Legislature(2015 - 2016)SENATE FINANCE 532
01/28/2015 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Alaska Energy Authority | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
January 28, 2015
9:02 a.m.
9:02:28 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:02 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Donny Olson
ALSO PRESENT
SARA FISHER-GOAD, EXECUTIVE DIRECTOR, Alaska Energy
Authority
SUMMARY
^PRESENTATION: ALASKA ENERGY AUTHORITY
SARA FISHER-GOAD, EXECUTIVE DIRECTOR, ALASKA ENERGY
AUTHORITY
9:03:30 AM
Ms. Fisher-Goad began her presentation, "Alaska Energy
Authority, Senate Finance Committee: January 28, 2015."
(copy on file). She presented Slide 2, "Alaska Energy
Authority: Mission":
"To Reduce the Cost of Energy in Alaska"
· AEA is an independent and public corporation of
the State of Alaska
· Created by the Alaska Legislature in 1976
· 44.83.070: "The purpose of the Authority is to
promote, develop, and advance the general
prosperity and economic welfare of the people of
the state by providing a means of financing and
operating power projects and facilities that
recover and use waste energy and by carrying out
the powers and duties assigned to it under AS
42.45."
Ms. Fisher-Goad informed the committee that many of the
powers and duties relegated to the authority were assigned
by the legislature under statute.
Ms. Fisher-Goad referred to Slide 3, which offered a
continuum of project development. The slide listed the
umbrella projects: Energy Policy and Outreach, Program
Development and Project Evaluation, Operations and Project
Implementation, AEA-Owned Infrastructure, and the
associated sub-projects.
9:05:24 AM
Ms. Fisher-Goad noted Slide 4, "Collaboration":
Collaboration
• Alaska Wind Working Group: collaboration of
government agencies, nonprofit organizations,
businesses and individuals interested in identifying
specific concerns and barriers to and opportunities
for wind development in Alaska. About 90 participants
• AEA Regional Energy Planning: a way for Alaskans to
determine their energy priorities and formulate a
concrete, implementable, fundable energy plan. About
11 subgroups, 169 participants.
• Alaska Energy Efficiency Partnership: AEA-led
working group led that meets quarterly to share
information and capitalize on collaborative
opportunities. About 40 participants.
• Alaska Wood Energy Development Task Group: was
formed in 2005 to explore opportunities to increase
the use of wood for energy and biofuels production in
Alaska. 13 participating organizations
• Energy Ambassadors: collaboration with the U.S.
Department of Energy to collectively address energy
issues in Alaska, including state and federal agencies
and regional partners.
• Intra-agency collaboration on energy programs
• Issue specific stakeholder groups include Power Cost
Equalization, Alaska Affordable Energy Strategy,
Galena Interagency Recovery Team, REAP Rural Issues
Committee.
9:07:59 AM
Ms. Fisher-Goad summarized Slide 5, "Focusing on
Communities":
Focusing on Communities
• Emphasizing community-based approach to projects
• Technical assistance, regional planning and project
management
• Provide synergy between planning, projects and
funding sources
• Assist communities to move to project ready status
• Break down internal silos
9:08:54 AM
Ms. Fisher-Goad continued to slide 6, "Power Cost
Equalization":
Power Cost Equalization
• Provide economic assistance in rural Alaska where
electrical rates can be 3 to 4 times higher than in
urban Alaska
• PCE created at a time when State funds were used to
construct major energy projects to serve urban areas
(Four Dam Pool)
• PCE is a way for rural communities to also benefit
from those projects
• Regulatory Commission of Alaska (RCA) sets rates,
calculations based on use, costs and efficiencies
• The program reduced power costs an average of 55
percent for residential customers and community
facilities up to 500 kWh per month.
