Legislature(2011 - 2012)BARNES 124

02/17/2011 08:00 AM House COMMUNITY & REGIONAL AFFAIRS


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08:06:01 AM Start
08:06:16 AM Overview: Alaska Energy Authority
09:32:29 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: Alaska Energy Authority TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                       February 17, 2011                                                                                        
                           8:06 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Cathy Engstrom Munoz, Chair                                                                                      
Representative Neal Foster, Vice Chair                                                                                          
Representative Alan Austerman                                                                                                   
Representative Alan Dick                                                                                                        
Representative Dan Saddler                                                                                                      
Representative Sharon Cissna (via teleconference)                                                                               
Representative Berta Gardner                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW: ALASKA ENERGY AUTHORITY                                                                                               
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SARA FISHER-GOAD, Executive Director                                                                                            
Alaska Energy Authority (AEA)                                                                                                   
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented an overview of the AEA.                                                                        
                                                                                                                                
JIM STRANDBERG, Project Manager                                                                                                 
Alaska Energy Authority (AEA)                                                                                                   
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During the AEA overview, answered                                                                        
questions.                                                                                                                      
                                                                                                                                
MICHAEL HARPER, Deputy Director                                                                                                 
Rural Energy                                                                                                                    
Alaska Energy Authority (AEA)                                                                                                   
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION   STATEMENT:     During   the  AEA   overview,   answered                                                            
questions.                                                                                                                      
                                                                                                                                
CHRIS MELLO                                                                                                                     
Program Manager RPSU & BF                                                                                                       
Alaska Energy Authority                                                                                                         
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION   STATEMENT:     During   the  AEA   overview,   answered                                                            
questions.                                                                                                                      
                                                                                                                                
PETER CRIMP, Deputy Director                                                                                                    
Alternative Energy & Energy Efficiency                                                                                          
Alaska Energy Authority                                                                                                         
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION   STATEMENT:     During   the  AEA   overview,   answered                                                            
questions.                                                                                                                      
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:06:01 AM                                                                                                                    
                                                                                                                                
CHAIR  CATHY  ENGSTROM  MUNOZ  called   the  House  Community  and                                                            
Regional  Affairs  Standing Committee  meeting  to  order at  8:06                                                              
a.m.  Representatives  Foster, Austerman, Dick,  Saddler, Gardner,                                                              
Cissna (via  teleconference), and Munoz  were present at  the call                                                              
to order.                                                                                                                       
                                                                                                                                
^Overview: Alaska Energy Authority                                                                                              
               Overview: Alaska Energy Authority                                                                            
                                                                                                                                
8:06:16 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ  announced that  the only order  of business  would be                                                              
an overview of the Alaska Energy Authority.                                                                                     
                                                                                                                                
8:07:26 AM                                                                                                                    
                                                                                                                                
SARA  FISHER-GOAD,  Executive Director,  Alaska  Energy  Authority                                                              
(AEA), Department  of Commerce,  Community & Economic  Development                                                              
(DCCED), began by  noting other staff that are on  line.  She then                                                              
informed the committee  that she has been with AEA  and the Alaska                                                              
Industrial   Development   and   Export  Authority   (AIDEA)   for                                                              
approximately  10  or 11  years.   She  noted  that  in her  prior                                                              
capacity as  deputy director she  was the legislative  liaison for                                                              
AEA and  AIDEA.   Ms. Fisher-Goad  further informed the  committee                                                              
that she  has a Bachelor's  degree from  the University  of Alaska                                                              
Fairbanks  (UAF)  and a  Masters  from  the University  of  Alaska                                                              
Anchorage (UAA).   She opined that it's going to  be a challenging                                                              
and  exciting time  to  be the  executive director  of  AEA.   Ms.                                                              
Fisher-Goad   then   turned   attention   to   the   presentation,                                                              
specifically slide  2 entitled "AEA's Mission: Reduce  the Cost of                                                              
Energy  in  Alaska".    The  AEA   manages  several  programs  and                                                              
projects.   In fact, AEA  has been the  lead agency  for statewide                                                              
energy planning,  developed large  infrastructure, assisted  rural                                                              
communities,  reduced energy  waste and use  local resources,  and                                                              
finance  projects.   She pointed  out  that AEA  owns the  Bradley                                                              
Lake Hydroelectric  Project and the Alaska Intertie.   As some may                                                              
have   heard,  AEA   is  interested   in   pursuing  the   Susitna                                                              
Hydroelectric  project.   The  Susitna Hydroelectric  Project  was                                                              
one  that  had  been  developed  in the  1980s  and  recently  AEA                                                              
received  a decision  document that  has  recommended the  Susitna                                                              
Low  Watana  Project  be  pursued  in  the  Railbelt  area.    The                                                              
assistance  to rural  communities  has been  with  the power  cost                                                              
equalization   (PCE)  program,   tank   farm   and  power   system                                                              
construction,  and training  to support local  operators  in rural                                                              
communities.                                                                                                                    
                                                                                                                                
8:11:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DICK inquired  as to the  details between  Susitna                                                              
and Chakachamna that resulted in choosing the Susitna project.                                                                  
                                                                                                                                
MS.  FISHER-GOAD  explained that  last  year  AEA received  a  $10                                                              
million  appropriation  to evaluate  several  projects,  including                                                              
the  Susitna Hydroelectric  Project and  the Chakachamna  Project.                                                              
The appropriation  legislation specified  that if a project  had a                                                              
"fatal flaw,"  then the funds should  be utilized for  the project                                                              
that  made  more sense.    She  noted  that  AEA has  about  3,000                                                              
documents  regarding  all the  studies  performed  on the  Susitna                                                              
Hydroelectric  Project.  The  Chakachamna Project had  significant                                                              
environmental  issues that would  require further study,  although                                                              
they weren't  necessarily a  fatal flaw.   Therefore, it  became a                                                              
risk  analysis  to determine  which  project  made sense  to  move                                                              
forward.   To learn  more about Chakachamna  and its  issues would                                                              
require  an expenditure  of about  $30 million.   Furthermore,  to                                                              
address  the environmental  issues  a significant  flow  reduction                                                              
would  be required  in order to  permit and  license the  project.                                                              
Therefore, to  meet the  state's goal of  producing 50  percent of                                                              
the state's  electricity with a  renewable energy source  by 2025,                                                              
the  Susitna  Hydroelectric project  made  the  most sense.    She                                                              
noted  that the  preliminary  document with  the  details of  this                                                              
choice is on AEA's website.                                                                                                     
                                                                                                                                
