Legislature(2009 - 2010)BUTROVICH 205
02/18/2010 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB220 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 220 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 220-ENERGY EFFICIENCY/ ALTERNATIVE ENERGY
3:36:12 PM
CO-CHAIR WIELECHOWSKI announced SB 220 to be up for
consideration [CSSB 220(RES), labeled 26-LS1197\K, was before
the committee]. He asked Mr. Pawlowski to walk them through the
first amendment.
MIKE PAWLOWSKI, aide to Senator McGuire, explained Amendment
K.2, labeled 26-LS1197\K.2.
AMENDMENT K.2
OFFERED IN THE SENATE, SENATE BY SENATORS WIELECHOWSKI
AND MCGUIRE TO: CSSB 220(RES), DRAFT VERSION "K"
Page 1, line 3:
Delete the first occurrence of "and"
Page 1, line 5, following the second occurrence of
"fund":
Insert "establishing an Alaska energy efficiency
revolving loan fund; and authorizing and relating to
the issuance of bonds by the Alaska Housing Finance
Corporation"
Page 3, line 18:
Delete "sec. 15"
Insert "secs. 6, 17, and 29"
Page 3, following line 20:
Insert a new bill section to read:
"* Sec. 4. AS 14.08.101 is amended to read:
Sec. 14.08.101. Powers. A regional school board
may
(1) sue and be sued;
(2) contract with the department, the
Bureau of Indian Affairs, or any other school
district, agency, or regional board for the provision
of services, facilities, supplies, or utilities;
(3) determine its own fiscal procedures,
including but not limited to policies and procedures
for the purchase of supplies and equipment; the
regional school boards are exempt from AS 37.05
(Fiscal Procedures Act) and AS 36.30 (State
Procurement Code);
(4) appoint, compensate, and otherwise
control all school employees in accordance with this
title; these employees are not subject to AS 39.25
(State Personnel Act);
(5) adopt regulations governing
organization, policies, and procedures for the
operation of the schools;
(6) establish, maintain, operate,
discontinue, and combine schools subject to the
approval of the commissioner;
(7) recommend to the department projects
for construction, rehabilitation, and improvement of
schools and education-related facilities as specified
in AS 14.11.011(b), and plan, design, and construct
the project when the responsibility for it is assumed
under AS 14.11.020;
(8) by resolution adopted by a majority of
all the members of the board and provided to the
commissioner of the department, assume ownership of
all land and buildings used in relation to the schools
in the regional educational attendance area, as
provided for in AS 14.08.151(b);
(9) provide housing for rental to teachers,
by leasing existing housing from a local agency or
individual, by entering into contractual arrangements
with a local agency or individual to lease housing
that will be constructed by the local agency or
individual for that purpose, or, without using for the
purpose that portion of public school funding that
consists of state aid provided under AS 14.17, by
constructing or otherwise acquiring housing that is
owned and managed by the regional educational
attendance area for rental to teachers;
(10) employ a chief school administrator;
(11) apply for and use the proceeds of a
loan from the Alaska energy efficiency revolving loan
fund (AS 18.56.855);
(12) exercise those other functions that
may be necessary for the proper performance of its
responsibilities."
Renumber the following bill sections accordingly.
Page 3, following line 25:
Insert a new bill section to read:
"* Sec. 6. AS 18.56 is amended by adding a new section to read:
Sec. 18.56.855. Alaska energy efficiency revolving loan fund. (a) The
Alaska energy efficiency revolving loan fund is established in the corporation to
carry out the purposes of this section. The revolving loan fund consists of money
or assets appropriated or transferred to the corporation for the revolving loan
fund, including money and assets deposited in the revolving loan fund by the
corporation and earnings on investments of money held in the revolving loan
fund. The corporation may establish separate accounts in the fund. The
corporation shall establish the interest rates, security provisions, and other terms
of a loan made under this section taking into consideration the corporation's cost
of funds and other factors the corporation considers appropriate.
(b) Money and other assets of the Alaska energy efficiency revolving loan
fund may be used to
(1) make loans to regional educational attendance areas or to
municipal governments, including subdivisions of municipal governments, or to
the state for the purpose of financing energy efficiency improvements to buildings
owned by regional educational attendance areas, by the state, or by municipalities
in the state;
(2) secure bonds issued by the corporation to finance the loans
described in (1) of this subsection;
(3) pay costs of administering the revolving loan fund; and
(4) pay the costs of administering and enforcing the terms of loans
made by the corporation from the revolving loan fund.
(c) Before a regional educational attendance area, a municipal
government, or a subdivision of a municipal government, may borrow money
from the corporation under this section, the regional educational attendance area
or the municipal government shall waive any sovereign immunity defense it may
have available to it with respect to enforcement of the terms of the loan. A
regional educational attendance area or a municipal government may waive
sovereign immunity to comply with the requirement of this subsection. The state
waives any sovereign immunity defense against enforcement of the terms of a
loan made to the state under this section. A person or corporation having a claim
under this section shall bring an action in a state court in Alaska that has
jurisdiction over the claim.
