Legislature(2011 - 2012)BARNES 124

04/05/2011 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

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08:08:35 AM Start
08:08:47 AM HB183
08:39:33 AM Overview: Update on the Energy Efficiency Policy & Recommendations by the Cold Climate Housing Research Center
09:24:52 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 183(CRA) Out of Committee
+ Overview: Update on the Energy Efficiency Policy TELECONFERENCED
& Recommendations Report by the Cold Climate
Housing Research Center
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                         April 5, 2011                                                                                          
                           8:08 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                                                                                                            
HOUSE BILL NO. 183                                                                                                              
"An Act relating to the Village Safe Water Act."                                                                                
     - MOVED CSHB 183(CRA) OUT OF COMMITTEE                                                                                     
OVERVIEW:  UPDATE ON THE ENERGY EFFICIENCY POLICY &                                                                             
RECOMMENDATIONS BY THE COLD CLIMATE HOUSING RESEARCH CENTER                                                                     
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 183                                                                                                                  
SHORT TITLE: APPLICATION OF VILLAGE SAFE WATER ACT                                                                              
SPONSOR(s): REPRESENTATIVE(s) DICK                                                                                              
03/09/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/09/11       (H)       CRA, FIN                                                                                               
04/05/11       (H)       CRA AT 8:00 AM BARNES 124                                                                              
WITNESS REGISTER                                                                                                              
SHELIA PETERSON, Staff                                                                                                          
Representative Dick                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Presented HB 183 on behalf  of the sponsor,                                                             
Representative Dick.                                                                                                            
BILL GRIFFITH, Program Manager                                                                                                  
Facility Programs                                                                                                               
Division of Water                                                                                                               
Department of Environmental Conservation (DEC)                                                                                  
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     During  hearing  of   HB  183,  answered                                                             
KATHIE WASSERMAN, Executive Director                                                                                            
Alaska Municipal League                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 183.                                                                          
JASON MAYRAND, Mayor                                                                                                            
City of Nenana                                                                                                                  
Nenana, Alaska                                                                                                                  
POSITION STATEMENT:  Urged passage of HB 183 this session.                                                                    
SCOTT RUBY, Director                                                                                                            
Division of Community & Regional Affairs                                                                                        
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     During  hearing  of   HB  183,  answered                                                             
DR. JOHN DAVIES, Senior Researcher - Energy Policy                                                                              
Cold Climate Housing Research Center (CCHRC)                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Provided an  update on the energy efficiency                                                             
policy and recommendations by CCHRC.                                                                                            
ACTION NARRATIVE                                                                                                              
8:08:35 AM                                                                                                                    
CHAIR  CATHY  ENGSTROM  MUNOZ  called  the  House  Community  and                                                             
Regional  Affairs Standing  Committee  meeting to  order at  8:08                                                               
a.m.   Representatives Foster,  Austerman, Dick,  Saddler, Cissna                                                               
(via  teleconference), Gardner,  and  Munoz were  present at  the                                                               
call to order.                                                                                                                  
          HB 183-APPLICATION OF VILLAGE SAFE WATER ACT                                                                      
8:08:47 AM                                                                                                                    
CHAIR MUNOZ announced that the first order of business would be                                                                 
HOUSE BILL NO. 183, "An Act relating to the Village Safe Water                                                                  
8:09:12 AM                                                                                                                    
SHELIA PETERSON, Staff, Representative Dick, Alaska State                                                                       
Legislature, paraphrased from the following sponsor statement:                                                                  
     House  Bill  183  amends the  definition  of  "village"                                                                    
     under  the   Village  Safe  Water  Act.   Currently  an                                                                    
     unincorporated  community, a  second class  city, or  a                                                                    
     first class  city with not  more than 600  residents is                                                                    
     eligible  to receive  a grant  under  the Village  Safe                                                                    
     Water Program. House Bill 183  amends the definition to                                                                    
     include a home rule city  with less than 600 residents.                                                                    
     A home  rule city has  the same government powers  as a                                                                    
     first class city.  The difference rests in  how the two                                                                    
     cities   are  organized.   A   first   class  city   is                                                                    
     established  under AS  29.35.50-260 while  a home  rule                                                                    
     city adopts  a charter as  the framework for  the city.                                                                    
     Four years ago the City  of Nenana as awarded a Village                                                                    
     Safe Water  grant to upgrade  an aging water  and sewer                                                                    
     system.   The  city   worked   diligently  with   state                                                                    
     officials for  several years to  plan and  finalize the                                                                    
     project. Unfortunately,  right before  construction was                                                                    
     to begin, the  Department of Environmental Conservation                                                                    
     notified  Nenana  that the  city  was  not eligible  to                                                                    
     receive a Village Safe Water  grant; the city was not a                                                                    
