Legislature(2011 - 2012)BARNES 124

03/06/2012 03:00 PM House ENERGY


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03:05:53 PM Start
03:06:47 PM Presentation: Tok Biomass Project
04:39:04 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
* HB 323 NONATTAIN AREA HOME HEATING SYSTEM GRANTS
<Bill Hearing Postponed to 3/13/12>
* HB 336 ENERGY ASSISTANCE PROGRAM & VOUCHERS
<Bill Hearing Postponed to 3/13/12>
* HB 357 AIDEA SUSTAINABLE ENERGY PROGRAM
<Bill Hearing Postponed to 3/13/12>
Presentation: Tok Biomass Project
                    ALASKA STATE LEGISLATURE                                                                                  
                HOUSE SPECIAL COMMITTEE ON ENERGY                                                                             
                          March 6, 2012                                                                                         
                            3:05 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Dan Saddler                                                                                                      
Representative Pete Petersen                                                                                                    
Representative Chris Tuck                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Lance Pruitt, Co-Chair                                                                                           
Representative Bob Lynn                                                                                                         
Representative Kurt Olson                                                                                                       
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                              
Representative Tammie Wilson                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION:  TOK BIOMASS PROJECT                                                                                              
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 323                                                                                                              
"An Act relating  to the Alaska energy efficient  home grant fund;                                                              
and  creating a  grant  program for  converting  homes in  regions                                                              
designated   as   particulate  matter   nonattainment   areas   to                                                              
efficient home heating systems."                                                                                                
                                                                                                                                
     - BILL HEARING POSTPONED TO 3/13/12                                                                                        
                                                                                                                                
HOUSE BILL NO. 336                                                                                                              
"An  Act  establishing   an  energy  assistance   program  in  the                                                              
Department  of  Revenue  to  issue an  energy  voucher  to  Alaska                                                              
permanent fund dividend  recipients; and relating  to the analysis                                                              
and  recommendation  of  an  energy   assistance  program  by  the                                                              
governor."                                                                                                                      
                                                                                                                                
     - BILL HEARING POSTPONED TO 3/13/12                                                                                        
                                                                                                                                
HOUSE BILL NO. 357                                                                                                              
"An  Act  establishing  the sustainable  energy  transmission  and                                                              
supply development  program in  the Alaska Industrial  Development                                                              
and Export Authority."                                                                                                          
                                                                                                                                
     - BILL HEARING POSTPONED TO 3/13/12                                                                                        
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DAVE STANCLIFF                                                                                                                  
Stancliff Consulting                                                                                                            
Tok, Alaska                                                                                                                     
POSITION  STATEMENT:   Speaking  as a  consultant  for the  Alaska                                                        
Gateway  School  District and  Alaska  Power &  Telephone  (AP&T),                                                              
presented  information  on  Tok   and  Tok  School,  and  answered                                                              
questions.                                                                                                                      
                                                                                                                                
JOHN "CHRIS" MAISCH, State Forester; Director                                                                                   
Division of Forestry                                                                                                            
Department of Natural Resources (DNR)                                                                                           
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Gave  a PowerPoint  presentation  entitled,                                                            
"Woody Biomass Update" dated 3/6/12, and answered questions.                                                                    
                                                                                                                                
THOMAS DEERFIELD                                                                                                                
Dalson Energy, Inc.                                                                                                             
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking as  consultant to  Alaska Power  &                                                            
Telephone (AP&T), described his task and answered questions.                                                                    
                                                                                                                                
TODD POAGE, Superintendent                                                                                                      
Alaska Gateway School District                                                                                                  
Tok, Alaska                                                                                                                     
POSITION STATEMENT:   Presented a short film that  depicted a fire                                                            
in Tok and the history of the biomass project at Tok School.                                                                    
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:05:53 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEAL  FOSTER  called  the  House  Special  Committee  on                                                            
Energy  meeting to  order at  3:05 p.m.   Representatives  Foster,                                                              
Tuck, Petersen,  and Saddler  were present at  the call  to order.                                                              
Representatives   Pruitt,   Lynn,    and   Olson   were   excused.                                                              
Representative T. Wilson was also present.                                                                                      
                                                                                                                                
^PRESENTATION:  TOK BIOMASS PROJECT                                                                                             
               PRESENTATION:  TOK BIOMASS PROJECT                                                                           
                                                                                                                                
