Legislature(2013 - 2014)BUTROVICH 205
01/24/2013 07:30 AM Senate SENATE SPECIAL COMM ON IN-STATE ENERGY
| Audio | Topic |
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| Alaska Energy Authority Overview | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE SPECIAL COMMITTEE ON IN-STATE ENERGY
January 24, 2013
7:30 a.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator John Coghill, Co-Chair
Senator Peter Micciche
Senator Dennis Egan
Senator Bill Wielechowski
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Senator Giessel
Senator Huggins
COMMITTEE CALENDAR
ALASKA ENERGY AUTHORITY OVERVIEW
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
SARA FISHER-GOLD, Executive Director
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Provided an overview of the Alaska Energy
Authority (AEA).
GENE THERRIAULT, Deputy Director
Statewide Energy Policy Development
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Provided an overview of the Alaska Energy
Authority (AEA).
ACTION NARRATIVE
7:30:38 AM
CO-CHAIR CLICK BISHOP called the Senate Special Committee on In-
State Energy meeting to order at 7:30 a.m. Present at the call
to order were Senators Micciche, Egan, Wielechowski, Co-Chair
Coghill, and Co-Chair Bishop.
CO-CHAIR COGHILL said the committee would look geographically at
Alaska's in-state energy issues. He explained that energy was
often divided between electrons: electricity transmission and
generation, or hydrocarbon based for home heating and industrial
use. He said the committee's intent was to address regional
energy issues and end up with proper planning or provide policy
with a plan element.
^ALASKA ENERGY AUTHORITY OVERVIEW
ALASKA ENERGY AUTHORITY OVERVIEW
7:33:13 AM
CO-CHAIR BISHOP announced the business before the committee was
to hear an overview of the Alaska Energy Authority's (AEA)
various energy related projects throughout the state.
7:34:21 AM
SARA FISHER-GOLD, Executive Director, Alaska Energy Authority
(AEA), said the AEA mission was to reduce the cost of energy.
She said reduced energy cost was done in a variety of ways in
programs as follows:
· Investing in Alaska's Energy Infrastructure.
· Diversifying Alaska's Energy Portfolio.
· Energy Planning and Policy.
· Technical and Community Assistance.
7:36:03 AM
MS. FISHER-GOLD said AEA's infrastructure and large projects
were as follows:
Bradley Lake Hydro Project
· State had provided a capital contribution of 50
percent. The cost of the project was over $328
million to build.
· Produces about 10 percent of the Railbelt's
electricity.
· AEA-owned asset.
· Low-cost energy producer.
· The installed capacity is 120 megawatts and it
does provide 4.5 cents/kWh power.
MS. FISHER-GOLD said there were outstanding bonds for the Bradley
Lake Project until 2021. She noted that one of the unique situations
on the Bradley Lake model was that the state invested 50 percent
upfront for the project and the utilities would be obligated to
continue paying the state for an additional 20 years after 2021.
CO-CHAIR COGHILL asked Ms. Fisher-Gold to explain where the
Bradley Lake Hydro Project was located.
MS. FISHER-GOLD answered that the Bradley Lake Hydro Project was
located in the Homer area. She noted that the Homer Electric
Association provided for the project's operations. She explained
that the operation was in the Kenai Peninsula area and provided
power for the entire Railbelt region up to Fairbanks.
CO-CHAIR BISHOP asked Ms. Fisher-Gold to explain Bradley Lake's
power capability versus actual output. He noted that there was
talk on upgrading lines to maximize the project's output.
MS. FISHER-GOLD responded that the installed capacity was the
120 megawatts and the energy produced was 10 percent of the
Railbelt's electricity. She explained that Bradley Lake's output
was 560 gigawatt hours.
CO-CHAIR BISHOP asked to verify that Bradley Lake's current
maximum output was 90 megawatts.
SENATOR MICCICHE replied that Bradley Lake's electrical output
became unstable at 90 megawatts.
MS. FISHER-GOLD responded that the installed capacity was
different from typical output levels. She noted AEA's Battle
Creek Project to divert additional water to increase Bradley
Lake's hydroelectric power output.
7:39:34 AM
CO-CHAIR COGHILL noted that Senator Giessel, Chairman for the
Senate Resources Committee Chairman was in attendance.
SENATOR MICCICHE commented that the [Battle Creek Project] would
increase Bradley Lake's output by ten percent and bring the
useable capacity to approximately 99 megawatts.
