SB 190-ENERGY EFFICIENCY OF PUBLIC BUILDINGS  3:33:22 PM CHAIR MEYER announced the consideration of Senate Bill 190 (SB 190). 3:33:39 PM SENATOR TOM BEGICH, Alaska State Legislature, Juneau, Alaska, sponsor of SB 190, provided an overview as follows: This bill is a continuation and expansion of an existing piece of legislation that we are currently operating under. The State of Alaska is responsible for $650 million in energy costs associated with close to 5000 different facilities. In 2010 the Alaska Sustainable Energy Act set forth a goal of energy efficiency retrofits for 25 percent of our state buildings, those were buildings over 10,000 square feet. The goal was to get to that target of 25 percent by 2020. Our state was able to reach that goal by 2014 and Senate Bill 190 simply extends that program to schools and those other large community centers which are eligible for power-cost equalization; this creates incentives for buildings receiving state support for energy bills so that they may perform retrofits saving the state, school districts and communities money. I have spoken before in the Senate Education Committee and in other forums about the high cost of energy in rural schools and this would be a way of addressing some of those costs and ensuring that more of those energy cost that are diverted away from teachers can go back to teachers, for example. Senate Bill 190 proposes financing efficiency retrofits by incentivizing a successful private financing called "Energy Service Performance Contracts," or contracting "ESCOs," there's other names for these, you will hear those names described as we go through the process, but essentially it's a partnership with private companies to absorb the frontend of the cost of these retrofits so that we can benefit publicly on the backend. These processes in this contracting has minimal cost to the state upfront, the energy contracting companies pay for those upfront costs associated with the energy efficiency retrofits and then are paid back using those guaranteed cost savings. SB 190 sets a goal for the state and certain public buildings to enter into about a $100 million worth of these performance contracts by 2025 to pay for energy retrofits set forth in the bill. 3:36:25 PM SYDNEY LIENEMANN, Staff, Senator Begich, Alaska State Legislature, Juneau, Alaska, provided a sectional analysis of SB 190 as follows: Section 1  Outlines the legislative intent that the energy audits and retrofits outlined in this legislation be financed using service-performance-contracting mechanism where upfront construction costs are paid by a third party either using Alaska Housing Finance Corporation's energy efficiency revolving loan programs or by a contracting company with those costs paid back by guaranteed energy savings from those retrofits. Section 2  Adds to a statute regarding the Alaska Housing Finance Corporation to coordinate with the Alaska Energy Authority (AEA) when performing energy audits for community buildings eligible for power cost equalization (PCE) over 5,000 square feet. Section 3  Gives the Alaska Energy Authority, the Alaska Housing Finance Corporation, and the Department of Transportation and Public Facilities the authority to perform energy audits on community facilities eligible to receive power cost equalization over 5,000 square feet, and these are the three state entities with expertise or funding streams that are dedicated to performing energy audits or energy retrofits. Section 4  Requires that public schools receive energy audits on the same schedule as other public buildings as required by the Alaska Sustainable Energy Act which passed into law in 2010. Section 5  Defines those public schools excluding charter schools eligible for energy retrofits under this bill. Section 6  Outlines coordination between the Alaska Energy Authority and the Alaska Department of Transportation and Public Facilities to perform those audits on PCE eligible community facilities. Section 7  Since this legislation extends the universe of public buildings requiring energy audits, it extends the deadline and pushes that back to 2025 from 2020; it also makes this contingent on the financing being able to be paid off within 15 years so if those energy efficiency retrofits will payoff within 15 years and also says, "If funding is available," so it's not a mandate. Section 8  Expands buildings that described as public facilities to include educational buildings like schools and reduces the minimum size for buildings to be considered for retrofits from 10,000 square feet down to 5,000 square feet. Section 9  Adds to the section of Alaska statute governing the Alaska Energy Authority, a section which requires all PCE eligible public facilities to receive an energy audit every seven years unless the facility managers refuse the energy audit. AEA will work with the Department of Transportation and Public Facilities to identify public and private funding sources and perform the audits. 3:39:06 PM SENATOR BEGICH noted documents in the packets and pointed out Hawaii's fact sheet on a similar program where the state saved hundreds of millions of dollars. He referenced a document that detailed Alaska's school energy costs from 2007-2017 which indicates the high costs the state pays for energy in schools. He pointed out the Department of Transportation and Public Facilities' 2016 report on savings achieved on performance contracting. He concluded the document overview by addressing the state's current energy performance contracting policies which has saved $3.6 million. He summarized that for a small upfront amount of money, the state could save as much as $100 million on energy costs. 