• 2014 changed the regulations to include community
facilities
• 192 participating communities
• AEA community assistance team helped four
communities reinstate in PCE during 2014
• Only four non-participating communities
9:10:41 AM
Ms. Fisher-Goad explained the graph on Slide 7, "PCE Level
Rates." She stated that the yellow represented the utility
rate prior to the PCE, the blue showed the effective rate
after PCE was applied. She said that the program was aiming
for the base rate, which was the average between Juneau,
Fairbanks, and Anchorage, roughly $14.5 cents per kilowatt
hour.
9:11:09 AM
Vice-Chair Micciche queried the base rate at which a
community would be eligible for PCE.
Ms. Fisher-Goad responded that the base rate was
approximately $14.5 cents. She noted that there were
several communities that had costs below the base;
Metlakatla, for example. She added that some North Slope
communities received a borough subsidy in addition to a low
amount of PCE.
9:12:12 AM
Vice-Chair Micciche wondered who has the authority to
approve communities under $14.5 cents.
Ms. Fisher Goad responded that some communities were not
regulated and had a Certificate of Public Convenience and
Necessity (CPCN) through the Regulatory Commission of
Alaska (RCA). She explained that for PCE eligible
communities that were not rate regulated, the Regulatory
Commission of Alaska would examine the eligible costs,
similar to a tariff structure, and evaluate the community's
cost based on similar criteria for fuel and non-fuel cost,
as if they were regulated.
9:13:09 AM
Co-Chair Kelly wondered why Metlakatla was eligible for PCE
when it had a power cost under the average of Anchorage,
Fairbanks, and Juneau.
Ms. Fisher-Goad responded that Metlakatla was eligible
based upon the power the community generated in 1984, if
their costs were lower, they would not receive a PCE rate.
She said that none of the PCE communities would receive a
PCE rate that would push them below the Anchorage,
Fairbanks, and Juneau base rate.
9:13:59 AM
Co-Chair MacKinnon asked why Fairbanks was being used in
the calculation when the city had some of the highest
energy costs.
Ms. Fisher-Goad replied that the statute required that
Regulatory Commission of Alaska evaluate the floor based on
Anchorage, Fairbanks, and Juneau. She clarified that it was
not the entire Fairbanks-Northstar borough, rather the city
of Fairbanks. She said that only 7 percent of the weighted
rate was impacted by Fairbanks, the 50 percent of the floor
was primarily driven by the Chugiak Electric Association.
Co-Chair Kelly interjected that the calculations were made
at a time when energy was more affordable in Fairbanks.
Ms. Fisher-Goad agreed.
9:15:08 AM
Co-Chair MacKinnon that that the calculations needed to be
re-examined due to the high energy costs in Fairbanks She
noted that Southeast Alaska would be bringing down the
average down, while Fairbanks increased it. She shared that
residents of Fairbanks and rural Alaska used 50 percent of
their disposable income for energy costs.
Co-Chair Kelly interjected that he had been told that a
significant rate reduction could be expected in the near
future.
9:16:09 AM
Senator Bishop believed that a 17 percent reduction was
imminent. He supported Co-Chair MacKinnon in her suggestion
to re-examine the PCE calculations.
9:16:32 AM
Vice-Chair Micciche suggested that Ms. Fisher-Goad provide
the committee with the PCE formula.
Ms. Fisher-Goad replied that she would get back to the
committee with the information.
9:17:17 AM
Mr. Fisher-Goad continued to Slide 8, "Regional Energy
Planning":
· Energy Pathways led to regional planning
· Address unique challenges while capitalizing on
regional resources
· Locally driven and community-vetted blueprint for
sustainability
· Provide specific, actionable recommendations
· Identify means of providing stable and affordable
electric, heat and transportation energy from
renewable and fossil fuels
· Build capacity at local and regional level to enable
stakeholders to continue planning process
Ms. Fisher-Goad related that a Railbelt Organized Plan and
a Southeast Integrated Regional Plan had been created in
order to learn how to address the unique situations in each
region. She added that AEA had offered technical assistance
to local stakeholders, providing guidance as to what energy
plans should look like.