REPRESENTATIVE  DICK expressed concern  with resource  development                                                              
in Western Alaska.   He opined that he would  rather consider both                                                              
[projects] versus an  either or situation.  He  also mentioned the                                                              
Donlin Creek situation.                                                                                                         
                                                                                                                                
MS. FISHER-GOAD  said she would  be happy to discuss  those issues                                                              
further with Representative Dick.                                                                                               
                                                                                                                                
8:15:38 AM                                                                                                                    
                                                                                                                                
MS.  FISHER-GOAD returned  to her  presentation  and reviewed  the                                                              
ways  in which  AEA seeks  to reduce  energy waste  and use  local                                                              
resources.   The  aforementioned  is accomplished  through  energy                                                              
efficiency,   biomass,   geothermal,   hydroelectric,   and   wind                                                              
projects.  She  noted that AEA also finances  projects through the                                                              
Renewable Energy  Fund, Energy Tech Fund, the  Bulk Fuel Revolving                                                              
Loan  Fund, and  the Project  Power Fund.   She then  moved  on to                                                              
slide  3  entitled   "Statewide  Energy  Planning,"   which  lists                                                              
several  initiatives regarding  energy  planning  over the  years.                                                              
The prior  executive director of  AEA was instrumental  in putting                                                              
together   the  Alaska   Energy  Pathway,   which  relates   local                                                              
information communities  can use  when developing their  own local                                                              
resources.   The  Rural Energy  Plan was  produced in  2002.   She                                                              
pointed  out  that  most  recently,   AEA  is  working  on  energy                                                              
statistic  updates  in  order  to have  good  data  available  for                                                              
communities  and utilities.   The AEA  is committed to  performing                                                              
regular updates, at  least every other year.  The  AEA has been in                                                              
partnership  with  the  Department   of  Natural  Resources  (DNR)                                                              
regarding the  Alaska energy  inventory.  The  maps at  the bottom                                                              
of slide  3 were  developed with  information  from DNR and  AEA's                                                              
staff in  order to  identify the location  of energy  resources in                                                              
Alaska.   Referring to slide  4 entitled "Alaska  Energy Pathway,"                                                              
she  informed the  committee that  AEA is  reviewing regional  and                                                              
community  planning  and  project  development.    This  year  the                                                              
effort is  to work  on a  regional level  to help communities  and                                                              
the regions of  the state develop projects that  make sense, which                                                              
are  projects that  develop and  use  local resources.   She  then                                                              
directed  attention  to  slide   5,  which  relates  more  details                                                              
regarding  the Alaska  Energy Inventory.    Moving on  to slide  6                                                              
entitled "Regional  Energy Plan," she explained that  the Railbelt                                                              
Integrated Resource  Plan (IRP) was  sponsored by the  state while                                                              
AEA, Railbelt utilities,  and other stakeholders  developed a list                                                              
of projects  that make  sense to pursue  for the Railbelt  region.                                                              
The IRP  helps establish  the estimated  costs of these  projects.                                                              
Ms. Fisher-Goad opined  that it has been an  extremely complicated                                                              
effort, particularly  since the  utilities have come  together and                                                              
formed  an  organization  for regional  projects.    Referring  to                                                              
slide  7, she informed  the committee  that the  Southeast  IRP is                                                              
currently  underway.   Although  the process  is  similar to  that                                                              
undertaken  with the Railbelt,  Southeast is  a bit different  due                                                              
to  the lack  of [connected  road] transportation  in the  region.                                                              
The  AEA  is  working  with  the   Southeast  Conference  to  help                                                              
identify  a  regional approach  in  terms  of projects  that  make                                                              
sense for  the Southeast  region and  specific communities  in the                                                              
region.                                                                                                                         
                                                                                                                                
8:21:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FOSTER related his  understanding that  the Alaska                                                              
Railbelt Cooperative  Transmission  and Electric Company  (ARCTEC)                                                              
is  comprised  of  five  of  the   six  Railbelt  utilities.    He                                                              
requested a  general assessment of  ARCTEC in terms of  having one                                                              
Railbelt utility not involved in the organization.                                                                              
                                                                                                                                
MS.  FISHER-GOAD deferred  to  Mr. Strandberg  who  has been  most                                                              
involved with ARCTEC.                                                                                                           
                                                                                                                                
8:22:08 AM                                                                                                                    
                                                                                                                                
JIM STRANDBERG,  Project Manager,  Alaska Energy Authority  (AEA),                                                              
Department   of  Commerce,  Community   &  Economic   Development,                                                              
Municipal  Light &  Power (ML&P)  has  a business  structure of  a                                                              
municipality; it's  an enterprise organization that's  part of the                                                              
overall  Municipality  of  Anchorage  business.  The  entities  in                                                              
ARCTEC are  electrical cooperatives  that  worked hard to  develop                                                              
an  approach with  which they  all  agreed.   However, ML&P  faced                                                              
real  limitations joining  ARCTEC in  terms of  ML&P's tax  exempt                                                              
status.   Mr. Strandberg  related his  understanding that  all the                                                              
utilities  continue to  talk and  ML&P has been  at the  meetings,                                                              
which  have   had  a  collegial   atmosphere.    In   response  to                                                              
Representative   Saddler,  Mr.   Stranberg   clarified  that   the                                                              
municipality  has  the ability  to  obtain tax  exempt  financing.                                                              
However,  one of  the  bond conditions  is  that  the benefits  of                                                              
those  funds  have   to  flow  directly  to  the   people  of  the                                                              
municipality.   If  the  benefits  stray from  the  people of  the                                                              
municipality, then the tax exempt status is in question.                                                                        
                                                                                                                                
8:24:47 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ  turned attention  to Southeast  planning efforts  and                                                              
the fact that  the Canadian government is moving  forward with the                                                              
extension of  the Northwest  power line to  within about  20 miles                                                              
of the Alaska-Canadian  border near Wrangell.  She  inquired as to                                                              
how Mr. Strandberg foresaw the relationship with Canada.                                                                        
                                                                                                                                