     first   class    city,   but   a   home    rule   city.                                                                    
     The  change in  HB 183  allows  the City  of Nenana  to                                                                    
     proceed with the needed upgrade  to its water and sewer                                                                    
     system using  Village Safe Water  funds. Passage  of HB
     183  this year  ensures that  a construction  season is                                                                    
     not lost.                                                                                                                  
8:10:46 AM                                                                                                                    
REPRESENTATIVE GARDNER inquired as to who establishes the terms                                                                 
for the grants.                                                                                                                 
MS.   PETERSON   deferred    to   Department   of   Environmental                                                               
Conservation (DEC) staff.                                                                                                       
8:11:19 AM                                                                                                                    
REPRESENTATIVE GARDNER  questioned whether  it would  be possible                                                               
to  merely change  the definitions  of  the grant  such that  the                                                               
language specified that home rule  cities are eligible for grants                                                               
rather than changing the definition of a home rule city.                                                                        
MS. PETERSON  clarified that  the definition  of "village"  is in                                                               
statute  and is  explicit  in  terms of  what  type of  organized                                                               
community  qualifies.   Therefore, to  add a  different type  [of                                                               
organized community] the statute would  have to be changed, which                                                               
is what HB 183 does.   Ms. Peterson added that there is companion                                                               
legislation  in  the  Senate  Finance   Committee.    The  Senate                                                               
Community  and  Regional  Affairs Standing  Committee  adopted  a                                                               
committee substitute  (CS) for that  companion legislation  and a                                                               
blank  CS  mirroring the  Senate  CS  has  been provided  to  the                                                               
8:12:40 AM                                                                                                                    
REPRESENTATIVE AUSTERMAN  asked if there has  been any discussion                                                               
regarding an effective date.                                                                                                    
MS. PETERSON related  that she and the sponsor  have noticed that                                                               
HB 183 doesn't  have an effective date, and  therefore they might                                                               
ask the committee to consider an effective date.                                                                                
8:13:04 AM                                                                                                                    
REPRESENTATIVE FOSTER  said that he fully  supports expanding the                                                               
definition if it results in  more communities being eligible.  He                                                               
then inquired  as to  the consequences  of removing  the existing                                                               
statutory language referring to the two-mile radius.                                                                            
MS. PETERSON  confirmed that Version  M does delete  the existing                                                               
statutory language referring to a two-mile radius.                                                                              
8:15:00 AM                                                                                                                    
REPRESENTATIVE  SADDLER   asked  if  this  change   would  impact                                                               
communities other than Nenana.                                                                                                  
8:15:27 AM                                                                                                                    
REPRESENTATIVE AUSTERMAN  moved to  adopt the  proposed committee                                                               
substitute  (CS)  for  HB   183,  Version  27-LS0601\M,  Bullard,                                                               
3/30/11,  as the  working document.   There  being no  objection,                                                               
Version M was before the committee.                                                                                             
8:15:40 AM                                                                                                                    
BILL GRIFFITH,  Program Manager,  Facility Programs,  Division of                                                               
Water, Department of Environmental  Conservation (DEC), said that                                                               
under Version M several communities  would be impacted.  The home                                                               
rule  municipality  change  would  allow Nenana  and  Yakutat  to                                                               
qualify  for   village  safe  water  funding.     Increasing  the                                                               
population allowed under  the statute for first  class cities and                                                               
home rule  municipalities from 600  residents to  1,000 residents                                                               
would  result   in  several  more  communities   being  included.                                                               
Several of the  communities that would now be  included have just                                                               
recently  surpassed a  population of  600, such  as Akiachuk  and                                                               
Kipnuk.  He  noted that several other communities have  been at a                                                               
population of more than 600  residents, but haven't been eligible                                                               
for some time.  Those  communities include King Cove, Hoonah, and                                                               
Sand  Point.   There  are  also  communities,  such as  Kake  and                                                               
Kasigluk,  with a  population  of  over 550  that  would soon  be                                                               
ineligible  if the  population doesn't  increase.   Mr.  Griffith                                                               
pointed out that Version M  also includes a change that specifies                                                               
which unincorporated communities would  be included.  That change                                                               
requires that the community has  an established local government,                                                               
either a  city or tribal  government.  Therefore,  some currently                                                               
eligible communities  without a  city or tribal  government would                                                               
become  ineligible.    However, these  communities  could  become                                                               
eligible again  by forming a second  class city.  In  response to                                                               
Representative  Saddler,  Mr.  Griffith guessed  that  there  are                                                               
probably  dozens of  unincorporated  cities or  cities without  a                                                               
tribal  government.    He  noted  that  although  most  of  those                                                               
communities  haven't  requested  village   safe  water  funds,  a                                                               
handful of communities have.                                                                                                    
