Legislature(2009 - 2010)DILLINGHAM
03/01/2009 01:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Alaska Energy Authority Statewide Energy Report | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
Dillingham, Alaska
March 1, 2009
1:31 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Charisse Millett, Co-Chair
Representative Kyle Johansen
Representative Jay Ramras
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
Representative Nancy Dahlstrom
OTHER LEGISLATORS PRESENT
Representative John Coghill
Representative Mike Chenault
Representative Bob Herron
COMMITTEE CALENDAR
Alaska Energy Authority Statewide Energy Report
PREVIOUS COMMITTEE ACTION
No previous action to report
WITNESS REGISTER
REPRESENTATIVE JOHN COGHILL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Asked questions during the discussion of
the Statewide Energy Report.
REPRESENTATIVE MIKE CHENAULT
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Welcomed local participants to the
discussion of the Statewide Energy Report.
REPRESENTATIVE BOB HERRON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Asked questions during the discussion of
the Statewide Energy Report.
ALICE RUBY, Mayor
City of Dillingham
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
DONNA VUKICH, General Manager
Naknek Electric Association, Inc.
Naknek, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
JASON METROKIN, President/CEO
Bristol Bay Native Corporation (BBNC)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
THOMAS TILDEN, Tribal Chief
Curyung Tribal Council
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
DAVE MCCLURE, Executive Director
Bristol Bay Housing Authority; Chairman
Southwest Alaska Vocational Education Center; Director
Nushagak Electric & Telephone Cooperative
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
FRANK CORBIN, General Manager
Nushagak Electric and Telephone Cooperative; President
Dillingham Chamber of Commerce
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
ROBIN SAMUELSEN, President/CEO
Bristol Bay Economic Development Corporation (BBEDC)
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
PETER CHRISTOPHER SR.
New Stuyahok, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
RALPH ANDERSEN, Chief Executive Officer
Bristol Bay Native Association (BBNA)
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
ROBERT CLARK, PRESIDENT/CEO
Bristol Bay Area Health Corporation (BBAHC)
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
CAROLYN SMITH, MAYOR
Aleknagik, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
JON CORBETT, Businessman
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
RUSSELL NELSON, Director of Facilities
Dillingham School District
Dillingham, Alaska
POSITION STATEMENT: Testified on behalf of the superintendent
of the Dillingham School District.
HJALMAR OLSON
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
KAREN DEARLOVE
Dillingham, Alaska
POSITION STATEMENT Testified during the discussion of the
Statewide Energy Report.
BOB HIMSCHOOT
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
GUSTY CHYTHLOOK
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy report.
MARILYN ROSENE, Principal
Dillingham Elementary School
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
JUNE INGRAM
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of
Statewide Energy Report.
KYLE BELLEQUE
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of
Statewide Energy Report.
LUCY WEEDMAN
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
MARK NEWSON
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
KIMBERLY WILLIAMS
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
JOE FAITH
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
JIMMY HURLEY
Ekwok, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
DON FORD
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
FRANK WOODS
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
WENDELL DOWNS, Pastor
Seventh-Day Adventist Church
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion of the
Statewide Energy Report.
BRIAN PAULING, Businessman
Dillingham, Alaska
POSITION STATEMENT: Testified during the discussion on the
Statewide Energy Report.
ACTION NARRATIVE
1:31:42 PM
CO-CHAIR BRYCE EDGMON called the House Special Committee on
Energy meeting to order at 1:31 p.m. Representatives Ramras,
Johansen, Petersen, Tuck, Millett, and Edgmon were present at
the call to order. Also in attendance were Representatives
Coghill, Chenault, and Herron.
^ALASKA ENERGY AUTHORITY STATEWIDE ENERGY REPORT
CO-CHAIR EDGMON announced that the only order of business would
be discussion of the Alaska Energy Authority (AEA) Statewide
Energy Report. He invited the committee members to introduce
themselves.
1:33:38 PM
Introductions were made by Representatives Ramras, Coghill,
Petersen, Chenault, Millett, Herron, Johansen, and Tuck.
Several speakers thanked the community of Dillingham for its
hospitality.
1:38:29 PM
CO-CHAIR MILLETT said the meeting in Dillingham was the second
part of the energy committee's trip after travelling to Nome and
Kotzebue. She expressed her interest in listening to residents
as they participate in the development of the statewide energy
policy for Alaska.
REPRESENTATIVE CHENAULT said he was glad to see the high local
turnout for the hearing. He recalled some of the activities of
the day and expressed his interest in listening to testimony.
1:40:23 PM
ALICE RUBY, Mayor, City of Dillingham, preceded her testimony by
thanking the committee for visiting the region and recognizing
the various groups that facilitated the activities over the
week-end and at the hearing today. She related that Dillingham
is a 1st class city that provides K-12 schools, police service,
water and sewer services, a landfill, street maintenance, a boat
harbor, a library, a museum, fire and ambulance services, senior
citizens programs, and planning. These services are supported
by a 13 millage rate real and personal property tax, a 6 percent
sales tax, a 10 percent bed and alcohol tax, and various user
fees. According to statistics by the Department of Commerce,
Community, & Economic Development (DCCED), Dillingham's per
capita tax rate of $1,894 is higher than the tax rate of some
larger communities in the state. Mayor Ruby said Dillingham's
general fund budget for fiscal year 2009 (FY 09) is $6.7 million
and a large part of that budget is $1.2 million for schools,
with a bond obligation of $15 million for school renovation. As
the state can contribute to the bond payment through the general
obligation (GO) bond program, she strongly encouraged the
legislators to continue the GO bond program. Mayor Ruby stated
that citizens and municipal operations are "buckling under the
strain" of energy costs; in fact, the city's energy costs have
increased 30 percent over the past five years.
1:44:06 PM
MAYOR RUBY further explained increased energy costs must be
added to a 50 percent increase in the cost of health insurance,
and increased demand for services. She encouraged the committee
consider the following: continued long-term investment in ways
to reduce the cost of energy; transitional solutions to address
the present crisis; continuing support of the Power Cost
Equalization (PCE) program for citizens and for public
entities; continued support of municipalities that are
suffering from high prices for heating fuel and gas. In fact,
in FY 09, Dillingham will invest $250,000 in heating fuel, which
is an increase of $100,000 in one year. She opined consumers
are concerned about an increase in sales taxes, although the
city council enacted a waiver from sales tax for one-half the
cost of home heating fuel from January to April. This waiver
will cost the city $116,000 in lost revenue.