MR.   STRANDBERG  confirmed   that   [AEA]  does   want  to   keep                                                              
communication  open with Canada.   In  fact, there are  colleagues                                                              
with whom  AEA has  maintained contact  with  over the last  three                                                              
years.   The concept  of the  potential for  importing energy  has                                                              
been discussed  by those  in Southeast.   The entities  with which                                                              
AEA  has had  contact are  BC Hydro's  business development  group                                                              
and  Power  X,  which  is  BC  Hydro's   power  marketing  entity.                                                              
Furthermore,  AEA  has  maintained  a close  connection  with  the                                                              
Alaska-Canada  Energy  Coalition   (ACE  Coalition)  in  Southeast                                                              
Alaska.                                                                                                                         
                                                                                                                                
CHAIR MUNOZ inquired as to the rate on the Canada side.                                                                         
                                                                                                                                
MR.  STRANDBERG  answered  that  there  are  various  rates.    He                                                              
offered  to obtain  the specific  rate of the  power being  bought                                                              
and purchased by Power X.                                                                                                       
                                                                                                                                
CHAIR  MUNOZ  related  her  understanding  that the  rate  on  the                                                              
Canada  side   is  quite  low.     She  acknowledged   the  export                                                              
potential,  but  suggested  there  could be  the  opportunity  for                                                              
import potential as well as the ensuing development.                                                                            
                                                                                                                                
MR.  STRANDBERG noted  that the  aforementioned has  been part  of                                                              
the Southeast IRP  process to actively evaluate the  impacts of an                                                              
electrical  intertie  with  Canada's  system and  the  ability  to                                                              
import inexpensive  energy into the region for the  benefit of the                                                              
ratepayers.                                                                                                                     
                                                                                                                                
8:27:28 AM                                                                                                                    
                                                                                                                                
MS.  FISHER-GOAD,   returning  to   her  presentation,   told  the                                                              
committee that  AEA's regional efforts  also include  working with                                                              
the University of  Alaska and the Denali Commission  to coordinate                                                              
support.   The current focus is  on the Yukon-Kuskokwim  Delta and                                                              
the Interior.   With  the development of  the Energy  Pathway, AEA                                                              
doesn't want  to have a  plan that isn't  used.  The desire  is to                                                              
continue   to  provide   the   technical   assistance  for   local                                                              
communities and  regions with  respect to how  to take a  plan and                                                              
develop   the  projects.      Referring   to  slide   9   entitled                                                              
"Infrastructure  and Large  Projects,"  Ms. Fisher-Goad  explained                                                              
that the  Bradley Lake  Hydro Project  is a  great model  project.                                                              
The state  contributed approximately  50 percent  of the  costs to                                                              
build  the project,  which produces  10 percent  of the energy  in                                                              
the Railbelt  area.  Furthermore,  the Bradley Lake  Hydro Project                                                              
is currently the  low cost energy producer.   Although the Susitna                                                              
Project   financing  will   definitely   garner  discussion,   the                                                              
[Bradley  Lake  Hydro  Project]  concept of  state  ownership  and                                                              
utilities  paying a  portion of  the  cost through  a power  sales                                                              
agreement is  a valid model  to use.   There are some  things that                                                              
could be done in  the 1980s that couldn't be today.   However, she                                                              
pointed out  that although the bonds  for the [Bradley  Lake Hydro                                                              
Project]  will  be paid  in  about  10  years, the  utilities  are                                                              
obligated to  continue to pay  the state  for another 20  years in                                                              
roughly  the amount  of the  debt service.   "It's  somewhat of  a                                                              
recoupment of the  capital contributions that the state  put in up                                                              
front, receiving  that on the backend  of the project,"  she said.                                                              
She then turned  to the Alaska Intertie, which is  wholly owned by                                                              
the state through  AEA and is operated by the  Railbelt utilities.                                                              
Currently, the  Alaska Intertie agreement is  under renegotiation.                                                              
She clarified  that the Alaska  Intertie wasn't financed  by debt,                                                              
but  rather  through  cash capital  appropriations.    The  Alaska                                                              
Intertie is  the way in which  the Interior and the  Golden Valley                                                              
Electric Association (GVEA) receives Bradley Lake Hydro power.                                                                  
                                                                                                                                
8:31:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   FOSTER  related   his   understanding  that   the                                                              
financing of  the Bradley Lake Hydro  Project was 50  percent from                                                              
the state  and the remaining 50  percent from the ratepayers.   He                                                              
inquired as to how the state contribution was funded.                                                                           
                                                                                                                                
MS.   FISHER-GOAD   related   that   there  were   a   series   of                                                              
appropriations  that  AEA  received   to  move  forward  with  the                                                              
construction of  the Bradley Lake  Hydro Project.  She  noted that                                                              
arbitrage   earnings  on  bonds   were  used   to  help   pay  for                                                              
construction.     However,   the  aforementioned   is  no   longer                                                              
available  due to  tax code  changes in  1986.  At  the point  the                                                              
Bradley  Lake Hydro  Project  was  going to  be  funded by  bonds,                                                              
power  sales  agreements  were developed  with  the  utilities  in                                                              
order to  have the revenue  to pay for  the project.   She related                                                              
her understanding  that they're general obligations of  AEA with a                                                              
moral  obligation of  the state.    Still, [per]  the power  sales                                                              
agreement, the  utilities pay for  the debt service of  the bonds.                                                              
The  debt service  amounts to  about  $12 million  annually.   She                                                              
noted  that   AEA's  preliminary  decision  document   includes  a                                                              
detailed description  of the concepts that could be  used with the                                                              
large Bradley  Lake Project as well  as limitations by  which [the                                                              
Bradley  Lake Hydro  Project  model]  may not  work.   In  further                                                              
response  to Representative  Foster,  she  agreed  to provide  the                                                              
aforementioned document.                                                                                                        
                                                                                                                                
8:34:21 AM                                                                                                                    
                                                                                                                                
MS.   FISHER-GOAD,   in  response   to   Representative   Saddler,                                                              
clarified that for  the Bradley Lake Hydro Project  the state paid                                                              
50  percent through  appropriations to  AEA and  the remaining  50                                                              
percent was  through bonds paid for  by the utilities.   She noted                                                              
that  the earlier  mentioned  document  includes  a schedule  with                                                              
regard to the state's contributions and the debt service.                                                                       
                                                                                                                                
8:35:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DICK  directed attention  to slide 8,  and inquired                                                              
as to the details  regarding AEA's regional energy  plans focus on                                                              
the Yukon-Kuskokwim Delta.                                                                                                      
                                                                                                                                