9:18:39 AM
Mr. Fisher-Goad summarized Slide 9, "Regional Planning
Process":
· Provides consistent format for planning efforts
· Community-driven process with AEA project management
and policy oversight
· Regional priorities not reliant on state funding
· Phased process:
o Phase I: Information gathering and working draft
development
o Phase II: Stakeholder engagement and feedback
o Phase III: Technical and economic analysis for
final draft development and interface with AkAES
9:19:21 AM
Ms. Fisher-Goad turned to Slide 10, "Alaska's Energy
Plans":
Alaska's Energy Plans
Completed plans
• Living documents
• Railbelt and Southeast Integrated
Resources Plans
Ongoing plans:
• AEA-funded, most often working with
ARDORs
• Kodiak, Northwest Arctic, Aleut,
Bering Straits, Bristol Bay, Copper
Valley, Yukon-Koyukuk/Upper Tanana
(TCC led), Chugach
AEA Advisory Role:
• Lower Yukon-Kuskokwim (Nuvista led)
North Slope
9:20:00 AM
Ms. Fisher-Goad noted Slide 11, "Regional Planning Status,"
which offered the region, contractor/lead entity, and phase
status of plans in the Aleutians, Bering Straits, Bristol
Bay, Chugach, Copper River, Kodiak, Lower Yukon-Kuskokwim,
North Slope, Northwest Arctic, and Yukon-Koyukuk/Upper
Tanana. She noted that most of the regional plans were
moving along nicely and it was anticipated that the plans
would be complete and moving into the next planning phase
of the Alaska Affordable Energy Strategy (AkAES) in summer
2015.
9:20:47 AM
Ms. Fisher-Goad turned to Slide 12, "Relationship between
Planning Efforts," which offered a Venn diagram showing
that the Regional Energy Plan and the AkAES sharing
technical and economic analysis.
9:21:09 AM
Ms. Fisher-Goad moved to Slide 13, "Senate Bill 138":
Senate Bill 138
Alaska Affordable Energy Strategy
Plan and recommendations to the Legislature on
infrastructure needed to deliver affordable energy to
areas in the state that do not have direct access to a
North Slope natural gas pipeline.
Due: January 1, 2017
Ms. Fisher-Goad she stated that the authority had worked to
assure that the regional plans included community and
regional priorities that were not necessarily tied to
whether the state would be funding the projects.
9:22:59 AM
Ms. Fisher-Goad presented Slide 14, "Electricity". She
state that AEA had attempted to categorize how various
regions were receiving electricity and heat. The slide
contained a map portraying the current use of natural gas
and renewable energy for electric, and included the
following informational key:
Electricity
4 Quadrants based on
Access to Energy Resources:
1. Natural Gas/Renewables
2. No Natural
Gas/Renewables
3. No Natural Gas/No
Renewables
4. Natural Gas/No
Renewables
9:24:52 AM
Ms. Fisher-Goad presented Slide 15, "Heat". The slide
contained a map of current use of natural gas and renewable
energy for heat, and included the following informational
key:
Heat
4 Quadrants based on
Access to Energy Resources:
1. Natural Gas/Renewables
2. No Natural
Gas/Renewables
3. No Natural Gas/No
Renewables
4. Natural Gas/No
Renewables
Ms. Fisher-Goad noted that there were many small, rural
communities that had no natural gas and no renewables.
9:25:31 AM
Ms. Fisher-Goad continued to Slide 16, "Cost-Effective
Strategies To Improve Energy Affordability". She shared
that the id would be ideal to move from the no gas, no
renewable quadrant to a potentially renewable situation.
The slide hypothesized that a wind project provide
electricity or heat to areas in need.
9:25:58 AM
Senator Bishop asked whether it was a certainty that the
areas on Slides 15 and 16 were areas of no gas and no
renewables.
Ms. Fisher-Goad responded that the goal of the slides was
to categorize what people were currently using, with the
hope of finding potential renewables or developing gas in
those areas in the future.