8:18:17 AM                                                                                                                    
REPRESENTATIVE  FOSTER expressed  interest  in which  communities                                                               
would  be impacted,  particularly  if any  are  in his  district.                                                               
Representative  Foster  then related  a  situation  in which  the                                                               
village  of Sheldon  Point  recently changed  its  name to  Nunam                                                               
Iqua, and asked if that would be a problem.                                                                                     
MR. GRIFFITH replied no.                                                                                                        
8:19:35 AM                                                                                                                    
REPRESENTATIVE GARDNER  related her understanding that  Version M                                                               
makes  changes to  move  from an  unincorporated  community to  a                                                               
village listed in 43. U.S.C. 1610 or 1615.                                                                                      
MR.  GRIFFITH  agreed  with  her  understanding  and  offered  to                                                               
provide a copy of that list.                                                                                                    
8:20:22 AM                                                                                                                    
REPRESENTATIVE GARDNER surmised that  the aforementioned is a bit                                                               
different than the sponsor's intent.                                                                                            
REPRESENTATIVE  DICK,  in  response  to  Representative  Foster's                                                               
earlier question, estimated  that there may be  eight villages in                                                               
Representative  Foster's district  that might  benefit from  this                                                               
proposed change.   He  then directed attention  to a  document in                                                               
the committee  packet that  specifies the  villages that  will be                                                               
eligible [for village safe water funding under Version M].                                                                      
MR. GRIFFITH, referring to the  list, pointed out that the second                                                               
class  cities  would remain  eligible  because  the statute  will                                                               
continue to have no population limit for second class cities.                                                                   
8:21:41 AM                                                                                                                    
KATHIE  WASSERMAN, Executive  Director, Alaska  Municipal League,                                                               
testified in  favor of HB 183  as it addresses an  issue that has                                                               
been  in play  for many  years.   Municipalities and  communities                                                               
with all the  attributes of "smaller ones" have been  left out of                                                               
[the ability to qualify for  village safe water funds] because of                                                               
their  populations   or  differing   status.    With   regard  to                                                               
Representative Foster's  earlier question,  the village  of Nunam                                                               
Iqua  would  be  fine  as  it's  still  a  municipality.    Those                                                               
communities that  have difficulties with elections  likely have a                                                               
tribal  government or  a municipal  government  and would  likely                                                               
[remain  eligible for  village safe  water  funds].   One of  the                                                               
issues with  programs that provide  services or pockets  of funds                                                               
to  unincorporated  communities  with   no  tribal  or  municipal                                                               
government,  is regarding  to whom  the check  is given  and held                                                               
responsible  in  terms  of ensuring  the  project  is  completed.                                                               
Therefore,  the language  defining  ["village"  as the  specified                                                               
organized  communities]  is  appropriate since  it  requires  the                                                               
residents in the  community to assign someone as the  head of the                                                               
community to  at least  receive the funds  and be  responsible to                                                               
the state in terms of the use of the funds.                                                                                     
8:23:32 AM                                                                                                                    
CHAIR MUNOZ  requested that Ms.  Wasserman explain  the different                                                               
types of community organization.                                                                                                
MS. WASSERMAN  explained that  a home  rule city  is guided  by a                                                               
charter,  although it  has ordinances.   First  class cities  are                                                               
responsible  for  their education,  have  a  planning and  zoning                                                               
commission, and  can levy  a property tax.   Second  class cities                                                               
are usually much  smaller and aren't required to  provide as much                                                               
paperwork or  responsibility in order  to operate the  city, save                                                               
one exception.   She agreed  with Ms.  Peterson that it  would be                                                               
difficult to change  the status through regulations.   In further                                                               
response to Chair  Munoz, Ms. Wasserman said a  second class city                                                               
has sales  tax authority. Although  a second class city  may have                                                               
property tax authority,  she didn't believe any levy it.   A home                                                               
rule city may levy a property tax.                                                                                              
8:25:30 AM                                                                                                                    
REPRESENTATIVE FOSTER,  referring to the document  specifying new                                                               
communities  eligible under  Version M,  inquired as  to why  St.                                                               
Mary's, a first  class city with a population of  507, would be a                                                               
newly eligible community rather than  a community that is already                                                               
qualified.   He  further  inquired  as to  why  St Mary's  wasn't                                                               
already eligible.                                                                                                               
MS.  WASSERMAN  responded  that she  would've  also  assumed  St.                                                               
Mary's would've  been eligible  all along  and wouldn't  know why                                                               
they aren't.                                                                                                                    
8:26:38 AM                                                                                                                    
JASON  MAYRAND, Mayor,  City of  Nenana,  informed the  committee                                                               
that the City of Nenana is  a home rule municipality and has done                                                               