8:35:34 AM                                                                                                                    
                                                                                                                                
MICHAEL  HARPER,  Deputy  Director, Rural  Energy,  Alaska  Energy                                                              
Authority  (AEA), Department  of  Commerce,  Community &  Economic                                                              
Development,   said   that  AEA   has   worked  with   the   major                                                              
stakeholders in  the region, including the Association  of Village                                                              
Council Presidents  (AVCP), AVCP  Housing, Yukon-Kuskokwim  Health                                                              
Corporation,  Calista  Corporation,  and Alaska  Village  Electric                                                              
Cooperative,  Inc.  (AVEC).   He  noted  that  AVEC is  the  major                                                              
utility in the  region as it serves  23 of the 56 villages  in the                                                              
region.   Mr.  Harper then  explained  that [AEA's]  notion is  to                                                              
review  other reports  that the  legislature  has already  funded.                                                              
There are at least  15 such energy reports, the list  for which he                                                              
offered to provide  to the committee.  Those  reports discuss ways                                                              
in  which  to produce  less  expensive  power.   He  informed  the                                                              
committee  that  there  is  a  large   hydro  power  potential  in                                                              
Chikumunik, which  is located above  the lakes in the  Bristol Bay                                                              
area  and within  110 or  so miles  of  Bethel.   There have  been                                                              
studies on the  potential at Chikumunik, including  a recent study                                                              
from Montgomery Watson.   The potential at Chikumunik  would power                                                              
Bethel  and  the surrounding  15  communities.   Although  AEA  is                                                              
pursuing the  Chikumunik potential,  more resources  are necessary                                                              
to ensure the information is up to date.                                                                                        
                                                                                                                                
8:38:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DICK  inquired as  to  whether anything  is  being                                                              
done for the mid Yukon region, such as for Galena or Kaltag.                                                                    
                                                                                                                                
MR. HARPER  replied yes, and informed  the committee that  AEA has                                                              
partnered with  the University of  Alaska Fairbanks  Alaska Center                                                              
for Energy and Power  (ACEP) for the last two years  to develop an                                                              
[energy] plan  for the Interior.   He explained that  AEA provided                                                              
funds  through ACEP  that  has partnered  with  the Tanana  Chiefs                                                              
Conference  (TCC)  to  begin  the  planning  for  alternative  and                                                              
renewable  energy sources  in  the Interior.    There are  biomass                                                              
possibilities  in the Interior,  such as the  Tok project  that he                                                              
said holds  great promise.   Wind  energy is  very limited  in the                                                              
Interior as  hydro seems  as well, but  heat recovery  systems may                                                              
be beneficial, he related.                                                                                                      
                                                                                                                                
8:39:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FOSTER related his  understanding that  Mr. Harper                                                              
mentioned hydro in  Representative Dick's area.  He  then asked if                                                              
there's   a  summary  sheet   regarding   hydro  in  more   Arctic                                                              
environments.                                                                                                                   
                                                                                                                                
MR. HARPER offered  to research that.  He noted that  AEA has good                                                              
reports  regarding the  Yukon-Kuskokwim  Delta,  but there  aren't                                                              
similar reports  for the Northwest  area.  However, he  noted that                                                              
AEA has  received a letter  from Kawerak,  Inc., and there  is the                                                              
desire  to  move forward  with  regional  energy planning  in  the                                                              
Northwest and Nome areas.                                                                                                       
                                                                                                                                
8:40:39 AM                                                                                                                    
                                                                                                                                
MS. FISHER-GOAD,  referring to  slide 11 entitled  "Infrastructure                                                              
and Large  Projects," informed  the committee  that the  Susitna -                                                              
Watana site  is expected  to generate 50  percent of  the Railbelt                                                              
energy.    At  this  point,  there would  seem  to  be  a  minimal                                                              
fisheries impact  and it  would provide  a long-term stable  price                                                              
of energy  for the Railbelt  area.  She  then turned  attention to                                                              
slide 12 entitled  "Rural Energy Construction."   She related that                                                              
since  2000   AEA  has  partnered   with  the  Denali   Commission                                                              
initially  to  fund the  construction  of  bulk fuel  tank  farms.                                                              
Rural communities  need a year's supply of fuel  delivered because                                                              
there typically isn't  a delivery system that allows  the delivery                                                              
of  a  monthly   or  daily  supply  as  is  the   case  in  larger                                                              
communities.   Therefore, tank  farms are  necessary.   Many years                                                              
ago the Environmental  Protection Agency (EPA) and  the U.S. Coast                                                              
Guard were  concerned with the state  of the tank farms  and there                                                              
was  concern with  regard to  possible  fuel spills.   The  Denali                                                              
Commission was  funded to lead [an  upgrade of the bulk  fuel tank                                                              
farms  and  rural  power  systems]  and  AEA  became  the  primary                                                              
partner.  The AEA  spent hundreds of millions of  federal funds in                                                              
rural Alaska  to upgrade  tank farm  projects.   To date,  67 bulk                                                              
fuel  tank  farm projects  competed,  another  9 projects  are  in                                                              
progress,  and   29  projects  remain.    The   Denali  Commission                                                              
requires sustainability  criteria in  order to ensure  a community                                                              
will  be  able  to  maintain the  infrastructure.    Of  those  29                                                              
projects  remaining, typically  there  may not  be the  capability                                                              
for communities to  move up the list and construct  a project.  To                                                              
date,  48  rural   power  projects  have  been   completed.    The                                                              
powerhouses  include the  electrical  distribution  and there  are                                                              
integrated systems  to ensure there  is heat recovery  capability.                                                              
Depending   upon  the   community,  there   is  integration   with                                                              
hydroelectric.   Currently, 16 of the aforementioned  projects are                                                              
underway and 45 remain.                                                                                                         
                                                                                                                                
8:44:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DICK inquired as  to who owns  the bulk  fuel tank                                                              
farm projects once completed.                                                                                                   
                                                                                                                                
MR. HARPER explained  that AEA works with those  in the community,                                                              
including  a  utility  or  small  cooperative,  schools,  and  the                                                              
village/city  council.   The  goal  is to  form  a cooperative  of                                                              
sorts to operate the bulk fuel tank farm once it's constructed.                                                                 
                                                                                                                                
REPRESENTATIVE  DICK  related  that  he has  heard  concerns  from                                                              
private  enterprises  in  communities  that  feel  as  if  they're                                                              
competing against federal dollars.                                                                                              
                                                                                                                                
