Legislature(2011 - 2012)BARNES 124

02/03/2011 03:00 PM House ENERGY


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03:05:27 PM Start
03:07:03 PM Presentation(s) by - the Alaska Energy Authority on Energy Efficiency and Conservation Efforts - the Alaska Housing Finance Corporation on Energy Efficiency, Energy Rebates, and Weatherization Program
04:35:10 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentations by: TELECONFERENCED
- The Alaska Energy Authority on Energy
Efficiency and Conservation Efforts
- The Alaska Housing Finance Corporation on
Energy Efficiency, Energy Rebates, and
Weatherization Programs
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                        February 3, 2011                                                                                        
                           3:05 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                                                                                                       
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                              
Representative Les Gara                                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION(S):  ALASKA ENERGY  AUTHORITY  ON ENERGY  EFFICIENCY                                                               
AND CONSERVATION EFFORTS; THE  ALASKA HOUSING FINANCE CORPORATION                                                               
ON  ENERGY  EFFICIENCY  - ENERGY  REBATES  -  AND  WEATHERIZATION                                                               
PROGRAMS                                                                                                                        
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SEAN SKALING, Program Manager                                                                                                   
Energy Efficiency and Conservation (EE&C)                                                                                       
Alaska Industrial Development & Export Authority (AIDEA) and                                                                    
Alaska Energy Authority (AEA)                                                                                                   
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Participated in the PowerPoint presentation                                                              
titled, "Energy Efficiency and Conservation Efforts at the                                                                      
Alaska Energy Authority," dated 2/3/11.                                                                                         
                                                                                                                                
KATIE CONWAY, Assistant Program Manager                                                                                         
Energy Efficiency and Conservation (EE&C)                                                                                       
Alaska  Industrial Development  &  Export  Authority (AIDEA)  and                                                               
Alaska Energy Authority (AEA)                                                                                                   
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Participated  in the PowerPoint presentation                                                             
titled,  "Energy  Efficiency  and  Conservation  Efforts  at  the                                                               
Alaska Energy Authority," dated 2/3/11.                                                                                         
                                                                                                                                
CARY BOLING, Deputy Director                                                                                                    
Governmental Relations and Public Affairs                                                                                       
Alaska Housing Finance Corporation (AHFC)                                                                                       
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Participated  in the PowerPoint presentation                                                             
titled, "AHFC  Energy Program Rebate and  Weatherization Update,"                                                               
dated 2/3/11.                                                                                                                   
                                                                                                                                
JOHN ANDERSON, Weatherization Program Manager                                                                                   
Alaska Housing Finance Corporation (AHFC)                                                                                       
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Participated  in the PowerPoint presentation                                                             
titled, "AHFC  Energy Program Rebate and  Weatherization Update,"                                                               
dated 2/3/11.                                                                                                                   
                                                                                                                                
DAN FAUSKE, CEO/Executive Director                                                                                              
Alaska Housing Finance Corporation (AHFC)                                                                                       
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Answered questions  during the  PowerPoint                                                             
presentation   titled,   "AHFC    Energy   Program   Rebate   and                                                               
Weatherization Update," dated 2/3/11.                                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:05:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  LANCE  PRUITT called  the  House  Special Committee  on                                                             
Energy meeting  to order  at 3:05  p.m.   Representatives Pruitt,                                                               
Petersen, Lynn,  and Foster  were present at  the call  to order.                                                               
Representatives Tuck  and Saddler arrived  as the meeting  was in                                                               
progress.  Representative Gara was also present.                                                                                
                                                                                                                                
^PRESENTATION(S)  by  - THE  ALASKA  ENERGY  AUTHORITY ON  ENERGY                                                               
EFFICIENCY AND CONSERVATION EFFORTS  - THE ALASKA HOUSING FINANCE                                                               
CORPORATION   ON   ENERGY   EFFICIENCY,   ENERGY   REBATES,   AND                                                               
WEATHERIZATION PROGRAM                                                                                                          
PRESENTATION(S)  by  -  THE ALASKA  ENERGY  AUTHORITY  ON  ENERGY                                                           
EFFICIENCY AND CONSERVATION EFFORTS  - THE ALASKA HOUSING FINANCE                                                           
CORPORATION ON  ENERGY EFFICIENCY,  ENERGY REBATES,WEATHERIZATION                                                           
PROGRAMS                                                                                                                        
                                                                                                                                
3:07:03 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT  announced that  the order  of business  would be                                                               
presentations  by the  Alaska Energy  Authority  (AEA) on  energy                                                               
efficiency and  conservation efforts,  and by the  Alaska Housing                                                               
Finance Corporation (AHFC) on energy efficiency programs.                                                                       
                                                                                                                                
