Legislature(2009 - 2010)BUTROVICH 205

02/18/2009 03:30 PM Senate RESOURCES


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Audio Topic
03:35:55 PM Start
03:37:12 PM Performance Contracting for Energy Efficiency
04:00:53 PM Alaska Energy Efficiency Program and Policy Recommendations
04:56:00 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overviews: TELECONFERENCED
Alaska Energy Efficiency Program and
Policy Recommendations
John Davies, Research Dir, Cold Climate
Housing Research Center
Cady Lister, Senior Consultant,
Information Insights
+ Performance Contracting for Energy TELECONFERENCED
Efficiency
Ken Bauer, Siemens Building Technologies
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                       February 18, 2009                                                                                        
                            3:35p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lesil McGuire, Co-Chair                                                                                                 
Senator Bill Wielechowski, Co-Chair                                                                                             
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Hollis French                                                                                                           
Senator Gary Stevens                                                                                                            
Senator Thomas Wagoner                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Bert Stedman                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Overview:                                                                                                                       
Performance Contracting for Energy Efficiency                                                                                   
Alaska Energy Efficiency Program and Policy Recommendations                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record.                                                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KEN BAUER                                                                                                                       
Siemens Building Technology                                                                                                     
Buffalo Grove IL                                                                                                                
POSITION STATEMENT: Discussed energy-efficiency retrofitting.                                                                 
                                                                                                                                
CADY LISTER, Senior Consultant                                                                                                  
Information Insights, Inc                                                                                                       
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Presented a report called Alaska Energy                                                                   
Efficiency Program and Policy Recommendations.                                                                                  
                                                                                                                                
JOHN DAVIES, Research Director                                                                                                  
Cold Climate Housing Research Center                                                                                            
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Discussed energy efficient construction.                                                                  
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:35:55 PM                                                                                                                    
CO-CHAIR  LESIL  MCGUIRE  called the  Senate  Resources  Standing                                                             
Committee meeting  to order at 3:35  p.m. Present at the  call to                                                               
order  were  Senators  Wielechowski,  French,  Wagoner,  Stevens,                                                               
Huggins, and McGuire.                                                                                                           
                                                                                                                                
CHAIR  MCGUIRE   introduced  Ken  Bauer  from   Siemens  Building                                                               
Technology  -  just  one  of  the  companies  looking  at  energy                                                               
solutions. It is  appropriate for him to be here  because some of                                                               
the recommendations  that come  out of  the Cold  Climate Housing                                                               
Report  would entail  modifications  to  Alaskan structures,  and                                                               
Siemens has a creative business approach.                                                                                       
                                                                                                                                
^Performance Contracting for Energy Efficiency                                                                                  
                                                                                                                                
         Performance Contracting for Energy Efficiency                                                                      
                                                                                                                                
3:37:12 PM                                                                                                                    
KEN BAUER, Siemens Building  Technology, Buffalo Grove, Illinois,                                                               
said he will  give an overview of  performance contracting, which                                                               
allows  entities  to improve  their  facilities  "by using  their                                                               
energy and operational budgets to  fund a project with guaranteed                                                               
results." Performance contracting begins  with an energy audit to                                                               
show how  the customer's energy efficiency  compares with similar                                                               
buildings around the country. It  is followed by a detailed audit                                                               
that  identifies facility  improvement measures  and their  costs                                                               
and savings. Once  a performance contract is  signed, the project                                                               
is  implemented  and  turned  over to  the  customer.  There  are                                                               
ongoing verifications to confirm the energy and other savings.                                                                  
                                                                                                                                
MR.  BAUER  showed  a  flowchart  of  the  process,  which  is  a                                                               
partnership between Siemens  and the customer to  design the best                                                               
plans.  The  goal  is  to achieve  maximum  efficiency  for  each                                                               
individual  building.  Financing  is  arranged  and  the  savings                                                               
generated  repay  the  financing. There  should  be  operational,                                                               
maintenance,  and energy  savings. "Siemens  guarantees that  the                                                               
savings exceed  the cost of  the financing, otherwise we  pay the                                                               
difference."  Siemens will  issue a  check in  the amount  of the                                                               
difference  and/or it  will  implement  free additional  facility                                                               
improvements to meet the energy guarantee.                                                                                      
                                                                                                                                
3:42:52 PM                                                                                                                    
MR.  BAUER  showed  a  flow   chart  of  the  "project  execution                                                               
process."  Siemens is  finishing phase  2 of  a project  with the                                                               
state of  Alaska. Eight buildings  were done in phase  1: Diamond                                                               
Courthouse,  Alaska   Office  Building,  Court   Plaza  building,                                                               
Douglas  Island  building,  and  the  State  Office  Building  in                                                               
Juneau, and  the Aviation building, Department  of Transportation                                                               
annex, and Public  Safety building in Anchorage.  Siemens is also                                                               
finishing  a Department  of Corrections  project for  8 buildings                                                               
around the state.                                                                                                               
                                                                                                                                