3:06:47 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER  announced the only  order of business would  be a                                                              
presentation on the Tok Biomass Project.                                                                                        
                                                                                                                                
3:07:07 PM                                                                                                                    
                                                                                                                                
DAVE STANCLIFF,  Stancliff  Consulting, said  he was a  consultant                                                              
for  the  Alaska  Gateway  School  District  and  Alaska  Power  &                                                              
Telephone (AP&T),  and also the vice-president of  the Tok Chamber                                                              
of  Commerce.   He  informed  the committee  that  Tok  is in  the                                                              
unique position  of having  a tremendous  amount of resource  that                                                              
threatens its  safety; however, the  community has found a  way to                                                              
harness that resource  for the benefit of its school.   Biomass is                                                              
now  heating Tok  School and  providing  its electricity,  whereas                                                              
the  school district  used  to spend  more  money  on heating  and                                                              
lighting than  on classroom instruction.   Mr. Stancliff  said Tok                                                              
is not connected  to other electrical grids in the  state, and was                                                              
forced to  find solutions  to the  high cost of  energy.   He said                                                              
the first  part of his presentation  would be through a  DVD video                                                              
entitled,  "Alaska's  Green Gold,"  produced  by  the Division  of                                                              
Forestry,  Department  of  Natural Resources  (DNR),  followed  by                                                              
updates  on projects,  and  the  measurable results  from  funding                                                              
previously provided  by the legislature.  Mr.  Stancliff concluded                                                              
that  these results  are not  only related  to power,  but to  the                                                              
wellbeing  of  the Tok  community  and  to  the education  of  its                                                              
children,  because  Tok School  now  has  a  music teacher  and  a                                                              
counselor paid by the money saved using renewable energy.                                                                       
                                                                                                                                
3:10:56 PM                                                                                                                    
                                                                                                                                
There followed a video presentation from 3:10 p.m. to 3:28 p.m.                                                                 
                                                                                                                                
3:28:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER commended the video.                                                                                            
                                                                                                                                
3:29:18 PM                                                                                                                    
                                                                                                                                
JOHN  "CHRIS"  MAISCH,  State  Forester;   Director,  Division  of                                                              
Forestry, DNR,  began a  PowerPoint presentation entitled,  "Woody                                                              
Biomass Update," dated  3/6/12.  Mr. Maisch said  his presentation                                                              
would  provide  a perspective  on  biomass  projects that  are  in                                                              
other areas of the  state.  Slide 1 was a map  that depicted woody                                                              
biomass  projects   currently  operational,  under   construction,                                                              
under design  phase, and  under feasibility  study throughout  the                                                              
state.  He  pointed out that  the first larger scale  chip project                                                              
that  came online  was  at the  Craig School  on  Prince of  Wales                                                              
Island, followed  by Tok  School, and Delta  High School  in Delta                                                              
Junction.   At this  time, Tok  School is  the only combined  heat                                                              
and power  operation.  Also, there  are many GARN  boiler projects                                                              
- using  solid wood that  is hand fed twice  per day -  in Tanana,                                                              
Gulkana, Coffman Cove,  and Thorne Bay.  Mr. Maisch  stressed that                                                              
there are  many types of systems  and their scale should  be sized                                                              
for the resource,  the community, and the heat load.   Slide 2 was                                                              
a  picture  of  the  Delta High  School  Wood  Chip  Boiler  Space                                                              
Heating  Project  which was  completed  for $200,500,000  with  an                                                              
appropriation  of $200,000,000  from the  Alaska Energy  Authority                                                              
(AEA)  and  a  capital  appropriation  from  the  legislature  for                                                              
$800,000.   The boiler is fueled  by white spruce wood  chips from                                                              
Logging  and   Milling  Associates'   slab  wood  waste   material                                                              
delivered at a cost of $64.20 per ton.                                                                                          
                                                                                                                                
