Legislature(2015 - 2016)SENATE FINANCE 532
04/16/2015 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB9 | |
| SB50 || HB105 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | SB 9 | ||
| += | SB 50 | TELECONFERENCED | |
| + | HB 105 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 176 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 16, 2015
2:55 p.m.
2:55:27 PM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 2:55 p.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
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Fred Parady, Deputy Commissioner, Department of Commerce,
Community, and Economic Development; Gene Therriault,
Deputy Director, Statewide Energy Policy Development,
Alaska Energy Authority, Department of Commerce, Community
and Economic Development; Ted Leonard, Director Emeritus,
Alaska Industrial Development and Export Authority (AIDEA),
Anchorage.
PRESENT VIA TELECONFERENCE
Jomo Stewart, Fairbanks Economic Development Corporation,
Fairbanks; Pamela Throop, Self, Fairbanks; Roger Burggraf,
Self, Fairbanks; Merrick Peirce, Self, Fairbanks; Gary
Hennigh, City Manager, King Cove; Lisa Herbert, Director,
Greater Fairbanks Chamber of Commerce, Fairbanks; Jim
Dodson, Fairbanks Economic Development Corporation,
Fairbanks; Luke Hopkins, Mayor, Fairbanks Northstar
Borough, Fairbanks; Andre LaRue, Self, Juneau.
SUMMARY
SB 9 ELECTION PAMPHLETS
SB 9 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published zero fiscal note: FN1 (GOV).
SB 50 AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT
SB 50 was HEARD and HELD in committee for further
consideration.
HB 105 AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT
HB 105 was HEARD and HELD in committee for
further consideration.
CSHB 176(FIN)
REPEAL ST EMPL WAGE RAISE;LEGIS EMPL BENE
HB 176 was SCHEDULED but not HEARD.
SENATE BILL NO. 9
"An Act repealing the authority to include certain
material from a political party in the election
pamphlet."
2:56:11 PM
Vice-Chair Micciche summarized that the bill would purify
the election process at the ballot box.
Co-Chair MacKinnon noted that public testimony had been
held during the 9am meeting on April 16, 2015.
Vice-Chair Micciche discussed the zero fiscal note.
2:57:16 PM
Vice-Chair Micciche MOVED to report SB 9 out of Committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
SB 9 was REPORTED out of committee with a "do pass"
recommendation and with one previously published zero
fiscal note: FN1 (GOV).
2:57:34 PM
AT EASE
3:03:18 PM
RECONVENED
SENATE BILL NO. 50
"An Act relating to the programs and bonds of the
Alaska Industrial Development and Export Authority;
related to the financing authorization through the
Alaska Industrial Development and Export Authority of
a liquefied natural gas production plant and natural
gas energy projects and distribution systems in the
state; amending and repealing bond authorizations
granted to the Alaska Industrial Development and
Export Authority; and providing for an effective
date."
CS FOR HOUSE BILL NO. 105(FIN)
"An Act relating to the programs and bonds of the
Alaska Industrial Development and Export Authority;
relating to the Alaska Industrial Development and
Export Authority sustainable energy transmission and
supply development fund; requiring the Alaska
Industrial Development and Export Authority to deliver
to the legislature reports relating to the Interior
energy project; relating to the financing
authorization through the Alaska Industrial
Development and Export Authority of a liquefied
natural gas production plant and natural gas energy
projects and distribution systems in the state;
amending and repealing bond authorizations granted to
the Alaska Industrial Development and Export
Authority; authorizing the Alaska Industrial
Development and Export Authority to issue bonds to
finance the infrastructure and construction costs of
the Sweetheart Lake hydroelectric project; authorizing
the Alaska Industrial Development and Export Authority
to issue bonds to finance the infrastructure and
construction costs of rebuilding transmission between
the Hope substation and Portage, rebuilding
transmission between Powerline Pass to Indian, and the
Eklutna hydroelectric transmission system upgrade
project; relating to legislative approval for loans
from the power project fund to the City of King Cove;
and providing for an effective date."
3:03:36 PM
FRED PARADY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE,
COMMUNITY, AND ECONOMIC DEVELOPMENT, drew attention to the
presentation, "Interior Energy Project.