MS. FISHER-GOLD explained that one of the unique situations with
the AEA owned projects was that management was done in
conjunction with the Railbelt utilities. She said a 1993 change
to the statutes allowed for the concept of maximum utility
control for the operation and management of AEA projects. She
noted that Bradley Lake was operated and managed by the Bradley
Project Management Committee (BPMC), a group made up of members
from [Railbelt] utilities and AEA.
She addressed additional infrastructure and large projects as
follows:
Alaska Intertie
· AEA-owned with no outstanding debt.
· Operated by AEA and Railbelt utilities.
· Runs from Willow to Healy.
Susitna-Watana Hydro
· New project with an installed capacity
anticipated to be 600 megawatts, which would
provide roughly 50 percent of the electricity in
the Railbelt.
· SB 42 had authorized AEA to pursue licensing to
own and operate the project. This is the first
new project that AEA would own and operate since
the Bradley Lake Hydroelectric Project.
She said AEA was created in 1976 to primarily own and operate
hydroelectric projects. She explained that even though AEA
divested certain projects, AEA would continue to own projects in
addition to pursuing the Susitna-Watana Hydro Project. She noted
that AEA built and owned the Four Dam Pool Project which served:
Kodiak; the Copper Valley Region; and the Southeast Alaska
communities of Petersburg, Wrangell, and Ketchikan. She said the
utilities formed the Four Dam Pool Association and purchased the
projects in 2001. She noted that the joint action agency was
ultimately split up in to Kodiak owning the Terra Lake Project,
Copper Valley Electric Association owning the Solomon Gulch
Project, and Southeast Alaska Power Agency (SEAPA) owning the
Two-Dam Project of Swan Lake and Tyee Lake projects. She noted
that SEAPA owned the intertie that connected the Swan Lake and
Tyee Lake projects. She explained that the joint action agency
remained, but the owning utilities were all municipally owned
utilities in Southeast Alaska.
7:42:59 AM
MS. FISHER-GOLD noted that AEA had owned the Larsen Bay
Hydroelectric Project and sold it two years ago to the city of
Larsen Bay.
She addressed a map that was titled: Alaska Energy Authority
Projects Under Construction Summer 2012. She explained that the
map provided a broad representation of the variety of AEA
programs: Renewable Energy Fund Projects, AEA managed Rural
System Upgrade Programs, and Energy Efficiency Projects. She
noted that several of the AEA managed Energy Efficiency Projects
were from the Federal Stimulus Fund via the Energy Efficiency &
Conservation Block Grant (EECBG). She remarked that AEA was not
just about a large hydro project or the Railbelt. She said AEA
had a broad portfolio of projects that impacted the entire
state.
7:44:07 AM
SENATOR MICCICHE noted that AEA was a state agency that owned a
significant portfolio of energy projects. He asked what the
current overall value was for state-owned energy projects.
MS. FISHER-GOLD answered that AEA owned the Bradley Lake
Hydroelectric Project and the Alaska Intertie. She stated that
the cost to build Bradley Lake was $328 million and the Intertie
was over $100 million. She noted that the projects were
depreciating in value.
SENATOR MICCICHE asked about the smaller rural projects where
AEA had been involved and the state did not technically own, but
project assistance was provided for funding and management.
MS. FISHER-GOLD responded that AEA had provided operational
management and training services on behalf of small communities.
She noted that some small communities do not have the technical
or management capabilities to build and operate projects. She
explained that AEA services include managing the payroll of the
local workforce, providing construction management oversight,
and paying contractors for the work to be done. She said
reimbursement was received from the specific funding sources
that included federal funds via the Denali Commission and the
state of Alaska. She noted that the state had extended AEA
funding to continue building Rural Power Systems Upgrade (RPSU)
projects in addition to bulk fuel projects. She summarized that
AEA did not technically own previously mentioned projects and
cited 1993 legislation that restricted AEA from owning new
projects. She explained that SB 42 was required in 2011 in order
to pursue the Susitna-Watana Hydroelectric Project.
GENE THERRIAULT, Deputy Director, Statewide Energy Policy
Development, Alaska Energy Authority, said even though AEA owned
Bradley Lake and Alaska Intertie, the policy was AEA would work
with local utilities and pass off as much day to day control to
them.
7:46:59 AM
MS. FISHER-GOLD addressed AEA programs for renewable energy as
follows:
Renewable Energy Fund (REF)
· State Goal: 50 percent renewable electricity by
2025.
· HB 152 (2008) authorized AEA to manage program,
reauthorized in 2012 for another ten years.
