Legislature(2009 - 2010)BUTROVICH 205

04/01/2009 03:30 PM Senate RESOURCES

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03:35:24 PM Start
03:35:40 PM Governor's Appointments
04:18:22 PM SB150
04:51:06 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Confirmation Hearings: TELECONFERENCED
Big Game Commercial Services Board
Alaska Oil & Gas Conservation Commission
Commercial Fisheries Entry Commission
+ Bills Previously Heard/Scheduled TELECONFERENCED
             SB 150-EMERGING ENERGY TECHNOLOGY FUND                                                                         
CO-CHAIR   WIELECHOWSKI   announced  SB   150   to   be  up   for                                                               
4:18:22 PM                                                                                                                    
CO-CHAIR MCGUIRE, sponsor of SB  150, said it basically creates a                                                               
fund  for emerging  energy technologies.  It's not  funded within                                                               
the bill, but it is merely a  structure to receive funds or to be                                                               
funded should better times come. It  is set up not as a dedicated                                                               
fund,  but rather  one  that  can receive  funds  should they  be                                                               
available.  It will  be  administered by  the  Alaska Center  for                                                               
Energy and Power.                                                                                                               
She said that emerging energy  technology is an important part of                                                               
Alaska's future  and funds  like this  have provided  seed monies                                                               
end up being an attractive  incentive for new renewable companies                                                               
to come in.  They know it drives the attraction  of grant dollars                                                               
and  the ability  to co-partner  with the  federal government  in                                                               
matching grants.                                                                                                                
CO-CHAIR MCGUIRE  explained that  in recent years  the Department                                                               
of Energy has  offered millions in federal  grants that typically                                                               
require as  low as a  20 percent cost  share at the  state level,                                                               
and  this is  the  kind of  fund that  can  offer those  matching                                                               
dollars.   The   stimulus    package   has   alternative   energy                                                               
opportunities,  and they  are  hoping this  fund  could serve  as                                                               
another mechanism  to leverage and  partner with those  funds, as                                                               
One of  the things missing  in alternative energy  development is                                                               
the research  and development dollars  - "the seed part  of where                                                               
some  of these  ideas grow  out  of." When  you look  at the  AEA                                                               
grants that  the Senate  Finance Committee  put into  place, they                                                               
are talking about proven technologies  that are out in the field.                                                               
This fund is  geared toward the research  and development dollars                                                               
that really happen more at the base level.                                                                                      
CO-CHAIR MCGUIRE  stated that at  one point Alaska had  an Alaska                                                               
Science and  Technology Fund  and there is  some impetus  in that                                                               
fund's existence for this bill  although they are different. This                                                               
is targeted specifically at emerging energy technologies.                                                                       
4:22:13 PM                                                                                                                    
The  board  members   have  to  have  a   background  in  energy,                                                               
engineering,  technology  and  science;  it should  be  based  on                                                               
science  and not  politics -  a  complaint when  the Science  and                                                               
Technology  Fund was  being considered.  Some people  thought the                                                               
projects that were approved out  of it were political or regional                                                               
in nature and not necessarily  provable. They also wanted to make                                                               
sure  it was  administered by  an association  that was  separate                                                               
from  the  University in  the  event  that  the University  or  a                                                               
partner  with the  University chose  to  apply for  any of  these                                                               
monies. That  is how she  came up  with Alaska Center  for Energy                                                               
and Power  (ACEP), but it could  be administered out of  a couple                                                               
of other places.                                                                                                                
SENATOR HUGGINS moved to adopt CSSB 150(RES), version E.                                                                        
TREVOR  FULTON,  staff  to  Senator  McGuire,  said  it's  really                                                               
version S.                                                                                                                      
SENATOR  HUGGINS  amended  his  motion  to  adopt  CSSB  150(RES)                                                               
version S. There were no objections and it was so ordered.                                                                      
4:25:25 PM                                                                                                                    
MR. FULTON  explained the changes  in the  version S. He  said it                                                               