3:07:20 PM                                                                                                                    
                                                                                                                                
SEAN   SKALING,   Program    Manager,   Energy   Efficiency   and                                                               
Conservation  (EE&C),  Alaska  Industrial  Development  &  Export                                                               
Authority (AIDEA)  and Alaska Energy Authority  (AEA), Department                                                               
of Commerce, Community & Economic  Development (DCCED), began the                                                               
presentation with  a brief history of  AEA.  The agency  has been                                                               
involved   in  several   projects  such   as  the   Bradley  Lake                                                               
Hydroelectric Project,  rural tank farm  replacements, powerhouse                                                               
upgrades  in rural  areas,  the rural  energy  fund, and  various                                                               
village energy efficiency  programs.  The agency's  mission is to                                                               
reduce the  cost of  energy for Alaska,  especially by  the least                                                               
expensive  path of  energy efficiency,  which  is more  effective                                                               
than  generating  additional  energy.   He  advised  that  energy                                                               
efficiency is  AEA's short-term goal and  developing more sources                                                               
of  renewable energy  is  its long-term  goal,  although both  of                                                               
these goals must be pursued  hand-in-hand.  Mr. Skaling clarified                                                               
that energy efficiency refers to  the technology that will reduce                                                               
the  amount of  energy needed,  and conservation  refers to  "the                                                               
human behavior aspects of it."   He recalled that the legislature                                                               
tasked AEA  with taking steps toward  improving energy efficiency                                                               
15  percent by  2020, and  the  agency has  begun the  groundwork                                                               
needed to  reach that  goal.  For  example, the  industrial audit                                                               
pilot  project addresses  energy  efficiency  for the  industrial                                                               
sector  such  as seafood  processors.    With the  University  of                                                               
Alaska Fairbanks (UAF) Institute  of Northern Engineering and the                                                               
Sea Grant  Marine Advisory  Program, AEA  is using  technical and                                                               
fishing expertise  working together to conduct  audits of seafood                                                               
processors.   So far  two audits have  been conducted,  both with                                                               
positive  results,  and he  displayed  a  slide that  showed  the                                                               
energy loss  from an  industrial oven that  could be  modified to                                                               
save the  processor an  estimated $10,000  in two  months.    Mr.                                                               
Skaling  described  other   energy  efficiency  programs  managed                                                               
through   AEA.     The  Small   Cities   Energy  Efficiency   and                                                               
Conservation  Block  Grants  (EECBG),   funded  by  the  American                                                               
Recovery and Reinvestment  Act of 2009 (ARRA),  provided money to                                                               
the  10 largest  cities and  the 10  largest boroughs  in Alaska.                                                               
Additionally,  $5  million  was  made available  to  pass  on  to                                                               
smaller communities; in fact, 97  eligible applications for these                                                               
funds  have been  received and  work is  underway to  improve the                                                               
efficiency of the  public buildings in these  communities.  Funds                                                               
from  ARRA also  support  the Village  Energy Efficiency  Program                                                               
(VEEP),  which  grants funds  to  villages  and rural  areas  for                                                               
improvements to their public facilities.                                                                                        
                                                                                                                                
3:14:47 PM                                                                                                                    
                                                                                                                                
MR. SKALING  further explained ARRA  funds are also used  for the                                                               
Whole  Village Retrofit  concept to  demonstrate how  much energy                                                               
efficiency  potential there  is in  a village,  and what  kind of                                                               
economic impact  is possible.   The  agency attempts  to simplify                                                               
the retrofit  reporting process for  cities by  offering regional                                                               
technical  assistance providers.   He  provided a  Light-Emitting                                                               
Diode (LED)  light bulb  for members to  examine and  pointed out                                                               
LED bulbs  are less affected  by extreme cold, are  more durable,                                                               
easier to  dispose of,  and are  longer-lasting than  are compact                                                               
fluorescent  light  bulbs,  thus  may  be  a  better  choice  for                                                               
replacement  bulbs in  villages.   In response  to Representative                                                               
Tuck, he said LEDs do not generate heat, and some are dimmable.                                                                 
                                                                                                                                
3:17:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  then asked for the  price difference between                                                               
LED and compact fluorescent bulbs.                                                                                              
                                                                                                                                