3:05:15 PM
Mr. Parady referred to Slide 2, "IEP: Goals Under SB23":
· Supply natural gas to Interior Alaska:
-At the lowest cost possible
-As many Alaska customers as possible
-As soon as possible
· IEP investments compliment eventual sources of gas
supply from a natural gas pipe line
· Lower PM2.5 in nonattainment areas of Interior
3:06:16 PM
Mr. Parady spoke to Slide 3, "IEP: Overview":
· Meet the goals set by the legislature to supply
affordable energy to Interior Alaska
· Project is complex, which is why the legislature
took action
· Now evaluating infrastructure to deliver natural gas
from any source, including Cook Inlet
· AIDEA financing the buildout of natural gas
distribution in Fairbanks and North Pole
3:06:27 PM
Mr. Parady moved to Slide 4, "IEP: HB 105/ SB 50":
· HB 105 / SB 50 gives AIDEA flexibility to use SB 23
financing tools with a non-North Slope liquefaction
location
-Current version of HB 105 also authorizes
financing propane and small diameter pipeline
(under 12" diameter) projects to meet the goals
of the IEP
-Current version of SB 50 authorizes financing
small diameter pipeline
3:06:37 PM
Senator Dunleavy queried the geographic boundaries of the
legislation.
GENE THERRIAULT, DEPUTY DIRECTOR, STATEWIDE ENERGY POLICY
DEVELOPMENT, ALASKA ENERGY AUTHORITY, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, explained
that the terminology "interior energy project" had been
selected by the previous administration, realizing that the
core demand within the Fairbanks Northstar Borough was the
demand that would justify the building of the
infrastructure. However, once delivery to serve that
geographic was achieved, the product would also be
available to figure out the economics of delivering it down
the road system to Delta, Northway, and Tok. He relayed
that there were storage credits on the books that would be
available to the smaller communities. He stated that there
had never been a firm definition of "interior" rather there
had been an expectation that the product would be made
available in as large a geographic area as possible.
3:07:55 PM
Co-Chair MacKinnon asked whether the governor understood
the "stage gate" approach to interior energy, and that the
boundaries were outside of the Fairbanks area.
Mr. Therriault believed so. He stated that they had had
discussions naming the interior as the primary market. He
added that once infrastructure was in place that was
producing the product, secondary markets could be served.
He understood that the economics of the smaller markets
could be a challenging but not impossible.
3:08:54 PM
Senator Dunleavy reasserted his question pertaining to the
boundary.
Mr. Therriault replied that the focus of the project would
be the Fairbanks/North Pole area.
3:10:01 PM
Mr. Parady returned to Slide 4.
3:10:39 PM
Mr. Parady presented Slide 5, "North Slope Project Map,"
which displayed a schematic map of the project authorized
under SB 23 in 2013.
3:11:33 PM
Mr. Parady discussed Slide 6, "Cook Inlet Project Map,"
which was a schematic map that illustrated the Cook Inlet
project authorized in HB 105/ SB 50.
3:11:52 PM
Mr. Parady moved to slide 7, "Cook Intlet, North Slope, and
other Alternatives":
Cook Inlet
Natural Gas Supply - Supply still uncertain but
indications are positive
LNG Plan Costs - Cheaper to construct and operate,
"off the shelf"
Trucking/Rail - Lower trucking costs, large trailer
potential rail option
Storage and distribution - Nor significant change in
design and costs
North Slope
Natural Gas Supply - Abundant supply at low cost,
existing contracts in place
LNG Plan Costs - Expensive to design and construct for
North Slope conditions
Trucking/Rail - Trucking is more expensive but
feasible
Storage and distribution - No significant change in
design and costs
Other
Natural Gas Supply - Propane: Canada (HB 105 only)
Pipeline: Cook Inlet
LNG Plan Costs - Propane: No plant
Pipeline: No plant
Trucking/Rail - Propane: Marine, rail, trucking
Pipeline: None
Storage and distribution - Propane: Redesign storage
and regas
Pipeline: Less storage
3:13:39 PM
Mr. Parady showed Slide 8, "North Slope LNG Project," which
illustrated the supply chain laid out in SB 23:
1. Two Existing Gas Supply Agreements with North Slope
Producers
2. 3rd Party LNG Developer
3. Private Trucking Contractors
4. Interior Gas Utility - Fairbanks Natural Gas -
Golden Valley Electric Association.
He shared that the North Slope LNG Project supply chain had
been well vetted and had provided Alaska Industrial
Development and Export Authority (AIDEA) and the Interior
Utilities with estimated costs. He furthered that the LNG
costs for a North Slope project under the Concession
Agreement was too high and that Alternative North Slope LNG
production projects would be considered.