1:46:05 PM
MAYOR RUBY further encouraged the committee to provide funds to
weatherize existing buildings owned by municipalities in order
to reduce energy consumption. She voiced support for
researching the rural fuel pricing structure and pointed out
that the price of fuel in Dillingham is more than the price for
the same product in Nome or King Salmon; moreover, as the cost
of delivery is an element of that fuel structure, perhaps
regulation is in order. The city is also in support of a
revision of the home energy rebate program to allow more
participation. Furthermore, she encouraged the committee to
review the Low Income Home Energy Assistance Program (LIHEAP)
and the Alaska Heating Assistance Program (AKHAP) for
improvements to the application processing time. Finally, she
encouraged the state to target Dillingham as a resource center
for technology and the distribution of energy related products
to regional residents. Every citizen needs information,
assistance, and a source for [energy related] products, and the
city has an excellent college campus and regional organizations
willing to contribute time and effort.
1:48:56 PM
DONNA VUKICH, General Manager, Naknek Electric Association Inc.,
welcomed the committee to the region and provided an update of
the Proposed Regional Geothermal Generation Project developed by
the Naknek Electric Association, Inc., (NEA). She explained NEA
just completed the latest geophysical work to verify some of the
previous work done by aeromagnetic studies. Ms. Vukich noted
the work has been favorable; in fact, NEA has contracted with
GeothermEx [Richmond, California] and Alaska Earth Sciences,
Inc., [Anchorage] as project managers. In addition, a request
for proposal (RFP) for a drill rig has been issued and plans are
to begin drilling this summer. She stressed the work is a
regional plan that complements the state's longer visions of a
regional energy facility that will "intertie" 25 communities
together to reduce the cost of fuel in the smallest communities.
At this time, utility rates are ranging from $.43 per kilowatt
hour to over $1 per kilowatt hour in Egegik and Aleknagik. She
opined the high costs of energy are destroying the villages; for
example, the Bristol Bay Borough School District lost 45
students in one year. Ms. Vukic disputed the conclusion of the
Institute of Social and Economic Research (ISER) [Fuel Costs,
Migration and Community Viability May 2008] report and said if
the study had gone back 20 years, the decrease in village
population would have been evident. In fact, the school
population in Bristol Bay has fallen from 300 to 137 students in
the past 10 years. She pointed out the utilities have spent 10
years working toward the geothermal project and she spoke
favorably of the renewable energy fund and the proactive work
done by the legislature.
1:52:17 PM
MS. VUKICH, in response to Co-Chair Edgmon, indicated the
geothermal project would produce 25 megawatts (MW) of power that
could be expanded to 50 megawatts, which is the ultimate load
desired. She expressed optimism about the success of the
project through the processes and equipment available from
GeothermEx. At this time, peak use for the region is about 18
MW and she said producing hydrogen and supplying heating for the
district and several nearby villages will eliminate the need for
diesel power.
REPRESENTATIVE RAMRAS observed the cost estimate from NEA for
the project is $200 million, but the estimate from GeothermEx
and Alaska Earth Sciences is for $96 million in capital costs.
He asked about the difference in estimates.
MS. VUKICH explained the higher estimate includes the possible
need for an enhanced geothermal system that would raise the cost
of the power plant and collection facility, and that also
includes [construction of] interties. Alaska Earth Sciences and
GeothermEx are only looking at generation. In response to
Representative Petersen, she said NEA was hopeful that it would
receive a match from the state for $5 million. The utility has
$3 million from the federal government; in addition, the co-op
has spent $2 million and has pledged to borrow the amount needed
to finish drilling the test well.
1:55:17 PM
JASON METROKIN, President/CEO, Bristol Bay Native Corporation
(BBNC), thanked Hjalmar Olson for his service to the Bristol Bay
Native Corporation and then read from the following prepared
statement [original punctuation provided]:
I am pleased to address the members of the State
Legislature as well as those in attendance regarding
the Energy Crisis facing the Bristol Bay region and
its residents.
There should be no question that our region has faced
abnormally high energy costs as compared to other
geographic regions of Alaska. I appreciate the work
of the Legislature and the Alaska Energy Authority to
address future energy needs in Bristol Bay. The
$5million in renewable energy grants recently awarded
may be helpful in ultimately lower energy costs in the
region. My concern is that this is only the tip of
the iceberg when it comes to the needs of our
villages. What we need is support for projects that
will address energy costs today, next week and next
year. While I support the notion of long-term energy
solutions and the need for studies and sustainable
funding streams. We cannot wait 5 or 10 or 20 years
for mega-project solutions to address this crisis.
I urge you as I urge all of our regional leadership
and local community members to focus on the costs of
energy and their impacts on the region today. Small
demonstration projects, while they may only benefit
the few, are affordable, sustainable and ultimately
lead to long-term and large-scale solutions for the
greater good.
Bristol Bay Native Corporation supports all energy
solutions for the region as long as they are realistic
and affordable. We will consider investing in energy
projects if they bring a financial return to the
corporation. To contribute monetary support of
individual energy projects without a return
expectation takes away from our ability to fund
increasing shareholder dividends, something we have
done for 30 consecutive years.
Having said that, we are open to new business
opportunities in the region, especially those that
address lower cost energy. BBNC is also supportive of
appropriately increasing PCE funding to keep up with
high rural electricity costs. We have explored a
similar program for home heating oil and would urge
the Legislature to consider opening discussions on how
to equalize expenses for those heating their homes who
do not live on the electrical grid - many of whom are
not only village residents but on the rail belt as
well.
Again, BBNC is appreciative of the work that has been
done thus far. We are all partners in this matter and
I hope you share the same opinion that no one single
solution will address this crisis. It will take a
balanced approach of renewables and non-renewables.
Residential and commercial. Wind, solar, hydro.
Efficient and reliable transportation of fuel and a
breakup of any fuel monopolies.
Local ingenuity can get us through these times but it
takes resources to apply good ideas. Grant funding
alone cannot pave the way. Private funding from all
available sources must come to the table to address
the needs of today.
I appreciate the opportunity to speak on behalf of
Bristol Bay Native Corporation. Thank you.