3:17:50 PM                                                                                                                    
                                                                                                                                
MR. SKALING  estimated LEDs  are five  times more  expensive, but                                                               
last five-to-seven  times longer.  In  response to Representative                                                               
Foster, he  surmised small LEDs  surpass compact  fluorescents in                                                               
value and  are becoming more readily  available.  As a  matter of                                                               
fact,  streetlights that  are 100  lumens per  watt will  soon be                                                               
available.   Addressing the  issue of  return on  investment, Mr.                                                               
Skaling advised  that the  abovementioned programs  are producing                                                               
an  average payback  of  about  three years.    For example,  the                                                               
estimated community savings from all  of the programs is about $3                                                               
million  per year,  and after  the estimated  lifespan of  eleven                                                               
years,  will result  in $33  million  in savings  from a  federal                                                               
investment of  $8 million,  and a  state investment  of $600,000.                                                               
Mr.  Skaling  furnished a  map  that  indicated the  location  of                                                               
projects funded  throughout the state.   To give an example  of a                                                               
Whole  Village Retrofit,  he  displayed a  slide  of the  Emmonak                                                               
Washeteria, and  noted that after  the installation of  new dryer                                                               
controls, and a boiler tune-up,  6,070 gallons of diesel fuel and                                                               
$21,000 are  being saved  per year.   In  Napaskiak, streetlights                                                               
were replaced  with 48 LED  streetlights saving 1,770  gallons of                                                               
diesel  fuel  per  year.   Finally,  he  described  the  $600,000                                                               
commercial energy audit program that  began about four weeks ago.                                                               
As  there are  no existing  programs or  services for  commercial                                                               
businesses,  AEA has  put together  a program  to provide  energy                                                               
audits  for  commercial  buildings.    The  program  has  already                                                               
attracted over  80 applications for  125-150 audits  and one-half                                                               
of  the  available  funding  is obligated.    He  concluded  that                                                               
commercial building  owners are very interested  in opportunities                                                               
for saving energy.                                                                                                              
                                                                                                                                
3:26:15 PM                                                                                                                    
                                                                                                                                
KATIE CONWAY,  Assistant Program  Manager, Energy  Efficiency and                                                               
Conservation  (EE&C),  Alaska  Industrial  Development  &  Export                                                               
Authority (AIDEA)  and Alaska Energy Authority  (AEA), Department                                                               
of Commerce, Community &  Economic Development (DCCED), explained                                                               
that  the  Energy  Efficiency   and  Conservation  Working  Group                                                               
(EECWG)  is  one  of  the  primary  components  of  AEA's  public                                                               
education  and  outreach  initiative for  energy  efficiency  and                                                               
conservation.  The group has  been working since January 2010, in                                                               
an  effort  to   coordinate  independent  efficiency  improvement                                                               
efforts.   She  opined the  common bond  among the  working group                                                               
members is  education and outreach;  in fact, members  range from                                                               
university  programs,  the  conservation community,  federal  and                                                               
state  program  offices,  tribal  organizations,  utilities,  and                                                               
private businesses.   The 30 member organizations  of the working                                                               
group share  information and are  moving forward  with efficiency                                                               
projects.     The  underlying  philosophy   for  the   EECWG  is:                                                               
Collaborating will be  a much more efficient way  of reaching our                                                               
efficiency goals.   Ms.  Conway described  a symbol  designed and                                                               
adopted by the  working group to represent  energy efficiency and                                                               
conservation in Alaska and to raise public awareness.                                                                           
                                                                                                                                
3:29:44 PM                                                                                                                    
                                                                                                                                
MS. CONWAY recalled at its  first meeting EECWG recognized a need                                                               
for better coordination  between state agencies and  all who work                                                               
for  energy efficiency.   The  working group  also called  for an                                                               
update to the  2008 Policy and Recommendation  report produced by                                                               
the Cold Climate Housing Research  Center (CCHRC) and paid for by                                                               
AEA and AHFC, which addressed  the need for baseline energy data.                                                               
Also, EECWG  found a  need for  a "one-stop  shopping information                                                               
source" for  energy efficiency and conservation  information, and                                                               
created a virtual  energy resource:  www.ak.energyefficiency.org.                                                               
The  website  will  reach  audiences all  over  Alaska  and  will                                                               
broadcast   events,  jobs   advertisements,   and  contacts   for                                                               
commercial energy auditors.  Ms.  Conway displayed a slide of the                                                               
website.                                                                                                                        
                                                                                                                                
