SB 150-EMERGING ENERGY TECHNOLOGY FUND  CO-CHAIR WIELECHOWSKI announced SB 150 to be up for consideration. 4:18:22 PM CO-CHAIR MCGUIRE, sponsor of SB 150, said it basically creates a fund for emerging energy technologies. It's not funded within the bill, but it is merely a structure to receive funds or to be funded should better times come. It is set up not as a dedicated fund, but rather one that can receive funds should they be available. It will be administered by the Alaska Center for Energy and Power. She said that emerging energy technology is an important part of Alaska's future and funds like this have provided seed monies end up being an attractive incentive for new renewable companies to come in. They know it drives the attraction of grant dollars and the ability to co-partner with the federal government in matching grants. CO-CHAIR MCGUIRE explained that in recent years the Department of Energy has offered millions in federal grants that typically require as low as a 20 percent cost share at the state level, and this is the kind of fund that can offer those matching dollars. The stimulus package has alternative energy opportunities, and they are hoping this fund could serve as another mechanism to leverage and partner with those funds, as well. One of the things missing in alternative energy development is the research and development dollars - "the seed part of where some of these ideas grow out of." When you look at the AEA grants that the Senate Finance Committee put into place, they are talking about proven technologies that are out in the field. This fund is geared toward the research and development dollars that really happen more at the base level. CO-CHAIR MCGUIRE stated that at one point Alaska had an Alaska Science and Technology Fund and there is some impetus in that fund's existence for this bill although they are different. This is targeted specifically at emerging energy technologies. 4:22:13 PM The board members have to have a background in energy, engineering, technology and science; it should be based on science and not politics - a complaint when the Science and Technology Fund was being considered. Some people thought the projects that were approved out of it were political or regional in nature and not necessarily provable. They also wanted to make sure it was administered by an association that was separate from the University in the event that the University or a partner with the University chose to apply for any of these monies. That is how she came up with Alaska Center for Energy and Power (ACEP), but it could be administered out of a couple of other places. SENATOR HUGGINS moved to adopt CSSB 150(RES), version E. TREVOR FULTON, staff to Senator McGuire, said it's really version S. SENATOR HUGGINS amended his motion to adopt CSSB 150(RES) version S. There were no objections and it was so ordered. 4:25:25 PM MR. FULTON explained the changes in the version S. He said it incorporated Senator Wielechowski's request - a concern about the possibility of funding projects that were a little too far into the realm of science fiction. So, language was added that limits project eligibility to those that might become commercially viable within the next five years. The second change added a five-member advisory committee - providing a level of separation between the administering agency and the recipients of the grants. SENATOR FRENCH asked regarding ACEP being the administering agency (page 1, line 12) that it is the interdisciplinary research unit of the College of Engineering and Mines at the University of Alaska, but the idea was to provide some separation between the University and the administering unit to keep from any allegations of self-dealing should the University be eligible for one of these grants. MR. FULTON said he is correct, and pointed out language on page 2, line 28, through page 3, line 1, which delineated the makeup of the advisory committee that has no members from the University - that took care of that issue. 4:27:49 PM He said the third and final change in the CS was to expand the definition of eligible applicants to include both private sector and non-profit sector entities. When the bill was first drafted, language was borrowed from the Renewable Energy Fund that excluded some entities they wanted to include because that is where these sorts of projects get a lot of their in-kind partnerships. A good example would be Gwen Holdman's geothermal energy project in Chena Hot Springs. Part of the equipment was donated by UTC, a large corporation that developed the technology, but they gave it to her as sort of an in-kind partnership deal. They did not want to exclude those kinds of deals. SENATOR HUGGINS asked for an example of a quasi-government entity. MR. FULTON replied the University qualifies as a quasi- governmental entity as well as the Alaska Railroad. 4:29:46 PM LARRY PERSILY, staff to Representative Hawker, added that he has been working on energy issues for the legislature, and specifically the stimulus bill. He offered that whereas much of the focus of the legislature in the last few weeks has been on the energy provisions of the stimulus bill - the State Energy Program, the Energy Efficiency and Conservation Block grants - those are funding for off-the-shelf technology and home energy improvements, not research and development money. However, the stimulus bill also has funding sources that deal with R&D and this would be one way for the state "to get into the game." 4:31:23 PM SENATOR HUGGINS stated that the state is doing all these things with energy, but it doesn't have an energy policy. Did he see the need for an umbrella policy under which to operate before they get too many things going? MR. PERSILY said his instructions were to give information and not opinions, but he opined that the state's energy policy is somewhat diverse. It has the Alaska Energy Authority with its role, the Alaska Housing Finance Corporation, which is technically designated by the Governor as the State Energy Office with the U.S. Department of Energy, the University has offices - and it would behoove the state to coordinate them with in one form or another. 