3:44:36 PM                                                                                                                    
MR.  BAUER  said  some  of   the  improvements  include  lighting                                                               
upgrades,  low-flow plumbing  fixtures, heating  system upgrades,                                                               
insulation,  and  "retro  commissioning,"  which  is  fine-tuning                                                               
existing  systems.  Siemens installed  an  ozone  machine in  one                                                               
prison so detergent  works with colder water, which  saves on hot                                                               
water costs.                                                                                                                    
                                                                                                                                
MR.  BAUER said  another facet  is alternative  energy, which  is                                                               
especially  important  in  the Bush.  In  conclusion,  there  are                                                               
several other energy services companies that do the same thing.                                                                 
                                                                                                                                
3:47:34 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked if the  state or municipality  has to                                                               
pay up front.                                                                                                                   
                                                                                                                                
MR.  BAUER gave  an example  of a  project estimated  to cost  $1                                                               
million  and  that  Siemens  believed  would  save  the  facility                                                               
$100,000 per  year. Without  any financing  costs, it  would take                                                               
ten years to pay the $1  million back. There would be an up-front                                                               
cost for  the detailed  audit, which would  be rolled  into that.                                                               
There would  also be financing costs.  So if the final  cost were                                                               
$1.2 million, there would be a  $1.2 million note to be paid off.                                                               
So the payments would be tailored  so that each year the customer                                                               
would  pay $100,000  on  this  note, which  would  come from  the                                                               
realized savings  (on electricity,  gas, etcetera).  Siemens will                                                               
not guarantee dollars, but it  will guarantee consumption because                                                               
of energy  price fluctuations. If an  entity has a grant,  it may                                                               
shorten the time and save money on interest.                                                                                    
                                                                                                                                
3:50:03 PM                                                                                                                    
SENATOR WIELECHOWSKI  said the Finance Committee  will appreciate                                                               
the  zero  fiscal  note.  He  asked for  examples  on  the  state                                                               
buildings that Siemens has done.                                                                                                
                                                                                                                                
MR.  BAUER said  the first  Department of  Transportation project                                                               
has a 12-year  contract and is saving a little  over $250,000 per                                                               
year.  The  project investment  was  a  little over  $4  million.                                                               
"However  when they  did the  measurement  and verification,  the                                                               
project  actually  came   in  24  percent  better   then  we  had                                                               
originally planned,  so the last  figure I saw is  probably going                                                               
to pay  off in ...  a little under  nine years." He  doesn't have                                                               
the figures for the Department  of Corrections, but it originally                                                               
was a 15-year payback, and a  $750,000 savings per year. But that                                                               
has not been  verified yet. Normally the company looks  for a 15-                                                               
year pay back or less.                                                                                                          
                                                                                                                                
CHAIR  MCGUIRE  asked  him  to   keep  the  committee  posted  on                                                               
projects.                                                                                                                       
                                                                                                                                
3:51:49 PM                                                                                                                    
^Alaska Energy Efficiency Program and Policy Recommendations                                                                    
                                                                                                                                
  Alaska Energy Efficiency Program and Policy Recommendations                                                               
                                                                                                                                
CADY  LISTER,  Senior   Consultant,  Information  Insights,  Inc,                                                               
Fairbanks,  said she  was one  of  the principal  authors of  the                                                               
Alaska  Energy  Efficiency  Program and  Policy  Recommendations.                                                               
When the report  was written the price of  fuel was significantly                                                               
higher than now. She used slides for her presentation.                                                                          
                                                                                                                                
MS. LISTER  said the  benefits of  energy efficiency  include the                                                               
ability  to do  it now.  There is  voluminous data  to prove  its                                                               
worth.  Efficiency relies  on advances  in technology,  which are                                                               
becoming  more plentiful  instead of  being depleted  like fossil                                                               
fuels.  Saving  energy usually  costs  less  than buying  it.  It                                                               
reduces  pollution and  carbon use.  The project  started with  a                                                               
literature  review  of  Alaska energy  programs.  The  last  time                                                               
Alaska  saw  high energy  prices  was  in  the 1980s  during  the                                                               
Iran/Iraq  war. Money  was  spent on  energy  programs, and  some                                                               
programs were then adopted, and some  of those went away when the                                                               
price of oil  went down. She reviewed those programs  to find out                                                               
why they  did not work or  did not stick. She  also reviewed best                                                               
practices  in  other  countries.  The  Rocky  Mountain  Institute                                                               
assisted in that.                                                                                                               
                                                                                                                                