3:32:51 PM                                                                                                                    
                                                                                                                                
MS.  CONWAY continued  to say  EECWG won  a $700,000  competitive                                                               
grant from  the U.S.  Department of Energy  (DOE) offered  to the                                                               
states with  the worst  performances in  energy efficiency.   The                                                               
title  of the  grant, which  will be  funded in  two phases,  was                                                               
"Biggest State to  Biggest Saver," and embodies one  of the goals                                                               
made by  the working  group which  was for  Alaska to  become the                                                               
most  efficient  state  in  the   nation.    In  addition,  EECWG                                                               
announced  Energy Awareness  Month  -  an integrated,  sustained,                                                               
outreach  initiative -  and hosted  an  event in  Anchorage at  a                                                               
privately-owned,    commercial   Leadership    in   Energy    and                                                               
Environmental  Design  (LEED)  certified building.    Ms.  Conway                                                               
returned to the details of the  DOE grant and opined the projects                                                               
funded by the first  phase of the grant will make  2011 a year of                                                               
research and information gathering to  determine a clear path and                                                               
recommendations  for energy  efficiency programs.   For  example,                                                               
one project  is a community-based  needs assessment to  be paired                                                               
with   a  best-practices   inventory  and   which  will   reveal,                                                               
community-by-community  and region-by-region,  where the  highest                                                               
needs are.   Other  projects are: a  greatly expanded  rewrite of                                                               
the  aforementioned CCHRC  report study  looking at  heat, power,                                                               
and the regulatory environment thereof  due 4/11; an end-use data                                                               
study  to obtain  baseline data  regarding statewide  residential                                                               
and  non-residential  power and  heat  energy  use due  2/12;  an                                                               
interface   to   link   successes  of   energy   efficiency   and                                                               
conservation  to   the  website.    In   conclusion,  Ms.  Conway                                                               
indicated  that  the  second  phase of  funding  from  the  grant                                                               
provides opportunities  for direct engagement with  the public to                                                               
encourage efficiencies.                                                                                                         
                                                                                                                                
3:38:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER  asked whether there  are guidelines for  the use                                                               
of the logo.                                                                                                                    
                                                                                                                                
MS.  CONWAY  said there  are  none.    In further  response,  she                                                               
acknowledged AEA  would not encourage  random use of  the symbol;                                                               
however,  she  assumed any  organization  working  towards a  "15                                                               
percent by 2020 goal" can use the logo.                                                                                         
                                                                                                                                
3:39:59 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER expressed his support.                                                                                          
                                                                                                                                
3:40:14 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT asked whether all ARRA funds have been spent.                                                                   
                                                                                                                                
MR. SKALING  responded that  ARRA funds are  all spoken  for, but                                                               
not  all are  spent.   For example,  the commercial  energy audit                                                               
rebate is  still in the  application period, and no  rebates have                                                               
actually been done.                                                                                                             
                                                                                                                                
3:41:29 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  PRUITT  surmised  that  with  the  expenditure  of  the                                                               
federal stimulus funds, future programs  developed by the working                                                               
group will wait for the completion of research.                                                                                 
                                                                                                                                
MR. SKALING  assured the committee  his agency will  move forward                                                               
with other  programs; however,  AEA is  taking full  advantage of                                                               
the free federal funds to  complete research, set a baseline, try                                                               
some new things,  and determine "a better sense in  the future of                                                               
where the best money is to be spent."                                                                                           
                                                                                                                                
3:42:16 PM                                                                                                                    
                                                                                                                                
CARY BOLING,  Deputy Director, Governmental Relations  and Public                                                               
Affairs,  Alaska Housing  Finance Corporation  (AHFC), Department                                                               
of  Revenue  (DOR),  provided  background   for  the  rebate  and                                                               
weatherization programs.   In  2008, energy  prices in  the state                                                               
were very  high because the  price of oil was  approximately $140                                                               
per barrel.   In  response, the  legislature provided  relief for                                                               
residents and  appropriated $200 million dollars  for an existing                                                               
income-based weatherization  program for homeowners  and renters,                                                               
and $160 million  for a rebate program for  homeowners who choose                                                               
to make  energy improvements.   He explained that for  the rebate                                                               
program  energy  ratings  are   required  before  and  after  the                                                               
improvements are made, to determine  the amount of the rebate, up                                                               
to the maximum of $10,000.                                                                                                      
                                                                                                                                
3:47:16 PM                                                                                                                    
                                                                                                                                
MR. BOLING, in response to  Co-Chair Foster, acknowledged that at                                                               
the beginning of the rebate program  there were only 38 raters in                                                               
the  state,  so AHFC  added  a  rater-training component  to  the                                                               
program.    Presently,  there  are  about  100  raters;  however,                                                               
because it is difficult for each  small community to have a local                                                               
rater, AHFC subsidizes travel costs  for "roving" raters to go to                                                               
rural   areas.      Additionally,   fourteen   regional   housing                                                               
authorities    joined    five   existing    agencies    providing                                                               
weatherization ratings and improvements.                                                                                        
                                                                                                                                