(d) All regional educational attendance areas and municipal governments
in the state are authorized to borrow from the corporation under this section. The
corporation shall set out the terms of a loan to a regional educational attendance
area in a loan agreement or similar document. At the discretion of the corporation,
a borrowing by a regional educational attendance area or a municipal government
under this section may be effected by use of a loan agreement or similar document
evidencing and setting out the terms of the loan or by issuance of a bond by the
municipal government to the corporation. Notwithstanding a charter provision
requiring public sale by a regional educational attendance area or a municipality
of its municipal bonds or other indebtedness, a regional educational attendance
area or municipality may sell its bonds under this section to the corporation at a
negotiated, private sale. At the discretion of the corporation, the bonds or other
indebtedness of the municipality may be general obligations of the municipality
or may be secured by an identified revenue source or by a combination of the full
faith and credit of the municipality and an identified revenue source.
(e) Notwithstanding any other provision of law, to the extent that a
department or agency of the state is the custodian of money payable to a regional
educational attendance area or to a municipality, at any time after written notice to
the department or agency head from the corporation that the regional educational
attendance area or municipality is in default on the payment of principal of or
interest on municipal bonds or other indebtedness then held or owned by the
corporation, or amounts due under an agreement between the corporation and a
regional educational attendance area or a municipality, the department or agency
shall withhold the payment of that money from that regional educational
attendance area or municipality and pay over the money to the corporation for the
purpose of paying the principal of and interest on the bonds or indebtedness. The
notice must be given in each instance of default. If a notice is given under this
subsection and under AS 44.85.170 and the default is continuing under this
subsection and under AS 44.85.170, the department or agency shall make
payment to the corporation and to the Alaska Municipal Bond Bank Authority on
a pro rata basis, taking into consideration the principal amount of the respective
default amounts.
(f) An authorized state officer may borrow from the corporation under
this section for buildings owned by the state. The superintendent of a regional
educational attendance area, at the direction of the regional educational
attendance area school board, may borrow from the corporation under this section
for buildings owned by the regional educational attendance area.
(g) In addition to other security that may be given with respect to a loan
made under this section, the corporation may require a deed of trust on the
building that is the subject of the energy efficiency loan and the real estate on
which the building is located. A regional educational attendance area or a
municipality may grant a deed of trust to the corporation as needed for this
purpose. An authorized state officer may grant a deed of trust to the corporation
as needed for this purpose.
(h) The corporation shall administer the Alaska energy efficiency
revolving loan fund in accordance with regulations adopted by the corporation.
The corporation may adopt regulations under AS 18.56.088 to carry out the
purposes of this section.
(i) This section applies to home rule municipalities.
(j) In this section, "authorized state officer" means
(1) the commissioner of the department of the state for a building
owned by the state;
(2) the executive director of a public corporation for a building
owned by the public corporation;
(3) the legislative council for a building owned by the legislature;
(4) the administrative director of courts for a building owned by
the judicial system;
(5) any other person designated in writing by a person listed in (1)
- (4) of this subsection."
Renumber the following bill sections accordingly.
Page 13, line 20:
Delete "sec. 15"
Insert "sec. 17"
Page 13, line 21:
Delete "sec. 11"
Insert "sec. 13"
Page 13, lines 21 - 22:
Delete "sec. 12"
Insert "sec. 14"
Page 13, line 27:
Delete "sec. 13"
Insert "sec. 15"
Page 14, following line 10:
Insert new bill sections to read:
"* Sec. 29. The uncodified law of the State of
Alaska is amended by adding a new section to read:
BOND AUTHORIZATION AND PROVISIONS. (a) In addition to the
powers in AS 18.56.090, the Alaska Housing Finance Corporation may issue
bonds in an amount not to exceed $250,000,000 to make loans from the energy
efficiency revolving loan fund established by AS 18.56.855, enacted by sec. 6 of
this Act, and to finance the purposes permitted by AS 18.56.855, enacted by sec.
6 of this Act. AS 18.56.110 - 18.56.190 and 18.56.855, enacted by sec. 6 of this
Act, apply to bonds issued under this section, except that bonds issued under this
section are not subject to, and may not be counted against, the bond issuance
limitation set out in AS 18.56.110(g).
(b) The Alaska Housing Finance Corporation shall deposit the proceeds
of bonds issued under (a) of this section in the Alaska energy efficiency revolving
loan fund in accordance with AS 18.56.855, enacted by sec. 6 of this Act.
* Sec. 30. The uncodified law of the State of Alaska is amended by adding a
new section to read:
REVISOR'S INSTRUCTION. The revisor of statutes is instructed to
change the heading of art. 6 of AS 18.56 from "Article 6. Energy Conservation"
to "Article 6. Energy Efficiency and Conservation Programs.""
MR. PAWLOWSKI explained that this amendment establishes an
energy efficiency revolving loan fund within the Alaska Housing
Finance Corporation (AHFC). He said the amendment largely
reflects SB 223 with a few changes and a copy of the sponsor
statement should be in their packets. He said it would be
helpful to have Brian Butcher with the Alaska Housing Finance
Corporation explain the program.
3:37:32 PM
BRIAN BUTCHER, Director, Public Affairs, Alaska Housing Finance
Corporation (AHFC), Juneau, AK, said this amendment takes $18
million of the $28 million that came from the State Energy
Program federal stimulus bill (that the Legislature overrode the
veto on in the summer) to leverage up to $250 million in bonds
to establish an energy efficiency revolving loan fund in AHFC.
He explained that all public facilities - both state and
municipal, and schools would be eligible participants for the
revolving loan fund.