· 227 projects approved totaling $202 million.
· More than 60 projects currently under
construction.
· Round 6 recommendations projects. AEA provides
recommendations in rounds on an annual basis.
Round 6 recommendations information will be
provided to legislature today. AEA provides
analysis detail of all projects that have come
in. The list is developed in funding levels,
there is a $25 million funding level and a $50
million funding level. An in-total recommended
projects fund of roughly $56 million for 60
projects that will be recommended
· By 2016, 12.3 million gallons of diesel and
natural gas equivalent will be displaced
annually. Results: $45 million in annual savings.
CO-CHAIR COGHILL asked if the Round 6 recommendation would be
submitted as a report to the legislature.
MS. FISHER-GOLD answered yes. She said the legislation that
authorized the renewable energy fund was a unique recommendation
program. She revealed that AEA was not appropriated money to
issue grants. She explained that AEA was required to go through
a solicitation process every year and provide the legislation
with a ranked projects list. She said the legislature determined
how far down the list to fund.
7:49:19 AM
MS. FISHER-GOLD addressed AEA programs for emerging energy
technology as follows:
Emerging Energy Technology Fund (EETF)
· SB 220 (2010) created fund. Senator Wielechowski
was the Co-Chair of the Senate Resources
Committee at the time that helped usher through
that legislation.
· The key difference with REF, EETF does provide
AEA with the funds to actually issue the grants.
Once AEA goes through the process, the grants are
issued. AEA is required to conform to a very
detailed regulatory process in order to get the
projects recommended and funds granted.
· Through Denali Commission matching grant, $8.9
million available. It was a 50/50 match between
state funds and federal dollars.
· First round, 16 projects selected for funding
(2012).
· Priority for the funds was for Alaska businesses,
utilities or nonprofit, and tribal or local
governments for emerging technologies. AEA was
looking for demonstration projects that could be
demonstrated and commercially viable within 5
years.
CO-CHAIR COGHILL addressed EETF projects and explained that the
committee's intent was to maintain a regional view. He asked if
the emerging technologies generally fell into the more rural
areas.
MS. FISHER-GOLD responded that the EETF projects were statewide
and some had a rural perspective. She noted that one of the
grantees was [Hatch and Williams Advanced Engineering]; a
company that was developing a flywheel for a wind-diesel hybrid
system that would help to regulate the wind powder coming into a
diesel system. She explained that the wind-diesel system would
have an application in rural Alaska.
She noted that the Altaeros Energies Helium Balloon Wind Turbine
as an EETF grantee. She said AEA had funded a broad variety of
projects: hydrokinetic, diesel generator energy efficiency,
power and storage capabilities, and biomass heat pumps. She
noted that EETF was not focused solely on renewable energy. She
explained that hydrocarbon and fossil fuels based projects were
also eligible for the program.
CO-CHAIR COGHILL stated that the committee would be looking at
emerging technologies, especially for smaller communities. He
said he was interested in seeing what applicants emerged and
fell out of the vetting process. He cited an example that three
or more in-river hydrokinetic variations existed.
7:53:03 AM
MR. THERRIAULT explained that EETF projects were driven by
economics. He cited an example of a technology that produced
power at 20 cents per kilowatt-hour might not make sense in
Anchorage, but would in a rural setting when competing power
cost was 50 cents per kilowatt-hour. He explained that the
program was not rural-targeted, but economics often dictated
that rural applications made the most sense.
CO-CHAIR COGHILL said the reason he brought up the rural aspect
was due to the committee's focus on geographic and economic
regions. He explained that the committee would be looking for
ways to help regions benefit from an energy policy strategy.
MS. FISHER-GOLD stated that AEA had an EETF partnership with the
Alaska Center for Energy & Power (ACEP) at the University of
Alaska-Fairbanks (UAF). She explained that ACEP assisted AEA in
managing the EETF program via data collection and technology
analysis. She said when legislation was created for AEA to
examine programs for its energy portfolio, a gap existed between
research and development at the university level and
commercialized technology. She noted that EETF was created to
develop demonstration projects in order to broaden AEA's
portfolio of options in Alaska.
CO-CHAIR COGHILL asked if ACEP would assist AEA in reviewing the
potential EETF applicants.
7:56:09 AM
MS. FISHER-GOLD answered yes.
She addressed AEA Programs as follows:
Energy Statistics
· Summary and analysis of electricity generation
and use across Alaska.