3:48:44 PM                                                                                                                    
                                                                                                                                
JOHN  ANDERSON, Weatherization  Program  Manager, Alaska  Housing                                                               
Finance Corporation  (AHFC), Department  of Revenue  (DOR), added                                                               
that  AHFC's  training component  is  ongoing;  in fact,  housing                                                               
authorities are  still encouraged to continue  with its sponsored                                                               
training  for them  - the  Building Performance  Institute -  and                                                               
become authorized energy raters.   In fact, about one-half of the                                                               
housing authorities  new to the program  have that certification.                                                               
On the other hand, he  expressed his frustration that training an                                                               
energy   rater  for   each  small   community  is   not  fiscally                                                               
responsible.                                                                                                                    
                                                                                                                                
3:49:55 PM                                                                                                                    
                                                                                                                                
CO-CHAIR   FOSTER   noted   the  opportunity   to   improve   the                                                               
weatherization of homes is very important for rural areas.                                                                      
                                                                                                                                
3:50:42 PM                                                                                                                    
                                                                                                                                
MR.  BOLING  recalled  the  "$360 million  flood"  of  money  was                                                               
appropriated  in April  2008, and  the program  was to  begin the                                                               
following  summer.   In fact,  AHFC launched  the program  in May                                                               
2008,  and three  years later  the results  are:   37,264 ratings                                                               
completed;  11,376  rebates  paid  to homeowners  in  an  average                                                               
amount of $6,200; 941 newly  constructed 5-Star Plus home rebates                                                               
paid in  the amount  of $7,500; 5,003  homes weatherized.   Since                                                               
2008, this is  a total of 17,320 homes which  are now more energy                                                               
efficient.  Mr.  Boling compared the new program  to the existing                                                               
energy rating system called AkWARM,  which was begun in 1996, and                                                               
pointed out  that under the  AkWARM program, 25,557  ratings were                                                               
performed and 10,704 homes weatherized  during the 12 years prior                                                               
to 2008.                                                                                                                        
                                                                                                                                
MR. BOLING  informed the committee  AHFC has a  valuable database                                                               
of energy  and carbon  dioxide (CO2)  savings resulting  from the                                                               
home energy rebate  program throughout the state.    For example,                                                               
total  energy saved  averages out  to about  $1,535 per  year per                                                               
home.   Carbon dioxide  reductions average  to 12,000  pounds per                                                               
year, and  most homes move from  an energy rating of  2-Star Plus                                                               
to 4-Star.   Furthermore, a total of 978  billion British thermal                                                               
units (Btus) are saved, reducing  the average energy use by 33.15                                                               
percent.   He equated  the annual savings  to 168,766  barrels of                                                               
crude oil, 7 million gallons of  fuel oil, or 717 gallons of fuel                                                               
oil per home.  Mr. Boling  also furnished a chart which indicated                                                               
statewide average  savings per home  by fuel type:   770 kilowatt                                                               
hours of electricity (kWhs); 999  therms (one hundred cubic feet)                                                               
of  natural gas;  642  gallons of  number 2  oil;  93 gallons  of                                                               
propane; 2.2 cords  of wood.     He returned to  the energy rater                                                               
training  component  and  estimated  at  least  2,500  jobs  were                                                               
created  from  a combination  of  the  weatherization and  rebate                                                               
programs.                                                                                                                       
                                                                                                                                
MR. ANDERSON stressed the difficulty  in tracking job creation or                                                               
retention because  of the number  of vendors, such  as mechanical                                                               
contractors,  electrical contractors,  and suppliers  affected by                                                               
this "brand  new industry that  sparked up because of  the rebate                                                               
and  weatherization  program."   A  study  by the  University  of                                                               
Alaska Fairbanks (UAF) Institute  of Social and Economic Research                                                               
(ISER) is expected to be available in June.                                                                                     
                                                                                                                                
3:58:08 PM                                                                                                                    
                                                                                                                                
MR.  BOLING  advised  the weatherization  program  received  $200                                                               
million and $74  million was obligated in  2008-2009, $63 million                                                               
was  obligated  in 2010,  and  $63  million  is projected  to  be                                                               
obligated in  2011.   The  number of homes weatherized:  1,864 in                                                               
2009; 3,139 in 2010; 4,000 are projected for 2011.                                                                              
                                                                                                                                
3:59:59 PM                                                                                                                    
                                                                                                                                
MR. ANDERSON,  in response to  Representative Saddler,  said AHFC                                                               
encourages  residents  to continue  to  apply  for the  programs.                                                               
Regardless of the sources of  the funding, the agency anticipates                                                               
continuation of  the programs;  in fact,  the U.S.  Department of                                                               
Energy  (DOE)  contributes an  average  of  $1.5 million  to  the                                                               
weatherization program each year.                                                                                               
                                                                                                                                