He said the way it would work is for instance, a school wants to
participate. It would hire an energy performance contractor and
he would look at the energy efficiency needs of that school and
estimate what it would cost to bring it up to a higher
efficiency level - say, $200,000. The contractor would guarantee
a certain savings - say, saving 30 percent of energy costs. The
savings after spending the $200,000 would be used to pay the
loan off.
MR. BUTCHER said this had been done in a lot of states; in fact
DOTPF had already done it on a handful of buildings in the
state. He explained if the school does not get the energy
efficient savings promised in the contract, the contractor would
pay what it was short. Setting up the program in this way allows
everyone to take advantage of it - it's just a matter of time.
3:40:05 PM
He said the U.S. Department of Energy (USDOE) was pleased with
this approach and signed off on the plan three weeks ago.
MR. PAWLOWSKI added that some consternation was heard when the
original committee substitute (CS), version K, came out about
the deletion of the energy efficiency grant fund. That fund is
dependent on a one-time appropriation and this amendment is
intended largely to replace that program. This amendment does it
through a revolving loan fund as opposed to a purely grant fund.
SENATOR WAGONER asked how many years it would take to complete
the work.
MR. BUTHCER replied that he doesn't have an estimate. Parts of
the bill discuss trying to put together an index of state
buildings in terms of which ones need the most work. He thought
the state departments might put together an idea of what it
might be on the state level.
3:41:55 PM
CO-CHAIR WIELECHOWSKI asked if the $300 million that has already
been appropriated for weatherization and the energy rebate
created any jobs in Alaska.
MR. BUTHCER replied that he had heard it had created an
estimated 2,000 jobs.
CO-CHAIR WIELECHOWSKI asked if he had similar projections about
the number of jobs this bonding would create.
MR. BUTCHER said yes; they expect it to create a lot of jobs.
Based on DOTPF's testimony, the state has three or four energy
performance contractors, but their expertise is just going in
and doing the energy efficiency audit and trying to figure out
the numbers. Almost all of the actual work done to the buildings
is subcontracted to contractors in local communities - a lot of
work for small and mid-sized contractors.
SENATOR WAGONER asked what the likelihood is of the number of
energy performance contractors growing.
MR. BUTCHER answered that it is good, especially with the
passage of this bill. The reason the number of energy
contractors is so small is that the private sector had been
doing only some energy performance contracting with DOTPF.
SENATOR WAGONER asked how an engineer would become certified to
be an energy performance contractor.
MR. BUTCHER replied that he didn't know specifically what that
would be, but AHFC has been in charge of training the energy
raters as well as the weatherization auditors so far. They are
currently updating software that energy raters use on both
residential and commercial buildings and public facilities. So,
they should have the necessary software soon to do that
training.
3:45:48 PM
MR. PAWLOWSKI said it is important to notice the guarantee by
the performance contractor of the savings, which then becomes
financeable.
SENATOR WAGONER said he understood that, but he wanted it on
record that if they are going to go through with the bond, they
better have the people trained to use it.
MR. BUTHCER added that he didn't anticipate doing a large $250-
million bonding, but doing it in stages as people are available
to do the work. They would ramp up as more businesses were
prepared to do it.
3:46:52 PM
MR. PAWLOWSKI highlighted a few points in the amendment; the
first on page 1, lines 9-11, that points to page 3, line 18 in
the CS, the purpose section in uncodified law. Since new
sections are being added that deal with energy efficiency they
had to add in references to the purpose section on page 3.
Section 4 (page 2, lines 25-26, of the amendment) was added on
page 1, lines 15. This language empowers regional education
attendance areas (REAA) to apply for these loans. Since their
powers are granted by statute, they had to actually modify the
powers of a school board within an REAA to allow them to borrow.
This was modeled on the teacher housing program authority that
was granted through the AHFC program earlier. Including the
REAAs is the fundamental change in this amendment.
CO-CHAIR WIELECHOWSKI said this bill was originally proposed by
the Governor and he said he would support it if it was included
in the Omnibus Energy Bill. He said he thought it was an amazing
chance for them to take a small amount of money and leverage it
into something that could make a difference all across Alaska.
Finding no further questions on proposed Amendment K.2, he set
it aside.
3:49:10 PM
CO-CHAIR WIELECHOWSKI announced that Amendment K.1 [labeled 26-
LS1197\K.1] was up for consideration and asked Mr. Livey to
explain it.
26-LS1197\K.1
Chenoweth/Kane
AMENDMENT K.1
OFFERED IN THE SENATE TO: CSSB 220(RES), Draft
Version "K"
Page 1, line 3, following "cooperative,":
Insert "to the Alaska affordable heating
program,"
Page 13, following line 18:
Insert new bill sections to read:
"* Sec. 21. AS 47.25.621 is amended to read:
Sec. 47.25.621. Alaska affordable heating
[ASSISTANCE] program. (a) The Alaska affordable
heating [ASSISTANCE] program is established in the
Department of Health and Social Services to provide
expanded eligibility for Alaska residents for home
heating assistance, to the extent funds are available
in the Alaska affordable heating fund [APPROPRIATED BY
THE LEGISLATURE FOR THAT PURPOSE].
(b) The Alaska affordable heating [ASSISTANCE]
program established under this section is in addition
to the federal low-income heating and energy
assistance provided under 42 U.S.C. 8621 - 8629 (Low-
Income Home Energy Assistance Act of 1981), as
amended, and implementing regulations.
