HOUSE BILL NO. 243 "An Act relating to the maximum annual regulatory cost charge collected from certain regulated public utilities and pipeline carriers; and providing for an effective date." Representative Stoltze MOVED to ADOPT work draft for HB 243 labeled 24-GH1138\Y, Craver, 5.3.05. There being NO OBJECTION, it was so ordered. Representative Kelly observed that the legislation has the support of the Governor and Alaska Industrial Development and Export Authority (AIDEA). The legislation would extend for one year the opportunity for the Four Dam Pool utilities to create a financing agreement that is satisfactory to AIDEA. 9:23:16 AM Representative Hawker spoke in support of the legislation and pointed out that there would be a zero fiscal note from Department of Commerce, Community and Economic Development. 9:24:03 AM Vice-Chair Stoltze requested comments from Mr. Miller. RON MILLER, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY, (AIDEA), (via teleconference) explained that the one year extension would allow the Four Dam Pool power agencies to provide a financing plan demonstrating committed funds for completion of the Swan/Tyee project. According to the original Memorandum of Understanding (MOU), the Four Dam Pool Power Agency had until April 11, 2005 to provide such a financing plan to AIDEA. A plan contingent on state and federal grants was submitted, but not accepted. An alternative was proposed, which would require the Agency to deposit $5 million with AIDEA or Alaska Energy Authority (AEA) in an escrow account. The $5 million would be a credit that the Four Dam Pool Power Agency would be required to pay into the PCE endowment should they not come up with a financing plan showing committed sums to complete the project. This was agreed to in the MOU. He observed that AIDEA has proposed a mechanism to allow the Agency to retain interest on the $5 million proposal. He noted that AIDEA does not support of oppose the legislation. 9:27:20 AM In response to a question by Vice-Chair Stoltze, Mr. Miller clarified that the legislation pertains to the Four Dam Pool Power Agency and is not connected to Healy coal production. There is a potential impact to the PCE endowment. There could be a possible loss in earnings to the endowment from a one-year delay. He observed that it is a policy call for the legislature. 9:29:26 AM Representative Weyhrauch summarized that the legislation is an innocent extension to allow the parties to establish the terms of a MOU. The potential impact of the PCE is a by- product of the extension. In response to a question by Representative Weyhrauch, Mr. Miller noted that the Four Dam Pool Power Agency is a joint action agency that was created to acquire the Four Dam Pool assets from the Alaska Energy Authority. Wrangell, Ketchikan, Kodiak, Copper Valley and Petersburg make up the agency, which is not a state agency. The MOU agreement is between the AEA and the Four Dam Pool Power Agency. 9:31:24 AM Representative Kelly referred to "may" on page 4, line 10, which would benefit AEA and AIDEA. He noted that the Governor is in support of this bill. 9:32:26 AM Representative Hawker asked if the fiscal note was from the Regulatory Commission of Alaska and asked AIDEA if a zero note is appropriate. 9:32:58 AM SHARON FISHER, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY, (AIDEA), (via teleconference) stated that the fiscal note should be indeterminate due to the loss of a year's worth of interest, if money is not held in escrow. 9:33:57 AM Representative Hawker MOVED to remove of the Regulatory Commission of Alaska fiscal note and adopt an indeterminate note from AIDEA. There being NO OBJECTION, it was so ordered. Representative Kelly agreed with the indeterminate note. Vice-Chair Stoltze said he is operating under a good-faith effort by allowing an indeterminate fiscal note. 9:35:48 AM Representative Kelly MOVED to report CSHB 243 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 243 (FIN) was REPORTED out of Committee with a "no recommendation" recommendation and with a new indeterminate fiscal impact note by the Department of Commerce, Community and Economic Development. 9:36:28 AM