SB 42-POWER PROJECT; ALASKA ENERGY AUTHORITY  3:32:43 PM CO-CHAIR PASKVAN announced SB 42 to be up for consideration [CSSB 42 (RES), 27-GS1822\D, was before the committee]. He said the title is changed to conform with changes to the original bill. In the original version the Senate sought to modify the state's procurement code. This committee substitute (CS) deletes that language so that there are no statutory changes relating to the Alaska Energy Authority (AEA) and procurement. The CS also makes changes to the Alaska Railbelt Energy Fund, preserving the legislature's authority to appropriate. Finally and most significant, the CS makes changes relating to the creation of subsidiaries and this is found on page 6; it makes the subsidiary created by this legislation specific to the Watana Hydroelectric Power Project on the Susitna River. He said the fiscal note for SB 42 is not impacted by any of these changes and will remain the same. These changes were considered after going through the committee process and incorporating language advanced by Mr. Brian Bjorkquist from the Alaska Department of Law. 3:34:30 PM SENATOR MCGUIRE joined the committee. 3:35:01 PM SENATOR STEDMAN moved to adopt Amendment 1, labeled 27- GS1822\D.11, as follows: 27-GS1822\D.11 Kane 3/21/11 AMENDMENT 1 OFFERED IN THE SENATE BY SENATOR STEDMAN TO: CSSB 42(RES), Draft Version "D" Page 1, lines 1 - 10: Delete all material. Insert "An Act relating to a Susitna River  hydroelectric project and to the power of the Alaska  Energy Authority to apply for permits, licences, and  approvals; and providing for an effective date." Page 1, line 12, through page 7, line 19: Delete all material and insert:  "* Section 1. AS 44.83.080 is amended to read: Sec. 44.83.080. Powers of the authority. In furtherance of its corporate purposes, the authority has the following powers in addition to its other powers: (1) to sue and be sued; (2) to have a seal and alter it at pleasure; (3) to make and alter bylaws for its organization and internal management; (4) to adopt regulations governing the exercise of its corporate powers; (5) to improve, equip, operate, and maintain power projects and bulk fuel, waste energy, energy conservation, energy efficiency, and alternative energy facilities and equipment; (6) to issue bonds to carry out any of its corporate purposes and powers, including the establishment or increase of reserves to secure or to pay the bonds or interest on them, and the payment of all other costs or expenses of the authority incident to and necessary or convenient to carry out its corporate purposes and powers; (7) to sell, lease as lessor or lessee, exchange, donate, convey, or encumber in any manner by mortgage or by creation of any other security interest, real or personal property owned by it, or in which it has an interest, when, in the judgment of the authority, the action is in furtherance of its corporate purposes; (8) to accept gifts, grants, or loans from, and enter into contracts or other transactions regarding them, with any person; (9) to deposit or invest its funds, subject to agreements with bondholders; (10) to enter into contracts with the United States or any person and, subject to the laws of the United States and subject to concurrence of the legislature, with a foreign country or its agencies, for the construction, financing, operation, and maintenance of all or any part of a power project or bulk fuel, waste energy, energy conservation, energy efficiency, or alternative energy facilities or equipment, either inside or outside the state, and for the sale or transmission of power from a project or any right to the capacity of it or for the security of any bonds of the authority issued or to be issued for the project; (11) to enter into contracts with any person and with the United States [,] and, subject to the laws of the United States and subject to the concurrence of the legislature, with a foreign country or its agencies for the purchase, sale, exchange, transmission, or use of power from a project, or any right to the capacity of it; (12) to apply to the appropriate agencies of the state, the United States, and a foreign country and any other proper agency for the permits, licenses, or approvals as may be necessary, to maintain, [AND] operate, acquire, or construct power projects in accordance with the licenses or permits, and to obtain, hold, and use the licenses and permits in the same manner as any other person or operating unit; (13) to enter into contracts or agreements with respect to the exercise of any of its powers, and do all things necessary or convenient to carry out its corporate purposes and exercise the powers granted in this chapter; (14) to recommend to the legislature (A) the pledge of the credit of the state to guarantee repayment of all or any portion of revenue bonds issued to assist in construction of power projects; (B) an appropriation from the general fund (i) for debt service on bonds or other project purposes; or (ii) to reduce the amount of debt financing for the project; (15) to carry out the powers and duties assigned to it under AS 42.45; (16) to make grants or loans to any person and enter into contracts or other transactions regarding the grants or loans; (17) to promote energy conservation, energy efficiency, and alternative energy through training and public education;  (18) to acquire a Susitna River power  project, whether by construction, purchase, gift, or  lease;  (19) to perform feasibility studies and  engineering and design with respect to a Susitna River  power project.  * Sec. 2. AS 44.83.396(a) is amended to read: (a) A power project that was acquired or constructed under AS 44.83.080(18) or as part of the former energy program for Alaska is owned, and shall be administered, by the authority. * Sec. 3. This Act takes effect immediately under AS 01.10.070(c)." CO-CHAIR PASKVAN objected for purposes of discussion. SENATOR STEDMAN said he has a lot of concerns with the bill and how it interrelates with the other utilities in other areas around the state even though he supports moving ahead with Watana. This amendment removes the split of AEA with Alaska Industrial Development and Energy Authority (AIDEA). It would also remove the authorization for AEA to create subsidiaries (except for the issue of moving forward with Watana). It would create a new Alaska Railbelt Energy Fund and authorize its capitalization and it would remove conditional effects in notification language. So, the bill would change its focus on planning and funding for large-scale Railbelt hydroelectric projects and it would allow the project to move forward and the legislature to work with the administration to address secondary issues in the future. He said he believed this was the best approach to moving Watana forward so they are focused on the large hydroelectric project for the Railbelt and don't get derailed "into a litany of other issues around the state dealing with other smaller utilities and impacts on other communities." SENATOR STEDMAN then withdrew Amendment 1. CO-CHAIR PASKVAN stated that they now have CSSB 42(RES), version D, before them. SENATOR WIELECHOWSKI said didn't know that it was necessary to have administrative clerks, for instance, in the exempt status, but he had decided to not offer an amendment at this time and would rather probably talk to the co-chair of Finance about it. CO-CHAIR PASKVAN found no further comments and said he was satisfied with the work this committee has done on this bill. CO-CHAIR WAGONER moved to report CSSB 42(RES) from committee with individual recommendations and attached fiscal note(s). There were no objections and it was so ordered. 3:39:22 PM At ease from 3:39:22 PM to 3:42:15 PM.