3:14:48 PM
Mr. Parady moved to slide 9, "Cook Inlet LNG Alternative,"
and commented that the project was similarly structured to
the project on the previous slide. He noted the supply
chain:
1. Gas Supply Agreement with Cook Inlet Producer(s)
2. 3rd Part LNG Developer
3. Private Trucking Contracts or Alaska Railroad
4. Interior Gas Utility - Fairbanks Natural Gas -
Golden Valley Electric Association
He stated that the allowance of the alternative, in
addition to the North Slope supply chain authorized in
2013, was the purpose of HB 105/ SB 50's IEP changes.
3:15:13 PM
Senator Dunleavy surmised that the most cost effective way
to move gas would be in a straight line, in a pipe. He
asked whether a small pipeline was the intention.
Mr. Parady related that the gas pipeline option was the
most elegant solution, but involved the longest permitting
timeline and largest upfront capital. He added that the
life expectancy of the project should be considered.
3:16:23 PM
Co-Chair MacKinnon referred to slide 8. She asked how much
it had cost to vet the North Slope Project.
Mr. Parady stated that expenditures from the capital
appropriation on the North Slope option totaled $12.4
million. He explained that there had been $1.3 million in
direct plant cost legal financial work; $5.7 million for
construction and permitting; $5 million for plan
engineering and design, and $330,000 in storage
distribution and conversion work. He furthered that much of
money was applicable to the project as it flipped, and some
of the money was contained in the value of the pad, which
could be disposed of as an asset at the appropriate time
that a North Slope option was set aside.
3:17:31 PM
Co-Chair MacKinnon asked whether the City of Fairbanks or
AIDEA walked away from the concession agreement.
Mr. Parady replied that it could be argued that MWH
Americas had walked away due to continually shifting terms
during the diligence process. He stated that, ultimately,
the AIDEA board had decided that the Concession Agreement
was not being met and chose not to extend its deadline.
Co-Chair MacKinnon asked what the unacceptable gate price
rate had been.
Mr. Parady thought that the rate was $13 or $14.
3:18:24 PM
Co-Chair Kelly asked for a breakdown of MWH Americas role
in the process. He
Mr. Parady deferred the question to AIDEA.
3:20:10 PM
Mr. Parady related that AIDEA would encourage and evaluate
all proposals to achieve the goals of the IEP as the
process moved forward. He presented Slide 10, "Project
Execution Plan":
o Natural Gas supply: Facilitate commercial
discussions between producers and utilities
o Liquefaction: Competitive solicitation to select
private partner to develop LNG capacity
o Transportation: Private trucking, Alaska
railroad, small diameter pipeline, propane
o Storage, Regasification, and Distribution:
Buildout of system continues Summer 2015
3:21:05 PM
Mr. Parady turned to Slide 11, "IEP Summary":
o The goals remain as established by SB23
o HB 105 / SB 50 authorizes the tool kit to best
achieve goals of IEP
o Market driven process
-Accomplishing IEP goals requires adaptation
to current market and operating realities
3:21:30 PM
TED LEONARD, DIRECTOR EMERITUS, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), ANCHORAGE,
addressed referred to Co-Chair Kelly's earlier question. He
stated that there were several factors in the Concession
Agreement that needed to be met, such as: having all of the
project criteria completed by December 31, MWH Americas
needed to have take-off agreements from the utilities, and
a fully vetted price needed to be established. He opined
that the conditions had not been met, and there had been
additional costs, but that the issues were due to time
constraints.
3:23:10 PM
Mr. Therriault spoke to the sectional analysis for CSSB
50(RES), version N:
Section 1: Adds intent language to the uncodified law
of Alaska detailing that the geographic flexibility
provided in Section 3 of this act is only to apply to
the AIDEA financing tools for the Interior Energy
Project previously authorized by ch. 26, SLA 2013 and
is not intended to expand the scope of the project.
Adds intent that AIDEA use an open and competitive
process to select private entities to participate in
the Interior Energy Project.
Section 2: Amends the definition of "qualified energy
development" that qualifies for SETS financing to
include consideration of propane and possible delivery
of natural gas to Interior Alaska via pipeline no
larger than 12 inches in diameter.