3:32:34 PM                                                                                                                    
                                                                                                                                
MR. MAISCH  explained that biomass is  measured as a green  ton or                                                              
a bone dry  unit.  Because the  slab wood is already  processed in                                                              
a  kiln, the  wood chips  are 18  percent  moisture content  (MC),                                                              
which is drier  than normal.  Slide  3 was a picture  of the Hurst                                                              
Boiler installed at  the Delta School.  The school's  2011 heating                                                              
oil  consumption was  24,000  gallons, and  on  a British  thermal                                                              
unit (Btu)  basis, one  ton of chips  at an  18 percent  MC equals                                                              
106  gallons of  fuel  oil,  thus the  cost  savings  is about  85                                                              
percent.     Slide 4  was a  picture of  the Sealaska  Corporation                                                              
wood pellet boiler that heats the Sealaska  Plaza building, and of                                                              
wood  pellets being  delivered  to the  storage  bin, which  auger                                                              
feeds the  pellets by an  automated system.   Turning to  the role                                                              
of  the Division  of  Forestry in  woody  biomass development,  he                                                              
stressed  that the forestry  division must  ensure current  forest                                                              
inventories in the  state forest and other lands  that are managed                                                              
by the division.   For AEA,  the division must calculate  the wood                                                              
supply for proposed  projects to ensure the supply  is sustainable                                                              
and economic  over time, and  write a report.   The  division also                                                              
helps  communities   with  jobs,  reduces  wildland   fire  risks,                                                              
improves  habitat, and offers  local energy  solutions.   Finally,                                                              
regarding  the  Alaska  Power  &  Telephone  (AP&T)  project,  the                                                              
division  is developing a  25-year, long-term  contract for  woody                                                              
biomass to  supply the proposed  two megawatt (MW)  power facility                                                              
in Tok,  including the  best interest  finding  and a timber  sale                                                              
that would commit a resource for that facility.                                                                                 
                                                                                                                                
3:36:10 PM                                                                                                                    
                                                                                                                                
THOMAS DEERFIELD,  Dalson  Energy, Inc., said  he is  representing                                                              
Alaska Power  & Telephone (AP&T).   His company is part  of a team                                                              
contracted  by AP&T  to  conduct  a full  scale,  investment-grade                                                              
feasibility  study of  a  two MW  combined  heat  and power  (CHP)                                                              
facility  in  Tok.   Alaska  Power  &  Telephone  is a  leader  in                                                              
utility  conversion to  renewable energy,  converting from  almost                                                              
100 percent  fossil fuel  generation in 1999,  to over  70 percent                                                              
renewable  energy  power  in  2012,   mostly  generated  by  small                                                              
hydropower.    Several  years  ago  the  utility  began  to  study                                                              
biomass  CHP operations  around the  world  and in  the Lower  48.                                                              
Currently, the upper  Tanana area is an isolated  power grid, with                                                              
a two  MW generation  station in  Tok that  pays the highest  fuel                                                              
cost for  power generation  in the  state at  over $4 per  gallon,                                                              
yielding power at  over $.50 per kilowatt (kW) hour.   The utility                                                              
has  researched alternatives  such as  small hydro,  hydrokinetic,                                                              
wind  turbine,  and solar,  all  of  which  have limitations.    A                                                              
prefeasibility  study of  biomass  CHP "looked  positive," so  the                                                              
utility and AEA  are funding further study.  Some  of the benefits                                                              
of biomass  are that it  is on-demand power  - not dependent  upon                                                              
wind  or sun  - that  is fueled  by  local fuel  and local  labor,                                                              
keeping  approximately $1,000,000  per  year in  the community  to                                                              
pay for local  feedstock supplied by local harvesters.   Also, the                                                              
cost of power  will be stable and significantly  lower; perhaps 30                                                              
to 40  percent lower  than fossil  fuel.   There is state  support                                                              
for the  project through  AEA, and federal  support is  possible -                                                              
with quick  action - through  Rural Development, the  Farm Service                                                              
Agency, and  the Forest Service,  U.S. Department  of Agriculture,                                                              
and  the  National   Renewable  Energy  Laboratory   (NREL),  U.S.                                                              
Department of Energy.                                                                                                           
                                                                                                                                
3:41:40 PM                                                                                                                    
                                                                                                                                
MR.  DEERFIELD   cautioned  against   comparing  the   project  to                                                              
conventional energy  because renewable  fuels cannot  compete with                                                              
the Btu density  of fossil fuels,  but fossil fuels are  no longer                                                              
cheap.    The cost  of operation and  maintenance (O&M)  is higher                                                              
with all forms  of biomass; however, O&M also  creates local jobs.                                                              
He  advised  that the  feasibility  study  is dependent  upon  the                                                              
long-term biomass  harvest contract from the Division  of Forestry                                                              
mentioned by  the previous speaker;  the need is for  25,000 green                                                              
tons harvested per  year for 25 years to secure  the financing for                                                              
the project.  In  addition, his company is working  on site review                                                              
and  technology review,  which looks  at all  of the  commercially                                                              
available  and  reliable  forms   of  small-scale  CHP  technology                                                              
appropriate  to Tok's  climate.   Permitting,  environmental,  and                                                              
financial  analyses will  follow, and  the report  is expected  by                                                              
the end of June.                                                                                                                
                                                                                                                                