· Annual report for the last three years. Prior
updates were only done every five to ten years.
· Provides a baseline to measure how AEA was doing
with its goals. One goal was passed via HB 306
regarding the 50 percent renewable energy
electricity by 2025. The other one that comes
into AEA's Efficiency and Conservation Programs
is improving efficiency by 15 percent by 2020.
AEA has a methodology through its statistics
collection to measure how AEA was meeting the
energy efficiency goal.
Efficiency and Conservation
· State Goal: improve efficiency 15 percent by
2020. AEA works in partnership with the Alaska
Housing Finance Corporation (AHFC) to recommend
and put forth residential programs that assist
AEA in attaining the efficiency goal.
· AEA's focus is on commercial buildings, rural
public buildings, industrial facilities and
electrical efficiency in the diesel systems
installed in rural Alaska.
· Statewide outreach and education.
· Support for multi-stakeholder group, Alaska
Energy Partnership.
· Coordination between State agencies.
· Alaska Commercial Energy Audit Program.
· Village Energy Efficiency Program.
7:57:42 AM
CO-CHAIR Bishop recognized that Senator Huggins was present at
the committee meeting.
SENATOR MICCICHE stated that the committee's focus was on a
statewide energy plan for both urban and rural areas. He noted
AEA's goals relating to renewable energy, commercial viability,
and improving efficiency. He asked if there was an independent
clearing-house to verify where the state was in meeting its
energy goals.
MR. THERRIAULT answered that AEA was the clearing-house. He said
AEA followed the policy that was established by the legislature
and the administration. He stated that HB 306 and SB 220 were
2010 bills that established a lot of the state's energy policy
direction. He said the empowering authority was provided to
implement the energy policy. He said it was his responsibility
to make sure AEA was implementing policy and achieving the set
goals for programs. He stated that he would be the point person
for the committee to contact to track down specific information.
MS. FISHER-GOLD explained that AEA was working on an "energy
cheat sheet" that showed the AHFC and AEA energy programs. She
noted that the Alaska Industrial Development & Export Authority
(AIDEA) had a new program, the Sustainable Energy Transmission
and Supply Development Fund (SETS). She explained that SETS
would play a significant role in financing energy projects in
the future.
CO-CHAIR COGHILL addressed the difference between industrial
base electricity and industrial base hydrocarbons.
MS. FISHER-GOLD stated that AEA had a high level statistical
overview for statewide electricity.
SENATOR WIELECHOWSKI asked if AEA had a list of state
expenditures for energy projects over the last 20 to 30 years.
MS. FISHER-GOLD answered that a ten year list of AEA funded and
constructed projects could be provided. She said she would
provide the committee with a report from the Office of
Management and Budget (OMB) on total funding for energy programs
beyond what AEA encompassed.
8:03:24 AM
MS. FISHER-GOLD addressed Community Concept-Nightmute as
follows:
Bringing Together Many Partners
· Partnerships: AEA, Alaska Village Electric
Cooperative (AVEC), Association of Village
Council Presidents (AVCP)-Housing, Nightmute,
Denali Commission, RuralCAP and Alaska Building
Science Network.
· Comprehensive assessment of the community's
energy need.
· Successes:
ƒLighting and weatherization
upgrades in 13 community buildings
and 4 teacher housing units.
ƒ59 percent energy savings.
ƒAverage building went from two to
four Star energy rating.
ƒAverage building fuel consumption
went from 961 gallons/year to 423
gallons/year.
MS. FISHER-GOLD explained that AEA was able to go into
communities and provide a comprehensive review of their energy
needs with their Village Energy Efficiency Program (VEEP). She
said VEED allowed AEA to address community facilities, lighting
retrofits, and upgrades. She noted that VEEP was particularly
effective in high cost rural communities where 60 cent per
kilowatt-hour was not unknown.
CO-CHAIR COGHILL asked if reporting would come through AHFC or
AEA.
MS. FISHER-GOLD answered that the VEEP report would come through
AEA.
CO-CHAIR COGHILL asked if information was available on specific
energy efficiency results.
MS. FISHER-GOLD answered yes.
CO-CHAIR COGHILL stated that the committee would address energy
conservation, new energy technology, as well as the use of oil
or gas.
MS. FISHER-GOLD replied that energy efficiency was AEA's top
priority.
CO-CHAIR COGHILL commented that his Fairbanks constituents
addressed the city's improved energy efficiency and their
consternation over receiving higher utility rates afterwards.