incorporated  Senator Wielechowski's  request -  a concern  about                                                               
the possibility  of funding projects  that were a little  too far                                                               
into the  realm of science  fiction. So, language was  added that                                                               
limits   project  eligibility   to   those   that  might   become                                                               
commercially  viable  within  the  next five  years.  The  second                                                               
change  added  a five-member  advisory  committee  - providing  a                                                               
level  of separation  between the  administering  agency and  the                                                               
recipients of the grants.                                                                                                       
SENATOR  FRENCH  asked  regarding ACEP  being  the  administering                                                               
agency  (page  1,  line  12) that  it  is  the  interdisciplinary                                                               
research  unit of  the College  of Engineering  and Mines  at the                                                               
University  of  Alaska,   but  the  idea  was   to  provide  some                                                               
separation between  the University and the  administering unit to                                                               
keep from  any allegations of self-dealing  should the University                                                               
be eligible for one of these grants.                                                                                            
MR. FULTON said  he is correct, and pointed out  language on page                                                               
2, line 28,  through page 3, line 1, which  delineated the makeup                                                               
of  the  advisory   committee  that  has  no   members  from  the                                                               
University - that took care of that issue.                                                                                      
4:27:49 PM                                                                                                                    
He said the  third and final change  in the CS was  to expand the                                                               
definition of eligible applicants  to include both private sector                                                               
and non-profit sector entities. When  the bill was first drafted,                                                               
language  was  borrowed  from  the  Renewable  Energy  Fund  that                                                               
excluded some  entities they  wanted to  include because  that is                                                               
where  these  sorts  of  projects  get a  lot  of  their  in-kind                                                               
partnerships. A  good example would be  Gwen Holdman's geothermal                                                               
energy project  in Chena Hot  Springs. Part of the  equipment was                                                               
donated  by   UTC,  a  large   corporation  that   developed  the                                                               
technology,  but they  gave  it  to her  as  sort  of an  in-kind                                                               
partnership deal.  They did  not want to  exclude those  kinds of                                                               
SENATOR  HUGGINS  asked  for an  example  of  a  quasi-government                                                               
MR.  FULTON   replied  the  University  qualifies   as  a  quasi-                                                               
governmental entity as well as the Alaska Railroad.                                                                             
4:29:46 PM                                                                                                                    
LARRY PERSILY, staff to Representative  Hawker, added that he has                                                               
been  working   on  energy  issues   for  the   legislature,  and                                                               
specifically the stimulus  bill. He offered that  whereas much of                                                               
the focus  of the legislature in  the last few weeks  has been on                                                               
the energy  provisions of  the stimulus bill  - the  State Energy                                                               
Program, the  Energy Efficiency and  Conservation Block  grants -                                                               
those are  funding for off-the-shelf  technology and  home energy                                                               
improvements, not  research and  development money.  However, the                                                               
stimulus bill  also has  funding sources that  deal with  R&D and                                                               
this would be one way for the state "to get into the game."                                                                     
4:31:23 PM                                                                                                                    
SENATOR HUGGINS stated  that the state is doing  all these things                                                               
with energy,  but it doesn't  have an  energy policy. Did  he see                                                               
the need  for an  umbrella policy under  which to  operate before                                                               
they get too many things going?                                                                                                 
MR. PERSILY  said his instructions  were to give  information and                                                               
not opinions,  but he  opined that the  state's energy  policy is                                                               
somewhat diverse.  It has  the Alaska  Energy Authority  with its                                                               
role,   the  Alaska   Housing  Finance   Corporation,  which   is                                                               
technically  designated  by  the  Governor as  the  State  Energy                                                               
Office with  the U.S.  Department of  Energy, the  University has                                                               
offices - and it would behoove  the state to coordinate them with                                                               
in one form or another.                                                                                                         