MS. LISTER  said an  energy efficiency work  session was  held in                                                               
January 2008. Experts sat down and  hammered out what had and had                                                               
not been  done in Alaska; what  had been talked about;  and where                                                               
road  blocks were.  The  Alaska Energy  Authority  (AEA) and  the                                                               
Alaska Housing  Finance Corporation  (AHFC) have collected  a lot                                                               
of data about energy programs in  Alaska for a long time. Interim                                                               
recommendations for  the legislature  were developed.  Energy and                                                               
policy  professionals gave  a  lot of  feedback.  Then the  final                                                               
recommendations were produced.                                                                                                  
                                                                                                                                
MS. LISTER  said Alaska is  ranked at 41  in the nation  by ACEEE                                                               
[American Council for an  Energy-Efficient Economy]. The criteria                                                               
used  was  utility  spending   on  efficiency  and  conservation;                                                               
combined   heat  and   power;   building  codes;   transportation                                                               
policies;   appliance  standards;   tax  incentives;   and  state                                                               
leadership by example. There are  only two positives. Alaska does                                                               
combined heat  and power  in rural areas,  and the  AHFC building                                                               
codes are good, but there is  no state energy code for buildings.                                                               
Alaska is dead-last  in utility spending on  efficiency. Only two                                                               
states are behind Alaska in  terms of dollars spent per resident.                                                               
Alaska spent 11  cents per person, and most of  that was spent by                                                               
the Golden Valley Electric Association (GVEA).                                                                                  
                                                                                                                                
MS. LISTER looked  at best practices but steered  away from those                                                               
of California  because Alaskans wouldn't  like them. She  said 39                                                               
states have  building energy codes  that require a  minimum level                                                               
of efficiency  for new  residential and  commercial construction.                                                               
Alaska  does   not.  Other   best  practices   include  appliance                                                               
standards; efficiency  funding to  pay for program  and outreach,                                                               
which  helps   change  behaviors;  energy  efficiency   in  state                                                               
facilities, which is  fairly widespread and found in  at least 36                                                               
states; tax  incentives, used in  many states and  most effective                                                               
in  states  with  significant taxes;  pay-as-you  save  programs,                                                               
which  are  similar  to  the  Siemens  program  and  may  include                                                               
incentives for switching to efficient light bulbs, for example.                                                                 
                                                                                                                                
4:00:53 PM                                                                                                                    
SENATOR  WAGONER  asked  about   building  energy  codes.  Is  it                                                               
necessary  to create  a code  or could  the state  set up  design                                                               
specifications for  any state  buildings? Universities  are using                                                               
less glass in their buildings.                                                                                                  
                                                                                                                                
MS. LISTER said setting up a  list of how to build is essentially                                                               
a building code.                                                                                                                
                                                                                                                                
JOHN  DAVIES, Research  Director, Cold  Climate Housing  Research                                                               
Center,  Fairbanks, said  the AHFC  adopted  the Building  Energy                                                               
Efficiency Standards for  Alaska, and it is  an energy efficiency                                                               
code that applies to projects  that AHFC finances. The discussion                                                               
is about  broadening that  code to  include all  buildings. There                                                               
are two  approaches to how such  codes can be structured.  It can                                                               
be  a  list of  prescriptive  specifications  or  it could  be  a                                                               
performance  standard.  Both  paths  are allowed  in  code.  Most                                                               
people use the performance standard for residential buildings.                                                                  
                                                                                                                                
SENATOR HUGGINS said Alaska has  a weatherization rebate program,                                                               
and he asked if that was factored in.                                                                                           
                                                                                                                                
MS. LISTER  said her group promoted  the program, but it  was not                                                               
included  when  ACEEE rated  the  states.  It would  likely  give                                                               
Alaska a few more points.                                                                                                       
                                                                                                                                
4:03:33 PM                                                                                                                    
SENATOR HUGGINS said he would like to get an A- on that.                                                                        
                                                                                                                                
MS. LISTER continued  her discussion of best  practices. She said                                                               
other states  use revolving loan  funds that are  capitalized for                                                               
purposes of  providing money for  energy efficiencies.  The loans                                                               
would be  repaid and  available for  others to  use. It  could be                                                               
used for school districts, for example.                                                                                         
                                                                                                                                
