Legislature(1993 - 1994)

02/17/1993 01:30 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     HOUSE FINANCE COMMITTEE                                   
                        February 17, 1993                                      
                            1:30 P.M.                                          
  TAPE HFC 93 - 24, Side 2, #000 - end.                                        
  TAPE HFC 93 - 25, Side 1, #000 - end.                                        
  TAPE HFC 93 - 25, Side 2, #000 - end.                                        
  CALL TO ORDER                                                                
  Co-Chair Ron Larson called the meeting of  the House Finance                 
  Committee to order at 1:30 P.M.                                              
  Co-Chair Larson                    Representative Brown                      
  Co-Chair MacLean                   Representative Foster                     
  Vice-Chair Hanley                  Representative                            
  Representative Hoffman             Representative Martin                     
  Representative Parnell             Representative Therriault                 
  Representative Navarre was not present for the meeting.                      
  ALSO PRESENT                                                                 
  Edgar Blatchford, Commissioner, Department  of Community and                 
  Regional Affairs; John Walsh, Deputy Director/Juneau,  Rural                 
  Development Division,  Department of Community  and Regional                 
  Affairs; Paul Fuhs, Commissioner, Department of Commerce and                 
  Economic  Development;  Guy  Bell,  Director,  Division   of                 
  Administrative Services, Department of Commerce and Economic                 
  Development; Ron Garzini, Executive  Director, Alaska Energy                 
  Authority, Department of Commerce and Economic  Development;                 
  David  Denig-Chakroff,  Director,  Rural   Programs,  Alaska                 
  Energy  Authority,  Department  of   Commerce  and  Economic                 
  Development;   John   Jemewduk,   Norton    Sound   Economic                 
  Development  Corporation  (NSEDC),   Elim,  Alaska;   Norman                 
  Anderson,  Bristol  Bay  Economic   Development  Corporation                 
  (BBEDC),  Naknek,  Alaska;  Robin  Samuelsen,  Bristol   Bay                 
  Economic  Development  Corporation, Alaska;  Mark Snigaroff,                 
  APICDA, Alaska;  Fred Phillip,  CVFC, Kwigillingok,  Alaska;                 
  Mark Springer, Yukon Delta Fisheries Development Association                 
  (YDFDA),  Hooper Bay,  Alaska; Perfenia  Pletnikoff, Central                 
  Bering  Sea  Fishermen's  Association   (CBSFA),  St.  Paul,                 
  Alaska; Laurentia  Mike, Yukon  Delta Fishermen  Development                 
  Association, Kotlich, Alaska.                                                
  SUMMARY INFORMATION                                                          
  OVERVIEW ON COMMUNITY DEVELOPMENT QUOTAS (CDQ)                               
  HB 60     An Act making appropriations for capital projects;                 
            and providing for an effective date.                               
            OVERVIEW:  Commerce and Economic Development                       
            HB   60   was  held   in  Committee   for  further                 
  HB 45     An Act making appropriations to the Department  of                 
            Education  for  support of  kindergarten, primary,                 
            and  secondary  education  and  community  schools                 
            programs   and   for   school  construction   debt                 
            retirement; and providing for an effective date.                   