Section 3: Changes the uncodified law [11(a), ch. 26,
SLA 2013] that deals with the Interior Energy Project
(IEP). Deletes the phrase "on the North Slope" and
changes it to "in the state that will provide natural
gas to Interior Alaska" so that natural gas can be
sourced anywhere in the state. The section also
clarifies that existing IEP financing can be used to
support more than one natural gas distribution system
in Interior Alaska.
Section 4: Requires AIDEA to provide quarterly reports
to the Legislature on the status of the Interior
Energy Project that contains:
1. a description of project progress;
2. an update on distribution system status
3. information on the conversions to natural gas
4. an accounting on the use and expected use of
funds.
Requires AIDEA to provide a brief on the Interior
Energy Project to the LB&A Committee
3:27:32 PM
Senator Dunleavy queried the issues behind the limitations
of the diameter of the pipe.
3:28:02 PM
Vice-Chair Micciche responded that one of the stopping
points of similar projects in the past had been the fear of
competing with the North Slope Project; AKLNG or ASAP
lines. He said that the language clarified that the project
was not intended to replace those projects, but was simply
for supply to Fairbanks.
3:28:29 PM
Mr. Therriault concluded the sectional analysis:
Section 5: Sunsets the reporting and briefing
requirements of Sec. 4 on June 30, 2025.
Section 6: Provides an immediate effective date.
Co-Chair MacKinnon explained that public testimony for HB
105 and SB 50 would occur simultaneously. She said that if
the bill were to move, the house bill would be the vehicle;
the contents of the final bill could come from HB 105, SB
50, and any amendments offered by the committee.
3:29:51 PM
AT EASE
3:30:19 PM
RECONVENED
Co-Chair MacKinnon introduced the legislation.
Mr. Therriault discussed the sectional analysis:
Section 1: adds intent language to clarify that the
financial tools discussed in Section 10 are only for
the benefit of the Interior Energy Project described
in Section 10.
Mr. Therriault noted that the intent language in HB 105 was
similar to the language in SB 50.
Section 2: increases the limit under AS 44.88.095(c)
from $6 million to $10 million. AS 44.88.095(c)
requires AIDEA to receive a certified copy of a
resolution of the municipality or from the Regional
Resource Advisory Council (in the Unorganized Borough)
consenting to the location of a project if AIDEA is to
issue bonds exceeding $6,000,000. AIDEA recommends
that this cap be increased to $10,000,000 to better
reflect the true costs of projects in 2015.
Mr. Therriault explained that several of the sections
detailed statues that had been updated for changes due to
inflation.
Section 3: increases the limit under AS 44.88.095(g)
from $10 million to $25 million. AS 44.88.095(g)
requires that AIDEA receive legislative approval to
issue bonds in amounts over $10 million to finance a
development project. The current bond limitations have
lessened AIDEA's ability to utilize bonding as a tool
in funding small to mid-size projects due to the time
it takes to get authorization from the Legislature and
to go through the community authorization process.
Additionally, AIDEA is recommending the dollar amount
of bond limitations be the same as the dollar amount
limit on loan participations AS 44.88.155(d)(1) since
loan participations may be funded through bond
issuances.
Section 4: changes the loan participation limit under
AS 44.88.155(d)(1) to $25 million (current limit - $20
million), and $25 million (current limit - $20
million) for a loan participation for a qualified
energy project without the necessity of obtaining
prior legislative approval. Increasing the limits
would allow AIDEA to provide more of the financing for
a large commercial project and a qualified energy
project and provide better financing terms for those
projects.
Co-Chair MacKinnon asked when the SETS Fund was
established.
Mr. Therriault thought that the fund was established in
2011.
Section 5: adds an exception to AIDEA's ability to
enter into projects that involve a lease.
Section 6: requires legislative approval before AIDEA
may enter into a gas supply contract with a natural
gas producer in order to supply natural gas to
Interior utilities unless the gas contract is for a
natural gas liquefaction plant or distribution system
that is owned by the Authority or a subsidiary of the
Authority.
Section 7: prohibits AIDEA from using the SETS fund to
purchase natural gas reserves or a gas lease or a
working interest owner of a natural gas lease.
Mr. Therriault acknowledged concerns that AIDEA
occasionally used its Enterprise Fund to invest in oil and
gas infrastructure and in doing so would take as collateral
for the loan an ownership in the potential production of
oil and gas out of the facilities. He said that work had
been done to add the restriction in Section 7, without
upsetting any ongoing AIDEA interaction of funding oil and
gas infrastructure.
