HB 306-STATE ENERGY POLICY    4:22:27 PM CO-CHAIR MCGUIRE announced consideration of HB 306 [CSHB 306(RES) was before the committee]. REPRESENTATIVE BRYCE EDGMON, sponsor of HB 306, related that last year a stakeholders' group met every month to consider all the various aspects of putting a state energy policy together. The group had membership from the supply and demand side of the energy equation, the academic side, the Denali Commission, as well as the Resource Development Council and members from the conservation community. In December they emerged with an energy policy and that energy policy, while it has been amended somewhat, is before them in HB 306. It passed the House with great vigor. 4:24:47 PM CO-CHAIR MCGUIRE said the committee enjoyed working with him on this issue and the policy language in the Senate bill mirrors the policy in this bill. She said that Senator Huggins had taken a leadership role on the subject of nuclear energy and the potential Alaska has there, and the Senate bill was amended to reflect that. She asked what he thought about adding "alternative energy" alongside "renewable energy". REPRESENTATIVE EDGMON replied that it is worth considering. 4:26:03 PM CHRIS ROSE, Executive Director, Renewable Energy Alaska Project (REAP), introduced himself. He listed the members of the Stakeholder Advisory Panel that was put together by the co- chairs of the House Special Committee on Energy. He said it started with a relatively small document that grew to seven pages. All realized that what they were really after was a comprehensive energy policy that would set up sidebars for planning decisions and goals down the road. 4:29:27 PM BILL POPP, Anchorage Economic Development Corporation (AEDC), said the design was to develop an overarching energy policy that would be the foundation for establishing energy goals and then plans while taking into account regional differences. State government would be aligned in a unified set of strategic goals which would help in developing a comprehensive energy plan to achieve them. The policy leaves a lot of room for new thinking and new direction. 4:30:57 PM MR. ROSE said it has four key steps: establishing the energy policy, developing strategic goals, creating the plan to achieve the goals and implementing programs and projects. People always came back to the fact that they were establishing an energy vision for the state and not talking about projects and plans. The bill is entitled "State Energy Policy" and has five goals, number five was added by the House for the State to become a leader in natural gas production, and that is where the renewable alternative energy policy is in the bill. 4:32:40 PM MR. POPP turned to the guiding principles that pushed this process and said the future success of the Alaska statewide economy is tied to available, reliable and affordable energy for residential, commercial and industrial users. Energy is key to the future of economic growth in Alaska. They also recognized that worldwide supply and demand for fossil fuels and concerns about global climate change will affect the price of fossil fuels in the future. Oil is already being seen in the mid-$80s when just a few months ago it was down in the $30s and a little over 1.5 years ago it was up near $150 a barrel. Assuring stability in energy prices and energy availability is paramount. They don't have to guarantee the lowest prices, but Alaskans shouldn't have to be paying the highest prices either. 4:33:48 PM MR. ROSE related that a few years ago the Tri-Borough Commission (the Mat-Su Borough, the Municipality of Anchorage and the Kenai Peninsula Borough) developed a private-sector oriented Energy Policy Task Force to deal with the issues Mr. Popp just mentioned. After meeting for about four months, they were able to come up with the policy they presented to the stakeholder group, and a large portion of the portfolio included renewables. The policy was developed initially for South Central Alaska, but was broadened into a statewide policy. 4:35:28 PM MR. POPP said the policy that has been passed out of the House promotes energy efficiency and conservation as a key premise as something that can be done immediately; it promotes development of renewable and non-renewable energy resources and recognizes the state has a portfolio of available energy sources. It orients towards market forces as to what solutions float to the top on a statewide-one-size-fits-all basis, but recognizing regional differences. It promotes economic development through long term sources of energy that are going to be vital to communities statewide in the coming decades. It supports energy research education and work force development so that Alaska can take advantage of the full value chain of energy development, not just the end cost of delivered energy. Research could be monetized and the educational aspects would be important to establishing Alaska as a center for energy research, as wells as the work force development pieces to establish these energy infrastructures and develop and deliver them cost effectively. It supports the coordination of governmental functions and promotes a better regulatory process so that regulations are developed within the umbrella of an energy policy and not in an individual agency's vacuum. This will bring an overall coordination and efficiency that is currently lacking at all levels of state government when it comes to energy policy. 