            CS HB 45 (FIN) was reported out of  Committee with                 
            a "do pass" recommendation.                                        
  HOUSE BILL 45                                                                
       "An  Act  making  appropriations to  the  Department of                 
       Education  for support  of  kindergarten, primary,  and                 
       secondary education and  community schools programs and                 
       for school construction debt  retirement; and providing                 
       for an effective date."                                                 
  Co-Chair  MacLean  MOVED to  report CS  HB  45 (FIN)  out of                 
  Committee with individual recommendations.   There being  NO                 
  OBJECTION, it was so ordered.                                                
  CS  HB 45  (FIN) was  reported out  of Committee with  a "do                 
  pass" recommendation.                                                        
  OVERVIEW ON COMMUNITY DEVELOPMENT QUOTAS (CDS)                               
  REGIONAL  AFFAIRS,  explained  that  the  CDQ  program   was                 
  initiated by the Governor to assist communities in Southwest                 
  Alaska  to achieve  an economic  stability and to  provide a                 
  stronger social and economic base.   The program concept was                 
  initiated many years ago.                                                    
  Last  year, the  North Fisheries  Management Council  (NFMC)                 
  allocated  7.5%  of  the  pollock  catch to  the  fifty-five                 
  communities in  Southwestern Alaska.   Various commissioners                 
  made recommendations on how to divide the allocation so that                 
  the  more  economically   depressed  areas   were  given   a                 
  proportionate  share.    The long  range  goal  would  be to                 
  provide jobs for  local residents.  The  communities divided                 
  themselves into six applicant groups.                                        
  Commissioner  Blatchford said the  State of  Alaska invested                 
  $300 thousand dollars into the CDQ effort, which resulted in                 
  a return the six applicant groups  of $20 million dollars in                 
  free enterprise money.  Each group created a development and                 
  financing plan.                                                              
  introduced members of each of the  six applicant groups.  He                 
  expressed  appreciation  for  Legislative  support  of   the                 
  program adding that the CDQ program is a tremendous resource                 
  for the State of Alaska.                                                     
  Representative Grussendorf asked if the IFQ's would be taken                 
  from smaller communities in Southeast Alaska.   Commissioner                 
  Blatchford  replied,  a  burden was  created  when  only six                 
  applicant groups were accepted.   Those groups must succeed.                 
  If they are  not successful, there  is a strong  possibility                 
  that the opportunities for access  to the Bering Sea fishery                 
  will be closed.  DCRA efforts  have been concentrated on the                 
  Bering Sea.   He added,  that there has  been discussion  of                 
  expanding  the program although  the impact  to Southeastern                 
  communities is uncertain.                                                    
  Mr.  Walsh  commented that  the IFQ  program  is tied  to an                 
  individual's  fishing history.   The quota would  go to that                 
  individual and  they  would  then be  eligible  to  sell  as                 
  private property their  interest in the quota.   Regulations                 
  for the IFQ program are available  for comment at this time.                 
  The  final  rule  has  not  been   settled.    There  is  no                 
  restriction of a transfer for an IFQ permit.                                 
  Mr. Walsh stated  that each applicant  group had to  address                 
  various aspects of the CDQ plan.   The Department provided a                 
  chart for the Committee  members to view.  The  chart listed                 
  vessels  allowed to fish, quota  amounts, the length of time                 
  the  quota was  received,  employment goals,  infrastructure                 
  development and the revenue capital received.                                
  CORPORATION  (BBEDC),  DILLINGHAM,  ALASKA,   expressed  his                 
  appreciation of funding for the CDQ  program.  He provided a                 
  brief history of the CDQ program in the Bristol Bay area and                 
  buy-pass issues affecting those fishermen.  The plan of that                 
  region is to train and employ the younger generation.  BBEDC                 
  hopes to employee one hundred twenty people this year.                       
  Representative Hoffman  asked how  the State  could help  to                 
  insure the success of the CDQ program.                                       
  Mr.  Samuelsen  stated that  it is  important that  the NFMC                 
  votes reflect  Alaskan  interests.   He  felt  if  the  vote                 
  switched  to  Seattle,  Alaska  would  lose   the  resource.                 
  Representative  Hoffman requested  the  Legislature be  kept                 
  informed as to the progress of the program.                                  
  CORPORATION  (BBEDC),  DILLINGHAM,  ALASKA,  reiterated  his                 
  appreciation for funding received for the CDQ program.                       
