HB 166-SOUTHEAST ENERGY FUND CO-CHAIR EDGMON announced that the next order of business would be HOUSE BILL NO. 166, "An Act relating to the Southeast energy fund." 3:26:34 PM REPRESENTATIVE BILL THOMAS, Alaska State Legislature, speaking as the sponsor of HB 166, paraphrased from the following written sponsor statement: In 1993 the Alaska State Legislature established the Southeast Energy Fund as a holding tank for money that could then later be used and appropriated to the Swan Lake-Tyee Hydroelectric Project. Since then, the need and fervor for hydroelectric power in Southeast Alaska has grown. Hydroelectric power is the most readily available source of renewable energy in Southeast. Some people refer to Southeast as the Saudi Arabia of renewable. However, despite this source of renewable energy, most communities in Southeast Alaska remain heavily dependent upon diesel generated electricity. REPRESENTATIVE THOMAS related the highest rate for electricity is $.83 per kilowatt, before Power Cost Equalization (PCE), with an average of $.58 per kilowatt. He opined the high cost of electricity has crippled communities. House Bill 166 broadens the authority of the Southeast Energy Fund to include all power projects within Southeast Alaska. In fact; it allows for a funding mechanism for the construction of power generation projects in Southeast and for the completion of the regional electrical intertie. Representative Thomas pointed out Haines has an intertie with Skagway; however, there is a 3-5 percent growth in the demand for electricity each year. He acknowledged that regions of the state compete for funds and stressed that regional pools of funds are best. 3:31:18 PM REPRESENTATIVE TUCK called attention to page 1, line 12, of the bill and asked for an explanation of the reference to "the authority." 3:31:44 PM KACI SCHROEDER-HOTCH, Staff to Representative Bill Thomas, Alaska State Legislature, informed the committee the authority referred to is the Alaska Energy Authority (AEA). 3:32:20 PM ROBERT VENABLES, Energy Coordinator, Southeast Conference, related his organization's support for HB 166, as it is a timely bill that will continue the progress in the development of natural resources in Southeast Alaska. He compared the bill with the Railbelt Energy Fund and said the bill would catch Southeast Alaska up with the Railbelt. Mr. Venables noted that the projects in the region will be costly, regardless of the investments that have been made in renewable energy. With the Congressional authorization of $384 million, there are vehicles that may bring funding into Southeast Alaska thus the need for a funding mechanism. He opined the needs of the system are for transmission lines for the intertie, and the development of capacity of other facilities along the intertie system. The total estimated cost for the planned projects in the region is in excess of $1 billion. He concluded the funding mechanism for these projects has always eluded his organization, and that is one reason Southeast Alaska is not ready when funds are available. Mr. Venables continued to explain that Southeast communities have worked together to forge a vision to develop their renewable resources into a regional electrical system, and HB 166 could be the mechanism that could facilitate this mission. 3:36:29 PM REPRESENTATIVE JOHANSEN asked whether the reference to hydroelectric projects on page 1, line 14, of the bill also includes interties. MS. SCHROEDER-HOTCH understood interties are included; however, if not, interties would be included in paragraph (2). 3:37:39 PM REPRESENTATIVE TUCK confirmed that the bill allows options for other funds to enter the fund, and that the [AEA] will be able to administer the funds as needed. Furthermore, the funds can be invested in other projects in the region. MS. SCHROEDER-HOTCH concurred. 3:38:28 PM CO-CHAIR EDGMON, upon determining no one else wished to testify, closed public testimony. 3:38:54 PM REPRESENTATIVE JOHANSEN moved to report HB 166, 26-LS0689\R, out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, HB 166 was reported from the House Special Committee on Energy. 3:39:20 PM The committee took an at-ease from 3:39 p.m. to 3:40 p.m. 3:40:58 PM