3:41:23 PM SENATOR GIESSEL addressed section 1 regarding legislative intent and read from the bill's sectional analysis and queried as follows: Upfront construction costs are paid for by a third party, it mentions Alaska Housing Finance Corporation or by a contracting company with those costs paid back using guaranteed energy savings. So, I'm looking at the fiscal note and it looks like the general fund appropriation, at least I'm looking only at the first year and I realize it drops slightly in the ongoing years, but it's $621,000, but it's $2 million and that looks like receipt authority. So, you're thinking that construction companies are going to fund this upfront and then somehow get their costs paid back through guaranteed energy savings, how does that work? SENATOR BEGICH explained as follows: This is exactly how we do it now and those savings have been realized and the little bit of general fund money you brought up, because we are going to be doing more audits, that's one of the reasons why you would have that. 3:43:07 PM MS. LIENEMANN explained the ESCO process as follows: The way it generally works is one of these contracting companies will set into a contract with the state or with the federal government and they will perform an audit to see how much money can be saved and there will be those guaranteed savings and then the money that you would normally be paying to your energy bill above the cost savings would go to the company to pay them off over the length of the contract, then after five years or ten years, whatever the length of the contract is, the contract company is done, you get to receive those energy cost savings and your costs drop dramatically after you have paid off those upfront capital costs. 3:44:01 PM SENATOR BEGICH added to Ms. Lienemann's explanation as follows: That's one of the keys here, we don't have the ability to just simply fund at the school-district level or at the state level. The kind of retrofits we are talking about here would cost the state tens of millions of dollars to do so. So, this methodology basically doesn't change in the near term the cost of energy that would be paid, say at the length of the contract, five or ten years, but the minute that contract is paid off, all of those savings are realized and that is when the big benefit kicks in. So, it's a way of looking at our tough fiscal situation and innovatively coming up with a way we can retrofit buildings that would otherwise probably languish for another 10 or 20 years, possibly even up to replacement time before we can do anything to ensure energy savings from them. SENATOR COGHILL asked if a survey has been done on the number of 5,000-square-foot facilities that would be impacted by the legislation. 3:45:28 PM MS. LIENEMANN answered that the Alaska Department of Transportation on Public Facilities (DOT&PF) in their fiscal note cited 430 buildings. SENATOR COGHILL addressed section 2 regarding the Alaska Housing Finance Corporation (AHFC) coordinating with the Alaska Energy Authority (AEA) to perform audits. He asked what was previously permissive and what would be new from the requirement. MS. LIENEMANN explained that DOT&PF was responsible for audits but because PCE is administered by AEA, AEA takes ownership of the facilities. She summarized that the bill would allow AEA to work with DOT&PF to perform the energy audits. SENATOR COGHILL addressed section 8 and noted that both governmental and educational facilities were included. He asked what the breakout was between governmental and educational facilities. MS. LIENEMANN replied that previous reports were done by the Alaska Housing Finance Corporation and the Cold Climate Housing Research Center that broke down the different number of buildings that belong to school districts as opposed to the State of Alaska. 3:47:54 PM SENATOR COGHILL noted that the requirement in section 9 can be waived and asked for an explanation. MS. LIENEMANN explained that the goal was not to make a mandate for anyone to have an energy audit without a community facility impacting its PCE. She emphasized that the legislation was not meant to be a threat, just something helpful that the state could provide. SENATOR BEGICH added that he was very keen on not adding more mandates to communities but to make the state more efficient in how it does its facility management. He opined that the opt-out provision would encourage communities to do an energy audit rather than discouraging them. SENATOR WILSON noted that Senator Begich during his sponsor's statement said 25 percent of the state's buildings were retrofitted for energy efficiency and asked why he did not go on to get another 25 percent of state buildings under compliance. 3:49:33 PM SENATOR BEGICH replied that in discussions with DOT&PF, the department indicated that there were just a few buildings. He explained that the idea was to try and make as big an impact as possible. He said he had a strong concern about energy costs, particularly in rural Alaska. He asserted that SB 190 is a way to get to long term lowering of energy costs in rural Alaska and to redirect state resources to teaching and education. SENATOR WILSON pointed out that in some rural communities there is a general cost to provide power and once the threshold goes below the minimum cost, somebody must bear the cost. He said if a school does not bear the cost, then the cost gets spread out equally throughout the community through higher rates. He asked if there was a plan to address the expectation for lower rates after retrofitting that resulted in bills staying the same due to an increase in rates. 