8:06:54 AM
CO-CHAIR BISHOP asked Mr. Therriault to address the Nightmute
Project. He inquired if it made any difference what hydrocarbon
was used as fuel. He noted that efficiency was the key and
cutting the fuel use by 59 percent was a great outcome.
MR. THERRIAULT replied that AEA's authority directive was to
lower the cost of energy for Alaskans. He explained that the
directive was not just to lower per unit price, but to lower
people's average energy bill.
SENATOR WIELECHOWSKI asked what happened to Nightmute's fuel
bills.
CO-CHAIR COGHILL inquired if the 59 percent savings was
attributed specifically to Nightmute.
SENATOR WIELECHOWSKI asked if AEA had a number on what the
kilowatt-hour or diesel cost difference was.
MS. FISHER-GOLD responded that she did not have a specific
number on the energy cost difference. She noted that the
electrical rates were 53 cents per kilowatt-hour.
CO-CHAIR COGHILL commented on Nightmute and addressed the
challenges from the Power Cost Equalization (PCE) program. He
explained that PCE was directed towards residential use and
businesses were left out. He asked if businesses would be
included within the conservation measures.
8:08:46 AM
MS. FISHER-GOLD answered that AEA was working on increased
funding and financing for commercial efficiency upgrades. She
said the Alaska Department of Commerce, Community, and Economic
Development (DCCED) offered business entities a loan program for
alternative energy and energy efficiency. She noted that the PCE
Program did not cover commercial facilities. She explained that
the Renewable Energy Program would impact an entire community's
displacement of diesel fuel and not just the 33 percent that
were eligible for the PCE Program.
CO-CHAIR COGHILL commented that entrepreneurs should not be
discouraged in communities. He explained that residential homes
may realize lower costs, but enterprising businesses were vital
to a community.
SENATOR WIELECHOWSKI asked what Ms. Fisher-Gold's thoughts were
on expanding the PCE Program to include businesses in rural
Alaska.
MS. FISHER-GOLD replied that legislation was introduced in the
House to address the PCE Program for businesses. She said AEA
would provide fiscal impact analysis when the bill was heard.
She explained that she did not have a position on whether a
commercial business should be included in the PCE Program. She
said a small amount of commercial businesses were included in
the PCE Program in 1999, but were removed during the same year.
She explained that the PCE Program was a $40 million program
that would require additional funding if commercial customers
were added. She noted that schools were not included in the PCE
Program.
8:11:35 AM
SENATOR WIELECHOWSKI asked if Ms. Fisher-Gold had a sense of the
cost for including schools and businesses.
MS. FISHER-GOLD answered that AEA had not completed the analysis
and noted that the House bill had not been scheduled. She said
the AEA report would address the current costs and estimate the
commercial impact.
MR. THERRIAULT responded that AEA's report would allow
legislators to consider the fiscal impact from adding entities
to the PCE Program. He noted that attention would have to be
given to assure that the PCE endowment would continue to cover
residential demand.
CO-CHAIR COGHILL commented that the policy call on PCE
highlighted the challenges for businesses in smaller
communities. He said it was important for the committee to
continue looking at ways to assist businesses, especially in
regional areas with energy supply issues.
8:13:07 AM
MR. THERRIAULT addressed Senator Coghill's statement that
residents in his district were encouraged to conserve energy and
rewarded with higher electricity rates. He noted that increased
fuel costs may have had an impact on rates during Fairbank's
energy conservation. He explained that reduced consumption would
force a utility to spread its fixed costs on fewer kilowatts,
but the increase in fixed cost per unit of energy would be
minimal.
He addressed Senator Wielechowski's question on Nightmute's
impact on fuel consumption. He said the amount of fuel that each
residence used was cut dramatically. He explained that the use
of power was probably reduced, but the cost per kilowatt-hour
may have gone up. He stated that the overall annual energy bill
went down.
He said AEA was addressing loans and programs to assist
businesses. He noted that the state faced added risk in
providing loans to smaller businesses that may declare
bankruptcy.
He said AEA was not seeing the desired program activity levels
from schools. He explained that a program existed for
incentivizing schools to take on energy efficiency measures. He
said lower program activity may be attributed to school
districts being geared towards a Capital Improvement Project
(CIP) request process. He stated that AEA would try to figure
out ways to remove barriers and reshape programs to increase
participation levels that policy makers had hoped for.
CO-CHAIR BISHOP asked if consideration should be given to
centralizing energy loans from a one-stop-shop. He inquired if
the state was doing a good enough job in educating school
districts that funds were available outside of the CIP request.
