Legislature(2009 - 2010)KODIAK
09/01/2009 05:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| State Energy Plan | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
JOINT MEETING
SENATE RESOURCES STANDING COMMITTEE
SENATE SPECIAL COMMITTEE ON ENERGY
KODIAK ISLAND BOROUGH ASSEMBLY CHAMBERS
September 1, 2009
5:40 p.m.
MEMBERS PRESENT
SENATE RESOURCES
Senator Lesil McGuire, Co-Chair
Senator Bill Wielechowski, Co-Chair
Senator Hollis French
Senator Bert Stedman
Senator Gary Stevens
Senator Thomas Wagoner
SENATE SPECIAL COMMITTEE ON ENERGY
Senator Lesil McGuire, Chair
Senator Lyman Hoffman
Senator Bert Stedman
Senator Bill Wielechowski
MEMBERS ABSENT
SENATE RESOURCES
Senator Charlie Huggins, Vice Chair
SENATE SPECIAL COMMITTEE ON ENERGY
Senator Albert Kookesh
OTHER LEGISLATORS PRESENT
Senator Johnny Ellis
Senator Joe Thomas
COMMITTEE CALENDAR
State Energy Plan
PREVIOUS COMMITTEE ACTION
No Previous Action to Report
WITNESS REGISTER
JEROME SELBY, Mayor
Kodiak Island Borough
POSITION STATEMENT: Commented on Kodiak Island Borough energy
issues.
CAROLYN FLOYD, Mayor
City of Kodiak
POSITION STATEMENT: Commented on Kodiak energy issues.
MAGGIE WALL, representing herself
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
ELAINE O'BRIEN, representing herself
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
DONNA JONES
Sustainable Kodiak
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
ROD MURDOCK
Alpha Appliance
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
DARRON SCOTT
Kodiak Electric Association
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
STEVEN TAUFEN, representing himself
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
BOB BRODIE, representing himself
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
THERESA PETERSON, Outreach Coordinator
Alaska Marine Conservation Council
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
JUDY FULP, representing herself
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
ROLAN RUOSS, small business owner
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
SWITGARD DUESTERLOH, small business owner
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy and ocean
acidification issues.
STOSH ANDERSON, representing himself
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
PAT HOLMES, representing himself
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
JOANN GOYNE, representing herself,
Kodiak, AK
POSITION STATEMENT: Commented on Kodiak energy issues.
LAURIE MURDOCK, representing herself
Kodiak, AK
POSITION STATEMENT: Her philosophy is, "Burn calories, not
fossils."
ACTION NARRATIVE
5:40:59 PM
^State Energy Plan
State Energy Plan
CO-CHAIR BILL WIELECHOWSKI called the joint meeting of the
Senate Resources Standing Committee and the Senate Special
Committee on Energy to order at 5:40 p.m. Present at the call to
order were Senators McGuire, Stevens, and Wielechowski.
5:41:25 PM
CO-CHAIR WIELECHOWSKI recounted that their flight was late this
morning, but they toured Kodiak Electric Association and the
wind farm, as well as Alaska Aerospace. "The hospitality has
been fantastic." The purpose of their visit, he said, is to hear
from the people of Kodiak about their ideas for a statewide
energy plan.
5:42:25 PM
JEROME SELBY, Mayor, Kodiak Island Borough, said that Kodiak
uses a combination of hydro, wind and diesel and he hoped that
villages like Ouzinkie could benefit from the same kind of
combination. One more other type of energy might be beneficial
and that is tidal generation, which is being researched. Kodiak
has a 5-6 knot current, and one would think serious energy could
be generated from that. A lot of coastal Alaska shares that
resource.
5:44:48 PM
MAYOR SELBY said that they have a lot of things going on, but
they do need some help with retrofitting public facilities with
updated equipment. Kodiak has a 40-year old high school that has
boilers that are 40 years old as well. Coming up with money for
these projects is daunting, but that would be another piece of
improving energy use in the state of Alaska.
Senators Wagoner Hoffman, Stedman and Thomas joined the meeting.
5:46:56 PM
CAROLYN FLOYD, Mayor, City of Kodiak, said she hadn't prepared
remarks, but she hoped they were looking at ways to decrease the
cost of energy in the communities. They have partial wind power
on Pillar Mountain, and if tidal could be perfected in the
future, that would be another source of energy they could really
use. Whatever the project is, though, it requires money. "So,
show us the money, okay?"
5:48:42 PM
MAGGIE WALL, representing herself, said she does a radio show
about the legislature called the LegHead Report, and she thanked
them for coming to Kodiak and all the other communities around
the state. She said she was always struck by how willing
legislators are to hear what people have to say. She always
encourages people to learn how it works and to participate in
the legislative process.