3:52:18 PM SENATOR BEGICH replied that there is no mandate, primarily if a school district that is receiving PCE does not want to participate. He noted that SB 190 is part of a complex process of determining ways to lower costs without raising the cost for individuals. He asserted that he would continue to propose legislation to effectively lower energy costs. He said he did not think any school district would want to raise the energy costs for residents. He conceded that he has heard resistance due to higher rates, but that was one of the reasons why there is no mandate. He summarized that if ways are found to lower energy costs in the long run, then ways to payback the artificially increased energy costs in rural villages will be found. CHAIR MEYER addressed section 5 regarding a statute quotation as to what a public school is. He noted that the "public school" definition did not include charter schools and asked if there was a reason why that was not included. MS. LIENEMANN explained that the decision was to, "Keep the universe small to start with," but there were no reasons why other educational facilities could not be included if the program proved to be successful. SENATOR BEGICH added that charter schools tend to be smaller and operate under tight budgets. He said he did not feel that it was necessary to include a charter school in the process but indicated that they certainly could be. 3:54:54 PM CHAIR MEYER asked if people who go through the proposed process would receive a grant and there would be no money out of their pockets. MS. LIENEMANN answered as follows: The aim is that there would be no grant, but they wouldn't be out of pocket money to start out with. So, they would enter into a contract, the energy-service- contracting company would come in, perform the upgrades and then the school district or the community center would see no difference in their energy costs for the length of the contract with the savings going to pay off that contract, to pay off those upfront capital costs. For the school district or for the community center, or the public facility, they would essentially see no change in their energy costs until the end of the contract when it would drop dramatically despite having those efficiency upgrades having been made. SENATOR BEGICH emphasized that there would be no upfront costs to the school and that the contractor would bear the upfront cost. CHAIR MEYER noted his concern that even though a school is retrofitted that energy savings may not be realized because students may leave windows and doors open. He confirmed that the proposed program was optional, but questioned the fiscal note presented by the DOT&PF and the need for four people to administer an optional program. He added that he wondered if AEA has the staff to do all the audits that need to be done. 3:57:32 PM CHAIR MEYER opened public testimony. 3:57:58 PM DONALD GILLIGAN, President, National Association of Energy Service Companies (NAESCO), Salem, Massachusetts, testified in support of SB 190. He noted that members of NAESCO have delivered approximately $60 billion worth of performance contracting projects during the last 30 years. He detailed that NAESCO is delivering $6 billion to $7 billion worth of projects a year. He noted that over $3 billion out of the $6 billion to $7 billion in projects are in public schools. He explained that the types of projects NAESCO delivers, Energy Savings Performance Contracts (ESPC), are authorized by the federal government and all 50 states. He added that the ESPC contracting process has had very strong bi-partisan support for 30 years. He noted that the current White House administration supports public-private partnerships where private money is invested to improve public facilities. He explained that a performance contract repurposes money spent on wasted energy or obsolete equipment into a payment stream for capital improvements. He detailed that the capital improvements pay for themselves from energy and maintenance savings over the life of the contract while delivering capital improvements in the form of new lighting, heating, controls, windows, doors, roofs, whatever the building needs to become energy efficient. He addressed measures that typically are in a performance contract which includes retrofitting, advanced measures and renewable energy measures. 4:01:24 PM He explained what is driving the retrofits and noted that there are a couple of major drivers. He said number one is a mandate at all levels of government to stop wasting money and what the contracts do is stop wasting money and diverts an expenditure into a productive use. He disclosed that there are federal mandates which have been ongoing for the last 20 years to upgrade the efficiency of federal facilities. He noted that Senator Begich has talked about the success of Alaska mandating the upgrading of many state facilities. He asserted that committee members will see that the key to the program's success is an actual mandate that is enforced at the state level where the state is behind a real push for energy efficiency. MR. GILLIGAN disclosed that over the last 4 or 5 years at the federal level, the federal government has done about $5 billion worth of ESPC projects in response to President Obama's performance contracting challenge. He noted that the Trump administration has just issued a new set of contracts for federal facilities, 21 companies have the ESPCs with the anticipation that there will $10 billion worth of projects done over the next 8 years at the federal level. He added that the Trump administration also developed a new analysis of how much value there is in performance contracting around the country and they came up with the estimate of a potential market of $200 billion to $300 billion. 