4:37:50 PM MR. ROSE concluded that both the task force and the House have put together a document that establishes a long term vision that can be used to develop and achieve energy goals. A lot of the work done on bills such as SB 220 complement this work, but a lot of things have yet to be addressed; and having this policy pass is going to be a key element to making sure the best energy resources are available to Alaskans - something that has been missing. 4:39:10 PM CO-CHAIR WIELECHOWSKI said one difference between the House and Senate versions is that the intent is written into the House version and the Senate version includes a letter of intent. He asked how they feel about this. MR. POPP responded that he feels the intent needs to have the force of law, otherwise it becomes subject to the whims of a given year's policy. 4:40:36 PM CO-CHAIR WIELECHOWSKI asked Michael Nave if the administration had any opinion on the question of intent versus having policy in statute. MICHAEL NAVE, Department of Law (DOL), replied that the department understands that it is a policy statement and therefore, that is how they've been analyzing it. CO-CHAIR WIELECHOWSKI said bluntly when his staff met with DOL staff, the DOL was adamant that they did not want the intent in law, but would prefer it as intent. He asked if that position has changed. MR. NAVE answered no, that was the request and it was understood that this was a policy statement. SENATOR WIELECHOWSKI asked if he has an opinion or preference on whether or not this should be policy in law or policy in intent. MR. NAVE said his opinion is that this statute as written is a statement of policy. 4:42:26 PM SARAH FISHER-GOAD, Deputy Director, Operations, Alaska Energy Authority (AEA), said regarding concerns about having the policy in Title 44.99 rather than in un-codified law as in SB 220, that the preference is to have it as it is in SB 220. Part of the reason is that AS 44.99 hasn't been amended to add new policies for several years which was due to the potential for litigation. She had offered the staff some language that would address some of the concerns the department has with SB 220, and they are catching up with where HB 306 comes in. She believed the confusion came up when Senator McGuire mentioned that the Senate bill "mirrored" the House bill. She added that two other minor changes will help with policy language. CO-CHAIR WIELECHOWSKI said he thought he just heard that DOL has no problem with HB 306 as policy and asked if she heard something different. MS. FISHER-GOAD replied that her understanding is that they prefer SB 220, and HB 306 would be OK with the suggested amendments. 4:45:34 PM STEVE HAGENSON, Executive Director, Alaska Energy Authority (AEA), commented that he was not a member of the committee, but they invited him to participate. He enjoyed the interaction he had with staff from both bodies and the work group. He thought they produced a quality document. 4:46:20 PM CO-CHAIR WIELECHOWSKI asked if he supports HB 306. MR. HAGENSON answered yes. 4:46:52 PM BRIAN KANE, Legislative Legal, Legislative Affairs Agency, Alaska State Legislature, said he was available for questions. 4:47:13 PM ELIZABETH OUTTEN, Statewide Energy Coordinator, Alaska Conservation Alliance, said they support both HB 306 and SB 220. They show a commitment to long term energy planning and it continues to put Alaska on an economically viable sustainable stable energy path to the future, and provides the very much- needed vision to help guide the state's energy decisions. The Alliance strongly supported including provisions encouraging the state and public focus on energy efficiency first, and it has identified it as a priority issue for this session. They support the establishment of statewide energy efficiency codes to decrease energy use in public buildings through efficiencies and educating the public about opportunities and support that is available to them to be more energy efficient. MS. OUTTEN said they also support the renewable energy development provisions because Alaska has so many opportunities to meet its energy needs with renewable energy. Finally, they also support the provisions that help Alaska become a leader in energy development and deployment of new energy technologies. The Alliance had identified emerging technology development and deployment as a priority issue for this session. They were excited to see these provisions included in SB 220. 4:49:26 PM CO-CHAIR WIELECHOWSKI closed public testimony. 4:49:43 PM REPRESENTATIVE EDGMON closed by thanking everyone for the time and work they put into this document and emphasized the importance of putting the goals and objectives in the front part of the bill into policy. SENATOR HUGGINS thanked Representative Edgmon for his effort. 4:51:50 PM CO-CHAIR WIELECHOWSKI echoed those comments and finding no further business to come before the committee, he adjourned the meeting at 4:51 p.m.