
Page 1 sets the short title which is the "Alaska Sustainable
Energy Act". It also sets out the legislative intent that she
referred to earlier. It also states that the state will attempt
to generate 50 percent of its electricity from renewable energy
sources.
3:51:06 PM
MIKE PALOWSKI, staff to Senator McGuire, added that the third
bullet point also says "work to ensure reliable instate gas
supply to residents of the state."
3:51:27 PM
MS. SYDEMAN said section 4 provides the Alaska Housing Finance
Corporation (AHFC) with the power to provide technical
assistance to municipalities regarding their adoption - if they
are interested - in energy codes and efficiency standards. She
explained that last year the state had a board that would have
adopted a state energy standard, but their position has moved
back to simply providing the AHFC with the power to help
interested communities to adopt standards.
Section 5 on page 2 creates and Energy Efficiency Grant Fund for
providing grants to municipalities, unincorporated communities,
school districts, and the University of Alaska.
3:52:35 PM
She said that section 6 on page 3 tasks the DOTPF with reviewing
the option of using alternative energy when adopting plans and
specifications for public works (from SB 21).
Section 7 on page 4 provides that the state shall give
preference in procurement for equipment and appliances that have
received an energy star under the Energy Star Program of the
U.S. Environmental Agency (EPA) in the U.S. Department of Energy
(DOE). This effort is leading by example and cutting state
operating costs.
3:53:20 PM
Section 8 on page 4 amends a provision of the Renewable Energy
Grant Fund regarding the methodology for determining the order
of projects to receive funding and requiring activity reports to
be filed by grant recipients. The AEA may already be evolving
this.
Section 9 on page 5 amends the Renewable Energy Fund statute by
requiring the AEA to hire an economist to prepare a written
evaluation of each grant proposal.
She said that section 10 on page 5 tasks the AEA with
organizing, or providing for, the organization of a statewide
fuel buying cooperative.
3:54:18 PM
MR. PAWLOWSKI continued that Section 11 on pages 5-7
incorporates bills that have already moved past the Resources
Committee, but do well in the omnibus policy. He began with
changes that were made to the Emerging Energy Technology Fund.
He explained that over the Interim, the Denali Commission,
working with the stakeholder groups identified the fund using
purely federal dollars. Last year they found a lot of federal
money for innovation in the stimulus bill and so some of it was
directed towards identifying problems in the process contained
in section 11. One of the fundamental changes was to repeal the
phrase "or loans". The original bill was passed as "grants or
loans", but they found the University's capacity to actually
make a loan did not exist.
In the next few weeks, Mr. Pawlowski said, they will hear about
some best practices oversight issues related to the grant fund,
but the root goal is still the same - to find mechanisms to fund
the next generation of energy technologies in Alaska.
Sections 12 and 13 pick up on page 7 and go through page 10 and
is the former SB 31 - the alternative energy tax credit, which
became the renewable energy production tax credit. This provides
a transferable tax credit with some limitations to renewable
energy projects within the State of Alaska. This is an incentive
that several states already offer and it has been found to spur
development of these projects. No changes were made to this
section.
3:56:52 PM
MS. SYDEMAN said section 14 on page 10 tasks the DOTPF with
updating the energy use index database and conducting an energy
audit of public facilities that are determined to have
substantial energy inefficiency.
Section 15 on page 11 tasks the DOTPF with retrofitting all
public facilities listed in the energy use index and allows for
the department to enter into performance contracting for energy
efficiency - the basic concept being that these companies do the
construction retrofits and don't ask for any money up front.
They are simply paid back by the state as it saves money on
energy consumption. Once the contracts are paid, the state just
keeps those savings.
Section 16 on page 11 requires the DOTPF to annually determine
an appropriate energy conservation target for each public
building and report the energy conservation targets for all
buildings to the relevant state agency - so that agencies really
buy into the fact that they are to do their best to cut their
costs. The idea here, again, is to lead by example.
3:58:35 PM
Section 17 on page 12 requires the AEA to annually plan and
conduct in cooperation with AHFC a public education campaign to
promote energy efficiency and conservation. Based on what other
states have done, the average household can cuts its energy
costs substantially and that information needs to get out to the
public, and AEA is committed to doing this work, but they don't
have clear statutory authority to do so.