1:59:36 PM
THOMAS TILDEN, Tribal Chief, Curyung Tribal Council, informed
the committee the Curyung Tribe has 2,400 hundred members. He
welcomed the committee to the region and said he was a fisherman
who also works part-time. He observed the fuel crisis is not a
surprise, but was foreseen by those who experienced a previous
economic crisis years ago. He urged the state to expand its
"price-fixing" investigation to include Southwestern Alaska and
related the price of gas in Anchorage is $2.37 per gallon,
compared to $6.31 in Dillingham and $11 in Kanakanak; this
difference warrants investigation. He said he is paying $1,200
a month for fuel to heat his well-insulated home. He encouraged
the state to look for short- and long-term goals and stated his
support for Naknek Electric in its search for thermal energy; in
fact, all renewable energy projects that serve more than one
community with long-term benefits need to be funded. Mr. Tilden
also encouraged the governor to accept [federal] stimulus
package money because the money and the work are needed by all
Alaskans. He opined the people of the region are a proud and
independent people, but they must break the silence now and say
that people are suffering; as a matter of fact, Bethel is far
worse off than Dillingham, because Dillingham has a fishing
economy. He also encouraged legislators to consider the impact
of the cost of fuel on subsistence [users], as the number of
residents dependent upon subsistence is rising. The state has
taken a hard stand against rural preference; however, it is time
to re-examine its stand in the light of hard times like this.
He said, "I don't know how many of you have ever put a sandwich
into your mouth and decided ... whether to eat or whether to
heat your homes." Subsistence can cure some of these problems,
but there are too many regulations that are required in order
for folks to subsist naturally. He also encouraged legislators
to study the situation that allows millions of dollars worth of
salmon to "go by" because there are not enough processors.
2:05:23 PM
MR. TILDEN then expressed his support for Senator Hoffman's
proposed legislation to "cap" the price of fuel at $3 per
gallon. He said this is a necessary step in order for residents
to survive. In addition, he called for an investigation into
the purchase of Yukon Fuels by the Crowley Company. On another
subject, he pointed out that the Board of Fish should meet in
Dillingham, because the only interested parties who can afford
to go to Anchorage to testify are from California, Seattle, and
Oregon. He cautioned about the damaging impact to the fishery
if there is insufficient testimony from the residents of
Dillingham. Mr. Tilden concluded by asking legislators to look
again at subsistence; to fund the Nushagak Electric & Telephone
Cooperative hydroelectric project; to fund the [NEA] thermal
energy project; and to strengthen the weatherization program by
putting local residents to work installing efficiency
improvements to state buildings. He reminded legislators that
"What some of the folks here are thinking about, and that is,
'Should I eat or should I heat my home?'"
2:09:25 PM
DAVE MCCLURE read from the following written statement [original
punctuation provided]:
My name is Dave McClure, and I serve as Executive
Director of the Bristol Bay housing Authority, and
serve as the Chairman of the Southwest Alaska
Vocational Education Center In King Salmon. I also am
a director of Nushagak Cooperatives here in
Dillingham, and have lived in Bristol Bay for 30
years.
I wish to thank you and the full legislature for
energy legislation adopted last year, specifically the
weatherization and alternative energy funding. We all
appreciate the effort you folks have taken to come out
and see our challenges firsthand.
Let me stress that the Alaska Housing Finance
Corporation has done an excellent job of mobilizing
the weatherization program in an expeditious manner,
and they work well with BBHA to accomplish the efforts
to weatherize homes in our region.
My main point today is to convey the extreme scope of
the need in our region. Please see the spreadsheet
provided which indicates that even at the 80% income
level of median income, there are over 1200 homes in
the thirty one villages that are eligible for Wx
assistance, which drives a total of approximately $ 42
million in need. The amount allocated to the Bristol
Bay Region is less than $ 6 million. To extend the
resources, BBHA has used an average of about $ 24,000
per home, which will allow us to stretch the funds and
weatherize additional homes. At that expenditure
level, payback is accomplished within 10 years, with
the important benefit of reducing the necessary cash
flow in the interim for the potential 40% savings in
fuel consumption. At $ 7 per gallon, this is almost $
3K per household in a winter.
Please know that the training dollars associated with
these funds are well spent. We partner with the
Denali Commission, Alaska Works Partnership, and our
Voc Ed Center in King Salmon to train local
individuals in becoming raters, but more importantly,
workers who understand building science. We have
trained over 25 individuals to date in various courses
of components of building science and OSHA training in
order to maximize local hire.
With the rebate program, we are talking with AHFC
about folks who fall just above the income threshold
for weatherization, but do no have the funds to pay
for a rater. AHFC has agreed to look at coming up
with a system to have these folks rated, and take
advantage of their improvement loan program to interim
fund the rebate upgrades to their home. BBHA can
assist with these ratings from our folks trained with
weatherization funds.
BBHA also supports the efforts of Senator Hoffman to
reduce the cost of fuel oil in the region. While we
support the current effort to assist communities with
the purchase of fuel, and to insure everyone had
adequate funds in a community to provide fuel to all
homes, we also support reduction at the point of sale
to the cost of fuel from State funds. This could be
done with an means-test methodology such as is used by
the Lifeline federal telephone subsidy, that is, if
you can show you have been income screened in any
number of federal programs, you would be eligible for
this program without further verification. As Robin
Samuelson stated last night, we have several instances
of people turning to electrical heat because they
cannot afford oil, even though they then have a large
electrical bill to pay.
BBHA and the village have used Federal HUD funds to
react to the high costs of fuel by providing energy
vouchers to homeowners; approximately $300,000 per
year is used in this fashion over the past two years.
The Federal stimulus funding will provide by formula
an additional $ 2.4 million to our region thru HUD for
construction activities such as weather-stripping,
window insulation, and other rehab type work.
It is important for the committee to continue to fund
the Weatherization program, as even with federal
stimulus funding, the need in the region is six times
the available funding.
BBHA also supports the Power Cost Equalization
program. In many of our villages, electrical costs
have increased dramatically, due to spreading the
increased cost by fewer consumer. PCE is an absolute
necessity for residential customers.
The hardest job all of us have is managing realistic
expectations of our residents. However, by continued
funding, with accountability of the resources expended
and effective and efficient use of the funds will
allow our scarce resource to go further.
I have asked Val Angasan, our weatherization director
to testify to specifics of our effort, and am happy to
answer any questions. Thank you.
2:14:50 PM
FRANK CORBIN, General Manager, Nushagak Electric and Telephone
Cooperative; President, Dillingham Chamber of Commerce, informed
the committee that the cooperative is a consolidated utility in
that it provides cable TV, internet, and telephone as well as
electricity, and its resources are balanced between the
different services. Last year, the cooperative borrowed about
$1 million to comply with a federal mandate to "change out"
telephone equipment. In addition, it is in the process of
bringing broadband bandwidth to its service area by microwave.