its utmost  to be self-sufficient,  reliable, and  independent of                                                               
the state.  He highlighted  the common understanding of the state                                                               
that communities  should keep  their government  as close  to the                                                               
people as  possible, which Nenana  has done by  incorporating and                                                               
having  its  own  charter.    Of  all  home  rule  municipalities                                                               
organized as  home rule,  Nenana is  the smallest  by far.   This                                                               
legislation   would   allow   replacement    of   35   year   old                                                               
infrastructure,  the water  and sewer  system.   He informed  the                                                               
committee  that the  City of  Nenana filed  its application,  the                                                               
grant  documents  were  accepted, and  the  grants  appropriated.                                                               
Shortly  thereafter,  Nenana's  ineligibility   was  found.    He                                                               
acknowledged that there  is the possibility of  going through the                                                               
Department  of  Environmental  Conservation (DEC)  project,  Safe                                                               
Water  and Clean  Water funds  for  which the  state provides  85                                                               
percent of the grant with a  15 percent match.  The city utilized                                                               
the aforementioned  back in  2000 for  a short  expansion project                                                               
which  resulted   in  a  debt   of  $520,000,  the   15  percent.                                                               
Therefore, the City of Nenana is  paying about $3,400 a month for                                                               
the next  20 years  to repay  that loan.   Although  that doesn't                                                               
seem like a lot, the  municipality operates on about $600,000 per                                                               
year.  With  the increases in energy costs and  health care costs                                                               
and payroll  for city  employees very  little is  left to  do any                                                               
capital  projects.   Mayor  Mayrand  stressed  that the  City  of                                                               
Nenana's water  plant could fail  any day.   Although maintenance                                                               
for the  water plant is  high, the city  has good operators.   In                                                               
fact,  the prime  operator for  the City  of Nenana's  sanitation                                                               
system was recently  awarded operator of the year  for the state.                                                               
He  opined that  the  aforementioned illustrates  that Nenana  is                                                               
responsible and takes care of  its systems.  In conclusion, Mayor                                                               
Mayrand requested that  HB 183 be passed this session  as time is                                                               
of the essence.                                                                                                                 
8:30:32 AM                                                                                                                    
REPRESENTATIVE SADDLER  inquired as  to the  project the  City of                                                               
Nenana borrowed money from the state.                                                                                           
MAYOR  MAYRAND specified  that it  was an  extension project  for                                                               
lines  that   provide  sufficient   capacity  for   the  required                                                               
sprinkler system in the Nenana Student Living Center.                                                                           
8:31:40 AM                                                                                                                    
REPRESENTATIVE  GARDNER  asked  if  the  changes  encompassed  in                                                               
Section  1   of  Version  M   would  impact  other   programs  or                                                               
8:32:22 AM                                                                                                                    
SCOTT RUBY,  Director, Division of Community  & Regional Affairs,                                                               
Department  of   Commerce,  Community  &   Economic  Development,                                                               
answered  that he  didn't  believe  the changes  in  HB 183  will                                                               
impact other programs  because the definition is  specific to the                                                               
eligibility of the Village Safe Water Program.                                                                                  
8:33:06 AM                                                                                                                    
CHAIR  MUNOZ, upon  determining no  one else  wished to  testify,                                                               
closed public testimony.                                                                                                        
8:33:24 AM                                                                                                                    
REPRESENTATIVE  AUSTERMAN  moved  that   the  committee  adopt  a                                                               
conceptual amendment  to include an immediate  effective date for                                                               
HB 183.  There being no objection, it was adopted.                                                                              
8:33:46 AM                                                                                                                    
REPRESENTATIVE  GARDNER  inquired  as  to  the  statute  for  the                                                               
Village Safe Water grants.                                                                                                      
REPRESENTATIVE SADDLER answered AS 46.07.010.                                                                                   
8:34:40 AM                                                                                                                    
The committee took an at-ease from 8:34 a.m. to 8:36 a.m.                                                                       
8:36:34 AM                                                                                                                    
REPRESENTATIVE  SADDLER asked  if the  adoption of  the immediate                                                               
effective date to  HB 183 will allow Nenana to  process its grant                                                               
application and begin the project this construction season.                                                                     
REPRESENTATIVE DICK replied yes.                                                                                                
8:37:06 AM                                                                                                                    
REPRESENTATIVE  AUSTERMAN moved  to  report the  proposed CS  for                                                               
HB 183, Version  27-LS0601\M, Bullard,  3/30/11, as  amended, out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying   fiscal  notes.      There   being  no   objection,                                                               
CSHB 183(CRA) was reported from  the House Community and Regional                                                               
Affairs Standing Committee.                                                                                                     
The committee took a brief at-ease.                                                                                             
^Overview:     Update   on  the   Energy   Efficiency  Policy   &                                                               
Recommendations by the Cold Climate Housing Research Center                                                                     
      Overview:  Update on the Energy Efficiency Policy &                                                                   
  Recommendations by the Cold Climate Housing Research Center                                                               
