SB 188-BULK FUEL REVOLVING LOAN FUND CAP  1:58:23 PM SENATOR DONALD OLSON, Sponsor, paraphrased the sponsor statement: I introduced SB 188 at the urging of members of the Governor's Rural Energy Action Council. The council's April 15 report has many recommendations to help rural communities contend with rapidly escalating energy costs. SB 188 is one of their recommendations that, if enacted this session, will allow communities to offset rising fuel costs with large purchase economies achieved through the bulk fuel loan program. This is particularly of concern for those communities that are ice bound during the winter and depend on just one or two large shipments to supply their fuel needs for the entire year. Currently, the bulk fuel loan program has a maximum loan of $300,000 that any one borrower may take in a fiscal year. The effect of this cap during times of high fuel prices is to reduce the maximum amount of fuel that may be purchased. The bill will counteract this effect by increasing the cap to $650,000 for cooperative organizations that are purchasing bulk fuel for more than one community. The larger purchase for multiple communities should result in a lower per unit price for all users. The enactment of SB 188 will directly affect this fall's bulk fuel purchase for most of rural Alaska. The bill is timely and needed. 2:01:39 PM CHAIR GARY STEVENS asked for a motion to adopt the CS. SENATOR WAGONER motioned to adopt CSSB 188 \F version as the working document. There being no objection, it was so ordered. SENATOR OLSON explained there are two significant changes from the original bill. 1. It includes electric utility cooperatives as a cooperative corporation that may use the loan fund for multiple community fuel purchases. 2. It provides a more flexible loan cap increase for multiple community fuel purchases - "may not exceed $300,000 multiplied by the number of communities on whose behalf the bulk fuel is to be purchased, or $1,000,000, whichever is greater;" 2:03:49 PM SENATOR BERT STEDMAN asked if the CS is applicable to communities with good credit. SENATOR OLSON replied that's true; communities that place high regard on bill paying and good credit should be rewarded and should be able to get needed fuel. Without this cap communities will run short of fuel during the winter and it would need to be flown in, which would boost fuel costs dramatically. He said it's imperative to give communities the benefit of the doubt so they won't run short during the winter. NELS ANDERSON, Dillingham resident, testified that the bill would help cooperative purchasing, which is a goal REAC has established. Legislation that helps to bring down the cost of fuel for small communities across the state is good legislation. He encouraged members to support CSSB 188. 2:07:18 PM JIM MCMILLAN, Deputy Director of Credit & Business Development, Alaska Industrial Development and Export Authority and Alaska Energy (AIDEA) and Alaska Energy Association (AEA), stated support for SB 188. Forming cooperatives may help reduce the cost of bulk fuel purchases for rural communities. The change will allow a borrower that is a cooperative formed under AS 10.15 or an electric cooperative organized under AS 10.25 to borrow more than the current $300,000 limit. This is a step in the right direction, he said. CHAIR GARY STEVENS noted there were no questions or further testimony. He asked for a motion. SENATOR WAGONER motioned to report CSSB 188(CRA), \F version, and attached fiscal notes from committee with individual recommendations. There being no objection, it was so ordered.