MR. THERRIAULT answered that he addressed energy programs with
Commissioner Hanley from the Department of Education and Early
Development.
8:17:04 AM
MS. FISHER-GOLD noted that Mr. Therriault's role was to address
issues and make sure AEA was able to effectively deliver
programs to its customers. She noted that AEA continued to
review programs and find ways to improve.
She explained that AEA's Power Project Fund (PPF) was as
follows:
· Loans to upgrade or develop small-scale electric
power facilities.
· Includes bulk fuel storage, transmission and
distribution, waste energy, energy conservation,
energy efficiency and alternative energy
facilities and equipment.
· State assistance for a project more than $5
million requires Legislative approval.
· Low interest rates.
· $42 million in PPF (half in application process).
· Chena Hot Springs geothermal power plant.
She said PPF had been under-utilized in the past due to utility
cooperatives having alternate funding sources, but noted recent
participation had increased. She explained that PPF required
legislative approval for a project that had state involvement or
assistance of more than $5 million. She noted that AEA would
address the application process to provide a user-friendly
format that in turn provided AEA with the proper information to
evaluate projects.
She addressed AEA's Rural Energy Programs as follows:
Bulk Fuel and Rural Power Systems Upgrades
· Help utilities improve efficiency, safety and
reliability of power systems.
· Completed $304 million in rural bulk fuel and
rural power system upgrade projects since 2000,
in partnership with Denali Commission.
· Thirteen projects under construction next year.
· Circuit rider technical assistance in 53
communities (FY 12).
Training and Technical Assistance
· Training for power plant operators, advanced
power plant, bulk fuel, electric utility manager,
Power Cost Equalization.
· Energy specialists assisted 40+ communities to
advance to project-ready status.
MS. FISHER-GOLD stated that AEA had a hands-on approach
when assisting rural communities in building energy
infrastructures. She noted that AEA invested a significant
amount of time to make sure rural communities were trained.
She said AEA worked with the Alaska Department of Labor and
Workforce Development to send individuals to power plant
training at AVTEC-Alaska's Institute of Technology. She
explained that PCE training was provided for utility clerks
to assist in accurately expediting reports and monthly
payments. She noted that AEA received funding for two new
energy specialists to provide rural communities with
technical assistance for energy grant applications.
8:20:45 AM
She explained the Rural Energy-Power Cost Equalization (PCE) as
follows:
· Provide economic assistance in rural Alaska where
electrical rates can be three to four times
higher than in urban Alaska.
· Available to community facilities and residential
customers.
· Regulatory Commission of Alaska (RCA) sets rates,
calculations based on use, costs and
efficiencies.
· Approximately 77,341 people live in the 183
participating communities (FY 11).
· PCE payments at 100 percent totaling $39.5
million (FY 12).
· $788 million PCE Endowment.
MS. FISHER-GOLD explained that the PCE Program's endowment
funding was based upon a monthly market value average over
a three year period. She noted that the program's endowment
received a $400 million appropriation in 2011 and the
appropriation was working its way through the three year
average. She said the program would realize a significant
increase for the upcoming fiscal year with the 2011
appropriation being fully realized in 2016.
SENATOR WIELECHOWSKI noted that friends from Fairbanks had asked
if PCE funds might be expanded to include energy cost assistance
for interior areas like Fairbanks.
MS. FISHER-GOLD answered that there had been legislation in past
years for Fairbanks to receive PCE funds. She noted that any
legislation would require AEA to provide cost information if PCE
funds were considered for more communities. She explained that
eligibility for PCE was based upon community size and 1984 fuel
usage. She noted that PCE was not an expandable program without
legislation. She noted that Fairbanks was paying 22 cents per
kilowatt-hour and some PCE communities were paying less than
Fairbanks. She explained that some of the PCE communities had
14.5 cents per kilowatt-hour floors that paid up to 95 percent
of the first 500 kilowatt-hours. She said based upon the PCE
program formula, some PCE communities could be paying 15 to 16
cents per kilowatt-hour for 30 percent of the total kilowatt-
hours produced.
8:24:03 AM
She addressed AEA's Supporting Regional Solutions-Regional
Energy Planning as follows:
· Energy Pathways led to regional planning.
· Address unique challenges while capitalizing on
regional resources.
· Locally driven and community-vetted blueprint for
sustainability.
· Objective to provide specific, actionable
recommendations.
· Includes electric, heat and transportation
energy.