* Sec. 22. AS 47.25.621 is amended by adding a new
subsection to read:
(c) The Alaska affordable heating fund is
established as a separate fund to be managed by the
Department of Revenue. The fund consists of
appropriations made to it. Interest earned by the fund
may be appropriated to it. The Department of Health
and Social Services shall use money in the fund for
Alaska affordable heating payments.
* Sec. 23. AS 47.25.622 is amended to read:
Sec. 47.25.622. Duties. The Department of Health
and Social Services [DEPARTMENT] shall
(1) administer the Alaska affordable
heating [ASSISTANCE] program provided under
AS 47.25.621;
(2) adopt regulations under AS 44.62
(Administrative Procedure Act) to carry out the
purpose of the program;
(3) coordinate payments among other heating
assistance programs to avoid duplication of payments.
* Sec. 24. AS 47.25.623 is amended to read:
Sec. 47.25.623. Eligibility; payment amount. An
individual is eligible for home heating assistance
payments under the Alaska affordable heating
[ASSISTANCE] program if the individual
(1) is a resident of the state;
(2) is physically present and resides in a
home in the state when the home heating costs are
incurred;
(3) for assistance calculated under (b) and
(c) of this section, has gross household income not to
exceed, as a percentage of the federal poverty
guideline for Alaska set by the United States
Department of Health and Human Services and revised
under 42 U.S.C. 9902(2),
(A) 225 percent for a determination to be
made under (c)(1) - (3) of this section; and
(B) 250 percent for a determination to be
made under (c)(4) of this section; and [HAS GROSS
HOUSEHOLD INCOME ABOVE 150 PERCENT BUT THAT DOES NOT
EXCEED 225 PERCENT OF THE FEDERAL POVERTY GUIDELINE
FOR ALASKA SET BY THE UNITED STATES DEPARTMENT OF
HEALTH AND HUMAN SERVICES AND REVISED UNDER 42 U.S.C.
9902(2);]
(4) meets other eligibility requirements
specified in regulations adopted under AS 47.25.622.
* Sec. 25. AS 47.25.623 is amended by adding new
subsections to read:
(b) The Department of Health and Social Services
shall (1) determine the number of points for each
eligible individual based on the point formula used
under 42 U.S.C. 8621 - 8629 (Low-Income Home Energy
Assistance Act of 1981), as amended, and implementing
regulations; and (2) add to the determination made
under (1) of this subsection one point if the
individual has applied during the year for home energy
conservation and weatherization assistance under any
program of the Alaska Housing Finance Corporation
developed to implement AS 18.56.850; the department
may add the point authorized by this paragraph only
once and may not add the point if an individual has
received a benefit under a program developed to
implement AS 18.56.850 before the effective date of
this section. The amount of the Alaska affordable
heating payment for an individual equals the base
amount calculated under (c) of this section minus the
amount the individual is eligible to receive under the
federal low-income home energy assistance program
under 42 U.S.C. 8621 - 8629, as amended, and
implementing regulations.
(c) The Department of Health and Social Services
shall calculate the base amount of the Alaska
affordable heating payment for the individual based on
points determined under (b) of this section and on the
average price a barrel of Alaska North Slope crude oil
for sale on the United States West Coast during
September through February of the preceding fiscal
year as follows:
(1) $130 a point when the average price is
not more than $75 a barrel;
(2) $140 a point when the average price is
more than $75 and not more than $100 a barrel;
(3) $150 a point when the average price is
more than $100 and not more than $150 a barrel;
(4) $165 a point when the average price is
more than $150 a barrel.
(d) Under the program authorized by AS 47.25.621
- 47.25.626, if insufficient money is appropriated to
fully fund the Alaska affordable heating payments
during the first year taking into consideration the
gross household income rates established in (a) of
this section and the base amounts to be calculated
under (b) and (c) of this section, the department
(1) shall, for the duration of that fiscal
year, suspend calculation and payment under (a)(3)(B)
of this section and calculate and pay all eligible
individuals under (a)(3)(A) of this section; and
(2) may, to the extent there is or may be
an appropriation balance surplus to the amount
required to make all payments under (1) of this
subsection, by regulation, establish at any time
during the fiscal year a prospective pro rata
reduction of the payment rates that the department
will pay to eligible individuals under the program
during that fiscal year qualifying under (a)(3)(B) of
this section and, thereafter, may provide for prorated
payments.
* Sec. 26. AS 47.25.626(a) is amended to read:
(a) The Department of Health and Social Services
[DEPARTMENT] may develop a regional Alaska heating
[ASSISTANCE] program for the administration of
AS 47.25.621 - 47.25.626 to provide home heating
assistance in a uniform and cost-effective manner in a
region of this state if an Alaska Native organization
is authorized to implement a federally approved tribal
family assistance plan that includes that region and
has been awarded a tribal energy assistance grant for
a program that includes that region under 42 U.S.C.
8623(d).
* Sec. 27. AS 47.25.626(b) is amended to read:
(b) The department may award contracts to
implement a program developed under (a) of this
section. A contract authorized for delivery of home
heating assistance under a regional Alaska heating
[ASSISTANCE] program under this section is exempt from
the competitive bid requirements of AS 36.30 (State
Procurement Code). Subject to appropriation, a
contract under this section must be in an amount that
represents a fair and equitable share of the money
appropriated for the Alaska affordable heating
[ASSISTANCE] program under AS 47.25.621 - 47.25.626 to
serve the state residents specified in (a) of this
section. The authority provided under this section to
contract is in addition to the authority to contract
in AS 47.05.015 or other law.