4:00:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER surmised  all of  the allocated  money is                                                               
obligated at this time.                                                                                                         
                                                                                                                                
MR. ANDERSON indicated  yes.  It is known that  Anchorage has 600                                                               
potential weatherization clients on a waiting list.                                                                             
                                                                                                                                
4:01:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  observed there is a  growing demand, and                                                               
he  asked   whether  additional   funding  is  needed   from  the                                                               
legislature.                                                                                                                    
                                                                                                                                
MR.  ANDERSON  related that  the  program  is in  the  governor's                                                               
budget  for $25  million.   The presentation  has shown  what has                                                               
happened over the  past four years; however,  the projections for                                                               
next year are without a plan for the future.                                                                                    
                                                                                                                                
4:02:54 PM                                                                                                                    
                                                                                                                                
MR.  BOLING  displayed a  chart  which  indicated the  number  of                                                               
communities served:   56 in 2008,  90 in 2009, 100  plus in 2011,                                                               
and 100 plus estimated in  2011.  He concluded the weatherization                                                               
program has  attained "a sustainable  capacity."  Turning  to the                                                               
home  energy rebate  program, Mr.  Boling said  the $160  million                                                               
appropriation to this program is  fully obligated.   He explained                                                               
the  process begins  with  an  energy rating  of  the home  which                                                               
recommends improvements.   The homeowner  is reimbursed  $325 for                                                               
the  cost of  the  rating, and  then has  an  18-month period  to                                                               
complete the work  and submit paperwork for the  remainder of the                                                               
rebate.  Thus money is held for 18 months for each applicant.                                                                   
                                                                                                                                
4:04:36 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT  asked for  the action  that begins  the 18-month                                                               
period.                                                                                                                         
                                                                                                                                
MR. BOLING  clarified that the  time period starts with  the home                                                               
energy  rating.     In  further  response   to  Co-Chair  Pruitt,                                                               
applications are still  being received; in fact, it  is a mistake                                                               
to wait to send in an application once the rating is done.                                                                      
                                                                                                                                
4:05:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN shared  his  personal   experience  with  the                                                               
program.                                                                                                                        
                                                                                                                                
REPRESENTATIVE PETERSEN  reported he  has completed  the process,                                                               
and increased the  energy rating on his home from  2-Star Plus to                                                               
4-Star  Plus.   He  cautioned  that  some residents  believe  the                                                               
program is over.                                                                                                                
                                                                                                                                
4:08:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN said  he  wanted to  be  present during  the                                                               
energy rating.                                                                                                                  
                                                                                                                                
MR.  BOLING recommended  that the  homeowner be  present for  the                                                               
rating because  "it has  been a  very good  learning experience."                                                               
He also  recommended that homeowners attend  classes sponsored by                                                               
AHFC to help them make their own improvements.                                                                                  
                                                                                                                                
4:10:03 PM                                                                                                                    
                                                                                                                                
MR. ANDERSON assured  the committee there is a  procedure to deal                                                               
with people who have extenuating circumstances.                                                                                 
                                                                                                                                
4:10:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  PRUITT  asked  whether  has there  been  feedback  from                                                               
members of the public.                                                                                                          
                                                                                                                                
MR. BOLING  opined some homeowners  believe there is  no funding,                                                               
and there is a long waiting period now, which is discouraging.                                                                  
                                                                                                                                
4:11:19 PM                                                                                                                    
                                                                                                                                
DAN  FAUSKE,  CEO/Executive   Director,  Alaska  Housing  Finance                                                               
Corporation  (AHFC), Department  of  Revenue (DOR),  acknowledged                                                               
that  there  are 3,000  homeowners  on  the waiting  list,  which                                                               
proves there is  still interest in the program.   He provided his                                                               
personal  experience with  people who  are very  satisfied.   The                                                               
program  is unique  and the  response has  been very  good.   The                                                               
agency did  not advertise heavily,  but he guaranteed  there will                                                               
be a strong response to the next appropriation.                                                                                 
                                                                                                                                