· Previous plans: Railbelt Integrated Resources
Plan and Southeast Integrated Resources Plan.
MS. FISHER-GOLD said the Energy Pathways Plan was put
forward in 2008 by Steve Haagenson, AEA's former Executive
Director. She said the plan was completed in 2010 and noted
that AEA was working on the further development to provide
communities with an inventory of what was available to
reduce the cost of energy. She said energy planning would
be regionally lead and locally driven.
8:25:24 AM
She addressed AEA's Supporting Regional Solutions-Lessons
Learned: Building Blocks of Energy, as follows:
· What keeps the lights on? Is this a safe and
efficient source of power:
· Can renewable energy sources be integrated?
· Is there potential for economic development?
She explained that AEA reviewed energy sources and noted
that rural Alaska was often diesel based. She said smaller
power systems evaluations were made in addition to ensuring
system safety and efficiency. She noted that AEA looked at
renewable energy integration as well as energy rate impact
on economic development.
She addressed Supporting Regional Solutions, Five-Step Process
to Developing a Plan, as follows:
1. Preliminary planning and stakeholder's
identification.
2. Resource inventory assessment/data analysis.
3. Develop and review draft energy plan
alternatives.
4. Solicit comments on draft.
5. Final Document.
She noted that in Step 4, the regional leaders in the plan
were solicited for comments. She said AEA provided
assistance that was specific to projects or the technology
that was sought out.
She identified an AEA map on the Alaska Regional Energy Plan.
She explained that the map roughly followed the Alaska Native
Corporations' boundaries. She noted that regional planning was
not limited to boundaries and shared resource opportunities were
sought out.
CO-CHAIR BISHOP commented that trusting local knowledge for
planning was positive.
MS. FISHER-GOLD addressed Supporting Regional Solutions-Calista
Region as follows:
Uniqueness:
· Large region with largest population, including
56 villages.
· High energy and transportation costs.
Resources:
· Wind in the coastal areas.
· Exploring feasibility of hydropower at Chikuminuk
Lake.
· Community clusters: brings potential for energy
interties.
She said the Calista Region plan was one of the first plans
that AEA initiated beyond the Southeast Integrated Resource
Plan. She noted that the Nuvista Light & Power group would
be involved with the Chikuminuk Hydroelectric & Alternative
Energy Project. She explained the community clusters for
potential energy interties included: Tooksook
Bay/Tununak/Nightmute, Alakanuk/Emmonak, and St.
Mary's/Mountain Village/Pilot Station. She said the Calista
Region was looking at the community clusters beyond energy
infrastructure and noted school facilities as an example
that could benefit from a larger region.
8:29:53 AM
She addressed the Current Regional Plan Contracts as follows:
· Ahtna Region: Copper Valley Development
Association.
· Aleut Region: Southwest Alaska Municipal
Conference (SWAMC).
· Bering Straits Region: Bering Straits Development
Council.
· Bristol Bay Region: SWAMC.
· Calista Region: Nuvista Light and Electric
Cooperative.
· NANA Region: Northwest Arctic Borough Economic
Development Commission.
· Doyon Region: Direct grant to Tanana Chiefs
Conference from the Denali Commission.
· Working with Chugach, Kokiak and Arctic Slope
Regions.
MS. FISHER-GOLD said AEA had been holding Regional Planning
Group meetings to make sure that the regional planners
could get together and look at some of the roadblocks. She
noted that AEA was primarily trying to work with the
[Department of Commerce, Community, and Economic
Development's] Alaska Regional Development Organizations
(ARDOR). She explained that ARDOR encompassed regional
leaders with economic development roles and provided a good
segue for regional planning impact on economic development
efforts.
8:31:12 AM
She addressed Supporting Regional Solutions-Ahtna Region as
follows:
Uniqueness:
· 17 communities on the road system.
· Federal land ownership.
· Large seasonal load growth.
· Village corporations merged with Ahtna Regional
Corporation to form on land owner.
Resources:
· Biomass.
· Hydropower.
· Interties and transmission.
She explained that the Ahtna Regional Corporation's focus
was on biomass and noted that the region's potential to
connect with the Railbelt Region.
She addressed Energy Policy Development and Coordination as
follows:
· Deputy Director for Statewide Energy Policy
Development.
· Coordination of energy plans on statewide level.
· Coordinate multi-agency efforts.
· Serve a lead on Alaska's energy policy
development.
· Individual project analysis and vetting.
· Transmission planning.
· Working with AIDEA on LNG trucking.