This improvement will bring internet services to at least six
more villages and, because there is no use for satellite, will
lower cost. Addressing the energy crisis, he stated the
cooperative has been involved in a generator upgrade to the
powerhouse and has installed the newest and most efficient
generators to save fuel. Additionally, with support from the
Denali Commission, the state, and the federal government the
upgrades have been funded with grant money to keep overhead
costs down and "we don't have to charge that directly to the
rate base ... our rates could be higher if we had to borrow
money to put those generators in." He explained once the
powerhouse upgrade is complete, the cooperative has a plan for a
hydro project to move the base power source into something other
than diesel generation. Then, diesel generation would only be
needed for back-up and periods of maintenance. Mc Corbin opined
when there is potential for hydro power, there is also a
potential to lower the rates to consumers. Again, the rates to
consumers are dependent on financing and grants for capital
expenses mean lower debt and lower rates. Mr. Corbin concluded
that hydro generation is a very good project because, as a small
cooperative, Nushagak Electric and Telephone could trade some of
the [revenue paid toward] debt service instead of fuel expense.
2:18:48 PM
REPRESENTATIVE COGHILL asked for an estimate of the completion
date of the hydro project.
MR. CORBIN said the project is viable with current technology.
The course of the project depends on the point at which the
utility has enough funds promised that it can "put ourselves up
as collateral for the balance." He predicted the cooperative
would need to be beginning work at the site within two years and
construction completed three years after that. In further
response to Representative Coghill, he explained that the
cooperative applied for funds from the Alaska Energy Authority
(AEA) renewable energy grants program and has been awarded $4
million for the project, thus the project has been investigated
and vetted by AEA and is going forward.
2:21:10 PM
REPRESENTATIVE PETERSEN asked for a comparison of rates between
last year and this year.
MR. CORBIN estimated the residential rate was around 33 cents
per kilowatt last year and was 46.3 cents beginning last fall
and continuing through the next delivery. Of the 46.3 cents,
about 17.5 cents is overhead and the rest is fuel cost. He
pointed out that the overhead cost has not increased because of
the grant funds available during the generator upgrade.
Wholesale diesel in Seattle is $1.25 per gallon and the utility
paid $4.25 per gallon last summer. Also, transportation costs
are increasing; in fact, transportation cost estimates for next
summer indicate that 25 percent of fuel cost will be for
transportation.
2:23:02 PM
REPRESENTATIVE MILLETT asked for details on the grant money
received from the Denali Commission.
MR. CORBIN explained the upgrade project received a $1 million
grant from the federal government, a $1.3 million grant from the
Denali Commission, a $1 million grant from the state, and $1.6
million from the Rural Utilities Service of the U.S. Department
of Agriculture (RUS/USDA). He clarified that the upgrade was a
separate project from the $4 million renewable energy grant for
the [Elva Lake] hydro project.
2:23:35 PM
REPRESENTATIVE RAMRAS requested the committee hear further
discussion on this project at the conclusion of public
testimony.
2:24:18 PM
ROBIN SAMUELSEN, President/CEO, Bristol Bay Economic Development
Corporation (BBEDC), opined the cost of energy is the number one
issue facing the Bristol Bay region today. The elderly and
disabled are most vulnerable, but no one can keep up with the
problems that the cost of energy is creating such as expensive
electricity, groceries, and services. The situation demands a
radical change from the present dependence on oil that makes
everyone vulnerable to [shortages] from the Middle East. Mr.
Samuelsen said he was born and raised in Dillingham and has no
desire to live anywhere else, although a lot of folks in rural
Alaska have been forced to move out. The BBEDC represents 17
villages and is very aware of the problems there. Residents are
looking for answers and for short-, medium-, and long-term goals
of an energy plan for Alaska, regardless of the price of a
barrel of oil. He stated the BBEDC is very involved in
education and the fishing industry; in fact, scholarships are
provided for kids to go outside for school, but there is very
little reason for them to come back. His organization has
included a "forgiveness" clause in the scholarships in an effort
to prevent "brain drain in the region."
2:29:39 PM
MR. SAMUELSEN encouraged the committee to consider various power
sources including wind, solar, tidal, and geothermal, and
described several advantages to nuclear reactors. He also
mentioned consideration must be taken for the new carbon
footprint of products. Mr. Samuelsen recalled the fishing
industry in the region supported the commercial fisherman for
125 years and subsistence users for time immemorial; however,
as fish prices began to rise, the community is faced with $5 a
gallon diesel fuel. "It basically wiped out our shoulder
seasons," he said. One solution suggested by the BBEDC is to
put in processing plants in villages to provide employment and
extend opportunities for fishermen, but there needs to be a
source of cheap power for ice, refrigeration, and longer
[airport runways.] With the help of the state and the federal
government and with long-term plans, he said the region "will
get over this impasse that we're in."
2:33:59 PM
MR. SAMUELSON opined Alaskans must change their mindset and
encouraged the committee to quit funding entitlement programs.
He gave a personal story of his work ethic and said the $1,200
given last year was helpful but was soon forgotten; moreover,
that money would have been better invested in local, long-term
solutions to rural energy problem. Rural areas do not have the
expertise or financial backing to solve the energy crisis on
their own and need the state's help. He called attention to the
Foregone Harvest Survey and pointed out that between 2003 and
2008, fishermen lost $131 million in foregone harvest in Bristol
Bay; with the wholesale value added, the total is $360 million.
He listed losses for other communities and emphasized those
dollars are needed in order to keep communities alive. Mr.
Samuelsen concluded the solutions may start with the windmills
and solar installations that can minimize the state's dependence
on fossil fuels and keep residents in their rural homes.
2:37:58 PM
REPRESENTATIVE RAMRAS described the costs of possible solutions
to the energy crisis for several different parts of the state.
Referring to the state's limited resources, he asked, "How would
you allocate the money, where do you see sending it first, to
the little villages that are hurting the worst, the regional
hubs like your community that are as you say, relatively
healthy, the urban centers where the ... largest amount of
people in the state live. What do you think?"
2:39:35 PM
MR. SAMUELSEN disagreed that most of his community is healthy.
For example, the village of Emmonak is just "hanging on." The
solution is not how much money is thrown at a problem, but the
criteria used to find a solution such as long-range goals,
energy audits of each community, and collaboration with the
tribes - that are a major economic force - and city government.
Working together, the state, the tribes, and the city government
can change the dynamics of the region. He said, "As policy
setters, you guys got to set the goals and objectives that you
... want to achieve, and then go out with an RFP to all of the
communities, all the regions, all the city governments, all the
tribes, and force everybody to the table ... to come up with a
comprehensive plan for Bristol Bay." He also suggested the "due
diligence" use of federal stimulus money that may come
available.
2:42:39 PM
REPRESENTATIVE HERRON related a personal story of his warm
relationship with Mr. Samuelsen and his father.
2:44:18 PM
CO-CHAIR EDGMON noted that the committee will honor its
commitment to travel to Bethel.