9:27:03 AM
Ms. Fisher-Goad summarized Slide 17, "Strategies for More
Affordable Energy," and noted that energy efficiency as a
strategy could be used in any region. The slide detailed
various strategies to assist communities:
· Evaluate communities individually on ability to
cost-effectively access to renewable energy or
natural gas.
· Provide funding mechanisms, assistance, and other
changes to promote cost-effective measures in
communities.
9:28:34 AM
Ms. Fisher-Goad stated that the affordable energy strategy
should fulfill what the legislature expected in the 2017
report. She noted that AEA's goal was to ensure that there
were no unintended consequences caused by the report and
that the report had public support. She thought that the
Southeast Integrated Resource Plan had offered learning
experience; the recommendations on developing biomass had
seen a lot of support, but when the plan was first
developed, biomass development had not been embraced by the
region. She hoped that lessons learned through the
development of certain plans would help people to
understand what the affordable energy plan would entail.
She moved to Slide 18 reviewed slide 19, "Renewable Energy
Grant Fund":
Renewable Energy Grant Fund
• Displaces volatile-priced fossil fuels through
hydroelectric, wind, biomass, heat recovery, heat
pumps, solar and transmission of renewables
• Earned national recognition for excellence from the
Clean Energy States Alliance
• In 2013 13 million gallons of diesel and natural gas
equivalent were displaced
• Capitalizes on local energy resources
• Benefits businesses not eligible for PCE
• Expands Alaska's renewable energy knowledge base
• Overall Program Benefit Cost Ratio: 2.8 (Based on
first
44 projects in operation)
9:32:30 AM
Senator Hoffman noted that much of the displaced diesel in
his district was going toward wind power, which was being
used for electricity, and the result was an insignificant
decrease in the cost of energy. He commented that the
driving goal should be instituting programs that actually
reduce the cost of energy for the people of Alaska.
9:33:52 AM
Vice-Chair Micciche asked whether PCE could be used when
moving from diesel to an alternative like wind power.
Ms. Fisher-Goad replied that one-third of the energy of PCE
eligible communities was eligible for PCE. She said that a
renewable energy source would impact 100 percent of the
kilowatt hours generated in the community; 60 percent of
the kilowatt hours would receive the direct benefit of the
diesel displacement. She said that the State of Alaska
benefited from the savings advantages of the renewable
energy fund through the reduction of the PCE program draw.
She furthered that the strength of the renewable project
was the two-thirds of kilowatt hours that were not covered
under the PCE program. She noted that schools were not
covered under the PCE program. If there were a renewable
project in a community, a school would receive the direct
benefit by the cost going down and the diesel being
displaced. She stated that she could provide further
information to the committee on the overlap of PCE and
renewables.
9:36:53 AM
Vice-Chair Micciche understood that theoretically a
community could enjoy the benefits of a renewable energy
project and individual energy costs could go up.
Ms. Fisher-Goad replied that the issue was that the costs
would not go down.
Vice-Chair Micciche asked where renewable energy had
replaced natural gas in a way that would reduce space
heating costs.
Ms. Fisher Goad thought that the project that had the most
impact was a solid waste project through Anchorage
Municipal Light and Power (ML&P).
9:38:11 AM
Co-Chair MacKinnon noted that she and Senator Hoffman
served on the Advisory Board for the Renewable Energy Grant
Fund.
9:38:32 AM
Ms. Fisher-Goad presented Slide 19, "REF Grant and Funding
Summary":
Applications Received - 732
Applications Funded - 277
Grants Currently in Place - 122
1
Amount Requested($M) - $1,442.3
AEA Recommended ($M) - $398.3
2
Appropriated ($M)- $247.5
Cash Disbursed ($M) - $163.3
3
1. Total grant amount requested by all applicants.
2. $12.8 Million was re-appropriated from earlier
rounds for use in Round IV ($10M) and Round VII
($2.8M).
3. Represents only amounts recorded in the grant
document and does not capture all other funding.
