Legislature(2011 - 2012)BARNES 124
02/01/2011 03:00 PM House ENERGY
| Audio | Topic |
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| Start | |
| Presentation(s) by the Alaska Energy Authority On: | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 1, 2011
3:04 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Lance Pruitt, Co-Chair
Representative Bob Lynn
Representative Dan Saddler
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
Representative Kurt Olson
COMMITTEE CALENDAR
PRESENTATION(S): ALASKA ENERGY AUTHORITY on the Emerging
Technology Fund, and Renewable Energy Fund
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
BARBARA TRIPLETT, Program Manager
Emerging Energy Technology Fund (EETF)
Alaska Industrial Development & Export Authority (AIDEA) and
Alaska Energy Authority (AEA)
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation titled,
"Emerging Energy Technologies Progress Report" dated 2/1/11.
PETER CRIMP, Deputy Director
Alternative Energy and Energy Efficiency
Alaska Industrial Development & Export Authority (AIDEA) and
Alaska Energy Authority (AEA)
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions and provided a
PowerPoint presentation titled, "Alaska Renewable Energy Fund
Program Status," dated 2/1/11.
ACTION NARRATIVE
3:04:09 PM
CO-CHAIR LANCE PRUITT called the House Special Committee on
Energy meeting to order at 3:04 p.m. Representatives Pruitt,
Lynn, Saddler, Petersen, Tuck, and Foster were present at the
call to order.
^PRESENTATION(S) BY THE ALASKA ENERGY AUTHORITY ON:
PRESENTATION(S) BY THE ALASKA ENERGY AUTHORITY ON:
- THE EMERGING TECHNOLOGY FUND
- THE RENEWABLE ENERGY FUND
3:05:09 PM
CO-CHAIR PRUITT announced that the order of business would be
presentations by the Alaska Energy Authority (AEA) on the
Emerging Technology Fund and the Renewable Energy Fund. He then
asked members to review the governor's "Energy Report to the
Legislature," issued 1/31/11. Committee members congratulated
Sara Fisher-Goad on her appointment as director of AEA.
3:06:17 PM
BARBARA TRIPLETT, Program Manager, Emerging Energy Technology
Fund (EETF), Alaska Industrial Development & Export Authority
(AIDEA) and Alaska Energy Authority (AEA), Department of
Commerce, Community & Economic Development (DCCED), informed the
committee the objective of AEA's EETF was to expand energy
sources available to Alaskans through grants made to eligible
applicants for demonstration projects that have a reasonable
expectation to become commercially viable within a five-year
period. The goals of EETF are: a clear and rigorous
application and review process; constructive technical and
economic oversight of the projects; development of entities to
continue deployment of proven technologies. She explained
meeting these goals will ensure there is a robust portfolio of
projects for the fund. A three-pronged approach is used to
evaluate projects, beginning with a strategic technology
evaluation program (STEP) that includes evaluations on
technology, marketability, and legal matters. Additionally, AEA
will require explicit abstract and formal applications to ensure
a rigorous and intense look at the proposals. On 1/7/11, AEA
released a request for application (RFA) with a deadline of
3/2/11, beginning the first round of evaluations on the initial
applications. At that point, there will be a first round, first
stage evaluation and from that surviving applications will be
asked for a "full blown project proposal." After the formal
proposals are ranked and recommendations are made to the AEA
executive director and the Denali Commission federal co-chair,
final selections advance to grant set-up, kick-off meetings, and
project execution. Ms. Triplett continued to explain that once
the projects are in, AEA will arrange for a reporting and review
process by third party oversight entities such as the University
of Alaska Fairbanks (UAF), Alaska Center for Energy and Power
(ACEP), and the U.S. Department of Energy's National Renewable
Energy Laboratory and National Energy Technology Laboratory.
The oversight entities will help validate some of the
performances of the projects and make economic evaluations of
the technologies.