5:50:51 PM
ELAINE O'BRIEN, representing herself, said she is "Lanie Welch"
on the radio. She urged them to reconsider the Chuitna coal
strip mine in upper Cook Inlet. It is a project by Pack Cole, a
Delaware corporation that would take 1 billion tons of coal from
this area and over 22 square miles of fish habitat. While, she
said she wasn't going to stress the 12-mile long partially
enclosed conveyor belt from the mine that will transport the
coal onto massive two-mile long docks that will jut into Cook
Inlet into cape-class vessels that will then go by Kodiak, she
was going to point out that this mine could set a precedent for
taking traditional salmon set net sites by eminent domain.
She wanted mostly to emphasize that every bit of this coal -
coal is the largest source of green house gases in the world -
is going to Asia where it will all be burned and come back in
the form of CO, which will be dumped into the Pacific Ocean. The
2
chemistry doesn't lie, she said, the cold waters of the Bering
Sea and the Pacific are already showing the signs of ocean
acidification. So, Cook Inlet would get this methyl mercury
trade off back for this strip coal mine.
5:53:28 PM
Secondly, she urged them to look into the possibilities posed by
a really exciting technology called algae bio fuels. A Cape Cod
project on cold water algaes is finding that like anyone else in
the cold, they retain the fat and produce more oil. Exxon has
reportedly invested $600 million in bio fuels using cold water
algae.
She has learned that algae can be turned into bio fuel in just
three weeks compared to six months for vegetable oils. Algae bio
diesel also has a composition that is almost identical to
petroleum diesel, but it is more efficient and produces lower
emissions. These facilities could be operated in the remotest
regions of Alaska.
5:54:46 PM
Thirdly, she said she belonged to the right-to-dry movement in
which people use clotheslines for drying clothes for half the
year. Adopting this concept could save 3.3 percent of the U.S.
CO output. She brought this up because since the 1970s
2
development restrictions have banned clotheslines in most of the
U.S. According to Project Laundry List, 60 million people live
in 300,000 association-governed communities nationwide, most of
which restrict outward drying. Condominium and home owner groups
say they have the right to ban practices that drag down property
values, and clotheslines top the list.
5:56:13 PM
MS. O'BRIEN had pamphlets on turning fish byproducts into other
products - to everything from high heel shoes to salmon bikinis.
In Kodiak they are turning it into fish meal and oils, and
actually using some of the fuel to fire their reduction plant,
another energy conscious thing they are doing.
5:56:48 PM
SENATOR STEVENS asked her concerns about the effects of the coal
mine on the fisheries.
MS. O'BRIEN said she sees the difficulties people in Seward have
with their coal dust problem. If you are talking about a 12-mile
long partially-covered conveyor belt, and Pac Rim says they are
going to spray the coal with water to keep the dust down -
"Well, it could be frozen in October." She worries about the
impacts of smothering coal dust on streams, not just for fish,
but for all living creatures. Why go for this known culprit of
global warming causation when Cook Inlet has so many other
energy resources to look at - like the tides, wind and
geothermal.
SENATOR WAGONER remarked that Cook Inlet doesn't have the
biggest tides in world; they are third or fourth. Going back to
her statement about exporting coal into China, he asked if she
realized this is one of the lower-sulphur coals; so every ton of
it put into that market would displace high sulfur content coal.
Would that make a difference in her opinion?
MS. O'BRIEN answered no difference whatsoever.
5:59:01 PM
DONNA JONES, Sustainable Kodiak, said this organization is a
loose coalition of a whole lot of different community groups and
individuals from all kinds of interests. If you want to increase
energy, it's a no-brainer to conserve first.{ She also supported
expanding the current energy rebate program for homes by
extending it to nonprofits, schools and other public buildings,
businesses and apartment buildings that are a major source of
inefficient energy use.
She also suggested mandating higher efficiency standards in
residential and commercial construction; and state and borough
buildings should be built to efficient green building standards.
A lot of work has been done in this area, for one thing and
buildings are not only efficient, but pretty, too. Super
insulation is good, especially for remote villages instead of
flying in oil.
6:01:35 PM
She suggested doing a state matching fund for the upcoming
federal appliance rebate program and a small rebate program for
people who can't do their whole house at once - for things like
LED light bulbs, weatherization materials and insulation
products.