Ms. Fisher-Goad showed Slide 20, "Renewable Energy Fund
Projects, Rounds I - VII," which detailed the distribution
of the projects and where the resourced lie in the state.
9:39:37 AM
Ms. Fisher-Goad presented Slide 21, and noted there were
three primary statutory requirements for the program: the
most weight was focused on the high-cost areas of the
state, AEA was required to have a regional spread
throughout the state, and there had to be significant
weight for match provided to a project. She noted that over
the years Southeast Alaska had benefited well from the
program, which was due to having large biomass and hydro
resources. She added that when the advisory committee met
in January 2014, they had asked that the project list be
reviewed; specifically, the cost of energy in communities
and the possibility of capping projects at a different
level than what had been traditionally done. She said that
the list would be examined taking into consideration the
three requirements and advisory committee recommendations.
9:41:59 AM
Ms. Fisher-Goad turned to Slide 22, "Heating Degree Days,"
which offered a map color coding the heating degree days in
the state. She noted that there were significant
temperature differences throughout the state on any given
day. She said that heating degree days were used to
evaluate the comprehensive cost of energy throughout the
state.
9:43:22 AM
Co-Chair Kelly asked for an explanation of the formula used
to discern heating degree days.
Ms. Fisher-Goad replied that she would provide the
information to the committee at a future date.
9:45:01 AM
Senator Dunleavy asked if AEA was getting any "push-back"
from the federal government or the Environmental Protection
Agency (EPA) regarding any of the fuel sources out lined in
the presentation. He wondered whether AEA was being
encouraged to use any particular fuel sources.
Ms. Fisher-Goad responded that the EPA 111D (targeted to
reduce emissions) had been targeted to the Railbelt areas
of the state, the biggest issues was the use of coal for
electricity. She noted that federal intervention depended
on project-by-project development. The state was focused on
the development of wind while the rest of the country was
focused on solar energy; the state did not have the ability
to maintain significant solar development in the state. She
relayed that she could not point to specific push-back, but
different regulatory hurdles existed for all projects. She
relayed that AEA had a good working relationship with the
United State Forest Service to develop small biomass
projects through the wind working group.
9:48:26 AM
Senator Dunleavy suggested that if it were not for fear of
push back from the federal government, the state would
utilize more of its coal for cheaper energy.
Ms. Fisher-Goad responded that diesel has been used
effectively in rural Alaska. She said that she did not
think that coal would be utilized more in rural communities
because diesel had already proved effective. She shared
that AEA had been looking into combined heat and power,
with respect to whether coal could be a source of energy.
She stated that the coal would still need to be shipped
into the smaller rural communities and that the factors
against coal development were economic rather than federal
regulation.
Senator Dunleavy queried whether more coal would be used in
the Railbelt if it were not for federal considerations.
Ms. Fisher-Goad deferred to Golden Valley Electric
Association concerning the hurdles faced by the Railbelt.
9:51:49 AM
Co-Chair Kelly interjected that it could be shown that in
Fairbanks, federal interference resulted in the burning of
more coal, while simultaneously restricting the burning of
coal in certain areas. He offered that the University power
plant was at under 25 megawatts in order to avoid applying
for a federal permit. He argued that the power plant could
have been built larger, and served a larger area, but was
limited due to permitting. He asserted that one big coal
plant could provide energy to the entire Interior of Alaska
were it not for "goofy" rules.
9:52:59 AM
Senator Dunleavy encouraged AEA to consider using coal to
provide energy for the state. He worried that the idea of
using coal was losing ground in the state.
Co-Chair Kelly added that the coal power plant that would
be built at the University would have lower particulate
production than gas.
9:54:39 AM
Co-Chair MacKinnon spoke of the use of coal at Eielson
Airforce Base. She said that federal government regulation
required that additives be added to the coal products that
were burned in an effort to reduce particulate matter. She
opined that that the addition of the chemicals was raising
the price of coal usage at those facilities. She suggested
that the additives were not helping reduce particulate
matter in the environment.