2:44:30 PM
REPRESENTATIVE TUCK referred to the handout presented by Mr.
Samuelsen and remarked:
Take a look at Aleknagik; 34 cents and then 19 cents
with the Power Cost Equalization. Does that 34 cents
include the 19 cents, or is that already deducted?
MR. SAMUELSON surmised the 19 cents was already deducted.
REPRESENTATIVE TUCK then asked:
We see ... Portage Creek and Clark's Point that have
flat rates. How did those come about?
MR. SAMUELSEN explained most of the residents have moved from
Portage Creek and the school is closed. He was unsure about the
situation at Clark's Point.
2:45:41 PM
PETER CHRISTOPHER SR. informed the committee New Stuyahok is
located 52 northeast miles from Dillingham on the Nushagak
River. It is a rural village in Bristol Bay where the cost of
fuel was unbelievable last fall. The village corporate entity
was forced to pay almost half a million dollars to purchase
heating fuel and gas to service the community. The only profit
made went to employees; for example, the fuel cost $6.64 per
gallon if picked up at the tank farm and $7.14 per gallon
delivered. He stressed that the village must pay whatever the
fuel company charges as there are no other choices. Mr.
Christopher related a conversation he had in Anchorage with a
representative from NorthStar Gas Company who was planning a
meeting in Dillingham to discuss the possibility of reducing the
cost of fuel. He encouraged the [officials of] Dillingham to
welcome the NorthStar company to the region in order to have
competition and reduce the cost.
2:49:43 PM
MR. CHRISTOPHER turned the subject to the Alaska Village
Electrical Cooperative (AVEC) and its plan to put in a new
electrical plant with service to New Stuyahok and Ekwok, which
is the next village down. He suggested Koliganek should also be
included so that there would be one plant for three villages to
save fuel and energy. The AVEC has also put in wind turbines
for a test, although reductions in the cost of kilowatts due to
wind generation would not be seen for two to three years. He
pointed out that many people are using wood for heat.
2:52:18 PM
MR. CHRISTOPHER expressed his hope that AEA and the federal
stimulus money will be available to fund the plan to provide
power to three villages from one new plant. The corporation has
been waiting for "Denali" to approve the plan and state
assistance from the legislature would also be appreciated. Mr.
Christopher pointed out that New Stuyahok is not part of the
DCCED Community Development Quota (CDQ) program; however, the
corporate entity in the village has established a scholarship in
the name of Chief Ivan Blunka for shareholders and their
descendents. He said the major concerns of the residents in the
region are about the future for the younger generation and [the
cost of] fuel and electricity. Mr. Christopher thanked the
committee for "hearing my words ... that are coming from my
heart." He mentioned his service to his country and said, "We
are all citizens of Alaska." He asked the legislature to let
the communities know "when that funding becomes available."
MR. CHRISTOPHER, in response to Representative Petersen,
explained each of the three villages has its own electrical
generation plant and supplies electricity, thus there are no
existing transmission lines between them. The distance from
Ekwok to Stuyahok is about 12 miles, and on from Stuyahok to
Koliganek is about 24 miles.
2:58:44 PM
RALPH ANDERSEN, Chief Executive Officer, Bristol Bay Native
Association (BBNA), informed the committee BBNA is a nonprofit
corporation of 31 tribes, organized under state law, and
encompasses a region of about 40,000 square miles. The BBNA
provides a wide range of public assistance, education, social,
economic, community, natural resource, and land management
services to tribes through funding agreements with the state and
federal agencies. Mr. Andersen said he is also chairman of the
Bristol Bay Partnership, composed of the chief executives of the
regional organizations, and co-chair of the Alaska Federation of
Natives (AFN) Human Resources Committee and chairman of its
Energy Working Group. He pointed out that the common goal of
these organizations is to help find answers to lowering energy
costs in the region and in rural Alaska. Residents are dealing
with high costs in innovative ways, but there is still evidence
of hardship and it is clear that residents need help now. He
expressed his hope that fuel prices will drop; however, it is
important to take action to prevent this situation in the
future. He opined every part of the economy is affected by the
cost of fuel; in fact, the employment rate in some villages is
at 80 percent or more. Furthermore, high fuel costs have
reduced the profits for commercial fishermen and limited the
activities of subsistence hunters and fishers. The final result
of the special session last summer fell short of meeting the
needs and expectations of rural areas. Mr. Andersen
acknowledged expanding PCE funding, the suspension of municipal
fuel taxes, and the $1,200 energy assistance payment was
helpful; however, these actions did not lower the [long-term]
cost of energy. These hearings are also helpful and he
encouraged the state to adopt an energy policy that covers every
region of the state with the goal of lowering or equalizing
energy costs for all Alaskans. The energy policy should contain
a specific plan with milestones, and should be more than an
index listing potential energy sources. He said, "We need a
policy directive, and more importantly a commitment of funds, to
help develop those potential energy sources," and encouraged
state help as rural areas transition to renewable energy
sources. Bristol Bay has many sources of renewable energy such
as geothermal, solar, wood, wind, tidal, and hydro, as many
residents have demonstrated.
3:03:24 PM
MR. ANDERSEN related economies of scale indicate that power
grids between villages will reduce the cost of power production;
in fact, the governor is proposing a Railbelt power grid. He
asked, "Why is rural Alaska being left out?" Rural areas do not
have natural gas fields or a pipeline planned to power their
generators. His organization supports buying down the debt of
rural utilities to reduce the cost to consumers, and he pointed
out some village members are still paying the costs of
improvements to power plants and systems even though
improvements were supposed to reduce their rates. He also
expressed support for strengthening the PEC program by "raising
the ceiling" and expanding coverage for schools, health
facilities, businesses, and community buildings, and continued
funding of LIHEAP and AKHAP. Senator Lisa Murkowski added $30
million to the federal share of LIHEAP and he said [BBNA] hopes
the state will do the same. His organization also supports the
AHFC weatherization and home energy rebate program, and Senator
Lyman Hoffman's efforts to cap fuel costs and to deliver 100
gallons of fuel to rural households. Finally, he expressed
support for fully funding the bulk fuel revolving loan fund and
encouraged the governor and legislature to accept all federal
economic stimulus funds, especially for energy projects.