Section 8: amends the definition of "qualified energy
development" that qualifies for SETS financing to
include consideration of propane and possible delivery
of natural gas to Interior Alaska via pipeline no
larger than 12 inches in diameter.
Section 9: refreshes a previous AIDEA bond
authorization for a bulk commodity handling facility
in Cook Inlet. The language requires the facility to
be located at Point MacKenzie.
3:39:48 PM
Vice-Chair Micciche asked for the primary reason that new
legislation had to be drafted in order for the project to
continue.
Mr. Therriault replied that the primary reason could be
found in Section 10 of the legislation; the removal of the
words, "on the North Slope."
Vice-Chair Micciche asserted that parochialism was creeping
back into the bill. He opined that qualifiers were being
added to the legislation that would limit the ability to
provide inexpensive natural gas to people in the Interior
and Fairbanks.
Mr. Therriault stated that as the bill moved through the
committee process in both bodies, the language had evolved.
He said that the language had not been in the
administration's original bill. He said that if the
refreshed authorization went into the final bill, it would
not be attached to the IEP project.
3:42:59 PM
Mr. Therriault returned to the sectional analysis:
Section 10: changes the uncodified law [11(a), ch. 26,
SLA 2013] that deals with the Interior Energy Project
(IEP). Deletes the phrase "on the North Slope" and
changes it to "in the state that will provide natural
gas to Interior Alaska" so that natural gas can be
sourced anywhere in the state. The section also
clarifies that existing IEP financing can be used to
support more than one natural gas distribution system
in Interior Alaska. Requires the AIDEA Board to
approve a project plan by resolution that includes the
following items before SETS financing tools can
continue to be used for the IEP.
1. An identified source of natural gas or propane
2. An estimated cost of the project
3. An estimated price for the resource delivered
to Interior Alaska utilities
Section 11: reduces a previous AIDEA bond
authorization at the Anchorage International Airport
from $85,000,000 to $28,000,000.
Section 12: repeals legislative bond authorizations
(1994 through 2006) under 44.88.095(g) for potential
projects that were determined not to be feasible or
did not move forward for other reasons. The repeal of
these authorizations would be beneficial to AIDEA's
bond rating as AIDEA moves forward to utilize its
bonding capacity for future projects. Authorizations
to be repealed include:
1. $50,000,000 for construction of processing
facility for seafood (ASI) - 1993 authorization.
2. $20,000,000 to assist in construction of
Kodiak launch complex facilities 1995
authorization.
3. $80,000,000 to fund expansion at Red Dog port
- 1998 authorization.
4. $30,000,000 to finance improvement at Nome
port facility - 1998 authorization.
5. $25,000,000 to finance development at Hatcher
Pass located in Matanuska-Susitna Borough -
amended 2006 authorization.
6. $20,000,000 to finance construction of port
facilities on Lynn Canal - 2004 authorization
Section 13: places a sunset of June 30, 2019 on the
bulk commodity handling facility bonding authorization
contained in Section 9.
Section 14: authorizes AIDEA to issue bonds to finance
infrastructure and construction cost of the Sweetheart
Lake hydroelectric project not to exceed $120,000,000
if a project financing application is submitted that
meets the Authorities due diligence standards and
investment criteria.
3:45:23 PM
Co-Chair MacKinnon asked where Sweetheart Lake was located.
Mr. Therriault related that it was just due south of
Juneau.
3:45:53 PM
Mr. Therriault continued with the sectional analysis:
Section 15: authorizes AIDEA to issue bonds to finance
Railbelt electric transmission upgrades between Hope
substation and Portage, between Powerline Pass and
Indian and to the Eklutna hydroelectric system. The
total bonding authorization for the Hope/Portage and
Powerline Pass/Indian improvements may not exceed
$107,100,000. The total authorization for the Eklutna
system may not exceed $20,400,000.
Section 16: authorizes the Alaska Energy Authority to
enter into a loan from the Power Project Fund for up
to $3,000,000 for the King Cove Waterfall Creek
hydroelectric project if a project financing
application is submitted that meets AEA's due
diligence standards and investment criteria.
3:46:53 PM
Co-Chair MacKinnon asked how high the priority ranked on
the renewable energy list.
Mr. Therriault said he would provide the information at a
later date.
3:47:17 PM
Mr. Therriault returned to the sectional analysis:
Section 17: requires AIDEA to submit a quarterly
report on the status of the Interior Energy Project.