3:59:19 PM
CO-CHAIR MCGUIRE thanked Senators Hoffman and Stedman for
instituting the weatherization program. They got the idea from
this program that indicated that Alaskans would improve energy
efficiency if they simply knew what to do.
MS. SYDEMAN continued saying that section 18 on page 12 requires
the AEA to establish an energy use index for all public
facilities.
4:00:14 PM
Section 19 on page 13 declares a state energy policy. She
explained that the House established a fairly large stakeholder
group that was really committed to sustainable energy
development and efficiency and that group developed this policy.
4:01:02 PM
Section 20 on page 14 amends the Alternative Energy Revolving
Loan Fund by changing the funding sources for the loan.
Section 21 on page 14 states that loans from the Alternative
Energy Revolving Loan Fund may only be made for alternative
energy systems located within the state.
Section 22 on page 15 amends the loan terms of the Alternative
Energy Revolving Loan Fund to add a security requirement and
resets the interest rate.
Section 23 on page 15 amends the definition of "alternative
energy system" as it relates to the Alternative Energy Revolving
Loan Fund.
Section 24 on page 16 repeals outdated Revolving Loan Fund
statutes.
Section 25 on page 16 repeals January 1, 2025 as the renewable
energy production tax credit deadline established in section 13
of SB 220.
4:02:47 PM
MR. PALOWSKI explained that both sections 25 and 26 deal with
ending the incentive program. The will was to not provide an
incentive that lasts forever; this stops it at 2025.
4:03:11 PM
MS. SYDEMAN said section 27 on page 16 simply directs the AEA to
establish the energy use index database no later than six months
after the effective date of this act.
Section 28 on page 16 requires DOTPF to submit an energy
performance report to the legislature regarding its energy
efficiency achievements in the measures it has taken.
Section 29 on page 16 requires the Department of Administration
(DOA) to submit a plan to the legislature to reduce state energy
use by 10 percent by 2015 and provide interim progress reports -
building in accountability on carrying through on the
legislative intent.
4:04:14 PM
CO-CHAIR WIELECHOWSKI commented that they would have additional
financial recommendations as well, because a lot of their
recommendations are financial.
4:05:17 PM
CO-CHAIR MCGUIRE announced that they would release the list of
capital infrastructure investment at their news conference
tomorrow.
MR. PALOWSKI said they should be getting updated fiscal notes
for SB 220.
SENATOR HUGGINS focused on page 2, line 6, that says "work to
ensure reliable instate gas supply for residents of the state."
However, he said some people talk about importing LNG and other
kinds of items, and he questioned whether it would be
appropriate to have a provision that addresses a preference for
using Alaska's energy sources rather than importing others.
CO-CHAIR MCGUIRE agreed that that language could be made
stronger on page 2, line 6.
4:07:36 PM
MR. PALOWSKI said their suggestions should go into section 19 on
page 13 that has provisions related to domestic natural
resources, particularly in subsections (a) and (b).
SENATOR FRENCH asked her to "sketch out" how "alternative
energy" is different from or the same as "emerging" and
"renewable energy."
MS. SYDEMAN acknowledged the passion behind the issue of which
term is used and said she wasn't ready to go into that at this
point. Many of the statutes in this omnibus have their own
definitions. So, renewable energy in one statutory section may
mean something a little different in another.
SENATOR FRENCH said that he wanted that "ironed out" so that it
is "crystal clear."
4:09:45 PM
SENATOR STEDMAN said he would check on the funding location
because the Finance Committee is in the process of closing down
a lot of specialty funds and merging them into the general fund.
4:10:38 PM
SENATOR FRENCH went to page 4, lines 25-27, regarding the
placement of projects in a priority list - the idea being to
find projects that are likely to have a financial benefit that
exceeds the amount of the grant funds received. He asked for
some background on that language and how realistic it is,
because they all recognize that some sort of investment is
necessary to get these technologies launched, and it's probably
likely that they will not exceed the financial benefits at
first. Start up costs might not allow them to exceed their
limited supply of money.
MS. SYDEMAN agreed that that language needed more discussion.
CO-CHAIR MCGUIRE thanked everyone for their comments and held SB
220 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 220 Overview.pdf |
SRES 1/20/2010 3:30:00 PM |
SB 220 |
| SB 220 Bill Components and Brief Description.pdf |
SRES 1/20/2010 3:30:00 PM |
SB 220 |