MS. FISHER-GOLD stated that Mr. Therriault would provide the
committee with information on policy development and
coordination.
MR. THERRIAULT said legislation had been introduced in the
Senate regarding access and the issue pertained to removing
physical impediments for energy users. He explained that access
to biomass was a key issue and noted Alaska's tremendous biomass
resources. He revealed that existing state statutes with regards
to biomass access were geared towards harvesting timber for
dimensional lumber or other use. He said the desire for biomass
access as an energy source may facilitate change in regulations
and statutes. He explained that a clear policy call was required
from the legislature to assure that Alaskans had access to
biomass as an energy source.
He said there was an issue with traditional access across lands.
He said an example would be finding a potential hydro spot for
development and addressing whether the power could be wielded to
its possible consumers. He stated that consideration would have
to be given to allow for crossing state lands or legislatively
designated areas.
8:35:10 AM
He addressed the policy to increase energy efficiency by 15
percent by the year 2020. He said AEA had to work in-house to
determine how attaining the efficiency goal would be measured.
He noted that a report was delivered to the legislature
regarding AEA's proposal on efficiency measurement and
departmental coordination in measuring whether the goal was
being achieved. He said AEA's goal was to consistently provide
empirical data that showed whether funded programs were
achieving their policy goals.
He referred to the "disconnect" to get school districts to fully
understand how to get access to funded programs. He noted that
schools would have an impact on measurable energy efficiency
gains in government owned infrastructure. He said AEA's intent
was to include schools into a measureable matrix to monitor goal
achievement.
He addressed the 2025 goal for 50 percent of the state's
electrical needs to be supplied by alternative and renewable
energy sources. He said AEA believed the state would reach its
goal if current projects were ultimately deployed. He noted that
Alaska's electrical load was Railbelt focused and success was
largely dependent on the Susitna-Watana project.
8:37:47 AM
MR. THERRIAULT noted that the state's blessing and curse was its
vast array of energy alternatives. He disclosed that an AEA team
had been assembled to assist the legislature in the vetting
projects and proposals.
SENATOR WIELECHOWSKI asked if Alaska was better off pursuing
localized and regional energy project or running transmission
lines throughout the state from the Susitna-Watana Hydro
project. He asked how widespread an energy project's delivery
plan should be.
8:40:17 AM
MS. FISHER-GOLD replied that Alaska's challenge was its great
distances between resources and load. She explained that
building a transmission line was not always the answer to
reducing energy cost. She said there was a cost associated with
building a transmission system in addition to making sure that
the developed energy generation was cheaper than the intended
delivery location's existing alternatives.
MR. THERRIAULT said the state had an energy plan that was
established by the legislature through legislation that set
goals and programs to achieve the goals. He explained that
funding was provided to make sure the programs were moving
forward to achieve the goals. He noted that one size did not fit
all and addressed the Energy Pathways Plan for regionalized
planning efforts. He explained that the concept to deliver
energy across a large area was a challenge due to geographic
remoteness and load parameters. He said a copper wire could be
stretched over a large area, but very low demand could result in
line delivery losses that equal or exceed the intended load
coverage. He said AEA intended to work with geographic areas to
economically assess what made the most sense.
8:43:56 AM
SENATOR WIELECHOWSKI inquired what Alaska would look like in 50
years. He asked if a village's energy would be supplied by their
wind farm or solar panels, statewide transmission lines, or
regional hubs that supplied power in a geographical area. He
explained that a 50 year energy outlook was a critical exercise
for the committee and AEA to consider due to the large
investments in energy projects.
MR. THERRIAULT responded that the investments being made would
bring about less fluctuation in the price of power due to the
focus on alternative and renewable energies. He noted that there
were two metrics for users of power: cost and certainty. He said
a business considering an investment would have to estimate
their power costs for multiple years. He explained that the
power cost might not be as low as a business may want, but a
business plan could be built around how the cost could be met.
8:45:51 AM
MS. FISHER-GOLD addressed AEA's Active Energy Projects regarding
funding for various programs and the FY14 Budget Summary.
CO-CHAIR BISHOP thanked Ms. Fisher-Gold and Mr. Therriault for
their AEA presentation.
8:47:41 AM
There being no further business to come before the Senate
Special Committee on In-State Energy, Co-Chair Bishop adjourned
the meeting at 8:47 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AEA Overview Senate Instate Energy 01.24.13.pdf |
SISE 1/24/2013 7:30:00 AM |
AEA |