4:04:40 PM                                                                                                                    
MS. LISTER  said other incentives include  fast-tracking building                                                               
permits and allowing agencies to keep  the money that is saved by                                                               
reducing energy  bills. Alaska has a  weak regulatory environment                                                               
and  has  little  end-use  management  programs  in  any  of  the                                                               
utilities.  In other  parts of  the world  utilities use  end-use                                                               
management. There is interest among  the utilities in moving that                                                               
way, and  GVEA has.  Another strategy  is requiring  utilities to                                                               
use a total-resource cost test  and purchase all energy efficient                                                               
measures that meet the test.                                                                                                    
                                                                                                                                
MS.  LISTER  said  another  best  practice  is  aligning  utility                                                               
incentives  equally.  Often  utility incentive  programs  do  not                                                               
align  the  utility's  profits equally  with  supply  and  demand                                                               
resources,  and  utilities  will profit  from  high  consumption.                                                               
Another idea  is to create  rate structures that  encourage lower                                                               
consumption. Most utilities do the  opposite. Another strategy is                                                               
a non by-passable  charge on a utility bill that  is used to fund                                                               
energy efficiency initiatives.  She noted that GVEA  did that and                                                               
had very, very little push-back from consumers.                                                                                 
                                                                                                                                
4:07:05 PM                                                                                                                    
SENATOR FRENCH asked what a non by-passable charge is.                                                                          
                                                                                                                                
MS. LISTER  said, "It  just means you  have to pay  it." It  is a                                                               
fixed charge  of a dollar  or two  a month. Some  utilities don't                                                               
feel like they  can charge more, but GVEA did  it and didn't have                                                               
a lot of problem with it. GVEA explained what it was used for.                                                                  
                                                                                                                                
MS. LISTER  said there  are education  best practices  of ongoing                                                               
consumer education about energy efficiency and renewable energy.                                                                
When people  talk about  behavior change  they bring  up tobacco,                                                               
which took consistent and dedicated funds to succeed.                                                                           
                                                                                                                                
4:08:54 PM                                                                                                                    
MS.  LISTER suggested  builder education  for new  technology and                                                               
school  curricula that  includes the  value of  energy efficiency                                                               
and conservation. There are lesson plans available to schools.                                                                  
                                                                                                                                
CHAIR MCGUIRE noted  a meeting at 5:15 tonight  to discuss energy                                                               
and alternative energy in Alaska's schools.                                                                                     
                                                                                                                                
4:10:32 PM                                                                                                                    
MS. LISTER  agreed there are  a lot of opportunities  in schools.                                                               
She said the recommendations in  the report are presented in nine                                                               
categories: state  leadership; funding energy  efficiency; public                                                               
education;   baseline   data;   existing  and   new   residential                                                               
buildings;  existing and  new  commercial  buildings; and  public                                                               
buildings. The entire report is on the web.                                                                                     
                                                                                                                                
MS.  LISTER  said  the  governor   should  articulate  an  energy                                                               
efficiency vision for  Alaska and provide leadership  in terms of                                                               
action.  She should  designate a  sub-cabinet  for state  end-use                                                               
efficiency  programs. "Whenever  the  demand  side gets  together                                                               
with the  supply side, the supply  side gets a lot  more exciting                                                               
because it's  about stuff and  projects, and it can  create jobs,                                                               
and  it uses  new snazzy-looking  technology." If  there are  not                                                               
people  whose sole  task  is looking  at  the end-use  efficiency                                                               
side, then the effort gets sucked into the supply side.                                                                         
                                                                                                                                
4:12:23 PM                                                                                                                    
MS. LISTER  said the report  recommends four options  for funding                                                               
energy  efficiency  programs.  The  first is  the  state  funding                                                               
energy  efficiency  programs through  legislative  appropriation.                                                               
That is  least favorable because  funds won't  get reappropriated                                                               
in low money  years. The second is the RCA  implementing a system                                                               
benefit  charge  to  support  end-use  efficiency  programs.  The                                                               
charge  would show  up on  the utility  bill, and  it would  be a                                                               
dedicated, continuous  funding stream. Thirdly, the  state should                                                               
capitalize an end-use efficiency  endowment. The fourth option is                                                               
the  state   offering  matching   grants  to   local  governments                                                               
interested  in creating  a local  energy  plan that  incorporates                                                               
energy efficiency  and conservation. It  makes the most  sense to                                                               
have the RCA  require a system benefit charge, but  it may be the                                                               
most difficult to implement.                                                                                                    
                                                                                                                                
4:13:43 PM                                                                                                                    
MS. LISTER recommended that the  legislature fund a comprehensive                                                               
public  awareness campaign  with at  least $1  million per  year.                                                               
There is some  good baseline data, but it is  pretty spotty, even                                                               
along  the Railbelt.  That is  where  they focused  this work.  A                                                               
baseline  is important  so the  state  can know  if programs  are                                                               
working. "You could be spending  money and think its working, but                                                               
you just don't really know."                                                                                                    
                                                                                                                                