4:12:59 PM                                                                                                                    
                                                                                                                                
MR. BOLING reiterated  $160 million is fully  obligated and $88.6                                                               
million has been  expended.  He continued to  explain that 24,956                                                               
applicants  have completed  the as-is  rating and  received their                                                               
reimbursement   for  the   cost.     The   completion  rate   has                                                               
consistently been nearly  63.3 percent for one year.   Mr. Boling                                                               
informed the committee  that when the program first  began in the                                                               
fall of  2008, many residents  were unable to get  an appointment                                                               
with a rater.  Since there  was a shortage of certified raters, a                                                               
centralized  call  list was  developed  to  dispatch raters  more                                                               
efficiently, and as a result  the waiting list dropped from 9,492                                                               
in  December 2008,  to  463  one year  later.   Currently,  3,548                                                               
homeowners  are  on the  waiting  list,  not because  raters  are                                                               
unavailable, but  because new applicants  must wait 18  months to                                                               
know if previously obligated funds are available.                                                                               
                                                                                                                                
4:16:04 PM                                                                                                                    
                                                                                                                                
MR. ANDERSON added that about  100 applications per week continue                                                               
to be dispatched.                                                                                                               
                                                                                                                                
4:16:38 PM                                                                                                                    
                                                                                                                                
MR. BOLING, in  response to Representative Lynn,  agreed that the                                                               
average wait now is about eight months.                                                                                         
                                                                                                                                
4:16:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  asked whether  certified raters  will be                                                               
lost to other jobs.                                                                                                             
                                                                                                                                
MR. ANDERSON indicated yes, due to  the lack of demand.  He added                                                               
that most of the energy raters  came from the home inspection and                                                               
energy industry.                                                                                                                
                                                                                                                                
4:17:47 PM                                                                                                                    
                                                                                                                                
MR. BOLING displayed  a chart which showed  the average homeowner                                                               
spends about  $11,000 on energy  efficiency improvements  and the                                                               
average  rebate is  $6,287; thus  the average  investment by  the                                                               
homeowner  is  about $4,582.    Furthermore,  the average  annual                                                               
energy savings is about $1,535,  or about a three-year payback on                                                               
the homeowner's investment.                                                                                                     
                                                                                                                                
MR.  ANDERSON noted  the homeowner  investment  component of  the                                                               
original  legislation was  inserted by  Senator Hoffman,  and has                                                               
proven effective.                                                                                                               
                                                                                                                                
4:19:01 PM                                                                                                                    
                                                                                                                                
MR.  BOLING  turned  attention   to  another  AHFC  program  that                                                               
provides   second   mortgage   loans  for   energy   conservation                                                               
improvements.  This  program assists homeowners who  may not have                                                               
the  cash for  energy projects  and loans  up to  $30,000 for  15                                                               
years at  a fixed  rate.  At  this time 93  loans have  been paid                                                               
off, and  there are 33  active loans.   When used  in combination                                                               
with  the rebate  program, the  rebate is  used to  pay down  the                                                               
loan.                                                                                                                           
                                                                                                                                
4:20:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FOSTER  asked  how  the loans  are  serviced  in  small                                                               
communities.                                                                                                                    
                                                                                                                                
MR. ANDERSON  assured the  committee AHFC  "will make  it happen"                                                               
for qualified applicants.                                                                                                       
                                                                                                                                
4:20:28 PM                                                                                                                    
                                                                                                                                
MR. BOLING  summarized:  17,320  homes completed;  reduced energy                                                               
costs of 30  percent and energy savings of 32  percent; a minimum                                                               
of  2,500  new  jobs;  annual capacity  of  4,000  weatherization                                                               
program homes; all funds obligated.                                                                                             
                                                                                                                                
4:21:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  asked  whether   the  program  has  been                                                               
replicated.                                                                                                                     
                                                                                                                                
MR. ANDERSON  said the rebate  program has been shared  with many                                                               
entities,  including  the  DOE.     As  a  matter  of  fact,  the                                                               
weatherization  program  has  been an  ongoing  national  program                                                               
since 1978,  although the additional money  that was appropriated                                                               
by the  legislature allowed the  income threshold to rise  to 100                                                               
percent  of median  income, thus  many more  residents in  Alaska                                                               
qualified.                                                                                                                      
                                                                                                                                
4:22:59 PM                                                                                                                    
                                                                                                                                
MR. ANDERSON, in response to  Co-Chair Pruitt, explained that $25                                                               
million in  the governor's budget  is directed to  both programs.                                                               
In  further response,  he said  those funds  would cover  "on the                                                               
rebate  program,   roughly  2,000,  and  on   the  weatherization                                                               
program, roughly 1,000."                                                                                                        
                                                                                                                                