3:43:30 PM                                                                                                                    
                                                                                                                                
TODD POAGE, Superintendent,  Alaska Gateway School  District, said                                                              
he has been the superintendent for five years.                                                                                  
                                                                                                                                
There followed a video presentation from 3:44 p.m. to 3:54 p.m.                                                                 
                                                                                                                                
3:55:09 PM                                                                                                                    
                                                                                                                                
MR.  POAGE   said  the   low-speed  electrical   turbine   is  now                                                              
operational  and is  generating  20 kW  of  electricity.   Through                                                              
further  testing and  development,  it is  hoped  one-half of  the                                                              
school's  electricity  will  be   generated  by  the  turbine,  in                                                              
addition to the by-product of heat used for space heating.                                                                      
                                                                                                                                
3:56:13 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER  observed the school  does not benefit  from power                                                              
cost equalization (PCE).                                                                                                        
                                                                                                                                
MR. POAGE said correct.                                                                                                         
                                                                                                                                
REPRESENTATIVE  TUCK asked  how  many schools  are  served by  the                                                              
Alaska Gateway School District.                                                                                                 
                                                                                                                                
MR. POAGE  answered there are  seven schools and  a correspondence                                                              
program that  serve approximately  400 students  in the  district.                                                              
In  further response  to  Representative  Tuck, he  explained  the                                                              
turbine  and  boiler described  are  a  source  of power  for  Tok                                                              
School.   However, the district has  applied for a grant  from AEA                                                              
in  the amount  of  $750,000 to  run  a heat  loop  to the  multi-                                                              
purpose building in Tok.                                                                                                        
                                                                                                                                
REPRESENTATIVE   TUCK  asked  how   the  electrical   wattage  was                                                              
increased from 20 kW to 40 kW.                                                                                                  
                                                                                                                                
MR.  POAGE  explained bigger  air  fans  were  added to  keep  the                                                              
combustion cooler,  so that  all of the  wood is burned  and there                                                              
is no  smoke.    In further  response  to Representative  Tuck, he                                                              
said the  boilers will  last for  25 years to  35 years,  and they                                                              
can be reconditioned.                                                                                                           
                                                                                                                                
3:58:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  asked for the source - and  the timeline -                                                              
to obtain federal funds.                                                                                                        
                                                                                                                                
MR.  DEERFIELD  advised  2012 requests  for  proposal  (RFP)  from                                                              
federal  agencies are  open.   Historically,  communities look  to                                                              
NREL  and USDA  agencies such  as  the Farm  Services Agency,  the                                                              
Forest Service, and Rural Development.                                                                                          
                                                                                                                                
REPRESENTATIVE  SADDLER asked  whether harvesting  this amount  of                                                              
spruce  would   lead  to  any   environmental  or   forest  health                                                              
detriments.                                                                                                                     
                                                                                                                                
MR. MAISCH assured  the committee this is a  sustainable activity,                                                              
with an allowable  cut to ensure  the fuel supply is  available in                                                              
perpetuity.   There may be  opposition from a minority  viewpoint.                                                              
In further response  to Representative Saddler, he  confirmed this                                                              
harvest  is black  spruce;  however, in  Southeast,  the fuel  may                                                              
come   from  harvested   old  growth   timber,   which  leads   to                                                              
opposition.    Furthermore, in  the  Interior,  fire danger  is  a                                                              
factor; in fact,  spruce is known to firefighters  as "gasoline on                                                              
a stick."                                                                                                                       
                                                                                                                                
REPRESENTATIVE SADDLER  asked for per  unit costs of  the chippers                                                              
and boilers.                                                                                                                    
                                                                                                                                
4:01:58 PM                                                                                                                    
                                                                                                                                
MR.  STANCLIFF  said  the  chipper  was  $375,000,  plus  the  log                                                              
loader.   The chipper  can be  shared with  other communities  and                                                              
schools.   He  pointed  out all  of the  schools  that are  adding                                                              
biomass equipment  are trying to  make the equipment  and training                                                              
compatible to save  money.  In further response  to Representative                                                              
Saddler,  he said  in  order to  prevent  air pollution,  pellets,                                                              
briquettes,  and dry cured  wood all  are about  12 to  14 percent                                                              
MC, ideally.   However, in  a biomass boiler,  it is  desirable to                                                              
have chips with a 20 percent to 50 percent MC.                                                                                  
                                                                                                                                