MR.  HARPER said  that  it's not  AEA's intent  to  put a  private                                                              
business out  of business, and  therefore AEA takes  great efforts                                                              
to  avoid such.   He  offered to  speak  with Representative  Dick                                                              
regarding any problems.                                                                                                         
                                                                                                                                
8:46:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  asked if there  has been any  cost analysis                                                              
regarding what's  occurring in smaller  communities.  Many  of the                                                              
smaller communities  she has visited have energy  systems that are                                                              
far  too complex  for the  locals to  operate and  thus have  very                                                              
little oversight  of the equipment.   She related  her observation                                                              
that there have  been large expenditures on the  infrastructure in                                                              
communities.   Furthermore, review  of the  health costs  in these                                                              
communities  illustrates   a  disconnect  between   what's  really                                                              
happening in  communities in  terms of the  large amount  of funds                                                              
going  in for  diesel  requirements  and not  enough  help to  the                                                              
community to  start private [energy]  businesses.   She questioned                                                              
whether there  is a way  to rank communities  by their  real needs                                                              
today and not think big for those small communities.                                                                            
                                                                                                                                
MR. HARPER  agreed that  these systems  aren't simple  to operate,                                                              
but pointed  out that  AEA has  a good  cadre of utility  managers                                                              
for  communities   with  a  population   of  50  residents.     He                                                              
acknowledged that  there won't always  be a well  trained operator                                                              
in every  instance.   However, there  is a  training program  that                                                              
AEA  has operated  for  over a  decade.   Usually  the  Vocational                                                              
Training  Center in Seward  is used  to train  the bulk  fuel tank                                                              
operators  as  well as  the  power  plant  operators and  now  the                                                              
renewable  energy operators  to operate  the systems  in a  manner                                                              
that will sustain  the community.  Renewable energy  systems, such                                                              
as  wind turbines,  are  being  utilized  and they're  not  simple                                                              
systems  to manage.    He informed  the  committee  that AVEC  and                                                              
Kotzebue  Electric have  been in  business for  about 10-15  years                                                              
and are the pioneers  with this.  Still, the transition  from wind                                                              
to diesel  is not a  simple operation.   The AEA is  continuing to                                                              
work on that.   Mr. Harper opined  that the AVEC model  works well                                                              
for the  53 communities,  which have populations  of 1,000  or so,                                                              
for which  it provides  power.   Although AVEC  isn't involved  in                                                              
the  smaller communities  that have  50 or  so residents,  smaller                                                              
cooperatives  are able to  operate in a  sustainable fashion.   He                                                              
highlighted  the   Middle  Kuskokwim  Electric   Cooperative  with                                                              
Sleetmute, Stony  River, and three small communities  as it's able                                                              
to operate  systems in a sustainable  fashion, although  the costs                                                              
are higher.                                                                                                                     
                                                                                                                                
8:53:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER related her  understanding that  the state                                                              
has  addressed [upgrades]  for  about  two-thirds  of the  state's                                                              
tank farms.   She asked  if the tank  farms that haven't  yet been                                                              
addressed are more complex or more costly.                                                                                      
                                                                                                                                
MS. FISHER-GOAD  explained  that over  10 years  ago, AEA  and the                                                              
Denali  Commission developed  a  deficiency list  that ranked  the                                                              
projects  worst to  best.   She noted  that there  is a  directive                                                              
from  the  Denali  Commission  that  specifies  when  there  is  a                                                              
problem with  a particular project,  then AEA would move  down the                                                              
list.   At  the peak  of using  federal  funds, there  would be  a                                                              
certain number  in design, a certain  number in final  design, and                                                              
a   certain  number   under  construction.      She  likened   the                                                              
aforementioned  to a  pipeline that  fed the  projects.  [Some  of                                                              
the  problems]  that would  cause  a  project  to stall  could  be                                                              
contamination  or   land  ownership  issues.    Of   the  projects                                                              
remaining on the list, she requested that staff describe those.                                                                 
                                                                                                                                
8:55:26 AM                                                                                                                    
                                                                                                                                
CHRIS MELLO, Program  Manager RPSU & BF, Alaska  Energy Authority,                                                              
Department   of  Commerce,  Community   &  Economic   Development,                                                              
informed the  committee that in  terms of bulk fuel  the remaining                                                              
communities on  the list  were unable to  get the stakeholders  to                                                              
come  to an  agreement.   There  has  to be  a  clear grantee  and                                                              
operator.   Although  some  communities  require  tank farms,  the                                                              
village  council   and  village  corporation  can't   come  to  an                                                              
agreement.   Since a  business plan and  the participation  of the                                                              
grantee and stakeholders  in that business plan  is required, when                                                              
they  are unwilling  to  do so  the  project  can't move  forward.                                                              
There  are  some  communities that  simply  aren't  interested  in                                                              
participating in  this program.  In other communities  there isn't                                                              
a   clear   grantee   as   some   communities   don't   have   the                                                              
infrastructure  and  aren't capable  of  legally  entering into  a                                                              
grant.  Mr. Mello  related that there are many  communities in the                                                              
queue  that are  waiting for  funds.   In fact,  AEA is  currently                                                              
working with  Alakanuk, which is  the first AVEC village  in which                                                              
AEA has  agreed to construct  a tank farm.   The expected  date of                                                              
completion of  a tank farm  in Alakanuk is  2012.  With  regard to                                                              
the  rural  power systems  upgrade  (RPSU)  programs there  are  a                                                              
number of projects  in which the grantees are  moving forward very                                                              
well,  although much  of it  is a  matter of  the availability  of                                                              
funding.  Currently,  AEA is working in Angoon and  Ruby.  In some                                                              
cases, there  are communities  that don't  pass due diligence  and                                                              
may have problems  with the Internal Revenue Service  (IRS) and/or                                                              
bulk fuel  loans, and  may be unwilling/unable  to participate  in                                                              
the business plan.                                                                                                              
                                                                                                                                
8:57:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  inquired as  the  longevity  of the  bulk                                                              
fuel tank farms and the rural power systems.                                                                                    
                                                                                                                                