Also instructs AIDEA to provide briefings to the
Legislative Budget and Audit Committee when requested.
Section 18: places a sunset of June 30, 2019 on the
Sweetheart Lake, Railbelt transmission and Waterfall
Creek bond authorizations contained in Sections 14, 15
and 16.
Section 19: places a sunset of June 30, 2020 on the
reporting requirements contained in Section 17.
Section 20: provides an immediate effective date on
the legislation.
3:48:09 PM
Vice-Chair Micciche asked for the total general fund
dollars expended through the capital budget for the current
year.
Co-Chair MacKinnon specified that it was $113 million.
Vice-Chair Micciche contended that in order to get the
votes needed to move the bill out of the house, $224
million in projects had been added to the legislation. He
hoped that the committee could work to craft legislation
that would help residents in the Interior, without
scattering the focus around the state to, "collect votes."
3:49:23 PM
Co-Chair Kelly asserted that there was not $224 million in
extra projects in the bill. He pointed out that the bill
had a zero fiscal note, and said that was because the
projects would have to go through due diligence and would
not get funded if they were not good projects. He stated
that it was possible that none of the projects would see
fruition.
3:50:48 PM
Senator Hoffman stated that he was trying to reconcile the
differences between the reporting requirement sunset dates
in the two bills.
Mr. Therriault explained that the other body had proposed
that 5 years was adequate, but that the chair of Senate
Resources had felt that a longer period of time would be
better. He said that either date, or something in-between,
would be acceptable.
3:51:56 PM
Co-Chair MacKinnon noted that in Section 12, there were
projects listed from Kodiak, Red Dog, Nome, Hatchers Pass
(MatSu), and Lynn Canal.
3:52:32 PM
Vice-Chair Micciche said that he was focused on providing
lower cost energy to the Interior. He proposed that all
projects be evaluated with caution.
3:53:04 PM
Mr. Therriault pointed out that in the Governor's
transmittal letter, there was a breakdown of all of the
projects that were being repealed.
3:53:22 PM
Senator Dunleavy thought that the same information had been
written into SB 50.
3:53:41 PM
Co-Chair MacKinnon stated that she wanted to simultaneously
take public testimony for SB 50 and HB 105.
3:54:19 PM
Co-Chair MacKinnon OPENED public testimony for SB 50 and HB
105.
3:54:34 PM
AT EASE
3:55:14 PM
RECONVENED
JOMO STEWART, FAIRBANKS ECONOMIC DEVELOPMENT CORPORATION,
FAIRBANKS (via teleconference), testified in support of HB
105 and SB 50. He hoped that the project would address
clean air and energy problems in Fairbanks, and that the
project could be replicable for other communities in the
state. He discussed turning Alaska's gas into a movable
commodity. He said that in planning the project, a
replicable funding model was sought. He idealized that the
success of the project would serve as a path for other c
communities to follow.
3:58:32 PM
PAMELA THROOP, SELF, FAIRBANKS (via teleconference),
testified in support of SB 50 and HB 105. She thought that
it was imperative that the citizens of the Fairbanks area
receive immediate relief and that this was a pivotal time
in the city's history that would determine whether it
thrived or died. She thought that the bill would give AIDEA
the latitude to do research that would reveal the best
alternatives for affordable energy for the area. She shared
that she favored propane. She did not think that liquefied
natural gas was a viable option.
4:02:06 PM
ROGER BURGGRAF, SELF, FAIRBANKS (via teleconference),
testified in support of SB 50 and HB 105. He expressed
concern for the air quality in Fairbanks and the Interior,
as well as the need for affordable energy in the area. He
referred to the decreasing population in Fairbanks and
attributed it to high energy costs. He stressed the need
for affordable fuel in rural communities. He hoped that the
legislature and the administration could work together on
the issue.
4:05:25 PM
MERRICK PEIRCE, SELF, FAIRBANKS (via teleconference),
testified in support of SB 50 and HB 105. He believed that
HB 105 would allow the greatest number of options to
include an evaluation of propane and a small gas pipeline.
He noted that propane had great potential benefit for rural
Alaska. He felt that SB 23 had been too limiting. He said
that due to the lack of affordable clean energy, the air
quality in the Interior was terrible, putting lives at
stake. He thought that the economy in the Interior would be
bolstered through the legislation.