3:06:25 PM
MR. ANDERSEN continued to describe BBNA's work related to energy
such as plans to operate the LIHEAP program, to educate
residents through the Temporary Assistance for Needy Families
(TANF) program, and to coordinate delivery of the free fuel from
the "CITGO offer." Furthermore, BBNA established a new program
to assist tribes with energy projects, initiatives, and
opportunities; this program will be funded by the Bureau of
Indian Affairs Compact. The BBNA is united with other regional
institutions to address the crisis in a coordinated way; for
example, the Bristol Bay Partnership adopted a Bristol Bay
recovery plan that describes short-, medium-, and long-term
goals to wean the region from fossil fuels as the only source of
energy. He advised copies of the plan have been provided to the
committee. Finally, he recommended the committee hold hearings
to explain the pricing of fuel delivery in Western Alaska, and
to explore regulation by the RCA of fuel transportation and
delivery to rural Alaska, similar to the regulation of natural
gas in Anchorage.
3:09:16 PM
ROBERT CLARK, PRESIDENT/CEO, Bristol Bay Area Health
Corporation, said the Bristol Bay Area Health Corporation
(BBAHC) operates the hospital compound in Dillingham and serves
thirty-four villages including two from neighboring regions.
The service population is about 6,000 today, which is down from
8,000 residents who once lived in the area. He noted that one-
third of BBAHC's consumers live in villages and 300 live in
Dillingham. Except for Dillingham, King Salmon, and Naknek, all
transportation is by air; in fact, BBAHC spent $1 million on
patient travel and about $1 million on Medivac costs last year.
Mr. Clark explained each village of 20 or more residents has a
clinic of health aides that provide services, and there are four
regional health centers at Togiak, Chignik, Naknek, and Iliamna.
Service to patients has been impacted by operating costs during
the last year that increased by 43 percent for electricity and
by 88 percent for heating fuel for a total estimated increase of
$1 million. This increase will not be made up by increased
funding from the federal government or by $3 million in grants
from the state as many of the grants do not pay overhead costs.
He stressed that BBAHC operates as a community hospital even
though the facility is an Indian Health Service facility and a
critical access hospital.
3:13:52 PM
MR. CLARK continued to explain, like most small hospitals in
Alaska, BBAHC relies on Medicare and Medicaid payments. He
remarked:
My understanding is with the stimulus increase of the
federal share, the governor is going to be trimming
some $47 million from the state share of Medicaid
cost, but we'll be able to re-invest and build up the
tribal health providers which would then allow you 100
percent federal Medicaid dollars. Again, [it is]
very, very, much needed. Unfortunately, our
facilities in town don't accept the Medicare Medicaid,
so we're having to, on a limited basis, account for
that at the hospital. In the stimulus package which
... we provide input on, we're hoping to receive ...
an expansion of our out-patient program.
MR. CLARK expressed his hope the hospital can obtain a "CT
scanner" as this program is "shovel ready." He listed
additional needs such as prenatal quarters, a water treatment
plant, a new dental clinic, a system for the transfer of
electronic records, and video imaging that is critical when
there are transportation problems. He re-stated fuel costs are
beyond his organization's control, although there may be a
possibility of assistance through the PCE program.
3:17:43 PM
MR. CLARK expressed BBAHC's support of all renewable programs
and nuclear power that can provide electricity for 12 cents to
15 cents per kilowatt hour. He said his organization has been
forced to downsize some clinics; in fact, the BBAHC is almost $1
million dollars in the hole for the first time in 36 years.
Furthermore, several new health clinics can not follow their
business plans and local governments can not continue to
subsidize those programs. He stressed the BBAHC is searching
for "any and all" private and state grants and funds from the
federal stimulus package to try to cover its costs. It is also
beneficial to provide health care locally, so that patients do
not have to travel to Anchorage. The BBAHC is also exploring
the possibility of [obtaining] bulk fuel either through the
cooperative in town or independently. In fact, the possibility
of obtaining its own fuel, storing it, and adding wind
generation may stabilize the cost. He assured the committee his
organization was pursuing every possibility because it has no
choice. Further needs of the villages include water, sewer,
erosion control, fire trucks, the meeting of codes, and building
clinics.
3:22:01 PM
MR. CLARK called attention to the written information submitted
from the Alaska Primary Care Association and other regional
organizations. He stated his appreciation of the committee's
visit to the region and said that his frustration is with "too
much reliance on ... federal when the state needs to step up a
little more to help, because we serve everybody and we're the
first citizens of the state." He said, "All this stuff is a no-
brainer to get, except for unemployment insurance, and you guys
are too darn cheap." For example, many fishermen do not have
work over the winter months and have to rely on "some of these
things." Mr. Clark concluded the resources come from rural
areas; however, it appears that urban areas get more than their
just desserts and some equity is needed. He then asked for the
committee to review the information he provided on the proposed
Transportation Security Administration (TSA) regulations that
would hamper the fishing season for all of Bristol Bay and rural
Alaska.
3:23:33 PM
CO-CHAIR EDGMON noted that the House passed a resolution
opposing the TSA recommendations.
3:24:23 PM
CAROLYN SMITH, Mayor of the City of Aleknagik, stated Aleknagik
was lucky because of its connection by road to Dillingham;
however, beginning next year, only the residents on the south
shore will have fuel delivery. She noted that the road to
Aleknagik [from Dillingham] was started in 1959 so that Lake
Elva could be developed for hydroelectric power and today the
utility is again looking at the feasibility of this project.
Mayor Smith informed the committee the city operating budget is
$150,000 and fuel costs total $36,000 so far, making fuel costs
more than twice what they were last year. For income, the city
collects a 5 percent sales tax and a 5 percent bed tax. She
said the city collaborates with the Aleknagik Tribal Council and
"ANL" to work together as a community to get projects done. She
supported the investigation by a regulatory body into
standardizing fuel costs and opined there is no "true
capitalism" in this market. In addition, Mayor Smith supported
expanding the PCE program to public entities.
3:27:18 PM
JON CORBETT thanked the committee for its visit to Dillingham.
He said it is difficult to understand why Alaska, as a energy
state, is becoming a slave to the needs of other states;
instead, residents in Western Alaska should benefit from the
use of Alaska's resources. Mr. Corbett opined small-scale
nuclear energy is an excellent option because it can be funded
through public education money, perhaps through a University of
Alaska arctic research center. He said funding for
infrastructure is neither cheap nor easy, however, the
Department of Energy (DOE) has $40 billion in the new stimulus
package that has to be spent in the next two to three years for
capital projects. Unless something is done soon, the
municipalities and government entities in rural Alaska will
decay due to the loss of private business. Mr. Corbett agreed
with Representative Ramras that the state must control the
amount of money spent for large projects; in fact, $10 million
to $15 million worth of wind turbines would be more effective
than a multi-billion dollar project and would provide jobs right
away.
3:31:25 PM
RUSSELL NELSON, Director of Facilities, Dillingham City School
District, testified on behalf of the superintendent of schools.