9:55:44 AM
Ms. Fisher-Goad assured the committee that, if there was a
desire and an effort to make sure that coal was used as a
resource, AEA wanted to work with regions to bring local
priorities to fruition. She noted that the coal would be a
local resource that would be used for local needs.
9:56:50 AM
Ms. Fisher-Goad moved to Slide 23, "Renewable Energy Fund
Round VIII Draft Recommended Projects," and explained that
there was a regional/statewide mix of projects that AEA had
recommended for funding.
9:57:27 AM
Ms. Fisher-Goad continued to Slide 24, "Emerging Energy
Technology Fund":
Emerging Energy Technology Fund
· Provides funds for projects that can demonstrate
commercial viability within 5 years
· Includes renewable and alternative energy, storage
and transmission
· Nearly $11 million provided to 20 projects
· Projects in Juneau, Fairbanks, Kodiak, Delta
Junction,
· Nenana, Nikiski, Igiugig, Tuntutuliak, Kwigllingok
and
· Kotzebue
· Program extended to 2020
· Fills an energy development void by providing
infusion of capital to spur private investment in
emerging technology
· Synergy between state and business community
· Supports a growing Alaska energy industry
· ORPC Turbine in the Kvichak River
· Partner with ACEP on data collection
9:59:22 AM
Ms. Fisher-Goad summarized Slide 25, "EETF: Project
Highlight":
EETF: Project Highlight
Ultra-Efficient Generators and Diesel Electric
Propulsion (Kodiak)
· Technology aims to provide more efficient diesel power
generation
· Can be used in marine propulsion and stationary
powerhouses
· Power dense motor and inverter/controller invented by
operators of a machining and fabricating shop in
Kodiak
· Commercial availability anticipated at project's end
9:59:59 AM
Ms. Fisher-Goad noted Slide 26, "Energy Spotlight on
Alaska," which showed national publications that had
discussed the energy issues of Alaska.
10:01:05 AM
Ms. Fisher-Goad presented Slide 27, "Energy Efficiency and
Conservation":
Energy Efficiency and Conservation
State goal to reduce per capita energy use by 15% by
2020
· AEA's focus: commercial buildings, rural public
buildings, industrial facilities and electrical
efficiency
· Statewide outreach and education
AKEnergyEfficiency.org
· Coordination between State agencies
· Results:
· $1,534,062 and 282,938 diesel equivalent gallons
in projected savings
· Average immediate savings of implemented
efficiency measures: $0.29 cents/ $1 invested,
300% ROI after 10 years
· Alaska Commercial Energy Audit Program measures
produce
· 30% savings with 6.2 year simple payback
10:02:12 AM
Ms. Fisher-Goad noted slide 28, "Village Energy Efficiency
Program":
Village Energy Efficiency Program
· Provides grant funding for small, high-energy cost
communities to implement energy efficiency and
conservation measures in the public buildings and
facilities.
· Eligible applicants include:
o Municipalities, cities, school districts,
unincorporated villages, Alaska Native regional
and village corporations, tribal consortiums,
regional housing authorities, traditional
councils
· 2013: Seven projects received $1,381,000
· Projects include retrofitting lights, replacing
outdated
· HVAC equipment and boilers, improving insulation and
building siding and replacing windows.
10:03:09 AM
Ms. Fisher-Goad stated that AEA wanted to make energy
efficiency a cornerstone of the affordable energy strategy.
She explained Slide 29, "Revisiting Nightmute":
Revisiting Nightmute
· Revisited Nightmute as a collaborative model
· Multiple state partners, regional organizations,
the city of Nightmute and private sector
· Multiple energy efficiency efforts simultaneously
implemented in the community in 2009
· After five years:
o the average house and community building cut
energy use in half
o projected annual fuel savings to the village
store alone were estimated at $10,639
o community lighting upgrades resulted in more
than
o $14,000 in annual estimated savings
o total annual energy savings for the
community was calculated around $75,000.