* Sec. 28. AS 47.25.626(f) is amended to read:
(f) If the department establishes a regional
Alaska heating [ASSISTANCE] program and awards a
contract to provide home heating assistance under this
section, a person applying for home heating assistance
under AS 47.25.621 - 47.25.626 in the region of the
state covered by the regional Alaska heating
[ASSISTANCE] program may obtain home heating
assistance from the department only through the
organization designated by the department to serve the
region."
Renumber the following bill sections accordingly.
JAY LIVEY, staff to Senator Hoffman, explained that they have
been involved in a lot of conversations about energy prices and
the ability that Alaskan families, particularly in western
Alaska, have to pay their heating bills, particularly last year
when oil was peaking at $140/barrel. As a result they began
looking at Alaska's two heating assistance programs in the
context of how responsive the programs are to the actual price
of fuel and if they were responsive to when fuel prices change
for individuals. That is what led them to these amendments.
3:50:14 PM
SENATOR FRENCH joined the committee.
3:51:40 PM
MR. LIVEY provided a document called "Alaska's Current Heating
Assistance Programs" and explained that this amendment is a
departure from the rest of the bill as these heating programs
deal with individual assistance and the rest of the bill deals
with institutional changes.
He said that Alaska has two heating assistance programs. One is
a federal program that has been around a long time and is called
"Low Income Heating and Energy Assistance Program" (LIHEAP). It
serves individuals at 150 percent or less of poverty; the
eligibility limit is about $41,000/year/family of four. The
current federal appropriation is $27 million (as per the
department).
SENATOR FRENCH asked if the state contributes to LIHEAP.
MR. LIVEY replied that it is a purely federal program.
He said the second program is the "Alaska Heating Assistance
Program" and it was instituted two years ago to serve people at
150-220 percent of poverty; the eligibility limit is
$63,000/family of four. The current appropriation is $5 million.
This amendment focuses on these two programs.
3:54:41 PM
As they went through this process, Mr. Livey said, they had
several objectives in mind: to make Alaska's heating assistance
programs more responsive to a family's actual heating costs by
increasing the amount of the assistance and to do a better job
of acknowledging actual heating costs.
They wanted to adhere to several principles, the first being a
statewide approach; he provided a document listing all the
communities in Alaska that received money through Alaska heating
assistance programs. It had every community in Alaska; the
largest users were along the Railbelt. The second principle was
that they wanted to use the existing administrative structure as
much as possible. LIHEAP has a structure that uses a point
system for families based on income, fuel, where they live, how
cold it is there, size of their house, and others that make the
program fairly responsive to an individual's situation. Their
administrative structure is very efficient. It operates with
some part time help and a few full time employees.
3:57:25 PM
The third principle was making the program responsive to fuel
costs. This was found to be a serious problem last year with
many consumers. People could not pay their fuel bills and had to
make serious choices about what they wanted to pay.
The fourth principle was to establish an incentive for
weatherization. Everyone knows that one of the better energy
programs is conservation; so they tried to work that into this
proposal.
3:58:21 PM
MR. LIVEY said the way the current program operates, an
individual must apply to the program each year. The applications
that come in contain the information that the department uses to
assign points for each applicant. Generally, the department
estimates the cumulative number of points that they will receive
in a given year. It divides the available appropriation by the
total number of points to get a dollar value. This year it's
$113 per point. The assistance is not paid directly to the
applicant; they must designate a vendor (their fuel distributor)
on their application. The department simply sets up a credit
account in that person's name with the vendor.
3:59:54 PM
He said the information for determining points is based on an
individual's application as well as some other information. The
points a family has depends on some variables like household
income, heating degree days, the type and the cost of fuel used,
the type of house in which the applicant lives, the size of the
house and if the family has children, elderly or disabled
individuals. Taken together, the number of points a household
gets is a pretty fair representation of their heating situation.
4:01:34 PM
He prepared two sample calculations of how it might work and
reviewed them for the committee. The first example was a
household in Toksook Bay that got 21 points. Because they live
in a two-bedroom house there was no adjustment; a larger home or
a mobile home would have an adjustment. This family had a
poverty level of 75-100 percent of the poverty level, so they
got a 4.2 point deduction or 80 percent of their 21 points. Had
they been under 50 percent of poverty there would be no
deduction. The household contains children so they got 1 point.
As a result their total points were 18.
He did the same basic calculation for Fairbanks, but changed the
poverty level a little bit. This family had slightly more
income; consequently 50 percent of the point total was taken
away as opposed to 80 percent in the first example. Their result
was 6 points. The current program pays $115 per point; so the
family from Toksook Bay would get $2070 and the Fairbanks family
would get $690.
CO-CHAIR WIELECHOWSKI reminded people that this is the way the
current system works and asked what months this is typically
available.
MR. LIVEY answered that applications begin in November and they
have to be completed by April 15, but the money goes on the
books and can be used any time of the year.
SENATOR FRENCH asked what mechanism exists to keep the point
total and appropriation per family from exceeding what they have
to distribute statewide.