  his appreciation for the speed in  which the State of Alaska                 
  opened the 1992 CDQ fisheries.  This enabled communities and                 
  regions in Southwest Alaska  to generate income.  He  stated                 
  APIEDA has  created an  education endowment  and a  training                 
  program.    Funds  currently  generated  will  go  into  the                 
  infrastructure  on-shore  to  those  communities  which  the                 
  APIEDA  serves.     He  asked  for  further   assistance  in                 
  developing the St.  George Harbor, and noted that APIEDA has                 
  funds set aside to match State funds.                                        
  Co-Chair  Larson  inquired  about  the  dock  facilities  at                 
  Pribilof. Mr. Snigaroff stated that the harbor at St. George                 
  was  not completed.  It needs  to be dredged which will cost                 
  $4 million dollars.                                                          
  KWIGILLLINGOK,  ALASKA,  stated  that  CVFC  is  creating  a                 
  training facility in Bethel and an employment center for the                 
  local  residents.   He  asked  that the  Legislature support                 
  funding of this facility.                                                    
  ASSOCIATION (CBSFA),  ST.  PAUL,  ALASKA,  stated  that  the                 
  partner  of CBSFA  is  American Seafood  and added  that the                 
  operation in December was successful.  He added that further                 
  assistance is  needed in  order to  complete the dredge  and                 
  back up work  in the  Pribilof harbors.   St. Paul has  been                 
  declared an unsafe harbor.                                                   
  ASSOCIATION (YKFDA), KOTLIK,  ALASKA, noted her appreciation                 
  for the CDQ program in the Yukon Delta region.                               
  (YDFDA), HOOPER BAY,  ALASKA, explained that the idea of the                 
  CDQ  program originated  from Western  Alaska fishermen  and                 
  felt that  this is a credit  to those local  fishermen.  The                 
  YDFDA program is unique  with such a small quota.  The funds                 
  are being  used for  a wide  variety of  purposes such  as a                 
  project construction allocation of $600 thousand dollars for                 
  an on-ground processing plant.                                               
  Mr. Springer pointed  out that  the Department of  Community                 
  and Regional Affairs (DCRA) is requesting an additional $150                 
  thousand dollars in order to staff  a full time employee for                 
  the CDQ program in  order to enforce these regulations.   He                 
  added  that  all  the  associations  involved with  the  CDQ                 
  program support filling that position.                                       
  (Change Tape, HFC 93-25, Side 1).                                            
  CORPORATION,  ELIM,  ALASKA,  provided  the  Committee  with                 
  Attachment   #1.      Norton   Sound  Economic   Development                 
  Corporation  (NSEDC)  is  a  regional  economic  development                 
  nonprofit corporation  made up  of fifteen  villages in  the                 
  Bering  Strait  region of  Northwestern  Alaska.   NSEDC was                 
  originally incorporated in 1989 with  the general purpose of                 
  promoting economic development  opportunities primarily  for                 
  Norton  Sound.     In  June   1992,  the  organization   was                 
  restructured  to  expand membership  within  the region,  to                 
  focus its activities on fisheries  related activities and to                 
  qualify as a Community Development Quota (CDQ) applicant and                 
  managing organization.                                                       
  HOUSE BILL 60                                                                
       "An Act making appropriations for capital projects; and                 
       providing for an effective date."                                       
       OVERVIEW  -   DEPARTMENT  OF   COMMERCE  AND   ECONOMIC                 
  DEVELOPMENT (DCED),  provided the  Committee with a synopsis                 
  of  the  DECD  Capital Improvement  Project  (CIP) requests.                 
  [Attachment #2 & #3].                                                        
       *    Data  Processing  System  Enhancement request  for                 
            $750 million dollars.                                              
            Wang  Laboratories  has  filed for  bankruptcy  in                 
            August 1992.  DCED data bases are used extensively                 
            for   occupational,    business   and    insurance                 
            licensing, for corporate filings and for servicing                 
            $230  million  in  outstanding  loans, along  with                 
            several smaller systems.  All data bases currently                 
            use  proprietary  Wang  equipment   and  software.                 
            Requested  money  will  be  used  to  acquire  the                 
            equipment and  software necessary for DECD to make                 
            a  3-5  year   transition  from  proprietary  Wang                 
            systems products in line  with industry trends and                 
       *    Economic Development Matching  Grants request  for                 
            FY 93  Appropriation for $700  million dollars and                 
            FY 94 Request for $750 million dollars.                            
            Provides   matching   funds  to   communities  and                 
            nonprofits  for  economic   development  projects.                 
            This program  has been  in place for  the past  12                 
            years.  Leverages between $2.5 and $3.5 million in                 
            federal and other funds each year.                                 