4:04:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T.  WILSON asked whether the university  project to                                                              
measure trees growing in Tok is still underway.                                                                                 
                                                                                                                                
MR.  MAISCH said  the  University  of Alaska  (UA)  has an  active                                                              
Growth and Yield  program.  The Tok experimental forest  is a unit                                                              
within  the State  Forest  and there  is  an ongoing  agroforestry                                                              
species trial  comparing the  growth of  lodgepole pine  with that                                                              
of spruce  during drier climate conditions.    He  noted financial                                                              
support has been  requested for this type of research  in biomass.                                                              
In  further  response  to Representative  T.  Wilson,  Mr.  Maisch                                                              
explained that  the 25-year  contract the  division is  working on                                                              
now uses  its authority to  sell timber for  a period of up  to 25                                                              
years.   The division must  write a forest  land-use plan  for the                                                              
area,  a best  interest  finding,  and a  draft  contract for  the                                                              
purpose of  negotiation.   He expected this  work to  be completed                                                              
in draft form for public comment in June.                                                                                       
                                                                                                                                
4:07:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T.  WILSON asked whether  this process  is required                                                              
for each  project.  For example,  how does the division  work with                                                              
AEA and advise  different communities on which  fuel and equipment                                                              
is best for them.                                                                                                               
                                                                                                                                
MR. MAISCH  answered that  the division  practices due  diligence.                                                              
The role  of the division  is on the supply  side:  to  supply the                                                              
raw materials  for these  types of  projects.   The division  also                                                              
has  expertise  on the  types  of  fuels and  harvesting  systems,                                                              
which  is the  forest  management aspect  of  a project.   At  the                                                              
beginning   of  the   project  under   discussion,  the   division                                                              
recommended AP&T  engage a forestry  consultant so that  there was                                                              
a  common language  between the  parties.   The  division is  also                                                              
capable of data  analysis and can provide technical  assistance to                                                              
AEA  to ensure  that the  fuel supply  is sustainable,  available,                                                              
and economic for a specific project.                                                                                            
                                                                                                                                
4:11:09 PM                                                                                                                    
                                                                                                                                
MR.  POAGE, in  response  to Representative  T.  Wilson, said  the                                                              
district's electrostatic  precipitator came from Germany,  but was                                                              
purchased through  another company.   Every two  weeks the  ash is                                                              
easily dumped from barrels underneath.                                                                                          
                                                                                                                                
MR.  MAISCH suggested  that Representative  T.  Wilson could  tour                                                              
Sealaska's electrostatic precipitator.                                                                                          
                                                                                                                                
REPRESENTATIVE   T.  WILSON  has   heard  that  installation   was                                                              
difficult.                                                                                                                      
                                                                                                                                
Due  to technical  difficulties, the  committee took  a brief  at-                                                              
ease.                                                                                                                           
                                                                                                                                
REPRESENTATIVE   T.   WILSON  understood   the   installation   of                                                              
electrostatic  precipitators  in   chimneys  would  help  the  air                                                              
quality in Fairbanks.                                                                                                           
                                                                                                                                
MR. POAGE restated his earlier response for the record.                                                                         
                                                                                                                                
4:12:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN expressed  his belief  that to apply  for                                                              
an AEA  grant, one needs  to have  a financial feasibility  study.                                                              
He then  asked whether the trees  left standing grow  faster after                                                              
the undergrowth is cleared.                                                                                                     
                                                                                                                                
MR. MAISCH  said yes;  reducing competition  for water,  sunlight,                                                              
and nutrients  in a  stand of  trees encourages  growth in  height                                                              
and  diameter.   However, clearing  underbrush is  mainly done  to                                                              
create a  defensible space  around a home,  and make a  safe place                                                              
for firefighters to  work.  In further response  to Representative                                                              
Petersen, he added  that the trees left are more  esthetic, or can                                                              
be harvested by the homeowner for firewood.                                                                                     
                                                                                                                                
4:14:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN  asked   for  confirmation  that  biomass                                                              
boilers can use a mix of wood chips and solid waste.                                                                            
                                                                                                                                