4:03:33 PM He disclosed that the employment potential of the programs results in every million dollars' worth of projects involves 9 to 10 direct or indirect jobs. He specified that the ESPC jobs really cannot be outsourced because local contractors deliver the projects in the local communities. He added that there are multiplier jobs for the value of keeping the expenditures currently spent on wasted energy in the community, ultimately adding up to approximately 21 jobs per million dollars' worth of projects which would mean that the target in SB 190 would produce more than 2,000 jobs. He emphasized that the performance of the projects is dependent on long term operations and maintenance, but that means there are additional jobs or job upgrades in maintaining this equipment rather than spending the money on wasted energy. 4:05:08 PM SENATOR GIESSEL asked if NAESCO members have ever been involved in Alaska projects. MR. GILLIGAN answered yes. He disclosed that Siemens-Alaska has been involved and detailed that NAESCO members have done several projects for the U.S. Coast Guard and the Bureau of Land Management in Fairbanks as well as some very large projects at Alaska's military bases. SENATOR GIESSEL asked if Siemens-Alaska is a local company. MR. GILLIGAN answered that Siemens-Alaska is a branch office of an international company. SENATOR COGHILL asserted that SB 190 was an excellent idea. He noted that he wonders if the payback from the energy savings is realized or do retrofits continually have to occur. He remarked that energy may be saved but questioned whether costs are ever reduced. He asked if the payback time is something that has become valuable. MR. GILLIGAN answered that the project can be developed according to the requirements of the customer. He noted that if the customer wants a very quick payback so that the project can generate cash savings from day-one, that kind of project doesn't get you a comprehensive retrofit, it may not solve some of the long-term capital or maintenance problems in the building. He pointed out that a customer can have a three or five-year- payback project which generates cash savings from day-one. He said on the other end of the spectrum that a customer could invest their savings in long-term capital improvements solving the bigger long-term problems of the building so that the state or local government would not have to appropriate new tax money to deal with issues like roofs or windows. 4:08:02 PM SENATOR COGHILL opined that the concept was an as-needed basis and noted that he would look over a range of projects to see how they turned out. He noted that the bill addresses 5,000-square- footage facilities, a size that he believed was small, and inquired if smaller facilities result in tighter margins. He asked if Mr. Gilligan has dealt with 5,000 square foot municipal and state facilities. MR. GILLIGAN conceded that doing individual 5,000-square-foot buildings is very difficult. He continued as follows: The state organizing a project of willing customers so that you can aggregate a fairly large number of facilities and be able to do those in a streamlined way, it would be quite difficult to do individual 5,000-square-foot buildings scattered across the whole state of Alaska, you would really have to pull them together and figure out how to do it, but there are resources in Alaska that I think can handle this. 4:09:22 PM SENATOR COGHILL commented as follows: I think when we start talking about communities that we are going to qualify based on the PCE, certainly energy is a big issue, but they are definitely islands to themselves, so they are definitely going to be something you would have to template and maybe I will ask the sponsor how he envisions that kind of a template. SENATOR EGAN noted that he had done an energy audit on his home and received an AHFC loan for an energy upgrade. He explained that he had to pay off the loan and the state did not lose money. He asked if the proposed legislation was an offshoot of the energy audit and loan that he received. CHAIR MEYER asked if the program Senator Egan described is like the proposed legislation. MR. GILLIGAN answered essentially yes. He specified that the difference is the energy service companies guarantees the savings and takes the technical risk that the retrofits will save the money that is required to pay off the loan. 4:11:30 PM SENATOR EGAN concurred with Mr. Gilligan and noted that his home was re-audited and ultimately saved money. MR. GILLIGAN explained that the projects typically have the kind of reports that Senator Egan noted but not just once, every year for the length of the project so that the customer can be assured that the project is saving money. He emphasized that if a problem develops, the ESCO is responsible for fixing it. CHAIR MEYER asked if Siemens-Alaska is one of the contractors that is used for ESCO projects. MR. GILLIGAN answered yes. He noted that Siemens does a tremendous amount of performance contracts across the country. 4:13:16 PM STACY SCHUBERT, Director, Governmental Relations and Public Affairs, Alaska Housing Finance Corporation (AHFC), Anchorage, Alaska, admitted that people tend to think about AHFC regarding energy efficiency for the Energy Rebate Program and weatherization. CHAIR MEYER asked if the concept proposed in SB 190 will work the same way as home audits. 