MR. LIVEY answered that the department divides the available
appropriation by the estimated number of points. He also
prepared a current heating cost estimate and assumed,
conservatively, that a family would use 600 gallons of fuel:
Toksook Bay @ $6.08/gallon = fuel bill of $3648; Fairbanks @
$3.07/gallon = fuel bill of $1842. In Toksook Bay they were
paying 58 percent of the household's need; in Fairbanks, 37
percent.
SENATOR FRENCH asked how the relative poverty of an individual
influences the number of points they get.
MR. LIVEY said the department regulations explain how the points
are affected by a household's poverty. If a household's income
is 50 percent of the poverty level or less, then they get 100
percent of the points and they get no deduction. He went back to
the examples and showed him how the progression worked.
4:07:27 PM
MR. LIVEY said Section 21 [of Amendment K.1] changes the name of
the Alaska Heating Assistance Program to the Alaska Affordable
Heating Program, because it does a better job of trying to
explain their version of the program, which is to make heating
more affordable for residents of the state and not just be
assistance. Section 22 on page 1, line 17, establishes the
Alaska Affordable Heating Fund in the Department of Revenue
(DOR), but doesn't put money into it. Section 23 conforms
existing law to the name change.
Sections 24 and 25 contain more significant changes to the
program. He reminded them that they wanted to make these
programs linked more closely to the price of oil. So, Section 24
says if the price of a barrel of crude oil as measured by the
DOR exceeds $150, eligibility is extended for the highest income
group from 225 percent of poverty to 250 percent of poverty
(raising the $62,000 for a family of four to $68,000).
4:10:15 PM
MR. LIVEY said they are also trying to correspond the price of
oil to an individual's affordability. So they raised the dollars
per point based on how much a barrel of crude oil costs. Before
the points were simply calculated as a division of the available
appropriation divided by the number of points. Here they are
actually saying that the dollar value of a point depends on what
a barrel of oil is. For example, it says if oil is less than
$75/barrel, then the dollars per point is $130. If crude oil is
$75-100/barrel, then the price of a point goes to $140 and so
on. The idea is to have some link between the amount of
assistance an individual family is getting and the price of a
barrel of oil.
Third, he explained, because they have said that a point is $130
when crude is less than $75, that means they have automatically
raised the floor per point for this program to $130. It is
currently $115.
Next, he said they added one point as an incentive to families
who apply for the weatherization program. This section might be
problematic for the department because of difficulties in
getting this information from the weatherization providers.
Last, Mr. Livey explained, because they didn't want this to
become an entitlement program, they have given the department
the ability to prorate the assistance amounts if sufficient
money has not been appropriated to the Legislature to meet the
dollar per points they are putting in statute.
SENATOR WAGONER said it looks to him like it becomes an
entitlement program once it's initiated, much like the former
longevity bonus program.
MR. LIVEY said that it is set up to be a way of providing an
indication of how much should be appropriated based on the level
of affordability, but legally it doesn't have to be appropriated
that way.
SENATOR FRENCH said the comparison between this and the
longevity bonus is good, but it is also misleading in that the
longevity bonus was paid whether the state had a surplus or a
deficit. This is designed so that the money is available only
when oil prices are very high. When the oil prices are very low,
the need for assistance is far lower because home heating costs
are far lower. At the same time the state treasury doesn't have
any extra money in it.
4:17:16 PM
RON KREHER, Chief, Field Operations, Division of Public
Assistance, Department of Health and Social Services (DHSS),
said he oversees the heating assistance programs for the state.
CO-CHAIR WIELECHOWSKI asked if the department had any comments
on the proposed amendment.
MR. KREHER answered yes; essentially he said this is the Alaska
Heating Assistance Program with variations, which Mr. Livey
pointed out. It fixes the funding levels to the average price of
a barrel of crude oil, but then it also fixes the dollar value
for community heating points. It also potentially pushes
eligibility up to 250 percent of the federal poverty guidelines.
Some provisions cause them administrative challenges, Mr. Kreher
said. The methodology for calculating the average price of North
Slope crude for the prior fiscal year makes forward funding
planning a little more of a challenge. For example, if this
amendment was adopted effective July 1, they would look back at
the prior fiscal year for the average price of a barrel of North
Slope crude between February and September. So, they wouldn't
have the window they would need to calculate the funding level.
4:19:54 PM
MR. KREHER said there is also concern that oil could have a low
value in that prior fiscal year, but a very high value in the
program year causing them to come up short. He said they are
also always uncertain about federal funding levels and he
mentioned that the current administration is using a similar
model for triggering payments for LIHEAP. What would happen if
they didn't get sufficient federal funding to pay LIHEAP in
excess of $130 per point?
Another area of concern is that it's difficult to estimate the
size of the population they would be serving in Section 24 (page
2, lines 21-22) where eligibility limits are bumped up when the
price of a barrel of oil gets above $150. Also if it's a
significant increase, the department would probably have to find
additional staff resources - and probably look at the
possibility of long-term non-permanent positions they could
bring in as the demand came up.
Overall, he also thought, some of the provisions would be very
challenging for their 11 tribal grantees across the state that
operate tribal LIHEAP programs and the 8 tribes that operate
regional programs. "Administrative demands on those
organizations are very very challenging," he said. They all have
different plans that are all approved by the federal government.
Currently their regional programs mirror their federal plans; so
many of them don't use a point system to issue benefits.