4:32:57 PM                                                                                                                    
JASON  MEYER, Alaska  Denali Commission,  said he  is working  to                                                               
develop  a  renewable and  alternative  energy  strategy for  the                                                               
Commission and  supported SB 150.  He said the  Denali Commission                                                               
is  an independent  federal agency  designed to  provide critical                                                               
utilities infrastructure and  economic support throughout Alaska.                                                               
With  the  creation of  the  Alaska  Denali Commission,  Congress                                                               
acknowledged the need for  increased inter-agency cooperation and                                                               
focus  on Alaska's  rural  communities.  The Commission's  Energy                                                               
program  focuses   on  bulk  fuel  power   plants  and  renewable                                                               
alternative  energy. Recently  the  Commission's energy  advisory                                                               
committee   discussed  strategy   for  continued   investment  in                                                               
alternative  and renewable  energy and  supportive testimony  was                                                               
heard  on  their  involvement   in  emerging  alternative  energy                                                               
developments at their quarterly meeting  in Juneau last week. The                                                               
Commission has historically been  involved in emerging technology                                                               
pilot   projects,  several   of   which  are   the  Eagle   River                                                               
Hydrokinetic project,  the Chena  Hot Springs  geothermal project                                                               
and  the  high voltage  direct  current  (HVDC), feasibility  and                                                               
prototype  design.  "Without  the  investment  of  such  emerging                                                               
technologies,  new   options  for  energy  in   Alaska  would  be                                                               
limited," he said.                                                                                                              
MR.  MEYER said  the Commission  is tracking  efforts related  to                                                               
emerging technologies  that seem consistent with  their renewable                                                               
and alternative  energy strategy  which currently includes  a $10                                                               
million  budget.  It is  currently  developing  an MOU  with  the                                                               
University  of  Alaska's Center  for  Energy  and Power  and  the                                                               
National  Renewable  Energy  Lab.   Their  goal  is  to  leverage                                                               
resources  and  expertise  to support  emerging  technologies  in                                                               
Alaska in the hopes that  successful new options can be developed                                                               
and put to use.                                                                                                                 
4:35:26 PM                                                                                                                    
PAUL  KENDALL, representing  himself, said  he is  very concerned                                                               
about  Mr.  Haagenson   at  AEA.  In  1981   it  dropped  several                                                               
magnificent programs like the hydrogen  conversion at Old Harbor.                                                               
He said  the real  truth is  "that our  real partnership  lies in                                                               
waterways - the  Cook Inlet, the Turnagain Arm, the  Knik Arm and                                                               
various other  bodies close  in, and it  can be  immediate within                                                               
three  to six  years." Whenever  he sees  new divisions,  he sees                                                               
people "who know  how to work the system" to  capture these funds                                                               
and then they  go out with their elite group  of people who think                                                               
they are special. These same  people have energy forums where you                                                               
have to  pay a lot  of money to see  them, but the  state's money                                                               
put  them  where they  are.  "The  whole  thing has  just  become                                                               
perverse, at best."                                                                                                             
4:39:44 PM                                                                                                                    
KATHERINE KEITH, Alaska Center for  Energy and Power (ACEP), said                                                               
she works with  coordinating wind diesel systems  within the Wind                                                               
Diesel Application Center, which  was developed with partnerships                                                               
between National  Energy grants, the Alaska  Energy Authority and                                                               
ACEP.  She  said energy  is  foremost  in everybody's  mind,  yet                                                               
Alaska that  has the highest  energy costs  and some of  the most                                                               
complex and difficult issues to deal with in  the U.S., ranks 46                                                                
in  research and  development for  renewable energy.  We need  to                                                               
invest in energy projects, policy and research.                                                                                 
AEA  has  no  has  mandate  or capability  to  engage  in  energy                                                               
research, she  stated. The question  needs to be asked  what kind                                                               
of research exists in the  state. Wind turbine verification could                                                               