MR. MELLO  responded that  the bulk  fuel facilities are  designed                                                              
for a 40-year life  cycle.  When this program  began, the emphasis                                                              
was  to reach  compliance  with  the Oil  Pollution  Act of  1990.                                                              
Although  the  aforementioned didn't  particularly  resonate  with                                                              
members  of the  community, U.S.  Senator Ted  Stevens called  for                                                              
sustainability  and   thus  he  called  for  the   development  of                                                              
business  plans.   When AEA  worked  with the  communities on  the                                                              
business  plans,  there  was  a  change  in  the  attitude.    The                                                              
communities started  to view  the tank farm  as a community  asset                                                              
rather than  a project.   The business  plan can  be as  simple as                                                              
two  bank accounts:  an O&M  account  and a  repair &  replacement                                                              
(R&R) account,  which is funded  by a surcharge on  the throughput                                                              
of the fuel in  a particular facility.  Communities  contribute to                                                              
the R&R account  monthly and it helps pay for large  ticket items,                                                              
such  as painting  the  facility  or new  fencing.    Most of  the                                                              
communities are fairly  loyal to the [R&R account],  which extends                                                              
the life  of the facilities.   He highlighted that there  has been                                                              
an  increase in  the level  of best  business  practices in  these                                                              
communities.   Therefore,  AEA  is  fairly optimistic  that  these                                                              
facilities will be  able to exist for their useful  life.  He also                                                              
highlighted  that communities  are  beginning  to understand  that                                                              
these tank  farms aren't just  a place  where they store  fuel but                                                              
also  a  tool  along with  best  businesses  practices  that  will                                                              
enable these  communities to manage  their bulk fuel  inventory to                                                              
the  greatest   economic  advantage.     The  aforementioned,   he                                                              
remarked, is a huge step forward.                                                                                               
                                                                                                                                
9:00:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DICK  said that  he  is  trying to  reconcile  the                                                              
reality  in  communities  with  this [program].    He  recalled  a                                                              
community in  which the state fire  marshal closed the  local fuel                                                              
vendor until the  tanks met state requirements.   That fuel vendor                                                              
couldn't  sell fuel  to cover his  operating  costs, much  less to                                                              
obtain  the funds  to bring  his tank  farm into  compliance.   He                                                              
inquired as to what could've been done in that situation.                                                                       
                                                                                                                                
MR. MELLO explained  that the fuel vendors in  the communities are                                                              
not  the grantees,  rather  the  grantee  is usually  the  village                                                              
council.    However, all  the  stakeholders  are included  in  the                                                              
facility and  participate in the  same business plan.   Therefore,                                                              
a  fuel vendor  that's located  in  a community  that's unable  or                                                              
unwilling to  participate in  the program  leaves AEA  with little                                                              
it can do.   He clarified  that AEA doesn't enter  communities and                                                              
select one  stakeholder and  build a bulk  fuel facility  for that                                                              
vendor  as it  doesn't meet  the  economies of  scale, rather  AEA                                                              
[works]  for the  entire community.   He  acknowledged that  there                                                              
are  communities in  Representative  Dick's district  that are  in                                                              
the  above  discussed category,  AEA  can  continue  conversations                                                              
with  these  communities  and  the  potential  grantees  regarding                                                              
what's  necessary  to  come  together  on  a  project.    In  some                                                              
communities, AEA hasn't success with the aforementioned.                                                                        
                                                                                                                                
9:03:38 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ  mentioned that  today there  is an energy  conference                                                              
at Centennial  Hall in Juneau.   She then requested more  in depth                                                              
information on the Susitna Hydro and Chakachamna projects.                                                                      
                                                                                                                                
[Chair Munoz passed the gavel to Vice Chair Foster.]                                                                            
                                                                                                                                
9:04:25 AM                                                                                                                    
                                                                                                                                
MS.  FISHER-GOAD,  returning to  her  presentation  and slide  13,                                                              
provided the committee  with an example of the  bulk fuel upgrades                                                              
done in  Ruby.   She then  directed attention  to slide  14, which                                                              
highlights the rural power system upgrades of Tuluksak.                                                                         
                                                                                                                                
9:05:12 AM                                                                                                                    
                                                                                                                                
VICE CHAIR  FOSTER inquired as to  the details of the  R&R account                                                              
and the effectiveness of it.                                                                                                    
                                                                                                                                
MR. HARPER  said that upon the  creation of the  Denali Commission                                                              
in 2000 or  so, [the R&R account]  was clearly addressed  in order                                                              
to  avoid an  unsustainable project.    A business  plan that  was                                                              
developed with  the community and  all the major  stakeholders was                                                              
required.   Funds were to be  established in order to  prepare for                                                              
future major repairs.   Mr. Harper related that AEA  is glad these                                                              
business  plans were  required  at the  beginning  of the  process                                                              
because it's  coming to  the fore at  this point, particularly  as                                                              
community  leaders  change over  time.   For  the  most part,  the                                                              
process   is  working   well,   he  stated.      In  response   to                                                              
Representative Saddler,  Mr. Harper confirmed  that theoretically,                                                              
the [R&R  account]  funds would  be used to  replace the  facility                                                              
when  necessary.   However,  he  acknowledged  that it  might  not                                                              
cover the entire cost of replacement.                                                                                           
                                                                                                                                
9:09:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  pointed out that although  there is concern                                                              
with  regard  to  sustainability,   most  of  the  facilities  and                                                              
equipment  the state  is placing  in  rural Alaska  are fueled  by                                                              
diesel.   Even  Anchorage is  becoming more  dependent on  natural                                                              
gas, yet questions  remain about the long-term  success of natural                                                              
gas.    She  recalled  that  in  community  council  meetings  [in                                                              
Anchorage]  the  natural  gas  folks  said  that  other  forms  of                                                              
renewable energy  couldn't be considered because  the equipment in                                                              
homes makes it economically  dangerous to go to any  other form of                                                              
energy.    She  then  recalled that  in  the  past  these  smaller                                                              
communities used  biomass for thousands  of years, but  then there                                                              
was a  shift to  petroleum, specifically  diesel.   Representative                                                              
Cissna  opined that  the rural and  urban worlds  don't match  [in                                                              
terms of  energy].   Therefore, she indicated  the need  to review                                                              
more appropriate  alternatives versus  making people  dependent on                                                              
one form of energy.                                                                                                             
                                                                                                                                
MS. FISHER-GOAD  related that  in terms  of rural communities  and                                                              
the renewable energy  grant recommendation program,  AEA's primary                                                              
measure  for these  projects is  diesel replacement.   She  opined                                                              
that  through biomass,  energy  efficiency,  and renewable  energy                                                              
projects  AEA is experiencing  a significant  reduction of  diesel                                                              
being imported  into communities.   Furthermore, AEA  is reviewing                                                              
local  long-term solutions  for  communities to  meet their  long-                                                              
term energy  needs.  She opined,  however, that it will  always be                                                              
a  combination  or  energy sources  in  which  communities  aren't                                                              
completely independent of diesel.                                                                                               
                                                                                                                                
