SB 71-ALTERNATIVE ENERGY FOR PUBLIC WORKS  12:12:17 PM CHAIR MCGUIRE announced the consideration of SB 71. DAVE STANCLIFF, Staff to Senator Gene Therriault, sponsor of SB 71, said this bill is simply a piece of legislation to prepare Alaska for the alternative energy resources that are happening everywhere around the state. Everyone is familiar with the Alaska Energy Authority (AEA) report, and Senator Therriault has several communities in his district that are looking at something other than fossil fuels to provide energy and heat for buildings. The state has a tremendous number of public facilities and DOTPF involves itself in the designing process of building them. SB 71 suggests that DOTPF, as they consider the design of these public facilities, look at what may be coming on line and if they think those resources could play a part in solving some of the energy problems they could incorporate accommodations for those facilities in their designs. A good example of that would be biomass as people from Southeast and Interior Alaska are working on producing wood biomass to heat public facilities - something that is occurring in the Lower 48 as well. MR. STANCLIFF reasoned if a facility is designed with only one small boiler room and one boiler and it happens to be fossil fuel, and along comes a biomass source of energy, a retrofit will be costly and time consuming. Whereas if they had just increased the size to allow for a secondary fuel source such as biomass to be used, there will be tremendous savings to the state. This does not require DOTPF to make those decisions, but simply requires them to do an assessment and to make a determination, hopefully in concert with AEA and other folks, as to what may be coming down the line in terms of energy. In closing he said Senator Therriault has had him working on alternative energies issues. The Tok school was about to put in the first biomass heating system that is estimated to save $80,000 to $100,000 per year with fuel prices at $3/gal - and they were $5/gal last year. When folks came out to look at their utility room, the comment from the AEA engineer is if this building were just six feet wider and four feet longer they wouldn't have to add on to accommodate the new facility. 12:16:01 PM CHIRISTOPHER HODGIN, Project Manager, Department of Transportation and Public Facilities (DOTPF), explained that when they implement a retrofit for any viable alternative energy systems, they would be able to prepare for the costs to implement them. They won't be able to totally eliminate retro fit costs, but this bill will help minimize them. When determining a viable energy alternative system, they would also like to be able to consider maintenance costs so that the entire life cycle costs of that alternative can be evaluated overall with the building when it's constructed. 12:17:54 PM JEFF HERMANS, Forester, Tok area, Division of Forestry, Department of Natural Resources (DNR), said he was involved in the Tok school project that was just funded by AEA. That project provides four full time jobs in Tok, a special benefit to the community and the state. He said that right now diesel is $3.80 per gallon in Tok, its unemployment is 40 percent and in the outside villages it's 70- 80 percent. Tok has the school, DOTPF, low income housing, senior citizens, Head Start building, DNR Forestry, Troopers and the Courthouse - all state buildings - and they use 100,000 gallons of fuel oil per year. In ten years that's $2 million that leaves Tok and goes to the oil companies! A local contractor already makes pellets, and if those facilities used renewable resources such as pellet furnaces, they could have a bulk fuel pellet contract with them. For a small business to have a contract for $200,000 of their product every year would be a substantial benefit. The State of Alaska says they want to do renewable energy, and the best way to promote the use of it is to practice it themselves. The amount of fuel oil being burned by public facilities across the state is overwhelming. MR. HERMANS suggested that if the state did start doing this that it look at public facilities per region instead of "shotgun effect" over the entire state, because they have to get to an economy of scale. 12:20:58 PM DANA OLSON, representing herself, said she faxed testimony on SB 71. She just became aware of an Alaska Energy Authority book through the Legislative Information Office, and there are a lot of bills passing. Maybe they should reconsider some of those bills because they are on documents that are not publicly available. 12:23:31 PM MR. STANCLIFF reminded people that the AEA report is available on the Governor's website. SENATOR THERRIAULT, sponsor of SB 71, said with the passage of the alternative funding mechanism last year, the state is helping with the supply side of alternative energy sources. If the state builds into the state's facilities the ability to be a consumer, then it can help on the demand side, too. In communities like Tok or Glennallen, if there is a garage or a trooper facility that has the capability of providing heat for the facility, that provides a base demand in the community which allows the fixed cost for the pellets to be spread over a larger demand and lowers the cost for all the private consumers, too. 12:25:11 PM SENATOR WIELECHOWSKI moved to report SB 71 from committee with individual recommendations and attached fiscal note(s). There being no objection, the motion carried.