8:39:33 AM                                                                                                                    
CHAIR MUNOZ announced  that the final order of  business would be                                                               
an update on the energy  efficiency policy and recommendations by                                                               
the Cold Climate Housing Research Center (CCHRC).                                                                               
8:39:46 AM                                                                                                                    
DR. JOHN DAVIES, Senior Researcher  - Energy Policy, Cold Climate                                                               
Housing Research  Center (CCHRC), began by  relating that energy,                                                               
its cost  and availability are  crucial issues across  the state,                                                               
but  particularly   in  rural  Alaska.     Many  communities  are                                                               
struggling with  the idea  of whether  they are  even sustainable                                                               
under the  current circumstances.   One of  the solutions  is the                                                               
concerted effort to  improve the efficiency with  which energy is                                                               
developed.    He  encouraged the  committee  to  consider  energy                                                               
efficiency  as a  resource.   Significant  investments in  energy                                                               
efficiency  can  achieve the  effective  provision  of energy  at                                                               
rates that are comparable to  the provision of large power plants                                                               
or oil  and gas fields.   Dr. Davies reminded the  committee that                                                               
CCHRC  produced  a report  in  2008  that identified  the  energy                                                               
policy options  for the state.   Although a large amount  [of the                                                               
recommendations in  the report]  have been adopted,  much remains                                                               
to be done.   A working group  of energy experts met  on March 2,                                                               
2011, to  review and access the  report.  The [CCHRC]  is engaged                                                               
in  a long-term  effort  to expand  the scope  of  the report  to                                                               
include  transportation and  industrial  uses.   The  plan is  to                                                               
complete the report by December 2011.                                                                                           
8:43:06 AM                                                                                                                    
DR. DAVIES  began his slide presentation  entitled "Alaska Energy                                                               
Efficiency Policy Update  of 2008 Report by CCHRC."   He informed                                                               
the  committee that  the 2008  report was  managed by  CCHRC, but                                                               
funded  by  the Alaska  Energy  Authority  (AEA) and  the  Alaska                                                               
Housing   Finance  Corporation   (AHFC)   and   was  staffed   by                                                               
Information Insights.   Referring  to the slide  entitled "Energy                                                               
Efficiency Edge,"  Dr. Davies related  that energy  efficiency is                                                               
colloquially  referred to  as "the  low hanging  fruit."   Energy                                                               
efficiency  is something  that can  be  done now  and it  doesn't                                                               
require further study.   Energy efficiency is  receiving the same                                                               
output  for  less  input  and  it  largely  relies  on  advancing                                                               
technologies.  Furthermore,  energy efficiency reduces dependency                                                               
on  fossil  fuels and  often  costs  less than  any  alternative.                                                               
Moreover, a reduction in energy  use reduces pollution and carbon                                                               
dioxide   emissions.      The   2008   report   had   23   policy                                                               
recommendations in  9 categories,  which are  listed on  slide 5.                                                               
The main drivers of the  improvements were Senate Bill 297/330 in                                                               
2008.   Those pieces of  legislation expanded  the weatherization                                                               
program  and created  the energy  efficiency rebate  program.   A                                                               
significant amount  of funds were  appropriated for  that effort.                                                               
In  2010 House  Bill 306  established a  state energy  policy and                                                               
pointed  out that  supply and  demand  for fossil  fuels and  the                                                               
concern  over climate  change  will impact  the  price of  fossil                                                               
fuels, which  is occurring now  as the  price of fuel  has topped                                                               
$100 per  barrel.  The  state's energy policy had  several pieces                                                               
to it,  including pieces focusing on  energy efficiency, economic                                                               
development,  research,  education,  workforce  development,  and                                                               
coordination of government  functions.  The other  major piece of                                                               
legislation in  2010 was Senate  Bill 220, which  established the                                                               
following  programs   and  funds:     Alaska   Energy  Efficiency                                                               
Revolving Loan  Fund, The Southeast Energy  Fund, Emerging Energy                                                               
Technology Fund,  Alternative Energy Conservation  Revolving Loan                                                               
Fund,  and Alaska  Affordable Heating  Program.   The legislation                                                               
also  addressed  public facilities  and  building  an energy  use                                                               
database, public  vehicles, and nuclear power.   Moreover, Senate                                                               
Bill 220  discussed the need  for outreach with  public education                                                               
and  provided  tools  for municipalities  and  agencies  to  help                                                               
deliver the services.                                                                                                           
DR.  DAVIES informed  the committee  that the  present effort  is                                                               
funded by  AEA with a grant  from the U.S. Department  of Energy.                                                               
He reiterated that  he wanted to review what has  been done since                                                               
2008  and  then  expand  that  in the  final  scopes  to  include                                                               
transportation and  industrial uses of  energy.  The  2008 report                                                               
was  largely  focused  on  the  Railbelt  because  there  was  an                                                               
assumption that  there had been  a study addressing  rural Alaska                                                               
just prior  [to the  2008 report].   However,  there was  much in                                                               
that  report addressing  rural Alaska.    Therefore, the  current                                                               
desire is  to expand it  to be  statewide and determine  the real                                                               
issues and how to  improve those in every area of  the state.  He                                                               