4:32:57 PM JASON MEYER, Alaska Denali Commission, said he is working to develop a renewable and alternative energy strategy for the Commission and supported SB 150. He said the Denali Commission is an independent federal agency designed to provide critical utilities infrastructure and economic support throughout Alaska. With the creation of the Alaska Denali Commission, Congress acknowledged the need for increased inter-agency cooperation and focus on Alaska's rural communities. The Commission's Energy program focuses on bulk fuel power plants and renewable alternative energy. Recently the Commission's energy advisory committee discussed strategy for continued investment in alternative and renewable energy and supportive testimony was heard on their involvement in emerging alternative energy developments at their quarterly meeting in Juneau last week. The Commission has historically been involved in emerging technology pilot projects, several of which are the Eagle River Hydrokinetic project, the Chena Hot Springs geothermal project and the high voltage direct current (HVDC), feasibility and prototype design. "Without the investment of such emerging technologies, new options for energy in Alaska would be limited," he said. MR. MEYER said the Commission is tracking efforts related to emerging technologies that seem consistent with their renewable and alternative energy strategy which currently includes a $10 million budget. It is currently developing an MOU with the University of Alaska's Center for Energy and Power and the National Renewable Energy Lab. Their goal is to leverage resources and expertise to support emerging technologies in Alaska in the hopes that successful new options can be developed and put to use. 4:35:26 PM PAUL KENDALL, representing himself, said he is very concerned about Mr. Haagenson at AEA. In 1981 it dropped several magnificent programs like the hydrogen conversion at Old Harbor. He said the real truth is "that our real partnership lies in waterways - the Cook Inlet, the Turnagain Arm, the Knik Arm and various other bodies close in, and it can be immediate within three to six years." Whenever he sees new divisions, he sees people "who know how to work the system" to capture these funds and then they go out with their elite group of people who think they are special. These same people have energy forums where you have to pay a lot of money to see them, but the state's money put them where they are. "The whole thing has just become perverse, at best." 4:39:44 PM KATHERINE KEITH, Alaska Center for Energy and Power (ACEP), said she works with coordinating wind diesel systems within the Wind Diesel Application Center, which was developed with partnerships between National Energy grants, the Alaska Energy Authority and ACEP. She said energy is foremost in everybody's mind, yet Alaska that has the highest energy costs and some of the most th complex and difficult issues to deal with in the U.S., ranks 46 in research and development for renewable energy. We need to invest in energy projects, policy and research. AEA has no has mandate or capability to engage in energy research, she stated. The question needs to be asked what kind of research exists in the state. Wind turbine verification could be successfully deployed in Arctic environments, energy storage systems are needed for high penetration wind diesel systems, and waste heat recovery needs development. Utilities in rural Alaska are really struggling to find proven technologies that are beneficial to their communities without a high risk factor. Kotzebue Electric over has become a leader in energy innovation to supplement their diesel consumption over the last couple of years using such ideas as land fill gasification, waste heat recovery, waste heat power generation, and energy storage, electric vehicles, and so on. Each of these technologies is considered pre-commercial and not, therefore, eligible for state funding. Yet each of these technologies offers great promise to those communities. Another example would be the Venadium readout slow battery (VRB), which would help stabilize St. Paul Island's high penetration wind systems. The VRB is sitting at UAS right now, but there is no funding to analyze the data from that equipment. MS. KEITH said with a 20-percent match the state could receive funding from many sources. ACEP is already involved in programs to test new battery systems, waste heat recovery devices and hydro-kinetic turbines, the goal being to insure manufacturer claims are accurate and to insure that these systems will perform in Alaska. After the Chena Hot Spring Geothermal plant was installed a lot of attention was paid to this type of technology. This emerging technology fund will allow projects like this to be proven in Alaska for Alaskan communities. She said there is a sense of urgency in considering available federal funds. She said SB 150 should be considered a sister program to HB 152. Efforts in emerging technology will ensure greater success with existing and future HB 152 projects. Lastly, she said other research programs exist in the Lower 48, but they are not appropriate for Alaska's unique conditions. 4:44:41 PM D. DOUGLAS JOHNSON, Director, Alaska Projects, Ocean Renewable Power, said they are currently working on two projects in Alaska, one an ocean energy project and the other a river energy project. He said his company wouldn't be where it is today had it not received funds from similar agencies in the states of Maine and Massachusetts. This fund is something Alaska needs now. Alaska is one of the few places in the world that has a full suite of renewables available. To be able to fully utilize that suite of renewables, the technologies to do have to better understood. This is an opportunity for Alaska to be a leader in this area. The one-to-four ratio for every dollar the state puts in makes the federal stimulus funding is a good deal for Alaska. 4:47:31 PM KATE TROLL, Executive Director, Alaska Conservation Alliance (ACA), supported SB 150 for many of the reason already stated. She said that the clean energy business is looked at as a $55 billion/year industry - one of the few bright spots in today's slumping economy. This figure is projected to quadruple by 2015. She added that setting up this fund positions Alaska to leverage a lot of not just federal funds, but a lot of private investment in energy. CO-CHAIR WIELECHOWSKI closed public testimony and held SB 150 in committee.