MR. STANCLIFF  said yes.   He added  that wood  chips can  also be                                                              
mixed  with   coal,  and   this  process   is  called   co-firing.                                                              
Locally,  there is  concern among  harvesters  of firewood,  house                                                              
logs,  and saw  logs,  about the  loss  of wood  supply;  however,                                                              
working  roads  to the  biomass  supply  will increase  access  to                                                              
other commercial  trees.   The typical  biomass fuel is  four-inch                                                              
to  eight-inch diameter  trees,  and "is  not  going to  eliminate                                                              
these other multiple-uses of our wood resources."                                                                               
                                                                                                                                
REPRESENTATIVE  PETERSEN observed  Eielson Air  Force Base  uses a                                                              
mix of coal and garbage in its boiler.                                                                                          
                                                                                                                                
MR.  MAISCH,  in  response to  Representative  Petersen,  said  in                                                              
hazardous  fuel mitigation  areas there  is a  25-year to  30-year                                                              
short rotation  in spruce,  but normally the  cycle in  the Tanana                                                              
Valley State  Forest for  spruce is  100 years,  and 80  years for                                                              
birch and  aspen.  For  areas where the  division has  taken black                                                              
spruce  out of  a  fuel break,  aspen  sprouts  first, and  spruce                                                              
takes over  at age 60  years, thus the intent  is to mow  down the                                                              
hardwoods  on a 20-year  to 30-year  cycle, and  also create  good                                                              
browse for moose.                                                                                                               
                                                                                                                                
MR. STANCLIFF  added  that the nutrient  layer  down to 18  inches                                                              
can  be  sterilized by  a  very  hot fire,  causing  regrowth  and                                                              
regeneration  to  be slower  than  if  man  cuts down  the  trees.                                                              
Worldwide,  biomass  research  has  found that  planting  trees  -                                                              
which accelerates  regeneration - is carbon positive,  even though                                                              
biomass  is  considered  as  carbon negative.    He  reminded  the                                                              
committee that  in Tok, the trees  will burn in wildfires  if they                                                              
are not cut.                                                                                                                    
                                                                                                                                
4:20:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER asked  whether the  Department of  Natural                                                              
Resources (DNR) area  plans for the best use of  land encourage or                                                              
inhibit this action.                                                                                                            
                                                                                                                                
MR. MAISCH  said no.   The division works  with the area  plans as                                                              
they are  updated; for  example,  the Tanana Basin  Area Plan  has                                                              
been  divided into  the Yukon  Tanana  Area Plan  and the  Eastern                                                              
Tanana  Area  Plan.    The  Tanana  Valley  State  Forest  is  not                                                              
affected  by an area  plan, and  there is  pending legislation  to                                                              
designate more  land to the State  Forest.  The division  seeks to                                                              
aggressively  participate in  updating  the area  plans to  ensure                                                              
that forestry is discussed.                                                                                                     
                                                                                                                                
4:21:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  asked  for the  best  classification  for                                                              
land in  order to  facilitate woody  biomass power generation  for                                                              
heat.                                                                                                                           
                                                                                                                                
MR.  MAISCH  responded  that  land   in  a  State  Forest  is  the                                                              
strongest  way,  or  land  classified for  forestry  use  in  area                                                              
plans, although  classifications are subject to change  over time.                                                              
In further  response to Representative  Saddler, he said  there is                                                              
no  prohibition,   but  there  are  co-classifications,   such  as                                                              
"allowed use."    In Tok,  the lands are classified  as settlement                                                              
lands  and  concurrence must  be  obtained  from the  Division  of                                                              
Mining, Land & Water, DNR, for access.                                                                                          
                                                                                                                                
4:23:45 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FOSTER  asked  whether  there  are  obstacles  to  using                                                              
driftwood.                                                                                                                      
                                                                                                                                
MR. DEERFIELD explained  there was a pilot project  in Stebbins to                                                              
test both  the long-term sustainability  of volumes  of driftwood,                                                              
and the  ability of  boilers to  safely and  cleanly combust  wood                                                              
that has  been embedded with  salt.    The questions have  not yet                                                              
been resolved.                                                                                                                  
                                                                                                                                
REPRESENTATIVE   PETERSEN  asked   whether  underbrush   could  be                                                              
cleared on designated parkland to protect it from fire.                                                                         
                                                                                                                                
MR. MAISCH recalled  the division has done hazard  fuel mitigation                                                              
on some  parkland, in concurrence  with the Division of  Parks and                                                              
Outdoor Recreation,  DNR; however, these projects have  not been a                                                              
large commercial harvest.                                                                                                       
                                                                                                                                