He said the school district in Dillingham is aware of the energy
crisis; in fact, school facilities encompass 130,000 square
feet of space to heat, and the district has purchased
supplemental heat from Nushagak Cooperative for 50 percent of
the cost of heating with oil. He pointed out the need for
innovative ways to produce energy. Referring to the bond passed
for renovation of the Dillingham schools, he said that portions
of the bond will be used to improve the energy efficiency of the
school buildings. Additionally, the school board passed a
resolution requesting energy relief through the Power Cost
Equalization program for electrical costs incurred by the
Dillingham School District during the school year. Mr. Nelson
stressed the need for short-term help and long-term solutions
for the energy crisis in rural Alaska so that school districts
can put more money into classrooms.
3:33:29 PM
HJALMAR OLSON expressed his pride that state government agencies
and the legislature are coming out to listen to rural
communities. He re-stated the high energy costs are the number
one priority for the residents in rural Alaska. He talked about
helping the fishery support the Bristol Bay area and allowing
the fishermen to "harvest what we're supposed to harvest," by
easing the red tape on foreign processors.
3:35:36 PM
KAREN DEARLOVE thanked the committee members for their service
to Alaska. She stated the recent visit of a representative from
AHFC had been enlightening and she anticipated working closely
with AHFC staff. Ms. Dearlove, an Alaskan resident since 2005,
encouraged the legislature, when prioritizing funds for energy
programs, to consider the tax burden paid by 1st class cities
and the promises made at incorporation that are no longer kept
by the state. She referred the committee to her written
comments about improvements to the weatherization program and
agreed with Mr. Corbett that small businesses in rural Alaska
are not benefitting from Power Cost Equalization, yet they pay
the full tax burden. She further emphasized that the state
should partner with small business and the University of Alaska,
Bristol Bay Campus, to implement pilot projects in renewable
energy systems. She acknowledged that the Cold Climate Energy
Center in Fairbanks is excellent for those on the road system,
better suited to residents living in remote areas.
3:38:32 PM
REPRESENTATIVE HERRON remarked:
... people need PCE help for schools, and small
businesses. But, my question to you is that, USDA, in
my experience, is not very nimble. Are you optimistic
with the new state director?
MS. DEARLOVE said she was not speaking on behalf of the agency
for which she works; however, she said her implementation of
federal programming is appreciated. In fact, she is working
with statewide non-profits and the University of Alaska campus
on two USDA Rural Development planning programs that can be
brought to bear for a small business benefit to the region of
Bristol Bay, the Pribilof Islands, and the Aleutian Chain.
3:39:50 PM
REPRESENTATIVE HERRON expressed his wish that the USDA were
"more nimble."
3:40:23 PM
BOB HIMSCHOOT addressed the [AHFC] weatherization and energy
rebate program. Mr. Himschoot said the program does not work
well in rural Alaska because most of the remodel and energy
efficiency work on residents' homes is done by the homeowner.
He suggested that the program should accept a proof of
performance that does not require a pre-audit. For rural
Alaska, a post-audit and before and after photographs of the
project should suffice. This would get the money out to
Alaskans who do not qualify for the [low-income] weatherization
program but went ahead with projects. Although more energy
auditors are on the way, rural Alaskans could effectively use
that money now. Regarding how the money should be distributed,
Mr. Himschoot pointed out that the money is an investment by the
state and said, "The largest return on that money is going to be
the place it does the most good, and mitigates the most cost,
and I believe that is rural Alaska. I think that should be
considered when you're looking at funding for things like the
rebate program and for the alternative energy fund."
3:44:14 PM
REPRESENTATIVE HERRON expressed his appreciation for Mr.
Himschoot's community service.
3:45:12 PM
REPRESENTATIVE TUCK asked for the amount of power generation of
each of the turbines.
MR. HIMSCHOOT said they were 2.4 maxed, and .4 kilowatts maxed,
for a total of 4.8 [kw].
3:45:26 PM
GUSTY CHYTHLOOK said he was a lifetime resident of Bristol Bay
and stated his concern with the ever-rising cost of energy.
Many years ago, when gas was $.50 per gallon, he could not
imagine paying up to $6.31 per gallon for fuel. He asked
whether there were alternative sources of energy. The Bristol
Bay area is not privileged with natural gas like the Cook Inlet;
however, it would be good to be connected to the [proposed]
natural gas pipeline.
3:47:50 PM
MARILYN ROSENE, principal, Dillingham Elementary School, said
she has been a resident of Dillingham since 1982. Speaking as a
parent and a resident, she noted that the school will get a new
roof in 2009, and new windows and doors in 2010. She opined
there should be discussions about PCE and the cost of fuel;
however, she recommended an emergency team come to Dillingham
and go through all of the buildings, schools, apartments, and
homes to find leaks and to caulk and insulate homes. Using the
energy money this way would help residents stay in the community
by saving them money and creating jobs.
3:49:59 PM
JUNE INGRAM said she was speaking on behalf of her family and
her husband. They are both fishers and it is their way of life.
To supplement their fishing income they both work winter jobs
and during the cold spell they used 164 gallons of fuel in one
month, not including gas. She related a personal story of
better days in the past and the financial difficulties of the
present. From her work experience, Ms. Ingram related that from
October 2007, to October 2008, 1,000 people left Bristol Bay.
She said, "I am asking you, our representatives that we voted
for, please help the rural area, and I thank you for your time,
and you'll be in my prayers."
3:52:23 PM
KYLE BELLEQUE expressed his belief that every crisis is an
opportunity for change and that the energy crisis is basically a
housing crisis. This is because houses throughout the state
were built when oil was cheap and are not designed to conserve
heating oil. He proposed the state design a program similar to
the federal Housing and Urban Development (HUD) Indian Home Loan
Guarantee Program (Section 184), that specifically allows for
owner construction. He opined the state should use some of its
money to guarantee loans for young families so they may build
their own homes. Mr. Belleque acknowledged a problem may be
that the state may require inspectors, but the state should
design a program so that residents can take care of themselves.
3:56:00 PM
LUCY WEEDMAN informed the committee that she has been a resident
of Dillingham for five months. Her family moved here to find
employment, although she has worked for the BBNA for 27 years
and has never applied for assistance. However, the high cost of
oil forced her into applying for assistance and she expressed
her worry about the well-being of her nine year old son. She
said she has been forced to rely on family and friends to pay
for oil because her income is just $100 over the limit for
energy assistance. Ms. Weedman talked about the choice of
heating the house to keep her son warm or to buy food. Two
weeks ago she said she thought about giving up, packing up, and
going home and living off welfare, but she has always been able
to provide for her family. She presented the committee with
letters from her co-workers describing the hard life in the
villages. Ms. Weedman said, "The middle class, who have never
had to apply for assistance before, I think are taking it harder
than most of the people that are already getting assistance.