be successfully  deployed in Arctic environments,  energy storage                                                               
systems are needed for high  penetration wind diesel systems, and                                                               
waste heat recovery needs development.  Utilities in rural Alaska                                                               
are  really  struggling  to find  proven  technologies  that  are                                                               
beneficial to their communities without a high risk factor.                                                                     
Kotzebue Electric over  has become a leader  in energy innovation                                                               
to supplement  their diesel consumption  over the last  couple of                                                               
years using  such   ideas as land  fill gasification,  waste heat                                                               
recovery,  waste  heat  power  generation,  and  energy  storage,                                                               
electric  vehicles, and  so  on. Each  of  these technologies  is                                                               
considered pre-commercial and not,  therefore, eligible for state                                                               
funding. Yet each  of these technologies offers  great promise to                                                               
those communities.                                                                                                              
Another  example  would  be the  Venadium  readout  slow  battery                                                               
(VRB),  which  would  help  stabilize   St.  Paul  Island's  high                                                               
penetration wind  systems. The VRB  is sitting at UAS  right now,                                                               
but there is no funding to analyze the data from that equipment.                                                                
MS. KEITH  said with a  20-percent match the state  could receive                                                               
funding from many  sources. ACEP is already  involved in programs                                                               
to  test new  battery systems,  waste heat  recovery devices  and                                                               
hydro-kinetic  turbines, the  goal being  to insure  manufacturer                                                               
claims  are  accurate  and  to insure  that  these  systems  will                                                               
perform in  Alaska. After the  Chena Hot Spring  Geothermal plant                                                               
was  installed a  lot  of  attention was  paid  to  this type  of                                                               
technology.  This emerging  technology fund  will allow  projects                                                               
like this to be proven in Alaska for Alaskan communities.                                                                       
She said  there is  a sense of  urgency in  considering available                                                               
federal  funds. She  said SB  150 should  be considered  a sister                                                               
program to  HB 152.  Efforts in  emerging technology  will ensure                                                               
greater  success  with  existing  and  future  HB  152  projects.                                                               
Lastly, she said  other research programs exist in  the Lower 48,                                                               
but they are not appropriate for Alaska's unique conditions.                                                                    
4:44:41 PM                                                                                                                    
D. DOUGLAS  JOHNSON, Director,  Alaska Projects,  Ocean Renewable                                                               
Power,  said  they  are  currently working  on  two  projects  in                                                               
Alaska, one an ocean energy project  and the other a river energy                                                               
project. He  said his company wouldn't  be where it is  today had                                                               
it  not received  funds from  similar agencies  in the  states of                                                               
Maine  and Massachusetts.  This  fund is  something Alaska  needs                                                               
now. Alaska  is one  of the few  places in the  world that  has a                                                               
full suite of  renewables available. To be able  to fully utilize                                                               
that suite of  renewables, the technologies to do  have to better                                                               
understood. This is  an opportunity for Alaska to be  a leader in                                                               
this area. The one-to-four ratio  for every dollar the state puts                                                               
in makes the federal stimulus funding is a good deal for Alaska.                                                                
4:47:31 PM                                                                                                                    
KATE  TROLL,  Executive  Director, Alaska  Conservation  Alliance                                                               
(ACA), supported  SB 150 for  many of the reason  already stated.                                                               
She said  that the clean  energy business is  looked at as  a $55                                                               
billion/year industry  - one of  the few bright spots  in today's                                                               
slumping economy. This figure is  projected to quadruple by 2015.                                                               
She added that setting up  this fund positions Alaska to leverage                                                               
a lot of not just federal  funds, but a lot of private investment                                                               
in energy.                                                                                                                      
CO-CHAIR WIELECHOWSKI closed public testimony  and held SB 150 in                                                               

Document Name Date/Time Subjects
Dirk Nickisch - Confirmation.pdf SRES 4/1/2009 3:30:00 PM
Betty Jo Schmitz - Confirmation.pdf SRES 4/1/2009 3:30:00 PM
SB 150 - Bill Packet.pdf SRES 4/1/2009 3:30:00 PM
SB 150
Paul E. Johnson - Confirmation.pdf SRES 4/1/2009 3:30:00 PM
John K. Norman - Confirmation.pdf SRES 4/1/2009 3:30:00 PM
Peter B. Froehlich - Confirmation.pdf SRES 4/1/2009 3:30:00 PM