6:03:14 PM
MS. JONES strongly urged protecting small Alaskan farm and ranch
lands from development. Once this land is developed, it's almost
impossible to get it back. Alaska is at the end of the supply
chain in the U.S., and we need to keep this food growing farm
land available now and later for local food production. This is
important because as oil becomes scarcer and more expensive, the
price of shipping is going to sky-rocket for food.
She encouraged walk-able mixed-use neighborhoods that establish
things like trails. Rich Seifert from UAF, "the energy guy,"
suggested looking at using some of the Permanent Fund money to
make permanent energy changes in the state.
6:05:34 PM
ROD MURDOCK, Alpha Appliance, Kodiak, said over the last two-
year period he has been able to cut heating costs in half by
using an air source heat pump. Others have done the same. He
would be putting in a test heat pump in one of the Kodiak
Electric Association's buildings in the next week or two. Off
the shelf instruments and gadgets that make energy more
efficient can be easily found especially on the Internet. Many
of them don't have any emissions and don't use a drop of oil.
CO-CHAIR WIELECHOWSKI asked how much a heat pump costs to
install in an average house.
MR. MURDOCK replied for a 1,500 ft. house it would be cheaper to
install than oil-driven heat equipment.
6:09:55 PM
DARRON SCOTT, Kodiak Electric Association, thanked them for
looking at their wind farm on Pillar Mountain. The only other
point he wanted to share today is if they are inclined to fund
future renewable energy projects. He said they were recipients
of $4 million grant through renewable energy funds, which helped
this project be very successful. But there could potentially be
other ways to administer that money and one idea is that
production incentives could be used instead of direct grants.
6:11:24 PM
STEVEN TAUFEN, representing himself, related that he and a
partner tried to develop Adak Power and Electric years ago. The
whole situation in Adak was very instructive about how the state
failed to insure that the public-serving assets promised under
base realignment and closure flowed through to the public. That
ended up having severe effects on the cost of electricity and
the cost of fuel to fishing fleets.
It was also instructive about how a Native Corporation usurped
those powers and was price gouging on fuel - not charging itself
for electricity while overcharging the fishing fleet. All these
things got seriously in the way of development in Adak. Adak
remains troubled to this day and has new lawsuits. He believes
that the Knowles agreement still stands, and the state is still
obligated to make sure the public servicing assets that were
under the Navy go through and serve the public to this day.
He explained, that at that time it was their conceptualization
that 25-million gallon fuel tanks that served the Navy as a fuel
station could have been used to serve Western Alaska, the
Aleutian Island, Bristol Bay, and the AYK region, because (as
discussed with the Alaska Village Electrical Cooperative (AVEC),
it was possible with that volume to do more upfront engineering
and collective buying and supplying - especially at the right
times on the world market.
MR. TAUFEN said what really was instructive about Adak is that
emergency declarations were ignored and the RCA had difficulties
policing "that place." Only when they got a stronger magistrate
did things begin to change.
6:14:41 PM
They need to consider that Native companies fuel operations and
intend to make profits on them, but those advantages can have
detrimental effects on fleets and villages as is believed to be
happening in the Gulf of Alaska.
MR. TAUFEN said the topic he is best known for is abusive
transfer pricing, the means by which global corporations
transfer values through their products among their affiliates
around the world "to cheat the United States out of the economic
benefits and the taxes." This has sorely harmed the State of
Alaska both in timber and fisheries.
So when he hears Ms. Welch and others express their concerns for
coal and when he hears about issues like the Pebble Mine, he
thinks they have to keep in mind that Alaska, for all of its
resource dependency, does not have a state resource sovereignty
commission, unlike several other states and commonwealths.
He said that he had talked to a few legislators about forming a
resource accountability and transparency board, so they know the
true value of our exploited resources in world markets. Since
then he has advance to the idea of the commission. Underneath
such a commission they could have individualized resource
accountability and transparency boards. He estimated that the
state loses about $2 billion/yr. because of its failure to know
those true values and police them properly. Alaska needs to get
at least an adequate severance for its resources as laid out in
the Alaska Constitution.
6:17:05 PM
BOB BRODIE, representing himself, said the Alaska Housing Energy
Program was a huge success. It saved many consumers many
thousands of dollars on their future energy costs. He supported
expanding that program, if the funding was available, to
apartment buildings, as well - starting with 4-plexes. Many
people who work in marginal jobs rent, and their rents are tied
to the cost of oil when it goes up.
6:20:15 PM
SENATOR HOFFMAN said one of the discussion points they had when
they put the energy efficiency program together was to see that
direct benefits went to individuals, and while they knew
expanding the program to apartments would save energy money, how
could the state justify benefiting businesses rather than
individuals. How would that savings be passed on to the
individuals versus to the people running the businesses?
