SB 202-RENEWABLE ENERGY GRANT FUND  3:33:27 PM CHAIR REVAK announced the consideration of SENATE BILL NO. 202 "An Act relating to the renewable energy grant fund and recommendation program; and providing for an effective date." CHAIR REVAK noted that this was the first hearing for SB 202 in this committee. 3:34:02 PM EMMA TORKELSON, Staff, Senator Joshua Revak, Alaska State Legislature, Juneau, Alaska, presented SB 202 on behalf of the sponsor. She spoke on the following sponsor statement: [Original punctuation provided.] SB 202 extends the authorization of the Renewable Energy Grant Fund and Recommendation Program setting a new sunset date of June 30, 2033. The Renewable Energy Fund (REF) program was originally established in 2008 with the passage of House Bill 152 and later received a ten-year extension in 2012, in both cases receiving a unanimous vote of the legislature. The REF is managed by the Alaska Energy Authority in coordination with a nine-member Renewable Energy Fund Advisory Committee. Since its inception in 2008, the Renewable Energy Fund has distributed over $275 million dollars in grant funds for qualifying and competitively-selected renewable energy projects across the state. These REF grants have been supplemented by both federal and local funding to the tune of hundreds of millions of dollars. These combined funds help to stabilize and reduce energy costs for consumers by supporting renewable energy projects in both urban and rural communities across Alaska. As technology has improved and the available renewable energy sources have expanded, so too has the number of proposed projects. In the last application cycle, 39 applications from around the state were submitted. As energy prices climb, it is important to take advantage of all alternative sources of energy and heat, especially in our most vulnerable communities. The Renewable Energy Grant Fund is an important tool which supports Alaskan communities meet their energy needs. Please join me in supporting SB 202 and a ten-year extension of the Renewable Energy Fund, which will continue to support energy independence in more of Alaska's communities. MS. TORKELSON pointed out that two senators and two representatives serve on the nine-member Renewable Energy Fund Advisory Committee along with appointees from other designated groups. SB 202 also sets an immediate effective date. The fund operates by sending out open applications in rounds. The Alaska Energy Authority (AEA) considers each submission for its economic and technical feasibility. AEA's recommendations are forwarded to the advisory committee before they are submitted to the legislature for approval. 3:36:46 PM SENATOR KAWASAKI asked how many gallons of fuel have been saved in the past ten years. 3:37:11 PM CURTIS THAYER, Executive Director, Alaska Energy Authority, Anchorage, Alaska, answered that approximately 30 million gallons of diesel fuel have been displaced annually, primarily by renewable energy. CHAIR REVAK asked former representative Bill Thomas to testify on SB 202. 3:37:55 PM BILL THOMAS, Representing Self, Haines, Alaska, spoke on SB 202 as sponsor of the original Renewable Energy Fund legislation. He served in the House of Representatives for eight years, and this was one of his primo bills. He and then Speaker Harris had similar bills. They merged those two bills into one piece of legislation, the renewable energy grant fund, a program aimed at reducing energy costs in rural communities. The legislature allocated 50 million dollars per year for renewable projects years ago. Over time allocations are less, but the fund still receives money. The Renewable Energy Fund program works. The fund helped several Southeast communities switch to hydroelectric energy, reducing their energy costs by 30 to 40 percent. Several communities have a combination of wind and hydroelectric power. He expressed his belief that several communities now have almost 100 percent renewable energy. He expressed happiness with the efforts of groups and organizations like the Inside Passage Electric Cooperative (IPEC), which has supported this legislation and has worked with many Southeast villages on hydropower installations. The program has benefitted many communities, and hopefully, the legislature will renew SB 202 for ten more years. 3:40:46 PM CHAIR REVAK opened public testimony on SB 202. 3:41:15 PM MICHAEL ROVITO, Deputy Director, Alaska Power Association (APA), Anchorage, Alaska, testified in support of SB 202, stating APA is a statewide trade association for electric utilities in Alaska. APA members provide power to more than half a million Alaskans from Utqiagvik to Unalaska, throughout the Interior and Southcentral, and down the Inside Passage. APA thanks Chair Revak for sponsoring this bill, supports extending the renewable energy grant fund, and urges passage of SB 202 this session. Many APA electric utility members have received crucial funding from REF since its inception. These funds have supported the addition of REF projects that lowered reliance on diesel fuel, stabilized rates, and decreased the carbon footprint of electric generation. The Renewable Energy Fund contributed to over 95 operating projects, totaling 244 grants and $275 million since its inception, resulting in savings of over 30 million gallons of diesel fuel each year. So, it is clear that REF is an extremely valuable program that has proven worthy of continued operation. Also, numerous projects are still under consideration for future grant funding rounds. These projects, like past projects, will be chosen through a deliberative AEA process and reviewed by the Renewable Fund Advisory Committee. By extending the sunset date of the program, electrical utilities in Alaska will have certainty that REF will be available as long as they continue innovating power systems. 3:43:18 PM MR. THAYER spoke in support of SB 202, providing the committee with a brief REF financial overview. To date, REF has 95 operational projects, 38 are in development; REF contributed $34 million to Railbelt Projects and $248 million to rural Alaska, and REF brought in $138 million in matching funds. The legislature approved 11 projects in rural Alaska totaling $4.7 million last year. MR. THAYER said that this year's funding mechanism includes excess earnings from the Power Cost Equalization (PCE) program, the PCE endowment, and community assistance. $25 million will be divided between rural powerhouses, capitalizing on the revolving loan fund for bulk fuel and the REF program. The governor's proposed budget designated $15 of the $25 million to REF and $10 million to powerhouses. REF application round 14 received 39 applications totaling $19.2 million. The number of viable applications will drop as AEA goes through the evaluation process. AEA's goal is to submit $15 million in FY 23 project recommendations to the legislature in April. MR. THAYER pointed out that the Renewable Energy Fund did not receive funding for five fiscal years and only recently received funding for FY 22 and 23 and a little bit in FY 19. Despite the lean past years, the program put $15 million in earnings into the budget. 3:46:19 PM SENATOR KAWASAKI asked what happens when a project fails. MR. THAYER answered that when a project fails, the funds lapse back into the program. Round 13 funded 11 projects in rural Alaska, totaling $4.7 million, through closed-out outstanding grants, unexpended money, and canceled projects; this was a first in the program's history. AEA tries to recycle the program's money. 3:47:39 PM CHAIR REVAK found no further witnesses and closed public testimony on SB 202. He reiterated that SB 202 extends the sunset ten years. 3:48:04 PM SENATOR KIEHL moved to report SB 202, work order 32-LS1522\A, from committee with individual recommendations and attached fiscal note(s). CHAIR REVAK found no objection and SB 202 was reported from the Senate Resources Standing Committee.