9:13:51 AM                                                                                                                    
                                                                                                                                
MS. FISHER-GOAD reviewed  AEA's capital request of  $10 million of                                                              
state funds,  of which $6 million  would be used for  power system                                                              
upgrades, $3  million for bulk fuel  upgrades, and $1  million for                                                              
a  continuation  of the  agency's  regional planning  efforts  for                                                              
energy  projects and  planning.   Although since  the creation  of                                                              
the  Denali  Commission there  has  been  a reduction  in  federal                                                              
funds, there  has been a commitment  from the state to  place more                                                              
funds toward  these projects  in order to  make progress  with the                                                              
deficiency  lists  and  address the  rural  energy  infrastructure                                                              
needs.   Returning  to the  presentation,  Ms. Fisher-Goad  turned                                                              
attention  to  slide  15 entitled  "Technical  Assistance."    She                                                              
highlighted  that  when  AEA  installs   a  new  system,  it  also                                                              
installs a  remote monitoring system  and Supervisory  Control And                                                              
Data  Acquisition  (SCADA)  system.    The  aforementioned  allows                                                              
AEA's technical staff  in Anchorage to help troubleshoot  with the                                                              
local operator.   If an onsite visit is necessary,  then AEA staff                                                              
would be  informed with regard  to how the  plant is run.   Moving                                                              
on to  slide 16 she  informed the committee  that the  PCE Program                                                              
is an  approximately $32 million  grant program that  AEA operates                                                              
in conjunction  with the  Regulatory Commission  of Alaska  (RCA).                                                              
The  RCA establishes  the  PCE rate,  AEA  manages  the funds  and                                                              
issues the  grants to  the communities based  upon the  PCE level.                                                              
The  PCE  Program  is  available   for  community  facilities  and                                                              
residents in  PCE eligible  communities.   She explained  that AEA                                                              
reimburses   the  utilities   up   to  500   kilowatt  hours   per                                                              
residential customer  per month, whereas the amount  of reimbursed                                                              
funds for  the community  facilities is  based upon a  calculation                                                              
of the  number of kilowatt  hours and the community's  population.                                                              
The low  cost energy  enhances the  life of  rural residents,  who                                                              
face some  very high costs in  these small communities.   In fact,                                                              
with  and without  PCE the  costs are  still significantly  higher                                                              
than more urban  areas of the state.   Referring to slide  17, Ms.                                                              
Fisher-Goad  informed   the  committee  that  AEA   offer  various                                                              
training opportunities.   As mentioned earlier, AEA  partners with                                                              
the Department of  Labor & Workforce Development  (DLWD) and AVTEC                                                              
to help  communities send  their power  plant operators  to Seward                                                              
for  hands  on  training  with the  systems  and  the  generators.                                                              
Onsite training  is also provided.   She noted that  the operating                                                              
budget includes  a request for $200,000  of state funds  since the                                                              
long-time  Denali   Commission  training   funds  are   no  longer                                                              
available.    Therefore, the  funding  request  is to  maintain  a                                                              
quality training  program.   She then noted  that AEA  is involved                                                              
in various  conferences, including  the Wind-Diesel  Conference in                                                              
Girdwood  and  the Wood  Energy  Conference  in Fairbanks.    With                                                              
regard to  wood energy  for heat,  AEA would  like to  continue to                                                              
focus more on heat  issues since AEA believes it  has a relatively                                                              
good handle on electricity  with the power house and  PCE in terms                                                              
of good  energy efficient systems.    However, heating  issues are                                                              
more complicated  and they  usually aren't  a centralized  system.                                                              
She then informed  the committee that over the  last several years                                                              
AEA in  coordination with the  University of Alaska  Fairbanks has                                                              
sponsored  the Rural  Energy  Conference, which  will  be held  in                                                              
Juneau this  September.   Moving on to  slide 18, she  highlighted                                                              
the state's efficiency  and conservation goal of up  to 15 percent                                                              
by   2020.     The  AEA   manages  the   Energy  Efficiency   (EE)                                                              
Conservation  Block   Grants,  which  is  a  $9   million  federal                                                              
stimulus  fund project.    The AEA  has  developed the  Commercial                                                              
Audit  Program,   which  has  received  good  feedback   from  the                                                              
businesses that have  applied for that program.  The  AEA has also                                                              
developed  the  Industrial  Audit   Program,  which  is  currently                                                              
focusing  on the fish  processors.   She then  told the  committee                                                              
that AEA  heads up an  EE Conservation  Working Group, which  is a                                                              
partnership of 20  plus organizations.  The  aforementioned allows                                                              
AEA  to organize  with some  of the  nonprofits, the  communities,                                                              
and  the utilities  in  order to  achieve  a comprehensive  energy                                                              
efficiency effort.   Directing attention  to the map on  slide 19,                                                              
she pointed  out that it illustrates  where much of the  funds for                                                              
the  Energy  Efficiency  Conservation  Block  Grants  (EECBG)  are                                                              
utilized  as well  as highlights  the  Village End-Use  Efficiency                                                              
Program  (VEEP)  projects.    She   noted  that  some  communities                                                              
receive  both EECBG  and  VEEP funds.    The  average payback  for                                                              
these efficiency  upgrades is  about three  years and  the savings                                                              
reach about $3 million per year throughout the state.                                                                           
                                                                                                                                
9:20:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  asked   if  the  block  grants  are  only                                                              
available for private homes not businesses.                                                                                     
                                                                                                                                
MS.  FISHER-GOAD  clarified  that  these  are  actually  community                                                              
block grants,  a block of  American Recovery and  Reinvestment Act                                                              
of 2009 (ARRA) funds.   The community received an  amount based on                                                              
the size  of the  community and  then there was  a block  of funds                                                              
that  were to  be distributed  to  the smaller  communities.   She                                                              
further  clarified  that  this isn't  residential  assistance  but                                                              
rather  municipal  and  community   assistance.    Each  community                                                              
applied for  a grant and  developed a plan  for what it  would use                                                              
the money.                                                                                                                      
                                                                                                                                
REPRESENTATIVE GARDNER  asked if AEA  has discussed the  fact that                                                              
small business  owners also want  access to the  energy efficiency                                                              
programs the state is offering.                                                                                                 
                                                                                                                                