then  moved on  to slides  16-18 entitled  "Score Sheet  for 2008                                                               
Report,"  which assesses  each recommendation.   He  reviewed the                                                               
various  recommendations  and  percent  complete of  each.    The                                                               
recommendations   include   state  leadership,   funding   energy                                                               
efficiency,  public   education  and  outreach,   baseline  data,                                                               
existing  residential   buildings,  new   residential  buildings,                                                               
existing  commercial  buildings,  new commercial  buildings,  and                                                               
public buildings.  With regard to  the need for baseline data, he                                                               
remarked that it's surprising how  little is known about how much                                                               
energy is used  in the various types of  buildings throughout the                                                               
state.   Currently, there  is a large  effort coordinated  by AEA                                                               
and AHFC to  obtain the baseline data.  Still,  there's a need to                                                               
provide funding  to keep  the effort going.   Dr.  Davies pointed                                                               
out  that even  with the  fairly significant  funds put  forth to                                                               
address the  recommendations for existing  residential buildings,                                                               
only  3  percent  of  the  households  in  the  state  have  been                                                               
addressed.     As  the  unencumbered  funds   are  expended,  the                                                               
expectation  is to  reach 10  percent  of the  households in  the                                                               
state.   Therefore, 90 percent of  the homes in Alaska  are left.                                                               
With regard to new residential  buildings, Dr. Davies opined that                                                               
residential buildings continue  to be built to  a standard that's                                                               
too low.   The  working group  felt that the  top priority  is to                                                               
establish  a statewide  energy code.   The  same issues  apply to                                                               
commercial buildings.   Under Senate Bill 210 in  2010, there was                                                               
a significant  effort to make  the revolving loan  fund available                                                               
for many  public buildings.  The  goal was to address  25 percent                                                               
of  the public  buildings larger  than  10,000 square  feet.   He                                                               
opined that the  public buildings program is on  the right track.                                                               
Dr. Davies said that although about  60 percent of the things set                                                               
out in 2008 have been accomplished, much remains to be done.                                                                    
8:54:43 AM                                                                                                                    
DR. DAVIES,  in response to Representative  Saddler, reviewed the                                                               
key for the  codes used in the spreadsheets on  slides 16-18.  He                                                               
related  that  "FFF"  means  that  a  funding  program  has  been                                                               
established and "f"  means funding is available  with no specific                                                               
8:57:43 AM                                                                                                                    
DR.  DAVIES,  referring  to  slide  19,  reviewed  the  top  five                                                               
recommendations from the 2011 working group, as follows:                                                                        
     1. Statewide Energy Efficiency Code                                                                                        
     2. Sustainably fund Weatherization and Rebate Programs                                                                     
     3. Education - outreach, training, K-U courses                                                                             
     4. Utilities-based End-Use Electrical Efficiency                                                                           
        Programs, consider decoupling mechanisms                                                                                
     5. Legislate efficiency as a priority                                                                                      
DR. DAVIES  noted that although  the 2008 funding  was remarkable                                                               
and substantial,  it would  only reach 10  percent of  the houses                                                               
statewide.   Therefore,  he expressed  the  need for  sustainable                                                               
funding to be available.                                                                                                        
8:59:34 AM                                                                                                                    
CHAIR  MUNOZ inquired  as to  how a  statewide energy  code would                                                               
work in communities without planning and zoning or local codes.                                                                 
DR.  DAVIES  answered  that  a  statewide  energy  code  is  most                                                               
effective through  the financing of  the buildings.  In  fact, de                                                               
facto in  many places  the banks control  the standards.   Still,                                                               
it's variable across  the state.  Therefore,  CCHRC advocates the                                                               
state  adopting a  standard that  anyone who  seeks a  loan would                                                               
have to use.   However, at this point he  didn't believe there is                                                               
a need to create a large  inspection system, but rather allow the                                                               
existing mechanisms used by banks and other financing agencies.                                                                 
9:01:10 AM                                                                                                                    
DR. DAVIES, with  regard to recommendation 4, said  that not much                                                               
has been  done to address electrical  use.  Although there  are a                                                               
variety of  programs to address  electrical efficiency,  they are                                                               
usually delivered through utilities.   For example, Golden Valley                                                               
Electric Association has a program  in which an auditor comes out                                                               
to the consumer's house and  makes specific suggestions as to how                                                               
to  save  energy.     Dr.  Davies  opined   that  the  Regulatory                                                               
Commission of  Alaska (RCA) should  be empowered to  review these                                                               
programs.   Currently, the RCA  is beginning with  an information                                                               
docket,   which  is   a  formal   process  to   start  assembling                                                               
information that relates  to this topic.  The RCA  is careful not                                                               
to extend its authority beyond  what the legislature has granted,                                                               
and therefore it'll  be important for the  legislature to provide                                                               
the  RCA  guidance.    Dr.   Davies  then  turned  to  the  fifth                                                               