       *    Small  Business Assistance and Development - FY 94                 
            Request for $550.0                                                 
            Primarily matches federal funds for:                               
            Small Business Development Centers      $263.                      
            Procurement Technical Assistance         150.                      
            University Center for Economic Devl.      37.                      
            Buy Alaska                                50.                      
            Small Business Forum                      50.                      
       *    Alaska-Japan Fisheries Cooperation                                 
            FY 94 Request:      $45.0                                          
            Based on 1985 Memorandum of  Agreement between the                 
            State of Alaska and  the Japan Overseas  Fisheries                 
            Cooperation Committee.   Funding used for meetings                 
            and exchanges for the mutual benefit of Alaska and                 
            Japan fisheries,  particularly in the  interest of                 
            new product  development.  Past  successes include                 
            roe on kelp and surimi.                                            
       *    Gold Rush  Centennial Celebrations FY  94 Request:                 
            First  year  of a  five  year program  to organize                 
            celebrations of  the Gold  Rush Centennial  in the                 
            Klondike,  Nome,  Fairbanks, and  interior Alaska.                 
            Money  to  be  used  for planning  activities  and                 
            grants to local communities for events development                 
            and promotion.                                                     
       *    Coal Initiatives FY 94 Request:    $290.0                          
            Money to be used for test shipments of Alaska coal                 
            --  to confirm  the suitability of  the coal  in a                 
            number of combustion systems -- and for efforts at                 
            opening new markets.   The coal market  is growing                 
            at  up  to  80  million   tons  annually.    Major                 
            prospects  include  Japan,  Korea,   Taiwain,  the                 
            Philippines, Mexico and Hawaii.                                    
  Representative Martin  asked the criteria  used to determine                 
  the small business loans.  Commissioner Fuhs stated that all                 
  applicants  are screened.  The Economic Development Matching                 
  Grants Program    is not  required    to be  paid  back  and                 
  applicants can only  receive this grant  one time.  None  of                 
  the programs listed are loan programs.   He noted that there                 
  are  problems   in  the  Business  &   Industry  Development                 
  Corporation   (BIDCO)   program.     Representative   Martin                 
  disagreed with  the University  applying for  small business                 
  assistance and development grants.  Commissioner Fuhs stated                 
  that DCED's work is  to promote the private sector  business                 
  in  Alaska.    DCED  is   trying  to  make  businesses  self                 
  sufficient.  He added that the University's budget has shown                 
  double  funding   and   this   was   incorrect   accounting.                 
  Currently, those funds have been separated and will be shown                 
  only in the DCED budget request for the University Center.                   
  Representative  Martin  questioned  the  value of  the  coal                 
  initiative.  Commissioner Fuhs stated that for a few  years,                 
  Alaska has been shipping eight hundred thousand tons of coal                 
  to  Korea.   He expressed  his enthusiasm  with the  current                 
  efforts to create  a fuel mixture which is  not toxic and is                 
  environmentally safe for shipping.                                           
  Representative  Brown  referenced Attachment  #3,  the small                 
  business development  request for  $550 million dollars  and                 
  asked for  further  discussion on  the  budget  interfacing.                 
  Commissioner Fuhs replied the only area of duplication was a                 
  Development Specialist position.                                             
  the  past  there  has  been  duplication with  two  separate                 
  business  center  development   programs  operating.     One                 
  operates  through  the  University  system,  and  is  funded                 
  through the  Small Business Assistance  Development Program.                 
  There are two  other business assistance programs  which are                 
  operated  through private  nonprofit  organizations, one  in                 
  Anchorage and one in Fairbanks.   Two years ago, the funding                 
  for  those organizations  was  deleted  from  the  operating                 
  Representative Brown asked  how many new employees  would be                 
  added with the proposed  budget.  Mr.  Bell said none.   All                 
  additions  are  grants.   Commissioner  Fuhs added  that the                 
  grants are matched by  equal amounts of federal money.   Mr.                 
  Bell reiterated that no staff is paid for out of the capital                 
  request.  He offered to provide  the Committee a response in                 
  writing in order to avoid confusion.                                         
  Commissioner Fuhs interjected that Alaskan producers must be                 
  certified in  order to  qualify for  the product  preference                 
  program.  The program has been very effective.                               