MS.  FISHER-GOAD   answered  that   AEA  has  worked   with  DCCED                                                              
regarding some  type of  loan program for  businesses.   The audit                                                              
program AEA  offers is  a good start  in terms  of knowing  who is                                                              
interested  in  the  program  updates.     She  related  that  AEA                                                              
believes there  is a gap in  the services to  commercial entities,                                                              
and therefore it's  something that AEA is interested  in pursuing.                                                              
The Sustainable  Energy Act  that passed in  2010 included  a loan                                                              
fund  that   was  retooled   to  be   commercial  assistance   for                                                              
alternative energy  and energy efficiency.  The  governor's energy                                                              
report identifies  this matter  as something  that AEA  should do.                                                              
Although  AEA is  interested  in working  on  this program,  other                                                              
items, such  as the block  grants from ARRA  funds, are more  of a                                                              
priority  due  to  time  constraints.    Ms.  Fisher-Goad  further                                                              
related  that  AEA  has  determined   that  [a  commercial  energy                                                              
efficiency]  program is more  appropriate as  an AEA loan  program                                                              
rather than a program within the Division of Commerce.                                                                          
                                                                                                                                
9:23:46 AM                                                                                                                    
                                                                                                                                
MS.  FISHER-GOAD,  returning  to  her presentation,  moved  on  to                                                              
slide  20 entitled  "Renewable Energy  Goal:  50% by  2025".   She                                                              
reviewed  the various statewide  programs  and told the  committee                                                              
that  AEA  can  fund,  through  the  Renewable  Energy  Fund,  the                                                              
following:      permitting,   project   financing,   and   project                                                              
management.   Turning to slide 21,  she reminded the  committee of                                                              
the  2008 passage  of  House  Bill  152, which  included  specific                                                              
selection  criteria  regarding  concentrating  the funds  in  high                                                              
cost  areas,  matching funds,  and  a  statewide balance  for  the                                                              
funds  available.   There  is  an  advisory committee  that  helps                                                              
develop the program  and make recommendations regarding  where the                                                              
funds  should go.   She  highlighted  that $150  million has  been                                                              
appropriated  for  the first  three  rounds.    For round  4,  AEA                                                              
recommends  approximately $37  million  worth of  projects.   With                                                              
regard  to the Renewable  Energy  Fund funding,  the pie chart  on                                                              
slide  22  illustrates   the  various  funding  for   the  various                                                              
renewable  energy sources.    She  pointed out  that  much of  the                                                              
funding is  going toward wind  and hydro  projects.  The  graph on                                                              
slide 23  relates the  estimated cumulative  fuel savings  for the                                                              
renewable energy  funded projects.  For rounds  1-3, the estimated                                                              
fuel  savings is  about  6 million  gallons  of  diesel per  year,                                                              
which  would seem  to be  a good  measure.   Ms. Fisher-Goad  then                                                              
turned to  slide 24 "Emerging  Energy Technology Fund,"  which was                                                              
AEA's newest  initiative and it  was also in the  2010 sustainable                                                              
energy act.   The emerging  energy doesn't only  include renewable                                                              
resources  as it  includes oil  and gas.   The goal  is to  expand                                                              
energy sources available  to Alaskans, she stated.   There is $4.8                                                              
million available and  proposals are due March 2nd.   The advisory                                                              
committee  established   for  emerging  energy  technology   is  a                                                              
technical advisory  committee, which  will be intimately  involved                                                              
in  making  recommendations  regarding which  projects  should  be                                                              
pursued.   Ms.  Fisher-Goad then  pointed  out that  the next  few                                                              
slides provide examples  of projects that are on  line and include                                                              
information  regarding fuel  displacement.    She emphasized  that                                                              
information is important  as is continuing to work  with grantees,                                                              
even  after a  project is  constructed,  in order  to ensure  that                                                              
projects  are successful  and  there  are returns.    Furthermore,                                                              
this  information   is  helpful  in  terms  of   determining  what                                                              
projects to fund in the future.                                                                                                 
                                                                                                                                
9:28:25 AM                                                                                                                    
                                                                                                                                
VICE  CHAIR FOSTER  suggested  that the  remainder  of the  slides                                                              
could  be reviewed  when  Ms. Fisher-Goad  returns  to review  the                                                              
Susitna versus Chakachamna projects.                                                                                            
                                                                                                                                
9:28:56 AM                                                                                                                    
                                                                                                                                
MS. FISHER-GOAD  then quickly reviewed slides 25-34,  which relate                                                              
the grant,  total project cost,  capacity, and fuel  displaced for                                                              
various projects.                                                                                                               
                                                                                                                                
9:29:25 AM                                                                                                                    
                                                                                                                                
VICE  CHAIR FOSTER  inquired as  to  the reason  the Denali  solar                                                              
thermal project didn't result in the expected fuel savings.                                                                     
                                                                                                                                
9:29:44 AM                                                                                                                    
                                                                                                                                
PETER  CRIMP,   Deputy  Director,  Alternative  Energy   &  Energy                                                              
Efficiency,  Alaska  Energy  Authority,  Department  of  Commerce,                                                              
Community & Economic  Development, answered that there  seem to be                                                              
problems with distribution  for the Denali Solar  Thermal project.                                                              
Therefore, it  could be a need  to technically work out  the bugs.                                                              
Mr. Crimp  clarified that AEA isn't  saying that the  Denali Solar                                                              
Thermal project  is a bad project  but rather merely  relating the                                                              
statistics.    The AEA  is  working  with  GVEA to  determine  the                                                              
problem.                                                                                                                        
                                                                                                                                
9:30:24 AM                                                                                                                    
                                                                                                                                
MS.  FISHER-GOAD,  in  closing,  mentioned  that  Mr.  Harper  has                                                              
decided to  retire the  end of  April and  she wanted to  publicly                                                              
recognize  his  work  and  thank   him.    She  characterized  his                                                              
retirement as a loss to the agency.                                                                                             
                                                                                                                                
9:32:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER,   for  response  at  the   next  hearing,                                                              
inquired as  to why the wind  turbines on St. Paul  Island haven't                                                              
been used.                                                                                                                      
                                                                                                                                
9:32:29 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Community  and Regional  Affairs  Standing  Committee meeting  was                                                              
adjourned at 9:32 a.m.                                                                                                          
                                                                                                                                
                                                                                                                                

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