MR. BRODIE replied that it would have to be thought out, but
there should be a way to do it.
6:21:47 PM
THERESA PETERSON, Outreach Coordinator, Alaska Marine
Conservation Council, said it is a community based organization
made up of fishermen, subsistence harvesters, and coastal
Alaskans who rely directly and indirectly upon the ocean. She
said seeing the wind turbines spinning on a mountain on a remote
island in the North Pacific clearly illustrates the future for
energy in Alaska. "If we can do it here, it can be done in many
areas." She said as leaders, they should keep networking to find
such solutions.
Kodiak has a number of individuals taking an enormous initiative
to reduce their energy usage. Fishermen are re-outfitting their
boats with more fuel efficient engines, and a number are just
running at lower rpms to decrease fuel consumption. She has just
returned from summer set net fishing at the southern end of the
Island where many of the camps have solar panels, wind
generators and water turbines at work - just small scale
renewable energy sources. "Who'd 'a thought Kodiak would be so
progressive?"
6:23:40 PM
She urged them to continue to enact legislation that will
encourage conservation, innovation and getting away from fossil
fuels. Ocean acidification makes conservation and alternative
energies even more urgent. "The time to act is now." She thought
the state should start to forego new industrial developments
that pose substantial risks to the resource base everyone
depends on; this would include the proposed lease sales in
Bristol Bay that is far too rich with the world's largest salmon
run, crab and halibut, cod and groundfish fisheries.
6:25:39 PM
JUDY FULP, representing herself, said she sits on the Kodiak
Borough Assembly, and grew up in Kodiak and Seward. She really
appreciated their coming to Kodiak and the support they gave to
the energy assistance program. Besides oil development, fishing
and tourism, this is the most important thing Alaska can do at
this stage. She said energy is at the top of her husband's list,
too. As a state, he thinks we are positioned for the future
because we have the long coastline with wave and wind action.
6:27:15 PM
ROLAN RUOSS, small business owner, said he has an Air taxi in
Kodiak and saw the run up in fuel prices like the fishing fleet.
Energy efficient homes are a good idea, and he thought it might
be worth exploring spending Permanent Fund money on a North Pole
refinery. With the Matanuska Dairy in mind, he thought it might
at least be worth exploring the risk in the committee.
CO-CHAIR WIELECHOWSKI said the committee had presentations on
that issue; and there were many different opinions on it.
6:29:04 PM
SWITGARD DUESTERLOH, small business owner, said she is a fishery
scientist and has become interested in ocean acidification. She
is researching the topic and working with the Kodiak School
District on getting young people into the sciences especially
with the upcoming ocean acidification and climate change.
MS. DEUSTERLOH said she believes ocean acidification has come to
us because of the increase of CO in the atmosphere caused by the
2
extensive use of fossil fuels. Comparing America per capita to
any other industrialized nation with the same standard of
living, we use a much larger proportion of fossil fuels. Why is
that the case? That is where we need to start with an energy
policy - no waste of energy, but it doesn't have to mean a lower
standard of living.
6:31:42 PM
Alaska has a lot of scattered, small communities and has
problems with getting things and energy to these communities.
Localized projects are needed on a community basis, not just big
projects, she stated, and we need to get away from digging up
fossil fuels that haven't been used yet. The whole problem of
increased CO in the atmosphere comes from us digging up fossil
2
fuels that have been deposited for a long time by nature
thatwere not meant to be in the cycle. If we use something like
bio fuels, that is not a new addition to the CO in the cycle. It
2
won't do anything in the short term to reduce CO, but it won't
2
increase the world's budget of CO in the long term either.
2
MS. DEUSTERLOH said a new technology turns old plastic into
diesel fuel, for instance, and those kinds of solutions need to
be found and applied in our state.
6:35:08 PM
STOSH ANDERSON, representing himself, said he is a commercial
fisherman and is also on the board of Kodiak Energy Association.
He said that it's important that the energy plan relates to all
components of the local small communities. The plan needs to be
very flexible and it will ultimately guide funding. Legislator's
job is to allocate the funding; and it's the people's job to ask
for it.
He agreed with Mr. Scott that funding should be performance
based, so the state isn't funding boondoggles. A majority of
utilities in the state are non-grid utilities and renewables are
very capital intensive. Without a constant output, they don't
contribute any capacity to the utility system. He reminded them
that utilities need 100 percent backup and failures have to be
allowed for. It takes a lot of money to put good systems in
place that include peak demand and emergency backup.