  Representative  Brown questioned  the  establishment of  the                 
  Economic Center at  the University of Alaska.   Commissioner                 
  Fuhs commented that the center is in Anchorage  and resulted                 
  from a federal grant to help provide assistance to nonprofit                 
  corporations.  He  admitted that he  too had questioned  the                 
  Representative Parnell inquired if full funding for the data                 
  processing  component  was  expected this  year.    Mr. Bell                 
  responded  that a  new system  was necessary  by next  year,                 
  although the anticipated  conversion time  is three to  five                 
  years.  The pace  software is a difficult system  to change.                 
  Representative  Parnell asked  if  the entire  component was                 
  being requested this year.  Mr. Bell stated it was.                          
  ALASKA ENERGY AUTHORITY                                                      
  the Committee with Attachment #4 and #5 which summarizes the                 
  CIP requests for the Alaska Energy Authority (AEA).                          
  DEVELOPMENT,   explained   the   Operation,  Technical   and                 
  Emergency Assistance component, CIP  request of $1.3 million                 
  dollars.   This request addresses  continuation of  specific                 
  programs designed to provide a  wide range of energy systems                 
  operations,  technical  and  emergency  assistance to  rural                 
  communities  and utilities  in  evaluating deficiencies  and                 
  needs  with  respect to  the  collective energy  systems and                 
  facilities within a  community.  This may be accomplished by                 
  conducting  surveys  and  evaluating electrical  generation,                 
  distribution  systems and  waste  heat systems  serving  the                 
  community.  Additionally, as  assessments of the demand-side                 
  alternatives  such  as  insulation,  heating  and   lighting                 
  retrofits of local public buildings,  energy control systems                 
  and rate design could be made.                                               
  Mr.  Denig-Chakroff  continued  with the  second  component:                 
  Rural  Utility  Regionalization, Consolidation  and Business                 
  Management Training,  CIP request for $270  million dollars.                 
  The  goal  of  the  program  is  to  create  self-supporting                 
  utilities  in  rural  Alaska that  can  protect  the State's                 
  capital  investments   in  power  systems   by  continuously                 
  operating and maintaining those systems in a safe, efficient                 
  manner  and providing  reliable, affordable  power to  their                 
  customers without continual assistance from the State.  This                 
  will be done  by developing the corporate  strength of those                 
  (Tape Change, HFC 93-25, Side 2).                                            
  The Statewide Electric and Power Project Development program                 
  CIP request for $1,000 million dollars would provide funding                 
  for  the  engineering,   environmental,  and  economic   and                 
  financial analysis  of power projects  throughout the State.                 
  The objective is to  respond in a timely manner  to requests                 
  from legislators, utilities and communities on power project                 
  proposals   and   to   develop   a   multi-year   plan   for                 
  implementation  through the  issuance of  revenue  bonds and                 
  minimal  State  contributions.   If  possible, the  costs of                 
  feasibility studies and financial packages would be recouped                 
  from bond receipts.                                                          
  Mr. Garzini noted  the component  - Energy Conservation  and                 
  Management Program for  State-Funded Facilities - Phase  One                 
  CIP request for  $550 million dollars.   The State now  owns                 
  and  operates  more   than  11.5  million  square   feet  of                 
  buildings.   Additionally, the State  pays for a  portion of                 
  the operating expense for square  footage of school district                 
  and municipally-owned facilities  as well  as space that  is                 
  leased from private owners.  Responsible management of these                 
  facilities requires that end-use energy consumption for each                 
  facility be accurately  estimated, so that energy  costs may                 
  be analyzed  and  minimized.   The  program is  designed  to                 
  determine energy end-use  in facilities for which  the State                 
  bears  the  operation  costs,  and  to  implement management                 
  changes or capital projects designed  to reduce energy costs                 
  borne by the State general fund.                                             
  The   next  component   is  the   Sutton-Glenallen  Intertie                 
  Feasibility Study  CIP  request for  $500  million  dollars.                 