recommendation, which  is to legislate efficiency  as a priority.                                                               
For example, if a large amount  of funds are being provided for a                                                               
power plant of some sort, the  state, as a condition of receiving                                                               
the grant, should  require the agency and  the community involved                                                               
to consider  what can  be done  to reduce  the need.   Therefore,                                                               
achieving a reduction in demand  through efficiencies at the same                                                               
time  additional energy  is being  provided.   The aforementioned                                                               
would incentivize  the efficiency  effort and  may mean  that the                                                               
size  of  the  project  may  not  need to  be  as  large.    Many                                                               
communities  find  that  achieving  efficiencies  can  result  in                                                               
reduced  demand,  and  thus  lengthen the  life  span  of  energy                                                               
facilities.   He then encouraged  the committee to  review slides                                                               
22-26 and  the recommendations it  believe will save  an enormous                                                               
amount of energy.                                                                                                               
9:05:12 AM                                                                                                                    
DR.  DAVIES, directing  attention  to slide  27 entitled  "Energy                                                               
Efficiency  as a  Resource," explained  that the  graph uses  the                                                               
Home Energy  Rebate Program  as an  example.   Approximately $300                                                               
million  has  been  provided to  the  weatherization  and  rebate                                                               
programs.    To  date,  about 10,000  homes  have  completed  the                                                               
program and  achieved an  average energy  savings of  30 percent.                                                               
The  graph supposes  that the  [energy savings]  achieved by  the                                                               
aforementioned   10,000  homes   is  extended   to  all   280,000                                                               
households in the state.  Since  that couldn't be achieved all at                                                               
once, one  must determine how  fast it  could be achieved.   With                                                               
the  existing programs,  about  $125 million  per  year is  being                                                               
expended.  If  expenditures continue at that  rate on residential                                                               
programs, in about  five years there would be a  savings of about                                                               
7  trillion British  thermal units  (Btus) annually.   Therefore,                                                               
every  year there  would be  7 trillion  Btus that  were provided                                                               
that  don't need  to be  provided. He  likened it  to building  a                                                               
power plant  to provide  that energy, but  it operates  for free.                                                               
After 10 years,  the residential energy savings  amounts to about                                                               
15 trillion  Btus.  He  opined that if  the state put  aside $4.5                                                               
billion and spent the earnings  on residential energy efficiency,                                                               
after about  7 years  the energy savings  would be  equivalent to                                                               
Anchorage's  peak electrical  load, about  380 megawatts  a year.                                                               
Therefore, it would be equivalent  to building a power plant that                                                               
provides all of  Anchorage's electrical needs forever.   After 12                                                               
years [of  residential energy efficiency],  the savings  would be                                                               
equivalent  to  the entire  natural  gas  consumption in  Alaska,                                                               
about 18 trillion  Btus.  Dr. Davies  emphasized that considering                                                               
energy  efficiency as  a  resource is  potentially  a very  large                                                               
9:09:43 AM                                                                                                                    
DR.  DAVIES  concluded by  paraphrasing  from  slide 28  entitled                                                               
     It  is imperative  that we  use our  present wealth  to                                                                    
     develop an economy that is  much less reliant on fossil                                                                    
     fuels to assure a healthy and sustainable future.                                                                          
     One  of the  most cost-effective  resources we  have is                                                                    
     energy efficiency and conservation.                                                                                        
     The  sustained energy  and cost  savings to  businesses                                                                    
     and homeowners from EE  [energy efficiency] will result                                                                    
     in reinvestment in Alaska's  economy and stimulation of                                                                    
     substantial economic growth.                                                                                               
     Bottom Line - Sustained investment  in EE will foster a                                                                  
     more sustainable and vibrant economy.                                                                                      
DR.  DAVIES  pointed out  that  [sustained  investment in  energy                                                               
efficiency]  will mean  that some  of  Alaska's communities  will                                                               
survive.  Therefore,  energy efficiency is crucial.   He reminded                                                               
the committee that  it will be provided with  CCHRC's full report                                                               
once  it has  been  finalized.   He then  expressed  hope that  a                                                               
variety of the  recommendations in the report  will be considered                                                               
and brought forth in legislation in the next few years.                                                                         
9:11:29 AM                                                                                                                    
REPRESENTATIVE   CISSNA  related   her  understanding   that  the                                                               
information today was from homes in the Railbelt.                                                                               
DR. DAVIES  clarified that  the data is  drawn from  10,000 homes                                                               
throughout the  state.  The  data has  been analyzed in  terms of                                                               
each  of  the 40  House  districts  in  order to  understand  how                                                               
[programs] are applied across the state.                                                                                        
REPRESENTATIVE CISSNA  emphasized that the state  invests heavily                                                               
in communities  that can't  sustain the  projects that  the state                                                               
imposes on them.   Therefore, large amounts of  funds are wasted.                                                               
She then asked if there has  been any discussion of performing an                                                               