3:11:29 PM
MS. TRIPLETTE said at the completion of the projects, AEA will
disseminate information on the emerging technologies that have
proven their value in order to "provide a way for that to get
out to the marketplace." She furnished a tentative timeline:
RFA, 1/7/11; request for abstract, 3/2/11; complete evaluation
of abstracts, 3/23/11; request formal application, 3/23/11;
formal application deadline, 4/27/11; applicant presentations to
advisory committee, 5/10/11; recommendations, 5/17/11; final
selection, 5/24/11.
3:13:49 PM
REPRESENTATIVE TUCK asked how the public was made aware of the
RFA submission period.
MS. TRIPLETT indicated AEA has a list-serve on its website for
parties interested in emerging technologies, and issued press
releases.
3:14:40 PM
REPRESENTATIVE FOSTER asked how many proposals have been
received.
MS. TRIPLETT advised no proposals have come in; however, there
have been many inquiries. She anticipated receiving proposals
beginning 3/1/11.
3:15:22 PM
CO-CHAIR PRUITT asked what types of programs AEA expects to
approve.
MS. TRIPLETT said:
Right now, we have ... cast a wide net ... [including]
everything from energy production, storage
transmission control, energy efficiency, energy
conservation, so right now we're ... looking for any
type of emerging energy technology.
3:16:16 PM
REPRESENTATIVE FOSTER was interested in the inquiries AEA has
received.
MS. TRIPLETT has been told the inquiries are a wide array of
topics from fuel cell to geothermal projects.
3:17:02 PM
REPRESENTATIVE PETERSEN asked whether there are repeat
applications.
MS. TRIPLETT said she did not know. In response to
Representative Tuck, she repeated the third party oversight
entities.
3:18:16 PM
REPRESENTATIVE TUCK then asked whether the oversight costs would
be paid from the grant.
MS. TRIPLETT responded that third party oversight would be
funded through the administration of the grant. In further
response, she said inspections of installations would occur.
3:19:30 PM
CO-CHAIR PRUITT asked for a history of the program.
3:19:36 PM
PETER CRIMP, Deputy Director of Alternative Energy and Energy
Efficiency, Alaska Energy Authority (AEA), Department of
Commerce, Community & Economic Development (DCCED), clarified
that this is the first round of EETF projects. He related the
Denali Commission has funded a wide array of projects such as
hydrokinetic devices, the pellet boiler at Sealaska Corporation
in Juneau, psychrophiles, and the integration of wind energy
into diesel systems, as well as fossil fuel projects.
3:21:22 PM
REPRESENTATIVE FOSTER asked how EETF is capitalized.
MS. TRIPLETT reported that $2.4 [million] would come from the
state and $2.4 [million] from the Denali Commission.
MR. CRIMP, in response to Representative Petersen, said it was
unknown whether additional funding would be needed. In further
response, he agreed to furnish the committee with additional
information later in the session.
3:22:37 PM
REPRESENTATIVE SADDLER asked for the membership of the advisory
committee.
MS. TRIPLETT listed the members: Brent Petrie, Alaska Village
Electric Cooperative (AVEC); Brent Sheet, National Energy
Technology Laboratory; Joel Neimeyer, Denali Commission; Brian
Hirsch, National Renewable Energy Laboratory; Eric Erickson,
Alaska Electric Light and Power Company (AEL&P); Karl Reiche,
AIDEA; Stephen Trimble, MWH Americas, Inc. She added that all
of the members work within Alaska.
3:24:35 PM
REPRESENTATIVE TUCK returned to the subject of third party
oversight and asked how the agencies will be assigned to
projects.
MS. TRIPLETT opined each agency's expertise will make that
determination, although the process is not established yet. In
further response, she confirmed that contracts for oversight
responsibilities will be funded through the administration of
the grants, and the costs will not be paid from grantees' funds;
in fact, these funds are already budgeted and available right
away.
3:26:44 PM
MR. CRIMP began his presentation on the status of the Alaska
Renewable Energy Fund Program. He announced that "our fourth-
round [Round 4] package" was delivered to legislators in the
form of a compact disc (CD) containing the ranking of
recommended projects, status reports, and evaluation guidelines.