  Copper  Valley  Electric  Association  (CVEA)  has  proposed                 
  construction  of  one  hundred  and  twenty-seven  miles  of                 
  transmission  line between  Sutton and  Glennallen   linking                 
  CVEA to the Railbelt system.                                                 
  The second item of the component  is a CIP request for  $500                 
  million dollars  for  the  Southeast  Intertie  Feasibility.                 
  This project would fund the  feasibility level evaluation of                 
  a Tyee-Snettisham link of a Southeast Intertie  transmission                 
  system and  bring it  up to the  same level  in the  project                 
  approval process  as the  Tyee-Swan segment  of a  Southeast                 
  Intertie.   The project  is  justified to  determine if  the                 
  transfer of  surplus Tyee  energy and  possibly energy  from                 
  other    potential    hydroelectric   projects    along   an                 
  interconnected system.   This  is an  acceptable alternative                 
  for meeting growing energy demands in Juneau.                                
  Mr.  Denig-Chakroff addressed  the  CIP  request for  $2.750                 
  million dollars  for the Rural Power Systems  Upgrades.  The                 
  program would  provide funding to continue  Energy Authority                 
  achievement of  a variety  of rural  power systems  upgraded                 
  that  have  been  identified  through  the  Rural  Technical                 
  Assistance and Circuit Rider  Maintenance programs or  which                 
  have  been   pointed   out  by   community   officials   and                 
  legislators.   Projects  realized  under  this program  will                 
  provide for more efficient operation of rural power systems.                 
  The  next  CIP request  is for  $1  million dollars  for the                 
  Emergency Bulk  Fuel Repairs/Spill Prevention.  This project                 
  would provide funding to make emergency repairs to bulk fuel                 
  storage and handling systems in rural Alaska.   Priority for                 
  these funds would  be communities whose systems are  in such                 
  poor  repair that fuel vendors  have threatened to refuse to                 
  deliver fuel  and/or where  there is  an imminent  threat to                 
  life, health, safety or the environment.                                     
  Mr. Garzini  itemized the  next CIP  request  of $5  million                 
  dollars for the  Component Renewal and Replacement  - Alaska                 
  Energy Authority -  Owned Facilities.   He pointed out  that                 
  this is not a request for State funding.  It is a request to                 
  receive  monies from wholesale purchasers of power generated                 
  by or wheeled  over electrical systems  owned by the  Alaska                 
  Energy Authority and to expend  those monies for the renewal                 
  and replacement  of  aging components  of those  facilities.                 
  AEA has invested in those facilities a combined amount of $1                 
  billion dollars.                                                             
  Mr. Denig-Chakroff addressed Electrical  System Life, Health                 
  and  Safety  Improvements  CIP  request   for  $750  million                 
  dollars.  The program would provide follow-up funding of the                 
  agency's  program  to  correct  problems  in rural  electric                 
  systems that are  or could become  a threat to life,  health                 
  and safety in  rural communities.  Wherever  possible, funds                 
  will be used to leverage local matching funds.                               
  The Bulk Fuel  System Upgrades CIP request  for $4.5 million                 
  dollars  would  fund the  design  and upgrade  of  bulk fuel                 
  storage and handling facilities in rural Alaskan communities                 
  which are dependent  upon seasonal  fuel delivery and  long-                 
  term storage.   Upgrades are critically  needed in order  to                 
  resolve significant  hazards to life  and safety as  well as                 
  code violations and  to ensure  continued delivery of  vital                 
  petroleum products.   The work will be  accomplished through                 
  grants  and   contracts  with  administrative   and  project                 
  management oversight by the AEA.                                             
  The Alternative  & Applied Energy Technology Development CIP                 
  request is  for $700  million dollars.   This  program would                 
  fund  the  development, design,  construction, demonstration                 
  and/or operational testing of  technological enhancements to                 
  energy systems including generation,  storage, transmissions                 
  heating   and  chilling  and  end-use  efficiency  and  load                 
  management.  The program will be  used to coordinate efforts                 
  with energy research groups.                                                 
  Mr. Garzini commented on the  Reimbursable Authority CIP for                 
  $5,000.0 thousand  dollars.   The authority  to receive  and                 
  expend funds provided by others  allows the Energy Authority                 
  to enter into agreements with non-state entities and private                 
  parties  to  either  incorporate  change orders  into  State                 
  contracts or have  the Energy Authority perform  tasks which                 
  the other party cannot itself accomplish.                                    