CHAIR MCGUIRE  said it is  important to  know if enough  money is                                                               
being spent and to know if something is working.                                                                                
                                                                                                                                
MS. LISTER said the AEA should  establish an energy use index for                                                               
all public buildings.  That will let people know  how much energy                                                               
their buildings are consuming. It needs to be put in context.                                                                   
                                                                                                                                
4:15:39 PM                                                                                                                    
SENATOR FRENCH said  that is a great suggestion and  asked how to                                                               
make it happen.                                                                                                                 
                                                                                                                                
MS.  LISTER said  it's not  that tricky,  it is  just how  much a                                                               
building  consumes. Buildings  with  shared costs  might be  more                                                               
difficult to assess.                                                                                                            
                                                                                                                                
MR.  DAVIES said  it can  happen by  executive order.  It is  not                                                               
expensive, but it requires someone to do it.                                                                                    
                                                                                                                                
CHAIR MCGUIRE asked if it would be a website.                                                                                   
                                                                                                                                
MR. DAVIES said it would be a database of BTUs per square foot.                                                                 
                                                                                                                                
SENATOR FRENCH  said that would  be a way  to pick the  ten worst                                                               
buildings in the state that need to be weatherized.                                                                             
                                                                                                                                
4:17:27 PM                                                                                                                    
MS.  LISTER  said  the legislature  significantly  increased  the                                                               
funding  for  low-income weatherization,  which  was  one of  the                                                               
recommendations.  Also, the  AHFC should  create a  certification                                                               
and training  program for energy  retrofit and  new construction,                                                               
and  it should  subsidize up  to 100  percent of  costs for  home                                                               
energy  audits   for  households  not  eligible   for  low-income                                                               
weatherization   and   offer   low-interest  loans   for   energy                                                               
conservation improvements.  The legislature also did  that in the                                                               
form of grants or rebates.                                                                                                      
                                                                                                                                
CHAIR  MCGUIRE asked  why AHFC  was chosen  as the  entity to  do                                                               
certification and training.                                                                                                     
                                                                                                                                
MS. LISTER said it has the most expertise.                                                                                      
                                                                                                                                
MR. DAVIES said AHFC has a program for training energy raters.                                                                  
                                                                                                                                
MS. LISTER said  the legislature should fund  a pilot smart-meter                                                               
program through the  AHFC and AEA. Some people  like smart meters                                                               
and others are skeptical. There  are cheaper units that appear to                                                               
improve peoples' behavior. The Ontario  government bought a smart                                                               
meter for every single household,  and it expects to recoup those                                                               
costs by delaying new infrastructure development.                                                                               
                                                                                                                                
4:19:13 PM                                                                                                                    
CHAIR MCGUIRE asked  how smart meters work. "Does it  yell at you                                                               
when you leave the lights on?"                                                                                                  
                                                                                                                                
MR.  DAVIES  said they  just  provide  immediate feedback,  which                                                               
causes people to change their behavior  and save up to 10 percent                                                               
in energy costs.  It is like getting an electric  bill every day.                                                               
Some utilities  vary their  rates by  the time  of day,  so smart                                                               
meters can help people schedule their energy use.                                                                               
                                                                                                                                
MS. LISTER said the report  recommends the legislature adopt BEES                                                               
(building energy efficiency  standard) as the new  state code for                                                               
residential construction. The state  should enforce the codes and                                                               
contractor licensing to ensure quality and energy efficiency.                                                                   
                                                                                                                                
4:21:11 PM                                                                                                                    
SENATOR WIELECHOWSKI  said he thinks  Alaska could get  about $28                                                               
million from the  federal stimulus package. One  requirement is a                                                               
state building code.                                                                                                            
                                                                                                                                
MS. LISTER said, "You have to  have assurances that you will have                                                               
one."                                                                                                                           
                                                                                                                                
SENATOR WIELECHOWSKI noted that 39 states already have them.                                                                    
                                                                                                                                
MS.  LISTER said  the report  recommends that  the AEA  subsidize                                                               
energy audits for existing commercial  facilities and offer loans                                                               
for  improvements.  Commercial  facilities are  often  large  and                                                               
built  with blueprints  from California,  and they  waste a  huge                                                               
amount of energy.  The RCA should require  utilities to implement                                                               
pay-as-you-save loan programs.                                                                                                  
                                                                                                                                