Ms. Fisher-Goad revealed that waiting five years to revisit
the community was too long; the visit should have been made
one or two years into the process to determine how the
retrofits were being maintained. She felt that the overall
results had been positive. She shared that having many
agencies come into a community all at once had been
overwhelming and had spread the community thin. She said
that this would be considered in future endeavors.
10:06:36 AM
Senator Hoffman noted that $75,000 might not seem like much
money over 10 years. He requested a description of the size
of the community of Nightmute.
Ms. Fisher-Goad believed that the community consisted of
under 200 people.
10:07:17 AM
Co-Chair MacKinnon asked how many communities were close to
Nightmute, but not connected by road.
Ms. Fisher-Goad responded that she did not currently have
that information. She added that AEA's goal in doing coal
retrofits was to maximize efficiency through the systematic
review of nearby communities.
10:08:29 AM
Co-Chair MacKinnon noted her appreciation of the community
of Nightmute, but that a connection of a one mile road
would have provided benefit to two other villages.
10:09:13 AM
Ms. Fisher-Goad commented that part of the regional
planning had considered the economy of scale of regional
transition lines to be able to connect smaller communities
to a large powerhouse in another community.
10:09:49 AM
Ms. Fisher-Goad moved to Slide 30, "Bulk Fuel and Rural
Power System Upgrades":
Bulk Fuel and Rural Power System Upgrades
· Help utilities improve efficiency, safety and
reliability of power systems
o Promote local hire and training
· Completed about $340 million in rural bulk fuel and
rural power system upgrade projects since 2000, in
partnership with Denali Commission
· Circuit Rider program provides mechanical training
o 28 circuit rider visits to communities and
approximately
o 3,300 phone assistance instances
· Emergency response stabilizes power during lights
out or near-emergency situations
o Four emergencies in calendar year 2014
· Looking at training models to increase local
capacity
Ms. Fisher-Goad stated that even with the integration of
renewable resources in a community, a strong powerhouse and
stable electrical system were necessary in order to
integrate renewables into the system.
10:12:00 AM
Senator Bishop was glad to hear that AEA was working with
Alaska Vocational Technical Center (AVTEC). He added that
the systems were only as good as the people trained to keep
them running and in good condition.
10:12:39 AM
Ms. Fisher-Goad explained Slide 31, "RPSU Savings to
Communities," and noted that RPSU and bulk fuel projects
had been funded with grant funds since 2000. She
highlighted that the slide illustrated what the cost would
be to debt-finance the projects. She said that there would
be an increased cost to communities of $.19 per kilowatt
hour, on top of the rate that they were currently paying,
if they were funded in a debt service fashion.
10:14:03 AM
Ms. Fisher-Goad moved to Slide 32, "Susitna-Watana Hydro":
Susitna-Watana Hydro
· Safe and Effective Field Work
o Data collection complete for 13 FERC-approved
studies
o Advancing the state of science for agencies to
better manage resources
· Filed the Initial Study Report with FERC
· Report to the Legislature Distributed Jan. 20
· Data Collection and Findings Similar to
· 1980s effort
o Fish distribution
o Geomorphically stable river system
o Bird migration and breeding
10:16:01 AM
Senator Bishop queried the relationship between AEA and
Alaska Native corporations on the hydro project.
Ms. Fisher-Goad responded that that relationship was quite
good. She added that the team from AEA met regularly with
the village corporations to discuss the status of the
project.
Co-Chair Kelly corrected his earlier statement that there
were 12 coal power plants in Fairbanks, he qualified that
he had meant 12 in Interior Alaska, and added that the
figure was actually lower than 12. He surmised that the
number was closer to 8.
