SENATE BILL NO. 42 "An Act relating to the procurement of supplies, services, professional services, and construction for the Alaska Energy Authority; establishing the Alaska Railbelt energy fund and relating to the fund; relating to and repealing the Railbelt energy fund; relating to the quorum of the board of the Alaska Energy Authority; relating to the powers of the Alaska Energy Authority regarding employees and the transfer of certain employees of the Alaska Industrial Development Export Authority to the Alaska Energy Authority; relating to acquiring or constructing certain projects by the Alaska Energy Authority; relating to the definition of 'feasibility study' in the Alaska Energy Authority Act; and providing for an effective date." 10:46:14 AM Co-Chair Hoffman proposed committee substitute, work draft #27-GS1822/E, Kane, 4/15/11. Co-Chair Stedman OBJECTED. 10:46:41 AM DARWIN PETERSON, STAFF, SENATE FINANCE COMMITTEE, explained the CS. He stated that Sections 1, 3, 12, 16, and 17, which would have created the Alaska Railbelt Energy Fund, were removed from the previous CS. He noted that Sections 2 and 5 were also removed. The sections would have permitted the Alaska Energy Authority (AEA) to hire their own employees and advisors in the exempt service. He continued that previous Sections 14 and 15 were also removed. He stated that previous Sections 7, 8, 10, and 13 were removed. Those sections would have empowered AEA to establish subsidiary corporations to support the acquisition, construction, ownership, and operation of any power projects. Section 2 was amended, which allows AEA legislative approval to acquire a Susitna River project. A new section of uncodified law was added beginning on Page 4, Line 21, Subsection (a), which provided legislative approval for AEA to loan up to $11 million from the power project fund for the Reynolds Creek hydro-project. Subsection (b) provided legislative approval for AEA to loan up to $5 million from the power project fund for the Humpback Creek hydro- project. Co-Chair Stedman mentioned two fiscal notes from the Department of Commerce, Community and Economic Development. One fiscal note originated from the Alaska Industrial Development Export Authority (AIDEA) for $1,125,000 in interagency receipts for eight staff positions in the Susitna project office. One fiscal note originated from AEA for $1,763,000 in Capital Improvement Projects (CIP) receipts. 10:48:45 AM Co-Chair Stedman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. Version E was adopted. SARAH FISHER-GOAD, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY, discussed the CS. She mentioned the policy target to reach 50 percent of renewable energy by 2025. She noted that in November of 2010, AEA declared that the Susitna River Project was best suited to meet the policy target. She explained that the legislation allowed the AEA to construct the project. She stated that pending legislation, AEA will file a preliminary application document with the Federal Energy Regulatory Commission. An additional provision was the correction of a Board of Directors quorum from four to seven members. Co-Chair Stedman asked if she was comfortable with the bill's version. Ms. Fisher-Goad responded that the original intent was broader in scope to allow AEA to construct and own new projects and to hire new employees. She commented that the legislation allowed for the new hydro-project. 10:52:24 AM Senator Olson asked about the employees hired for the extensive hydro-project. Ms. Fisher-Goad responded that the Bradley Lake Hydroelectric project was exhibited as a model endeavor. She expected that the employees would be hired specific to the development of the project and would work short-term. She stated that the operation mode would include contracting with the private sector for long-term employees. 10:53:45 AM Senator McGuire applauded Ms. Fisher-Goad for her work. She thanked Senator Thomas for his leadership championing the project and the legislation. She expressed pride in Co- Chair Hoffman and the governor for their contributions as well. She stated that the day was monumental for Alaska. 10:55:05 AM RICH WILSON, PRESIDENT, ALASKA RATEPAYER ASSOCIATION (via teleconference), testified in favor of the legislation. He applauded the leadership responsible for their work on the legislation. He emphasized the importance of the successful hydroelectric energy. He mentioned various members of his organization. 10:56:55 AM RICH WILSON, PRESIDENT, ALASKA RATE PAYERS (via teleconference), testified in support of the legislation. He thanked the committee for their leadership. He stated that the lowest rates to the rate payer would be achieved by a well-organized and efficient entity. FRANK MIELKE, testified in favor of the legislation. He spoke about the power of eminent domain, which he opined contributed greatly to the timeliness of a project. Ms. Fisher-Goad commented on the testimony provided. She mentioned a provision stating that AEA will exercise eminent domain. CSSB 42 was HEARD and HELD in Committee for further consideration.