4:22:10 PM                                                                                                                    
MS.  LISTER  said  the  AEA should  contract  for  a  stakeholder                                                               
process to  develop a commercial energy  efficiency building code                                                               
for new commercial construction.  The governor should direct each                                                               
state  agency to  reduce energy  consumption by  20 percent  from                                                               
2000 levels.  The Board of  Regents should direct  the university                                                               
to do the  same. The legislature should fund an  energy audit for                                                               
every school  in the state. The  state should fund AEA  to revive                                                               
the Institutional  Conservation Program  to offer  public schools                                                               
energy conservation matching grants.                                                                                            
                                                                                                                                
CHAIR MCGUIRE asked if there are federal dollars for that.                                                                      
                                                                                                                                
MS. LISTER said no. The  AEA should establish a low-interest loan                                                               
program for  public facilities with payments  geared to projected                                                               
savings in energy.                                                                                                              
                                                                                                                                
MR. DAVIES said  the energy audit for schools could  be funded by                                                               
stimulus funds.                                                                                                                 
                                                                                                                                
MS.  LISTER  gave  an  overview   of  where  Alaska  stands  now.                                                               
Weatherization  received $200  million,  the  home energy  rebate                                                               
program  was funded  at $160  million, and  renewable energy  was                                                               
funded at $100  million. There is a fair amount  of market driven                                                               
conservation now in rural Alaska.  Rural Alaskans use less energy                                                               
than urban Alaskans.                                                                                                            
                                                                                                                                
4:24:49 PM                                                                                                                    
MS. LISTER said there is a  broad and growing awareness of energy                                                               
issues. Supply  side solutions continue to  dominate discussions,                                                               
which are important but they aren't the only thing.                                                                             
                                                                                                                                
4:25:29 PM                                                                                                                    
CHAIR MCGUIRE  said it  is interesting that  the supply  side has                                                               
more interest.  Conserving and saving is  always less interesting                                                               
to people  than expanding  and spending. She  has heard  the term                                                               
"nega-watts," and  simply not  expending a  kilowatt hour  is the                                                               
best thing to do, but we talk about other solutions.                                                                            
                                                                                                                                
MS. LISTER  said people think  that conservation means  they have                                                               
to negatively changes  their lives and be cold or  not have clean                                                               
clothes.  But   with  new  technology   and  by   building  homes                                                               
correctly, we can still have our homes at 70 degrees.                                                                           
                                                                                                                                
MR. DAVIES  said new construction  is easy, but  retrofitting can                                                               
be messy and difficult. Every  home is different. Conservation is                                                               
the cheapest and is what we should do.                                                                                          
                                                                                                                                
4:27:10 PM                                                                                                                    
CHAIR MCGUIRE  said her constituents tell  her it is hard  to get                                                               
the audit;  it is taking  months. Are you recruiting  more energy                                                               
auditors? We don't have enough.                                                                                                 
                                                                                                                                
MR. DAVIES said he believes it  is at equilibrium with the number                                                               
of people on list and the  number getting service. People were on                                                               
multiple lists  so it looked  worse than it  was, and now  we may                                                               
need a few more raters, but not many.                                                                                           
                                                                                                                                
4:28:28 PM                                                                                                                    
MS.  LISTER said  new  people are  being  certified nearly  every                                                               
week, and  she thinks there  are enough raters.  Anchorage didn't                                                               
have enough at first.                                                                                                           
                                                                                                                                
CHAIR MCGUIRE  noted the  downturn in the  economy, and  there is                                                               
not as  much work for appraisers.  Perhaps some of them  could be                                                               
re-trained.                                                                                                                     
                                                                                                                                
MS.  LISTER said  the  real opportunity  is  for people  actually                                                               
doing the energy  work. There are enough raters. It  will be hard                                                               
to find contractors  who know how to do energy  retrofits, but it                                                               
is an opportunity for them.                                                                                                     
                                                                                                                                
4:30:49 PM                                                                                                                    
MR. DAVIES  noted the  Cold Climate  Housing Research  Center and                                                               
its  website  with  this  entire  report  -  www.cchrc.org.  This                                                               
presentation  is also  available  through Senator  Wielechowski's                                                               
office. He  said a  statewide building  code has  been discussed.                                                               
Experts recommend  it as the  single most important  strategy. It                                                               
provides education and  a reasonable standard. There is  a lot of                                                               
debate  about regulating  people in  the last  frontier. "But  if                                                               
we're going  to start providing  hundreds of millions  of dollars                                                               
to help people  retrofit, then I think there's  a public interest                                                               
in  making  sure that  we  don't  go  too  low." There  are  also                                                               
pollution and greenhouse gas issues.                                                                                            
                                                                                                                                