His purpose at today's meeting was to provide a status report
for the first three rounds of the fund. He reminded the
committee HB 152 passed the legislature in 2008 and established
the renewable energy fund and selection criteria, the most
important of which was that the highest weight is given to
"high-cost energy areas." Mr. Crimp advised that AEA has
proceeded with regulations and guidelines, the RFA process, and
the review of the applications. The agency formed an advisory
committee to help develop methods, but recommendations are done
primarily by AEA staff, the University of Alaska Anchorage (UAA)
Institute of Social and Economic Research (ISER), and the
Department of Natural Resources (DNR). Currently, AEA has 125
projects valued at $150 million, and has submitted a FY 11
funding recommendation for up to $37 million. The project
review process proceeds through the following four stages: 1.
AEA determines what projects are eligible, including an economic
assessment; 2. AEA expert staff perform technical review with
economic analysis by ISER and other experts; 3. AEA ranks
proposals and determines the percentage of funding; 4. advisory
committee helps AEA achieve a balanced statewide distribution of
projects.
3:32:54 PM
MR. CRIMP continued to explain that after the project is
underway, AEA technical and grant staff begin to reimburse costs
already expended by the grantees. He acknowledged that advances
are sometimes allowed in the case of a "cash-poor" grantee. For
construction projects, funds are not released until the
completion of final design, permitting, and financing. At this
time, about one-half of the grant funds have gone to wind
projects, one-quarter to hydroelectric (hydro) projects, one-
eighth to biomass projects, and the rest to small components
such as heat recovery, geothermal, and solar. Mr. Crimp
provided a bar graph that indicated 23 projects were completed
at the end of 2010 that fell into the categories of feasibility,
design, and construction; furthermore, by the end of 2011, 79
projects are expected to be completed. By 2012, he estimated
that 100 projects will have been completed, depending on the
amount of appropriations received in FY 11. Not included in the
graph were 24 projects that are not yet scheduled.
3:36:33 PM
MR. CRIMP, in response to Representative Saddler, clarified that
the number of projects completed for a certain year includes
those that completed only the feasibility stage and were
abandoned at that stage.
3:37:10 PM
MR. CRIMP then provided a graph that indicated cumulative diesel
fuel savings per year for completed projects, and those that are
expected to be completed. For example, 2009 and 2010 figures
were actual savings; however, 2011-2015 figures are projected
savings. He called attention to an error on the graph and said,
"Million dollars per year should be million gallons per year."
Mr. Crimp noted that much of the diesel fuel displaced in 2010
was by the Pillar Mountain Wind Project in Kodiak. Projected
diesel fuel displacement for 2011 is expected to be a little
over 1.5 million gallons per year with the savings growing to
about 3 million gallons in 2012. A significant increase in
savings by biomass and hydro is expected during 2013, after
completion of the Anchorage Regional Landfill Gas-to-Energy
Project and the Humpback Creek Hydroelectric Project in Cordova.
He reminded the committee that 24 projects not included in this
presentation are described in the Round 4 CD, and offered to
display slides of projects that are currently under
construction.
REPRESENTATIVE PETERSEN asked for a description of available
funds.
MR. CRIMP answered that the intent of the legislature is to fund
$50 million per year, and the governor's FY 12 budget allows $25
million. His agency has identified $37 million in projects that
are reasonable to fund. In further response to Representative
Petersen, he explained that about $4 million obligated during
previous funding rounds have been reallocated.
3:43:01 PM
CO-CHAIR PRUITT requested clarification on the conditions
attached to [grants].
MR. CRIMP explained that AEA grants contain very detailed
conditions; for example, on construction projects milestones
such as final design, power purchasing agreements, and project
financing, need to be achieved before any construction funds are
released. Generally the grant money is "meter[ed] out,
according to progress on the schedule."
3:45:20 PM
REPRESENTATIVE FOSTER asked for the reasons a project may be
rejected.
MR. CRIMP acknowledged there is a wide array of reasons for
turning projects down and AEA strives to be clear as to why.
One reason could be poor economics; for example, AEA life-cycle
economic analysis has shown that photovoltaic - solar to
electric power - does not make economic sense in many cases.