4:14:13 PM JOHN ANDERSON, Director, Research and Rural Development, Alaska Housing Finance Corporation (AHFC), Anchorage, Alaska, explained AHFC's role as follows: How we got involved in this is back in 2009 with the American Recovery and Reinvestment Act. AHFC in conjunction with the Alaska Energy Authority received many millions of dollars, at that time we had also received $300 million for the Home Energy Rebate and Weatherization Program. Our team at AHFC found a hole in the process to be able to use $10 million to go after multi-family-public-facility retrofit and energy efficiency projects. What we did back then is we went in and did benchmarking on 1,200 facilities, and benchmarking is basically a documentation of the facility's size, use, energy use and basic information; of those benchmark buildings we chose 327 buildings that were very inefficient as far as data that we had collected, and we went and performed level-2 audits on the 327 buildings and half were schools. From that process, and from 2009 and 2010, state legislation happened that provided AHFC the bonding authority of $250 million; that's just bonding authority, we do not have that money, but it also helped us create the Energy Efficiency Revolving Loan Fund for public facilities. Through that process and the involvement of that, AHFC developed a standard of what we call the Retrofit Energy Assessment for Loan (REAL) or for funding, it's titled "loan," but our intention is for funding of some nature. At the end of the day that is what AHFC really wants to see in reference to not just public facilities and us working with DOT&PF and AEA, but our own 1,600 public housing units that we have that are really of the commercial model, mainly. The standard is what we believe is the important characteristic here. In the REAL manual we do have ESCOs listed, we do have energy performance contracting models that are in there, but we have also worked in conjunction with DOT&PF to create a smaller version of that aspect called Energy Project Developers, it was a statewide RFP and DOT&PF, and Alaska Housing worked hand-in-hand to put that out, there's a smaller list of approved qualified entities that perform smaller projects. The process to do 5,000 square foot buildings one-on-one, the ESCOs will not touch that type of a project, we've been told over and over its very difficult for them. That's really in a nutshell is how AHFC got involved. We developed a white-paper, a very in-depth white paper, in November of 2012 is when we published it, and that white-paper indicated through all of the information that we had gathered at the time of all of the audits and all of the bench markings we did that the potential improvements from energy savings could be roughly $125 million a year for public facilities alone. You have to remember that that is a time-and- time caption because the cost of energy in 2009-2011 is a lot different than what it looks like today. Any type of a project that gets established through this or through the lesser version of the energy project developer or even inhouse capability, at some point in time the project has to pencil-out based on energy on that day. We don't know what the future brings, we don't know if it's going to escalate, we don't know if it's going to de-escalate, so it's a very difficult process. The ESCO guarantee in normal fashion will guarantee the energy savings, not cost, so that is a factor moving forward. Senator Begich pointed out that the local utilities, even though they might be seeing an energy consumption reduction, the cost may increase. We have witnessed that in other communities on a smaller level with our weatherization program, but it's kind of an unknown factor. We could also continue to have a technical assistance for our revolving loan program for the REAL manual, we have a competitive grant right now through the Department of Energy, that is also doing what is called a "kick starter" program where we are actually providing up to $10,000 in minimal grants to go through this process using those energy project developers, to get a project kind of kick-started in some of these rural communities and see actual how big the benefit is. 4:19:54 PM CHAIR MEYER asked if AHFC worked with the Alaska Energy Authority (AEA). MR. ANDERSON answered correct. He noted that AHFC has had a monthly coordination meeting with AEA for the past three years and meetings have been useful. He explained that the intent is to make sure there is not overlapping of services and that activities are coordinated. He added that AHFC works with DOT&PF regarding project maintenance and verification, an aspect required for contracts and guarantees. SENATOR GIESSEL asked what Mr. Anderson meant by "Maintenance has to be written into the contract." She disclosed that she had worked in rural Alaska and commented as follows: I'm going to speak about schools, that's where I worked, that those buildings, which are called "plants," they require some expertise to maintain. So, with these energy upgrades are we talking now about yet more expertise being required in rural areas? 