Even though hydro is the backbone of their system and they have
three wind turbines, which are very symbolic of what Kodiak is
doing, they still need to have 125 percent of diesel generation
capability in case the power lines go down or whatever.
He thought more electricity would be used for space heating and
running vehicles in the future, and that is very appropriate for
Kodiak as well as other communities in Alaska. He perceived that
with improvements in battery technology, more and more electric
vehicles would be seen in this state. But, because of this, the
utilities will have an increased demand, and that means capital
investments of 225 percent for every kilowatt they are adding to
the system. They will need a lot of help in financing and
guidance on how to reach those goals.
MR. ANDERSON emphasized that they need to honestly address what
is happening with ocean acidification; it's a reality, not just
a pipedream. "It's going to cripple our communities if we don't
consistently work at reducing our input on the carbon side, but
also finding ways to reduce the ocean acidification after it's
in the water." These technologies need to be developed as time
goes on.
6:39:54 PM
SENATOR STEVENS said he appreciates all Mr. Anderson has said
and done, and he is proud to show these folks what the people in
Kodiak have taken a chance on doing. "It's pretty remarkable."
In the end, they know that hydro will be cheaper than
electricity generated by wind - by about half. So, he asked him
to talk briefly about the expansion of the Terror Lake project,
which he thought was almost more exciting that the wind project.
MR. ANDERSON said the hydro facility is the backbone of their
utilities. Other water sources are available that could feed the
watershed to Terror Lake, but it would be very capital intensive
it bore tunnels through mountains. They average peak loads are
currently 23-25 mgW; Terror Lake currently can put out 20 mgW.
So whenever the processes are at full capacity they have to run
diesel generation. The wind plants can be going, but they don't
have any capacity to add to the system. To make the system work
ultimately and to reduce the carbon footprint, they need to put
another turbine in Terror Lake, which wouldn't make sense
because there isn't enough water to run three turbines year-
round, if renewables weren't contributing to the system at the
same time. So, Terror Lake can be used as a long-term energy
storage device. A third turbine would cost $15 million.
Four or five smaller projects are being looked at, he said, and
permits are available to expand the wind farm, but until they
have experience with integrating it with their system, it is not
prudent to spend money on them. If they ever harness tidal
energy, Terror Lake will be the key, because that will be the
storage device. Tides are cyclical, so when they aren't running
is when Terror Lake would pick up the slack. Federally, he said,
hydro projects are not considered renewable, especially new
ones. So, it would really help them if they could get renewable
energy funding to add to Terror Lake.
6:43:15 PM
CO-CHAIR WIELECHOWSKI remarked that they passed a resolution
urging the federal government to classify Alaska hydro as
renewable; now they have to see what happens.
6:43:26 PM
PAT HOLMES, representing himself, agreed with all of the
speakers so far. He asked them to remember that the Bush is an
integral part of the state; the folks that live there are "darn
special." He supported renewing energy assistance funds. It took
him seven months to get an audit here in Kodiak; probably half
of the town hasn't been able to get one. It's even more
difficult to get an audit in the villages. He supported Mayor
Selby's comments on the school and public building retrofits;
the school is cinder block and it will need some help in the
remodel, for sure.
He said that people in Atka were paying 45 cents kwH before the
cost of fuel went up. "It's just incredible what people have to
pay in the rural areas." Town has a lot of things that are
advantageous, but addressing the whole state - balancing rural
and urban areas is a tough job.
6:49:05 PM
JOANN GOYNE, representing herself, agreed that the energy
efficiency program has been quite successful and she also
thought it should be expanded to address apartment complexes and
commercial buildings. They could let the professional
organizations that manage these properties use their expertise
in putting together a partnership with the state to the effect
that if they make structures energy efficient that the rebate
will go back to the tenants. She saw this work successfully in
California when Proposition 13 passed in the 1970s.
6:52:32 PM
LAURIE MURDOCK, representing herself, said her philosophy is,
"Burn calories, not fossils." She rides her bicycle to work
three days a week even though their roads are not very bike-
friendly.
Encourage people to not drive cars, she urged, by developing
mass transit. Having electric cars would be a great way to get
around their town. She is a member of the Solid Waste Advisory
Board for the Kodiak Island Borough and, while she is not here
in that capacity, she is here to encourage coastal communities
in Alaska to begin recycling programs. Perhaps a coastal
recycling plan could work at reducing emissions and waste going
into landfills.
6:56:26 PM
CO-CHAIR WIELECHOWSKI thanked everyone for testifying and
adjourned the meeting at 6:56 p.m.
| Document Name | Date/Time | Subjects |
|---|