SENATE BILL NO. 289 "An Act relating to home energy conservation and weatherization for purposes of certain programs of the Alaska Housing and Finance Corporation." Co-Chair Hoffman, sponsor, announced that SB 289 was introduced to address energy needs throughout the state. JOHN WEISE, STAFF, CO-CHAIR HOFFMAN, referred to a handout entitled "SB 289 Home Energy" (copy on file.) He explained page 1, the Housing Assessment Survey 2005. It was estimated that in 2005 there were about 277,000 housing units in Alaska. The percentage of older housing was increasing and the percentage of newer housing was decreasing. Households eligible for weatherization - 60 percent of median income - numbered about 45,000. The number of households that reported being drafty was about 45 percent or about half of all houses in Alaska. Mr. Weise explained on page 2 that SB 289 would work with the Alaska Housing Finance Corporation (AHFC) to be more responsive to Alaskan's being impacted by high energy costs. The bill updates and expands the home energy efficiency and weatherization programs within AHFC. Mr. Weise turned to page 3, weatherization. The focus is on energy efficient improvements and directs available funding to items that will save the most energy. Typical improvements include air sealing, insulating, and improving heating efficiencies. Mr. Weise commented on page 4, Energy Efficiency and Weatherization Program. He related that after meeting with AHFC, a two-pronged approach was decided. The first was to focus on the weatherization program already in effect. It is a grant program available to Alaskans at the 60 percent median income level. This bill would raise the level to 100 percent median income. Low income Alaskans would continue to receive priority. Mr. Weise reviewed a graph on page 5, Median Income Guidelines. 3:02:33 PM Mr. Weise pointed out the impact of SB 289 as shown on page 6. In past years roughly $4.8 million was spent a year and 600 households were helped. Funding at the 60 percent level would not meet Alaska's needs. The expanded program, which would request $200 million, adjusts the median to 100 percent and would serve 17,400 households. Mr. Weise turned to the second program as describe on page 7, Home Energy Rating Rebate Program. Homeowners would need to self finance or get a loan and an energy audit would be required. The rebate would be based on improved energy star ratings. Mr. Weise detailed the Energy Star Ratings on page 8. Each step would equal an increase in the rebate. He shared expectations based on past research listed on page 9. There is an expected 30 percent reduction in home energy costs. Mr. Weise summarized SB 289 by saying it would be an improved and more flexible process for AHFC to respond to rising fuel costs. Existing AHFC programs will be more responsive and more Alaskans will be helped. 3:06:33 PM Mr. Weise summarized that the bill removes two programs no longer in existence. It adds energy efficiency, as shown on page 3, line 6 of the bill, and moves to 100 percent median income. Co-Chair Stedman requested a synopsis of the program's beginnings and successes. 3:07:47 PM DAN FAUSKE, CEO/EXECUTIVE DIRECTOR, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, thought that the weatherization program has been around for about 20 years. SCOTT WATERMAN, VALDEZ, reported that the weatherization program has been around since 1978. The home energy rebate program was in existence from 1992 to about 1995 when the funding ran out. It has not been reauthorized for refunding since then. Co-Chair Stedman asked how many years it has been underfunded. Mr. Fauske replied that there is a line item in the capital budget for weatherization. It was generally funded between $3.5 million and $6 million. He reported that the weatherization is especially effective now with high oil prices. He detailed how weatherization results in savings to a homeowner. Co-Chair Hoffman pointed out that housing construction is down at this time. Mr. Fauske explained that prior to the bill there was interest by home builders in home weatherization under the existing program. There is a great deal of excitement by home builders to implement an expanded program. 3:13:26 PM KATE TROLL, EXECUTIVE DIRECTOR, ALASKA CONSERVATION ALLIANCE (ACA), testified in support of SB 289. She related that energy issues are a priority in ACA's goals, especially in light of the energy crisis in rural Alaska. Many states have implemented such energy programs and have provided savings to home owners. She shared statistics about savings from such programs and about the possible reduction of carbon emissions. She emphasized that the bill provides short-term assistance and she encouraged support, also, for HB 252, which deals with investing in renewable energy. She added that SB 289 would create more jobs. 3:18:19 PM MEGAN WAGGONER, JUNEAU, testified in support of SB 289. She thought it was increasingly important for homes to be more energy efficient. She termed the subsidy an excellent incentive for people to start looking at their energy habits. She noted that rural communities would benefit the most from this legislation, but that all communities would be grateful. MADELIN SIEDLER, JUNEAU, spoke in support of SB 289. She related that she belongs to a generation that is beginning to value responsible resource consumption, and home energy efficiency is a keystone issue in this movement. She maintained that we have a duty to ourselves and to the future to conserve resources. She mentioned the financial benefits from this legislation. She called SB 289 a tremendous step in the right direction to a more sustainable energy future. SB 289 was heard and HELD in Committee for further consideration. AT-EASE: 3:21:06 PM RECONVENE: 4:01:20 PM