4:07:44 PM
GARY HENNIGH, CITY MANAGER, KING COVE (via teleconference),
testified in support (??) of SB 50 and HB 105. He said the
City of King Cove was the most prolific, single site,
renewable energy community in Alaska. He related that King
Cove successfully utilizes a hydroelectric facility and was
in the process of constructing a second hydroelectric
facility. He said the Waterfall Creek project was currently
one of the top ranked projects on the renewable energy fund
list. He said that when the grant money for Waterfall Creek
was added to the loan money still needed, the project would
be over $5 million; which was why the project was in the
bill. He stated that with the completion of the second
project, 80 percent of the annual power in King Cove would
come from renewable energy. He relayed that King Cove had
the lowest PCE cost in rural Alaska.
4:10:22 PM
Co-Chair MacKinnon asked about the cost of the first
project in renewable energy in King Cove, and how much the
state contributed.
Mr. Hennigh relayed that the first project, in 1994, cost
approximately $6 million and was 35 percent funded by the
state. He added that the city contribute 40 percent of the
cost and the rest came from federal energy grants.
Co-Chair MacKinnon asked how much the state would
contribute to the second project's $6.5 million price tag.
Mr. Hennigh replied that the project was on the current
renewable energy fund list for an additional capital grant
of $1.5 million. He opined that an additional $1.2 million
would be needed in order to put together the total funding
scenario to reach the $6.5 million.
4:11:54 PM
LISA HERBERT, DIRECTOR, GREATER FAIRBANKS CHAMBER OF
COMMERCE, FAIRBANKS (via teleconference), testified in
support of HB 105. She shared that stakeholders in her
community had been engaged in conversations with AIDEA and
encouraged the legislature to remain committed to, and
supportive of, the stated goals of the Interior Energy
Project.
4:13:39 PM
Vice-Chair Micciche asked Ms. Herbert if she also supported
SB 50.
Mr. Herbert understood that HB 105 would be the vehicle for
the project. She said that it was important that AIDEA have
optionality, and looked to the legislature to pass a bill
that would allow forward movement with the Interior Energy
Project.
4:14:26 PM
JIM DODSON, FAIRBANKS ECONOMIC DEVELOPMENT CORPORATION,
FAIRBANKS (via teleconference), testified in support of SB
50 and HB 105. He reiterated concern for the air quality in
Fairbanks and the need for affordable energy in the
Interior; he believed that the project would help to
improve both issues. He believed that bringing affordable
energy to the state would help to diversify Alaska's
economy.
4:16:33 PM
LUKE HOPKINS, MAYOR, FAIRBANKS NORTHSTAR BOROUGH, FAIRBANKS
(via teleconference), testified in support of HB 105. He
understood that SB 23 had put forth the majority of funding
for the Interior Energy Project in the form of bonds that
would be paid back by the rate payers. He hope that HB 105
would move forward as amended.
4:19:02 PM
ANDRE LARUE, SELF, JUNEAU (via teleconference), testified
in support of SB 50 and HB 105. He expressed distain for
the legislature "handcuffing" AIDEA in its decision making
process. He believed that any and all affordable energy
projects should be explored.
4:21:06 PM
AT EASE
4:21:17 PM
RECONVENED
Co-Chair MacKinnon CLOSED public testimony for HB 105 and
SB 50.
4:21:52 PM
Co-Chair Kelly commented that the extra projects attached
to the legislation diluted the original focus of the bill.
He said that the repealers in the bill totaled $332
million.
4:23:19 PM
AT EASE
4:23:54 PM
RECONVENED
Co-Chair MacKinnon reiterated that HB 105 would be the
vehicle for the legislation moving forward. She clarified
that the CS for SB 50(RES) would be inserted verbatim into
HB 105. She stated that amendments would be accepted until
noon the following day.
4:25:01 PM
Senator Dunleavy asked for clarification on the legislative
vehicle.
Co-Chair MacKinnon responded that amendments should conform
to what already existed in the bill version that had come
out of Senate Resources.
4:25:21 PM
Co-Chair Kelly asked if whether it would made sense to
amend HB 105 with SB 50.
4:26:39 PM
AT EASE
4:28:01 PM
RECONVENED
Co-Chair MacKinnon explained that the committee would bring
an updated version of the bill before the committee the
following day and consider amendments.
ADJOURNMENT
4:28:27 PM
The meeting was adjourned at 4:28 p.m.