4:21:41 PM MR. ANDERSON explained that he was referring to a normal ESCO model or "EBC" contract and explained as follows: You would have a process that that contractor has to provide to the owner of the facility, maintenance and verification that their upgrades and their process is doing what they said they were going to do to achieve the goal. SENATOR GIESSEL replied as follows: I'm still blank. So, the project is finished, maybe it took five years to finish and the contractor is on their way and they are waiting to be paid back now with the savings, somebody living in the community where this 5,000-foot school is, it's going to have to maintain that building, they are going to have to have the expertise. So, that's not what you are referring to when you say maintenance must be in the contracts? MR. ANDERSON replied that Senator Giessel was correct that that was not what he was referring to. He specified that he was referring to a maintenance and verification process that the contractor performed like they said they were going to. SENATOR COGHILL readdressed his question on 5,000-square-foot facilities and asked if Mr. Anderson's expectation was to get several communities to quantify a general savings. MR. ANDERSON replied that he thought the process could be done regionally to combine a lot of facilities into one project. 4:25:08 PM CHRISTOPHER HODGIN, Energy Project Manager, Alaska Department of Transportation and Public Facilities (DOT&PF), Anchorage, Alaska, explained the department's implementation of SB 190 as follows: Some parts of the bill regarding the 5,000 square foot threshold and the ability to make those sized projects work, what DOT&PF has done on recent projects, we have had cases where we have had buildings that were smaller scale, so we bundled those projects. In a recent case we had 16 maintenance stations that we bundled together, so we have a term contract with Energy Service Contractors, Siemens being one of our providers, so that's how we were able to address those situations with remote stations that were smaller in nature. A little about what Mr. Anderson was speaking about from Alaska Housing Finance Corporation, he was speaking to validating the savings after our project was complete, that phase is called "measurement and verification," so after a project is complete the ESCOs like Siemens visit the project sites again to take measurements and validate the projected energy savings that they proposed as part of the projects were indeed realized. He explained that DOT&PF operates the state's Energy Performance Contracting Program. He detailed that the department has invested $35 million in approximately 70 state buildings. He specified that funding was done with a combination of financed funds borrowed from lenders, state funds, and the federal government's American Reinvestment Recovery Funds. He disclosed that the annual monetized savings from the program is $3.3 million. CHAIR MEYER asked if the state has invested $35 million in making retrofits and the savings has been approximately $3.3 million per year. MR. HODGIN answered correct. CHAIR MEYER inquired if the $3.3 million in savings will be used to pay off the loan that was financed. 4:28:28 PM MR. HODGIN answered correct. He noted that DOT&PF's recent project with its maintenance stations used Siemens and the savings will be used to repay the loan with a private lender. CHAIR MEYER asked where the state funds came from. MR. HODGIN replied that he believed the state funds were a combination of general funds from different maintenance appropriations. SENATOR GIESSEL commented as follows: I'm still caught in the practicality here. If we are talking about rural schools, I seriously am aware that maintaining these facilities requires some technical knowledge that may not be available in the community. So, if these facilities are going to be upgraded, there's going to be more information needed by the folks that actually live in these small communities of 175 people. I'm just wondering about the practicality of this, not we don't want to do it; again, having worked in these rural schools I can tell you number one, it's been my experience being there in the winter these buildings are vastly over heated, I mean yes, opening windows to cool the place off. There are a lot of issues when we are talking about rural energy in schools. CHAIR MEYER noted that PCE buildings run on diesel or heating oil and asked if alternative energy sources are being considered for retrofits. 4:31:31 PM KATIE CONWAY, Government Relations and Outreach Efficiency Manager, Alaska Energy Authority, Anchorage, Alaska, addressed PCE buildings receiving retrofits as follows: The PCE component and potential benefit in cost savings to both the state and the facility owner should that result in implementation measures conducted in the building would only concern the electricity savings, but there would likely be a pretty significant savings on the heat side as well. I can say that the community facilities receiving power cost equalization would probably have a lot of potential savings identified in audit. CHAIR MEYER replied that PCE is obviously the electric part but noted that heating fuel should also be thought about for energy savings as well. MS. CONWAY answered that the audit would point at both electric and heat savings opportunities. 4:33:48 PM AMBER MCDONOUGH, Account Executive, Energy and Environmental Solutions, Building Technologies Division, Siemens Industry, Inc., Anchorage, Alaska, disclosed that Siemens has worked DOT&PF, AHFC, and AEA. She asked if Chair Meyer was inquiring if consideration was given to all options when Siemens makes recommendations. She detailed that Siemens goes through several stages during project development where different options are proposed with preliminary pricing so that the end user can pick the most viable solution. She said incorporating renewable technology is ultimately up to the end user. 4:35:01 PM CHAIR MEYER closed public testimony. SENATOR BEGICH noted that his office has worked with rural districts on exploring renewable energy sources. CHAIR MEYER pointed out that a renewable energy program could qualify for money from alternative energy programs. CHAIR MEYER held SB 190 in committee.