10:17:34 AM
Ms. Fisher-Goad presented Slide 33, "Chinook Salmon and
Devils Canyon," which provided information concerning
tagged Chinook salmon and Devils Canyon:
Chinook Salmon and Devils Canyon
· Salmon spawn in tributaries and off-channel habitats
· Chinook salmon only anadromous fish documented above
Devils Canyon
o Less than half of a percent of the total
Susitna River Chinook escapement
· 97 to 99% of tagged Chinook spawned in the
tributaries
· 93 to 97% of Coho tagged in the Lower River spawned
in tributaries
She stated that the tagged Chinook were spawning in the
tributaries. She stressed that a significant portion of the
funding AEA received from the state had gone toward the
environmental effort and putting together a good license
application.
10:19:01 AM
Ms. Fisher-Goad summarized Slide 34, "Engineering and
Costs":
Engineering and Costs
· Board of Consultants endorsed Roller Compacted
Concrete and dam configuration
· 2014 drilling confirmed no active faults found at
the proposed dam site
· Mean annual energy- 2,800 gigawatt hours
· Most probable cost $5.65 billion (range $5 to 6.2
billion)
· Combination of debt financing options can provide
50-year average wholesale power at about 7 cents per
kilowatt hour
· Cost of power would equal natural gas within 9 years
Ms. Fisher-Goad shared that AEA had seen a confirmation of
what had been assumed when the legislature passed
authorization for AEA to move forward with the project.
10:20:51 AM
Vice-Chair Micciche queried the seasonal fluctuation of
gigawatt hours.
Ms. Fisher-Goad said she could get back to the committee on
the projected seasonal fluctuation modeled on the
operational cost.
10:21:15 AM
Senator Bishop asked what the metered price of energy would
be as a result of the hydro plant.
Ms. Fisher-Goad replied that, assuming the plant followed
the Bradley Lake model, the wholesale cost would be $.7 per
kilowatt hour, but would change depending on the mix of
utilities involved. She furthered that the cost in
Fairbanks would be different from the cost in Anchorage.
10:22:09 AM
Senator Bishop stated that the information was important to
the discussion.
Ms. Fisher-Goad offered to provide a more detailed response
at a later date.
10:22:41 AM
Ms. Fisher-Goad explained Slide 35, "AEA Budget Summary,"
and noted that the Operating Budget for AEA was still the
Work-In-Progress budget that had been released on December
15, 1014. She noted that some of the previously mentioned
programs were embedded in the Capital Budget. She pointed
out that there were a bulk fuel tank farm and several
powerhouses that were slated for funding in the Governor's
Budget. She added that money for the Emerging Energy
Technology Fund and Electrical Emergencies Response were
listed in the summary, as well as $2.2 million for the
Alternative Energy and Energy Efficiency Programs.
10:24:06 AM
Senator Dunleavy said that there were "stranded areas of
energy" in his district. He asked whether an attempt would
be made to utilize interties in order to make use the
stranded energy in the Railbelt and reduce costs for all
involved.
Ms. Fisher-Goad responded that AEA had commissioned an
energy study focused on how to strengthen the transmission
system throughout the Railbelt. She offered that former
Senator Gene Therriault, Deputy Director, Statewide Energy
Policy Development, Alaska Energy Authority, Department of
Commerce, Community and Economic Development was in the
gallery for further questions on the issue.
Senator Dunleavy he believed that the issue should be
explored. He requested the PFM financial report, the MWH
Global cost report, the AECOM cost report, and the
Independent Feasibility report. He asked whether AEA had
responded to criticism of their fish study from the
National Marine Fisheries, and whether the response could
be made available to the committee. He noted that any other
fish study reports that had been done should be shared with
the committee. He wondered whether the reports could be
posted online for the public.
Ms. Fisher-Goad replied that several of the reports
referenced by Senator Dunleavy had already been made
available to the committee. She noted that Administrative
Order 271 had suspended project activity, which had stalled
the filing of some Federal Energy Regulatory Commission
(FERC) reports. She assured the committee that copies of
whatever reports were available would be provided to the
committee.
ADJOURNMENT
10:29:14 AM
The meeting was adjourned at 10:29 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 013015 AEA Senate Finance.pdf |
SFIN 1/28/2015 9:00:00 AM |
Alaska Energy Authority |