Different methodologies are used that may create a challenge for
those folks to continue to run regional heating assistance
programs, which may mean that work would come back to the
division.
The weatherization incentive can create some problems, as well,
Mr. Kreher agreed. Many providers for weatherization assistance
are out there and tracking them would be challenging. Someone
from AHFC might be able to say if it is even practical to do.
Also, many people are ineligible. You can get one only every 15
years; if you change dwellings you may apply for another one.
Renters have to get the cooperation of their landlord to approve
them.
Section 25 that talks about the proration needs more
clarification. It's uncertain what would happen after the first
year finances were provided. To some extent this proration
language conflicts with setting statutory points and then having
a way of overriding that. He would like to see set funding for
the heating assistance programs and have that level tied to the
price of oil, because it makes sense. It recognizes the
additional demand on people that are receiving the assistance
and it provides a fixed basis from which to operate the program.
Overall, the general administration would be the same; the only
additional demand might be trying to address the possibility of
having slow growth in pushing into the 225 percent limit.
CO-CHAIR WIELECHOWSKI found no further testimony on this
amendment and set it aside. He said it was an excellent attempt
at trying to solve a problem and looking at the key issues of
extremely high costs in rural and other parts of Alaska, taking
into account peoples' relative abilities to pay, and the price
of oil.
CO-CHAIR WIELECHOWSKI said they had one last amendment [K.3] for
the day by Senator Dyson.
26-LS1197\K.3
Kane
AMENDMENT K.3
OFFERED IN THE SENATE TO: CSSB 220(RES), Draft
Version "K"
Page 1, line 3:
Delete the first occurrence of "and"
Page 1, line 5, following the second occurrence of
"fund":
Insert "; and directing the Department of
Transportation and Public Facilities to prepare a
report on the feasibility of using compressed natural
gas to power vehicles in the state, including vehicles
owned or operated by the state, and including in that
study, if warranted, a pilot program proposal for
powering some vehicles owned or operated by the state
with compressed natural gas"
Page 14, following line 10:
Insert a new bill section to read:
"* Sec. 27. The uncodified law of the State of
Alaska is amended by adding a new section to read:
USE OF COMPRESSED NATURAL GAS TO POWER VEHICLES;
PILOT PROGRAM; STUDY; PROPOSAL; REPORT. (a) The
Department of Transportation and Public Facilities
shall, under the authority of AS 44.42.020(a)(3),
study the feasibility of using compressed natural gas
to power vehicles in the state. The study must
(1) review existing government programs and
incentives offered in Utah and other North American
jurisdictions that promote the use of compressed
natural gas to power vehicles;
(2) review and summarize relevant studies
and investigations on existing public policy
incentives that encourage the use of compressed
natural gas to power vehicles;
(3) evaluate the environmental benefits and
technical merits of using compressed natural gas to
power vehicles;
(4) consider the economic, environmental,
and technological advantages and disadvantages of
using and promoting the use of compressed natural gas
to power vehicles in the state; and
(5) if warranted by the findings of the
study, set out a proposal for a pilot program in the
state to test the use of compressed natural gas to
power vehicles owned or operated by the state; the
proposal must
(A) recommend the most cost-effective and
appropriate departments and geographic locations for a
pilot program;
(B) detail how the pilot program, if
successful, could be expanded to provide for increased
use of compressed natural gas to power vehicles owned
or operated by the state, as well as privately owned
or operated vehicles;
(C) estimate the costs to the state of a
pilot program in which the state would purchase
vehicles powered by compressed natural gas or convert
existing vehicles to be powered by compressed natural
gas, including
(i) the costs of maintaining vehicles
powered by compressed natural gas and training
maintenance personnel;
(ii) the costs of adapting, or encouraging
the adapting of, state vehicle fueling locations to
provide compressed natural gas;
(iii) the costs of using compressed natural
gas instead of diesel fuel or gasoline;
(iv) the costs of expanding the pilot
program or developing additional pilot programs under
(B) of this paragraph;
(v) other costs or savings that can be
reasonably expected to accompany the pilot program.
(b) The Department of Transportation and Public
Facilities shall prepare a report containing the
results of the study under (a) of this section not
later than December 1, 2010. The department shall
notify the legislature when the report is available."
4:25:18 PM
SENATOR DYSON said this Amendment K.3 [labeled 26-LS1197\K.3]
inserts a section that has the Department of Transportation and
Public Facilities (DOTPF) evaluating the use of compressed
natural gas in the transportation sector (vehicles). He said of
all the things they are trying to do with more efficient and
cleaner fuels, very few of them apply well in vehicles, but
compressed natural gas and propane do. According to USDOE 2006
figures, there is somewhere over 8 million vehicles in the world
that are powered by compressed by natural gas. Some vehicles
have dual fuel capacity. A number of folks where he and the
chair live have generators sitting at home that are run by
natural gas; and a number of neighbors have a slow-fill
compressor in their house from which they can pump natural gas
into their vehicles overnight while they are parked.