Also, if project applications are poorly written or poorly
defined, AEA engineering staff may find that the project is
technologically not viable. Mr. Crimp assured the committee
AEA works to assess projects "in as much detail and as fairly as
we could."
3:47:41 PM
REPRESENTATIVE FOSTER asked whether the current funding level of
$50 million is "satisfactory for now."
MR. CRIMP opined there are many more good projects that could be
funded, particularly in rural communities. He suggested that
his agency, UA, and other sources could provide project
development work and help rural areas "bring along projects."
He then displayed slides of projects completed or under
construction. The Falls Creek Hydro project in Gustavus saved
126,646 gallons of fuel in 2010 and is expected to have a 20-
year payback, bringing down the cost of energy for the residents
there. The total cost was $10,153,000 and the grant amount was
$750,000. He described the Pillar Mountain Wind project in
Kodiak as "a poster child of renewable energy fund projects,"
saving 1.6 cents per kilowatt hour (kWh). He reported that the
Denali Solar Thermal project has not met expectations; however,
if distribution problems are solved the amount of diesel fuel
displaced will increase. The Unalakleet Wind project began
operating in 2010 and due to integration issues is not working
to capacity, although problems will be solved. He advised that
data collected on all of the projects will be shared with the
legislature.
3:52:30 PM
REPRESENTATIVE FOSTER compared the power produced between wind
projects.
MR. CRIMP pointed out that the wind turbines in Unalakleet are
smaller Northwind 100 kilowatt (kW) turbines. The turbines in
Kodiak are GE 1.5 megawatt (MW) turbines which are "the large
turbines that you'll see in Hawaii and the Lower 48, ... [they
are] a lot less expensive per capacity installed." Regarding
integration issues, he cautioned that "it takes usually about a
year for any construction project to dial-in, to get the bugs
worked out of it."
3:54:18 PM
REPRESENTATIVE FOSTER agreed that wind farms will pay off in the
long-term.
3:54:38 PM
REPRESENTATIVE PETERSEN observed that many wind projects
underway will require a method to solve the problem of
integration and he asked for the best way to find solutions.
MR. CRIMP reported that switch gear systems for the integration
of wind power have advanced greatly over the past five years.
As a matter of fact, Northern Power Systems has a robust
interface available at this time. He also suggested several
ways to handle excess power, and opined the problems in
Unalakleet are isolated to that site. Generally speaking, new
technology can be obtained "off the shelf" to handle
transmission problems, along with the implementation of newer
ideas, such as sending excess power to residences for home
heating. Mr. Crimp returned to other projects under
construction and said the North Pole Heat Recovery project
should displace 99,000 gallons of naphtha fuel per year. The
Gulkana community wood-fired boiler is a clean-burning GARN
boiler that saved 3,000 gallons of fuel during October-December,
2010. The Tok School wood-fired boiler is a 5.5 million British
thermal unit (Btu) per hour boiler that burns wood harvested for
wildfire mitigation and will displace 50,000 gallons of diesel
fuel per year. The wood fuel source is made available by the
use of a wood chipper funded by the legislature. Finally, the
Cordova firewood processor makes firewood from logs and is
expected to displace 90,000 gallons per year.
4:00:52 PM
CO-CHAIR PRUITT asked what determines the percentage of the
grant.
MR. CRIMP stated there are no guidelines for a minimum match
amount; in fact, the advisory committee does not feel
percentages are appropriate because some communities are unable
to provide matching funds. However, projects with matching
funds available receive a higher ranking. In further response
to Co-Chair Pruitt, he explained that the economic feasibility
of a project is based on the full cost of the project as the
purpose of the renewable grants fund "is to make good projects
better, not to subsidize projects that are not inherently
economic."
4:02:12 PM
CO-CHAIR PRUITT thanked the presenters.
4:03:03 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 4:03 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Emerging Energy Technologies Progress Report.pptx |
HENE 2/1/2011 3:00:00 PM |
Alaska Energy Authority Presentation |
| Alaska Renewable Energy Fund Program Status.pptx |
HENE 2/1/2011 3:00:00 PM |
Alaska Energy Authority Presentation |