analysis  of  what  projects  have been  done  per  community  or                                                               
DR. DAVIES  characterized that  as a huge  issue.   He emphasized                                                               
that if  the state is going  to provide a facility  in a village,                                                               
it's important to design it to be  the right size for the need in                                                               
that  particular  village  and  to  be  as  energy  efficient  as                                                               
possible  in  order  to  minimize   the  operating  costs.    The                                                               
aforementioned can  mean the difference  as to whether  a village                                                               
can maintain  a facility.   The village,  he opined, needs  to be                                                               
involved  such  that  a  facility is  utilized  to  maximize  its                                                               
potential  and energy  efficiency.   One realm  of the  policy of                                                               
recommendations is  community and regional planning.   Currently,                                                               
AEA  has an  effort addressing  community and  regional planning,                                                               
but it's mostly  on the provision of power side.   He opined that                                                               
AEA's effort  should be expanded,  as should the scope  such that                                                               
it  includes energy  efficiency.   The  CCHRC  has a  sustainable                                                               
northern  communities program  that, upon  the invitation  of the                                                               
community, enters  a community  to help  identify how  to improve                                                               
the efficiency of housing design.   All of the aforementioned and                                                               
more needs to done to ensure  that communities are developed in a                                                               
sustainable fashion.   Dr. Davies  said that although  an average                                                               
reduction of  30 percent is  great, he knew of  specific examples                                                               
in  which  a  90  percent  reduction of  energy  usage  has  been                                                               
achieved.  For example, a  Fairbanks apartment complex pooled its                                                               
rebate money, about $60,000, to  reduce the energy consumption of                                                               
the building  by 90 percent.   "We need to raise  the bar, here,"                                                               
he  said.    If more  is  asked  of  the  people who  design  and                                                               
construct buildings in  the state, the amount of  energy used and                                                               
the operating costs can be  reduced substantially.  However, this                                                               
does require a different mindset, one that's all encompassing.                                                                  
9:18:22 AM                                                                                                                    
REPRESENTATIVE  DICK   directed  attention  to  slide   4,  which                                                               
mentions pollution and carbon dioxide  reduction.  He related his                                                               
understanding from  a constituent that  .2 percent of  the carbon                                                               
dioxide production on  the earth is anthropogenic  while the rest                                                               
is  from volcanoes,  oceans,  and decaying  plants.   He  further                                                               
related  that those  in District  6 don't  regard carbon  dioxide                                                               
production as a major threat to the environment.                                                                                
DR.  DAVIES said  that although  he  didn't want  to debate  that                                                               
issue,  the production  of carbon  dioxide from  fossil fuels  is                                                               
debated  globally.   Furthermore,  the availability  and cost  of                                                               
fuel  is  impacted  by  the  debate.    Whether  [carbon  dioxide                                                               
production] is an issue for a  particular area or not is an issue                                                               
he would  prefer to  set aside  in this  discussion.   Dr. Davies                                                               
pointed out that  if the state seeks energy  efficiency, it saves                                                               
funds and  has the advantage of  not being subject to  the global                                                               
9:20:01 AM                                                                                                                    
REPRESENTATIVE  DICK expressed  interest  in  the small  villages                                                               
surviving.  However, the greatest  inefficiencies in the villages                                                               
are   those  things   that  were   imposed  by   the  government.                                                               
Therefore, the  first place  to start is  in the  legislature and                                                               
state departments.                                                                                                              
DR. DAVIES agreed and opined that  it's important, as a matter of                                                               
policy, to  review anything provided  by the  state. Furthermore,                                                               
such integrated/coordinated discussions allow  what people in the                                                               
villages want  and will accept  to be  known.  For  example, when                                                               
CCHRC was  asked to work  in Anatuvak  Pass, they went  there and                                                               
spent  three  days  talking  with  its  residents.    That  local                                                               
knowledge was combined with the  technical information to develop                                                               
a proposal to discuss with the community.                                                                                       
REPRESENTATIVE  DICK  interjected   that  often  villagers  don't                                                               
consider  the  long-term  consequences   of  projects  the  state                                                               
DR. DAVIES agreed, but emphasized that the aforementioned type                                                                  
of [integrated/coordinated] process gets information out so that                                                                
people can consider it.                                                                                                         
9:22:58 AM                                                                                                                    
CHAIR MUNOZ thanked Dr. Davies, and related that the committee                                                                  
will continue to work with him on these priorities.  She then                                                                   
discussed a possible interim schedule for the committee.                                                                        
9:24:52 AM                                                                                                                    
There being no further business before the committee, the House                                                                 
Community and Regional Affairs Standing Committee meeting was                                                                   
adjourned at 9:24 a.m.                                                                                                          

Document Name Date/Time Subjects
HB 183 Sponsor Statement.pdf HCRA 4/5/2011 8:00:00 AM
HB 183
CSHB 183 ( ).pdf HCRA 4/5/2011 8:00:00 AM
HB 183
CSHB 183 ( ) Changes.pdf HCRA 4/5/2011 8:00:00 AM
HB 183
Nenana Letter.pdf HCRA 4/5/2011 8:00:00 AM
HB 183
Population 500-1000.pdf HCRA 4/5/2011 8:00:00 AM
SFIN 4/17/2011 10:00:00 AM
HB 183
ANCSA Reference.pdf HCRA 4/5/2011 8:00:00 AM
HB 183