4:26:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SADDLER   asked  what   is   required  from   the                                                              
legislature for continued success.                                                                                              
                                                                                                                                
MR.  STANCLIFF listed  many projects  in Vermont  and opined  they                                                              
are  successful because  the [Vermont]  Division  of Forestry  had                                                              
the resources available  to stay ahead of the demand.    He opined                                                              
in Alaska the  economic and social benefits of  biomass will cause                                                              
demand  for these  systems to  grow  quickly.   He also  cautioned                                                              
that funding must  be limited to sound projects  without failures.                                                              
In addition, his  experience is that the DNR office  in Tok is not                                                              
fully staffed.                                                                                                                  
                                                                                                                                
4:29:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  suggested adding garbage to  lengthen the                                                              
sustainability of the biomass material available.                                                                               
                                                                                                                                
MR. STANCLIFF advised  that everything burns at  some temperature;                                                              
in  fact, in  Sweden, utilities  collect the  refuse, process  it,                                                              
and generate  power at minimum  expense to  the utility.   This is                                                              
not an opportunity for Tok, but is for Anchorage.                                                                               
                                                                                                                                
MR. MAISCH  informed the  committee the  division has submitted  a                                                              
capital  budget request  in the  amount  of $200,000  for the  Tok                                                              
Long-Term Timber Sale for Biomass Energy.                                                                                       
                                                                                                                                
MR. DEERFIELD  opined that  the state will  be heating all  of its                                                              
rural schools  - and  the majority  of its  community buildings  -                                                              
with biomass,  as fossil  fuels escalate  in cost.   Although  the                                                              
infrastructure  is  not in  place  in  Alaska, the  technology  is                                                              
widely  established  in the  Lower  48, Canada,  and  Europe.   He                                                              
compared  the time  needed to  reforest  with the  time needed  to                                                              
produce oil or gas.                                                                                                             
                                                                                                                                
4:34:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   TUCK  referred  to   slide  1  of   Mr.  Maisch's                                                              
presentation and  asked whether  the eight operational  facilities                                                              
in  Alaska have  to  import wood  pellets  or are  self-sustaining                                                              
with local wood.                                                                                                                
                                                                                                                                
MR. MAISCH  said they  are all  self-sustaining operations,  using                                                              
waste wood from sawmills or local wood from vendors.                                                                            
                                                                                                                                
REPRESENTATIVE TUCK asked where Tok School gets its power now.                                                                  
                                                                                                                                
4:35:20 PM                                                                                                                    
                                                                                                                                
MR. STANCLIFF  stated that  prior to  the biomass conversion,  and                                                              
to a  degree now, Tok  School and the  1,200 residents of  Tok got                                                              
power from  the AP&T  main grid  located about  20 miles  from the                                                              
center  of  town.     This  power  supply  is   approximately  1.5                                                              
megawatts  (MW), and  when there  is a  fire, power  goes out  and                                                              
there is  no communication possible  from the communication  tower                                                              
to  the Public  Department  of Public  Safety,  the Department  of                                                              
Transportation   &   Public  Facilities,   and   other   emergency                                                              
services.   Now, however,  the independent  power system  from the                                                              
school  can back up  the communications  system.   The power  from                                                              
the school  will  have to be  balanced  with AP&T  on the grid  to                                                              
ensure that the cycles are the same.                                                                                            
                                                                                                                                
4:37:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK asked  whether there  will be an  opportunity                                                              
for the school to sell power on the grid during the summer.                                                                     
                                                                                                                                
MR. POAGE advised  the peak demand of the school  is 150 kilowatts                                                              
(kW), and  the system  seeks to produce  between 50  kW and  65 kW                                                              
which is one-third  of the peak demand rate.  He  said there is no                                                              
agreement  with  AP&T, but  AP&T  allows  the  school to  run  the                                                              
electricity  it produces through  its line  into the school,  thus                                                              
it is not  a closed circuit.   The ultimate goal is to  "have some                                                              
type  of  net  metering  in  place."     In  further  response  to                                                              
Representative Tuck,  he said peak  demand in the summer  is about                                                              
80 kW,  and "at this  time, none of  what we've been  creating has                                                              
gotten past Tok School."                                                                                                        
                                                                                                                                
4:39:04 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Energy meeting was adjourned at 4:39 p.m.                                                                  

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