4:23:06 PM                                                                                                                    
                                                                                                                                
MR. BOLING  recalled last session  the legislature  approved $220                                                               
million  for the  Alaska Energy  Efficiency  Revolving Loan  Fund                                                               
(AEERLF)  to be  used toward  energy efficiency  improvements for                                                               
regional educational attendance areas  (REAAs), the University of                                                               
Alaska  (UA), state  facilities, and  municipal facilities.   The                                                               
intent is  to promote energy efficiency  performance contracting,                                                               
wherein   guaranteed  energy   savings  from   energy  efficiency                                                               
improvements  are used  to  pay  off the  loan.    Prior to  loan                                                               
approval, a  Retrofit Energy Assessment  for Loan (REAL)  is done                                                               
to evaluate the payback for  certain conservation measures.  Also                                                               
prior to the loan there  is an initial project evaluation, energy                                                               
audits by  nationally certified engineers,  and the  execution of                                                               
energy performance  contracts (EPCs).  The  performance contracts                                                               
are  between  AHFC, energy  service  companies  (ESCos), and  the                                                               
Department of  Transportation & Public  Facilities (DOTPF).   Mr.                                                               
Boling noted that  retrofits can be managed by ESCos,  or in some                                                               
cases, the owner of the facility.                                                                                               
                                                                                                                                
4:25:11 PM                                                                                                                    
                                                                                                                                
MR. ANDERSON elaborated on the program,  noting that it is in its                                                               
final phases  of development; for example,  contractors have been                                                               
selected,  and AHFC  is working  closely  with school  districts,                                                               
municipalities, and DOTPF.                                                                                                      
                                                                                                                                
4:25:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER asked for examples of ESCos.                                                                             
                                                                                                                                
MR. ANDERSON responded that national  associations reflect on the                                                               
building-science  abilities of  some companies  such as  Siemens,                                                               
Ameresco,  Johnson  Controls  Inc., and  Honeywell  International                                                               
Inc.   Federal agencies  have been working  with ESCos  for years                                                               
and DOTPF  has completed  about 17 buildings  in the  state using                                                               
this  model.   The National  Association of  Energy Professionals                                                               
provides  the accreditations  for ESCos  and AHFC  will add  cold                                                               
climate specific requirements of its own.                                                                                       
                                                                                                                                
4:27:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN  pointed  out   the  popularity  of  the                                                               
programs that  were presented and  asked what kind of  funding is                                                               
necessary to continue "at the current rate."                                                                                    
                                                                                                                                
MR. ANDERSON estimated  that AHFC has the  capacity to administer                                                               
$100 million per year through these two programs.                                                                               
                                                                                                                                
4:28:31 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FOSTER  praised  AEA   and  AHFC  on  their  critically                                                               
important contributions  to the  wellbeing of  the state  and its                                                               
residents.                                                                                                                      
                                                                                                                                
4:29:44 PM                                                                                                                    
                                                                                                                                
MR.  FAUSKE   reminded  the  committee  that   energy  efficiency                                                               
improvements  lengthen  the  lifecycle   of  people's  homes  and                                                               
enhance the  quality of life.   He said, "What started  out a few                                                               
years ago  has turned  into just a  valuable program  around this                                                               
state."                                                                                                                         
                                                                                                                                
4:31:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT  asked how  many years  an appropriation  of $100                                                               
million would fund.                                                                                                             
                                                                                                                                
MR. ANDERSON  estimated the programs  would continue  until 3/13.                                                               
In  further  response  to  Co-Chair  Pruitt,  he  explained  AHFC                                                               
estimated that  the original allocation  of $300 million  in 4/08                                                               
would take care  of about 10 percent of the  state's needs.  With                                                               
the additional $60  million for the rebate  program, the estimate                                                               
of improved homes rises to about 12-13 percent.                                                                                 
                                                                                                                                
4:33:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  asked whether construction  codes require                                                               
new homes to comply with 4-Star or 5-Star energy ratings.                                                                       
                                                                                                                                
MR. ANDERSON confirmed that new  buildings receiving AHFC funding                                                               
have  to follow  the Building  Energy Efficiency  Standard (BEES)                                                               
requirements.   He understood that most  other financing agencies                                                               
are requiring the same.                                                                                                         
                                                                                                                                
4:33:44 PM                                                                                                                    
                                                                                                                                
MR. BOLING said BEES is equivalent to a 4-Star Plus home rating.                                                                
                                                                                                                                
4:34:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  expressed his  pride in the  program and                                                               
said it  would be shortsighted  not to continue to  help Alaskans                                                               
make their homes more energy efficient.                                                                                         
                                                                                                                                
4:35:10 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 4:35 p.m.                                                                  

Document Name Date/Time Subjects
Alaska Housing Finance Corporation presentation on energy efficiency programs.pptx HENE 2/3/2011 3:00:00 PM
Alaska Housing Finance Corporation Presentation
Alaska Energy Authority presentation on energy efficiency and conservation.pptx HENE 2/3/2011 3:00:00 PM
Alaska Energy Authority Presentation