  Mr.  Denig-Chakroff  introduced  CIP  request  for  $5,000.0                 
  thousand  dollars  for  Electrical  Service Extension  Grant                 
  Program  which  would  be  a  matching  grant  program  that                 
  provides up to 60% of the cost of eligible projects proposed                 
  by  utilities for  extending electrical  service  to private                 
  residences and small  businesses not currently served  by an                 
  electrical utility  and, as  a second  priority, for  making                 
  improvements to existing utilities.                                          
  The King Cove Hydroelectric Project Construction CIP request                 
  for $500 million  dollars for the  proposed King Cove  hydro                 
  project is located on Delta Creek, about five miles north of                 
  the community of King Cove.  A recent update of  the project                 
  analysis  concluded that  the  proposal  is technically  and                 
  economically feasible.   With back-up  diesel generation  to                 
  cover demand peaks  and low water flow  intervals, the hydro                 
  project  would  supply most  of  the City's  existing annual                 
  demand   and   supply  most   of   the   anticipated  growth                 
  requirements over the next twenty years.                                     
  Mr.  Garzini  introduced  the CIP  request  for  $50 million                 
  dollars for  the Snettisham Acquisition  which would provide                 
  support  for  Energy  Authority FY  93  costs  of personnel,                 
  travel,  communications,  and  legal  and  consulting   fees                 
  related to the possible sale of the Snettisham Hydroelectric                 
  Project to the State.  The  sale is part of the  legislative                 
  proposal  authorizing   the   sale  of   the   two   federal                 
  hydroelectric projects in Alaska and subsequent close out of                 
  the Alaska Power Administration.                                             
  Co-Chair  MacLean  questioned  the Governor's  $250  million                 
  dollar cut to the King Cove Hydroelectric Construction.  She                 
  asked if the cut would allow  them to qualify for Electrical                 
  Service Extension Funds.  Mr.  Garzini replied that the rule                 
  for that fund is a 60\40  grant program for line extensions.                 
  King Cove  could  qualify  if they  were  providing  a  line                 
  Representative  Brown   inquired  if   a  processing   plant                 
  currently existed in  King Cove.  Mr.  Denig-Chakroff stated                 
  it did and added that King  Cove has one thousand residents.                 
  Representative Brown  discussed disapproval  of the  project                 
  and stated it was not an economically feasible plan for that                 
  size  community.  Mr. Garzini pointed out that the community                 
  will assist in financing the balance.                                        
  Co-Chair MacLean asked for further detail on the Alternative                 
  &  Applied  Energy Technology  Development  component.   She                 
  asked why  funds were  not available  from  the Science  and                 
  Technology  Fund  for  that component.    Mr. Denig-Chakroff                 
  replied   when  a  specific   small  technical   problem  is                 
  identified, AEA does  ask the Science and  Technology Fund's                 
  Co-Chair MacLean requested more information on the Bulk Fuel                 
  System upgrades.  Mr. Denig-Chakroff offered to provide that                 
  information.     Co-Chair  MacLean  asked  how  the  Sutton-                 
  Glenallen  feasibility study  would  impact the  legislation                 
  introduced by Representative Navarre.   Mr. Garzini replied,                 
  when the legislation was heard in the House Labor & Commerce                 
  Committee, it  was  suggested  that  Representative  Navarre                 
  include the Sutton  to Glenallen  Intertie in that  package.                 
  Mr. Garzini noted that the project is not currently ready to                 
  build because a feasibility report has not been completed.                   
  Representative  Brown  asked  if  the Southeast  Feasibility                 
  Study  would continue  to need  funding with the  closure of                 
  Greens  Creek.    Mr. Garzini  replied  that  the forecasted                 
  energy demands in  Juneau still far  exceed the capacity  of                 
  energy generated in that area.                                               
  The meeting adjourned at 3:40 P.M.                                           

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