4:33:16 PM                                                                                                                    
MR. DAVIES said  he looked at the amount of  money being spent in                                                               
Fairbanks  on  energy. It  is  over  $450  million per  year.  By                                                               
cutting that, the money could  stay in the economy and circulate.                                                               
It's a big deal.                                                                                                                
                                                                                                                                
4:34:06 PM                                                                                                                    
SENATOR WAGONER said  this committee won't take on the  task of a                                                               
statewide building code.  Who will enforce it? He  thinks what is                                                               
needed is  a sub-code that  becomes part of a  statewide building                                                               
code.  He recommends  that someone  tackles this  outside of  the                                                               
building code and then attach it later.                                                                                         
                                                                                                                                
MR. DAVIES  said that is the  approach CCHRC took. It  was tasked                                                               
with  helping   AHFC  revise   the  building   energy  efficiency                                                               
standard.  When  it  started  it   recast  it  in  terms  of  the                                                               
International Energy Conservation Code.  The terms are code-like,                                                               
so it  could be slipped  right into  the building code.  AHFC has                                                               
seen the  need for a  level playing field  for a long  time. When                                                               
homeowners finance  a house, they can  use an AHFC loan  to get a                                                               
small reduction in  mortgage rates, or they can go  to Fannie Mae                                                               
or Freddie Mac and not  have energy efficiency requirements. That                                                               
may change  at the  federal level,  but it hasn't  yet. A  lot of                                                               
people don't want to deal with  it even though AHFC will get them                                                               
a lower  mortgage rate. Within  the last month, the  Alaska State                                                               
Homebuilders  Association   passed  a  resolution   supporting  a                                                               
statewide  energy  conservation code,  so  that  removes a  major                                                               
resistance - it is a big change.                                                                                                
                                                                                                                                
4:37:30 PM                                                                                                                    
MR. DAVIES  said the association  tried a voluntary code,  but it                                                               
hasn't worked. Also,  being on track to adopt  a statewide energy                                                               
conservation  code  is  required  to  get  some  of  the  federal                                                               
stimulus funds, particularly the state energy program grants.                                                                   
                                                                                                                                
SENATOR WIELECHOWSKI said  one of his concerns  is the additional                                                               
cost to people building homes.  But Mr. Davies said that wouldn't                                                               
be much. He asked him to explain that.                                                                                          
                                                                                                                                
MR.  DAVIES said  there are  trade  offs in  designing an  energy                                                               
efficient home. One might spend more  on insulation and less on a                                                               
heating system, for example. That  doesn't include the life cycle                                                               
savings. A  little money spent  on insulation will get  paid back                                                               
fairly quickly. Adding energy efficiency  at the end of a project                                                               
is more expensive, but if it  is programmed in from the beginning                                                               
it isn't  much more expensive.  The biggest builder  in Fairbanks                                                               
is  building  all  5-star-plus  buildings,  and  his  houses  are                                                               
slightly lower than the mid-price point in the market.                                                                          
                                                                                                                                
4:40:31 PM                                                                                                                    
CHAIR MCGUIRE said a code has plumbing and other requirements.                                                                  
                                                                                                                                
MR. DAVIES  said he would like  to see a statewide  building code                                                               
that includes  all of  those. There  are a lot  of devils  in the                                                               
details. There  will be issues  on how  to implement it  in rural                                                               
Alaska. Most banks  require inspections already, so  "if you just                                                               
added a  little more to  the task  of those inspectors  and train                                                               
them, the additional work would not  be that much more." It might                                                               
cost another $300  for a home inspection in  new construction. If                                                               
it  was done  through the  private sector  like banks  are doing,                                                               
there won't be a need for a large state bureaucracy.                                                                            
                                                                                                                                
CHAIR MCGUIRE  said there are a  lot of Alaskans who  build their                                                               
own homes.                                                                                                                      
                                                                                                                                
MR. DAVIES said  there is training out there  already. Mr. Davies                                                               
built his own  house and got some of that  training. He advocates                                                               
not applying  [the code]  to those who  self finance;  but people                                                               
need to  know that if they  want to sell the  house later through                                                               
bank financing, the bank may have issues.                                                                                       
                                                                                                                                
4:43:42 PM                                                                                                                    
MR. DAVIES said that the  state energy program grant requirements                                                               
from the stimulus  bill require the governor to send  a letter to                                                               
the  Secretary  of Energy  that  certifies  three things:  1)  It                                                               
assures that Alaska has a  program where utilities are supporting                                                               
consumer  energy  efficiency  policy   -  programs  that  provide                                                               
consumer education  for saving energy.  2) The state  has adopted                                                               
residential  and commercial  energy  conservation  codes. 3)  The                                                               
state  prioritizes  these  grants  toward  energy  efficiency  or                                                               
renewable  energy programs  wherever possible.  Those three  will                                                               
make Alaska eligible for the money from the stimulus package.                                                                   
                                                                                                                                