But thank you for listening."
4:00:08 PM
MARK NEWSON said the nature of his job includes a great deal of
research in the area of development. He has found that the high
cost of energy has greatly impacted the community in three
areas: transportation; the ability to gain independence from
non-renewable energy; and industry. Although residents do not
complain, his research indicates families are moving in with one
another and people are unable to afford travel to Anchorage for
health care; in fact, Bristol Bay has a high rate of fatalities
from cancer. Mr. Newson urged the committee to find a solution
to help Bristol Bay residents gain access to health care. In
response to what should be done with the state money for energy,
he said the money should be invested into infrastructure such as
the $200 million Bristol Bay intertie.
4:03:18 PM
KIMBERLY WILLIAMS said she was born and raised in Dillingham and
returned after obtaining her education. She listed several
positions she holds, her community service on various boards,
and said she was speaking as a community member. She stated the
BBEDC provided money through her tribe for assistance to
families to pay electric bills. During the first three and one-
half days of the application period, the tribe received ninety
applications for a $700 rebate. The applications were based on
"poverty guidelines." In fact, 69.7 percent of the school
children in the Dillingham School District qualify for free
breakfast and lunch. Ms. Williams described how support from
the community made a middle school basketball tournament in
Dillingham possible. The FY 10 school budget set aside $500,000
for heating and electricity, which is money taken away from kids
for their education. She opined whatever the legislature does,
there needs to be short-term solutions for the immediate crisis.
Ms. Williams related the steps her family has taken to stop
spending money and pointed out that where she stops spending to
save, the loss of revenue hurts community businesses. She
strongly urged immediate action by the legislative.
4:08:00 PM
JOE FAITH opined hydro power has potential in Bristol Bay,
because the bay has the third largest tide in the world. He
suggested the small barge power generators working on the Yukon
River could also work in Dillingham. Wind power generation also
has potential in this area as wind levels are similar to those
in Kotzebue and Pilot Point; in fact, the Bristol Bay Area
Health Corporation is working on a wind project. Mr. Faith said
he would also like to see North Slope oil, natural gas, and by-
products brought to a fuel station on the Yukon River and barged
down to Western Alaska. He said, "It makes little sense that
the oil is being shipped 3,000 miles down to the Lower 48 and
then shipped back to Western Alaska." He gave his support for
onshore oil development, but not offshore oil development
because all of the fisheries of the Bering Sea are worth over $1
billion per year, and it is not worth the risk of the loss of a
$1 billion sustainable industry. Mr. Faith concluded that
President Obama has made renewable energy an important part of
his plan to help restore the economy and Alaska should support
this effort as well.
4:10:28 PM
JIMMY HURLEY stated residents had to "team up" to save gas so
they could participate in the fall moose hunt; this has meant
that some have no moose. In his work for BBEDC he learned that
the number one thing in Bristol Bay is fish and they have to be
utilized. In the long term, he asked whether the salmon that go
to China could go to the villages. Mr. Hurley said he was happy
to see a movement supporting the construction of [energy
generation] plants in communities. The villages need jobs or
residents will have to move to Anchorage whether they want to or
not.
4:13:06 PM
DON FORD stated he has lived in Dillingham for 20 years and
hopes to stay but "right now that's debatable." He opined
short-term help would be to have PEC available to businesses,
schools, the hospital, and other entities necessary for
existence in the region. For long-term solutions, he suggested
[hydroelectric power from] Lake Elba, wind generation, and a
combination of all of the other sources discussed. Although he
said he considers himself middle income, he noted 80 percent of
residents are at the poverty level and both lower- and middle-
income people are really hurting now. He re-stated many of his
friends and acquaintances are leaving, but not by choice. On
the subject of weatherization, he said his home is 15 years old
and is considered to be of good construction, but while he is
paying the equivalent of his mortgage just to keep the home
heated, he can't pay the up-front money to replace windows or
add insulation. Mr. Faith stressed weatherization would save
his family money in the long term if he could participate in
this program.
4:17:48 PM
REPRESENTATIVE HERRON agreed with Mr. Ford's point about home
energy building standards that were based on $1 per gallon oil.
He said this point is also applicable to income guidelines for
assistance to people in need.
4:18:25 PM
FRANK WOODS pointed out Alaska is an urban state, and the
majority of the population lives in urban Alaska. However, the
rural areas are the bread winners of the state through tourism,
fisheries, oil and gas development, and mineral development. He
stated there is a shortage of manpower, infrastructure, and
resources to manage the existing lands and the use of lands.
Decisions made for rural Alaska are made in the urban centers of
Juneau, Anchorage, Fairbanks, and the Railbelt, without
representation from rural areas. He said, "During these hard
times, it's time to engage ... and its time for us to start
acting and getting involved in all that's happening in Bristol
Bay." Mr. Woods cautioned that, with a population of 6,000,
there was not enough manpower and resources in the region to
manage existing resources, let alone any more development. He
urged legislators to consider that every dollar spent now is
going to be worth one thousand dollars twenty years from now.
4:20:40 PM
WENDELL DOWNS, Pastor, Seventh-Day Adventist Church, told of his
experience serving all over the state. He said he thinks the
pain is felt in many places, such as the [Mat-Su] valley and
Wasilla, but in different ways. He suggested a short-term
solution is to create legislation to subsidize the cost of gas
at the pump. This would place the state in the position of
"negotiator" with the different suppliers. Contrary to this, if
the state caps the price, that may limit the supply and cause
problems in rural areas. However, if the gas is subsidized and
the state is negotiating the prices, this would help the
Railbelt communities, as well as the residents of Bristol Bay
and Kotzebue. This would also place the state in the position
to work on other issues, such as supply and demand, and would
stimulate the economy across the state by stabilizing prices.
Pastor Downs stated his preference that the state just send the
oil to the rural communities.
4:23:26 PM
BRIAN PAULING informed the committee he spent $12,000 since the
first of November on fuel. Instead of sending this money out of
the community, residents need to invest in renewable energy, and
have training about renewable energy available at the local
college. He listed his personal plans for installing renewable
energy generators. Mr. Pauling stressed that local investment
is critical to keeping businesses in the community. Further,
there is no point in bringing in outside technologies unless
there is a trained work force to maintain them, thus the "key"
is expanding the courses available at the college.
4:25:54 PM
CO-CHAIR EDGMON thanked everyone for his/her testimony and
acknowledged the members in attendance, and his staff, for their
work.
4:26:54 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at [4:27] p.m.
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