SENATOR DYSON said making the compressed natural gas work is a
chicken and egg sort of thing. The fast-fill compressors are a
bit expensive, so a network of users is needed to make their use
feasible. Portland, Oregon's, school buses are all run on
compressed natural gas and transport 12,000 students a day and
most of Utah's fleet vehicles are running on compressed natural
gas. The emissions from compressed natural gas are 20 percent
less than from gasoline. This amendment asked the DOTPF to
evaluate its feasibility, but he suspected that their answer
would be that many in the world are using it and if the public
sector would get some fast-fill compressors set up, the private
sector would very quickly follow. His research included talking
to two different national manufacturer of school buses who said
ordering buses set up at the get-go to run on compressed natural
gas comes very close to the original price; one said maybe $10K
more per copy.
SENATOR DYSON said municipal landfills are producing methane
approximately equivalent to 5,000 gallons in gasoline per day -
enough to run all the fleet vehicles, private and government, in
the entire city of Anchorage. Cleaner and cheaper fuel - he had
talked to people who go 9000 miles between oil changes and the
oil is perfectly clean. Light commercial vehicles, pickups with
one million miles running on compressed natural gas. This
amendment would get Alaska started on that which much of the
world is already doing.
CO-CHAIR WIELECHOWSKI thanked him and said it's a very
intriguing idea that is definitely worth pursuing.
SENATOR FRENCH asked if any compressed natural gas stations are
operating in Alaska now.
SENATOR DYSON answered the Alaska Railroad had one that they are
doing "kind of a pilot project" with.
SENATOR FRENCH said apparently running a bus on compressed
natural gas isn't that complicated because he sees them on the
road and he asked what's holding us up.
SENATOR DYSON said it's just the chicken and the egg. You just
have to get going or they will start having to answer why they
haven't done this yet.
4:31:38 PM
MARY SIROKI, Special Assistant to the Commissioner, Department
of Transportation and Public Facilities (DOTPF), said they have
analyzed this bill and have a very small fiscal note associated
with the study that they will go forward with if it is adopted.
SENATOR DYSON said Congress has bills pending that will give
very significant tax incentives or rebates for using compressed
natural gas vehicles.
4:33:13 PM
SENATOR WAGONER offered Amendment K.6.
26-LS1197\K.6
Kane
AMENDMENT K.6
OFFERED IN THE SENATE BY SENATOR WAGONER
TO: CSSB 220(RES), Draft Version "K"
Page 1, line 4, following "plan,":
Insert "to a light bulb exchange program,"
Page 12, following line 2:
Insert a new bill section to read:
"* Sec. 17. AS 44.83 is amended by adding a new
section to read:
Sec. 44.83.965. Light bulb exchange program. (a)
To provide fluorescent light bulbs to rural electric
cooperatives organized under AS 10.25 and to those
municipal electric utilities, regional electric
authorities, and joint action agencies that have
annual sales of at least 800 megawatt-hours, the
authority shall initiate and maintain a voluntary
light bulb exchange program that conforms to the
requirements of this section.
(b) An entity described in (a) of this section
may participate in the exchange program under this
section. An entity that elects to participate in the
program shall allow a customer to exchange an
incandescent light bulb for a fluorescent light bulb
of the same number and wattage at no cost to the
customer. A customer may not exchange more than 15
light bulbs for each transaction.
(c) Subject to appropriation, the authority
shall purchase the amount of fluorescent light bulbs
necessary to provide each entity participating in the
program with enough light bulbs to sustain the
exchange program.
(d) The authority shall adopt regulations to
implement the program and prescribe a form for an
entity to request fluorescent light bulbs from the
authority and to report to the authority the number of
light bulbs exchanged."
Renumber the following bill sections accordingly.
SENATOR WAGONER explained that his amendment takes fluorescent
bulbs and distributes them at state expense for three years
until people can see for themselves how much energy they have
saved. The one problem he has is that fluorescent bulbs are high
in mercury and they need to know what kind of collection process
rural areas have.
SENATOR FRENCH asked who the cost falls on.
SENATOR WAGONER answered the State of Alaska would subsidize it
for three years.
4:34:41 PM
SARAH FISHER-GOAD, Deputy Director, Operations, Alaska Energy
Authority (AEA), commented that she hadn't seen the latest
version of the amendment, but she would need to get an estimated
cost for AEA to implement a light bulb exchange program.
CO-CHAIR WIELECHOWSKI said it would be helpful if she could get
more detailed comments and any fiscal implications.
4:36:14 PM
SENATOR WAGONER asked if she knew of a rural collections system
for fluorescent bulbs.
MS. FISHER-GOAD replied that she thought Chugach Electric would
take light bulbs as well as a private company called "Total
Reclaim." She didn't know if rural Alaska had any coordinated
effort to turn in those light bulbs.
4:37:40 PM
CO-CHAIR WIELECHOWSKI asked the administration to provide
appropriate fiscal notes by next Monday afternoon. Finding no
further business to come before the committee, he adjourned the
meeting at 4:37 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Possible Amendment - 26-LS1197K.1.pdf |
SRES 2/18/2010 3:30:00 PM |
|
| Possible Amendment - 26-LS1197K.2 - SB 220.pdf |
SRES 2/18/2010 3:30:00 PM |
SB 220 |
| Possible Amendment - 26-LS1109K.3 - SB 220.pdf |
SRES 2/18/2010 3:30:00 PM |
SB 220 |
| SB 220 version K.pdf |
SRES 2/15/2010 3:30:00 PM SRES 2/18/2010 3:30:00 PM SRES 2/22/2010 3:30:00 PM SRES 2/24/2010 3:30:00 PM |
SB 220 |