4:45:29 PM                                                                                                                    
MR. DAVIES said Alaska should  consider a broad statewide program                                                               
that  could  be  called Sustainable  Northern  Communities.  Most                                                               
communities in  Alaska are not sustainable,  considering how they                                                               
are  spending  money  and designing  buildings.  He  suggested  a                                                               
vision to  use oil wealth  to transition to a  renewable economy.                                                               
Alaska has taken some steps in  the right direction, but it needs                                                               
to enunciate it  as a state vision. It will  take enormous effort                                                               
to get there  within 30 years. Alaska will need  to focus clearly                                                               
on the goal.  The integrated design process needs to  be used. It                                                               
means coordinating the design and  involving all the stakeholders                                                               
at the  beginning of the process.  Both AEA and AHFC  have talked                                                               
about it as the "whole village" retrofit.                                                                                       
                                                                                                                                
MR. DAVIES  said energy  is not  separate from  agriculture. When                                                               
planning sustainable  communities, one needs to  worry about food                                                               
security.  He has  heard that  Fairbanks has  only three  days of                                                               
food  in town.  Alaskans need  to think  about how  we will  feed                                                               
ourselves. When  looking at an  energy plan, look  at greenhouses                                                               
and using waste  heat to grow food. That  is especially important                                                               
in rural Alaska, but it applies all over the state.                                                                             
                                                                                                                                
4:49:20 PM                                                                                                                    
MR. DAVIES said  the CCHRC facilitated the  study and Information                                                               
Insights carried it  out with Ms. Lister doing most  of the work.                                                               
The funding came from AHFC and AEA.                                                                                             
                                                                                                                                
CHAIR MCGUIRE thanked  them and said when she was  in Iceland she                                                               
saw "exactly  this concept of  a sustainable community  that they                                                               
have developed."  It made the link  between energy sustainability                                                               
and food sustainably with  hydroponic vegetable greenhouses. It's                                                               
exciting  to think  that Alaskans  can  decide what  we want  our                                                               
communities to look like. It's  about sustaining culture and food                                                               
sources. "I think there are  tremendous opportunities that spring                                                               
from that."  Iceland has a sense  that it has the  energy and the                                                               
food to keep going.                                                                                                             
                                                                                                                                
4:51:46 PM                                                                                                                    
SENATOR  HUGGINS said  he was  visiting Fairbanks  about a  month                                                               
ago, and he asked about the Anaktuvuk prototype.                                                                                
                                                                                                                                
MR. DAVIES said  they have a program  called Sustainable Northern                                                               
Shelters to  provide housing in  northern areas. It tries  to use                                                               
an integrated design process and  involve the communities. It was                                                               
applied in  Anaktuvuk Pass, where  the North Slope  Borough asked                                                               
for a design  of a new house.  The town hadn't built  a new house                                                               
in 10  years because the last  quote for one house  was $750,000.                                                               
No one could  afford it. CCHRC set  a goal to do  it for $125,000                                                               
to $150,000  and fit  all of  the materials in  one DC3  plane. A                                                               
five-person senior complex  that was just built  there took about                                                               
40 "Herc loads" to get the  material there. There are no roads or                                                               
barges that go into Anaktuvuk. CCHRC  went to the village and had                                                               
a  two-day  design  charrette,  and  over  half  of  the  village                                                               
participated  in  this two-day  discussion  on  what they  wanted                                                               
their  houses  to  look like.  Important  design  features  would                                                               
include  a place  to repair  snow  machines and  skin a  caribou.                                                               
Kitchens  need  to be  large  for  a potlatch-type  event.  CCHRC                                                               
worked up a  design and went back and had  another charrette. The                                                               
approach that brings  everyone together at the  beginning is also                                                               
done  with the  contractors. "We  hope to  build this  place this                                                               
summer." The  ideas are  being tested  this winter  in Fairbanks.                                                               
This approach  can be used  around the state, and  other villages                                                               
have requested  assistance. The house  will get built  with local                                                               
labor - like a barn raising.                                                                                                    
                                                                                                                                
CHAIR MCGUIRE  said people  will have pride  and respect  for the                                                               
building. Observing people being productive is great.                                                                           
                                                                                                                                
4:56:00 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
CHAIR MCGUIRE adjourned the meeting at 4:56 p.m.                                                                                

Document Name Date/Time Subjects
Cold Climate Presentation 2 17 09.pptx SRES 2/18/2009 3:30:00 PM
Siemens Building Technologies Presentation Feb 18 2009.ppt SRES 2/18/2009 3:30:00 PM