Legislature(2015 - 2016)BARNES 124
03/09/2015 01:00 PM RESOURCES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HJR 8-FEDS ALLOW STATE TO MAKE ENERGY CHOICES 1:03:50 PM CO-CHAIR NAGEAK announced that the first order of business is HOUSE JOINT RESOLUTION NO. 8, Urging the federal government to empower the state to protect the state's access to affordable and reliable electrical generation. [Before the committee was CSHJR 8(ENE).] 1:05:27 PM JOSHUA BANKS, Staff, Representative David Talerico, Alaska State Legislature, introduced HJR on behalf of the sponsor, Representative Talerico. He said HJR 8 is in response to opposition to the Environmental Protection Agency's (EPA) Clean Power Plan rule, which is intended to reduce carbon emissions in the U.S. by 30 percent, and specifically in Alaska by 26 percent by the year 2030. This rule will apply to all fossil fuel fired plants greater than 25 megawatts, except for plants on military bases and the university. While well intentioned, the sponsor believes this plan will likely lead to higher electricity costs without meeting the EPA's carbon reduction goals. The Clean Power Plan is based on inaccurate assumptions that can have major effects on the state of Alaska. The first assumption is that the largest source of carbon emissions is from power plants. While this may be the case in some areas of the Lower 48, power plants in Alaska only account for about 25 percent of carbon emissions and the remaining 75 percent of stationary sourced carbon comes from operations on the North Slope. The sponsor believes that the Clean Power Plan puts unrealistic expectations on Alaska's power plants. The second assumption is that low cost natural gas and renewable energy is ready for use for major energy consumption. While this may be available in most of Southcentral Alaska and parts of Southeast Alaska, this would not be feasible for Interior Alaska. He said EPA's claim that Alaskans will save on energy costs will not be realized as long as natural gas is not available at affordable prices in Interior Alaska. 1:07:18 PM MR. BANKS said the fundamental reason for bringing HJR 8 before the committee is to protect Alaska's sovereignty. The Tenth Amendment of the United States Constitution clearly states that the powers not delegated to the United States by the constitution, nor prohibited by it to the states, are reserved for the states respectively or to the people. He related that in reading the constitution, he fails to find the enumerated power with the Executive Branch to regulate carbon emissions. If the constitution does not clearly say that the federal government has the ability to regulate carbon emissions, then the sponsor believes that this power resides with the state. The sponsor believes that the State of Alaska has the means to make effective decisions through the Regulatory Commission of Alaska (RCA), as well as various state agencies, that not only can deal with any problems relating to climate change, but also do so in a way that does not hurt Alaskans. He said HJR 8 urges the federal government to exempt Alaska from the Clean Power Plan and to leave decisions about regulating energy production to the State of Alaska in order to protect access to affordable and reliable electrical generation. MR. BANKS offered to address the changes made to HJR 8 that were made by the House Special Committee on Energy if the committee desires. He said the changes made in CSHJR 8(ENE) were made based on feedback from the Alaska Power Association, Golden Valley Electric Association, and the RCA. 1:08:57 PM REPRESENTATIVE JOSEPHSON offered his understanding that in July 2014 the [Supreme Court of the United States] cleared the way for the EPA's announcement in Section 111(d). He asked whether he is correct in this regard. MR. BANKS replied he is not aware of that court decision, but will look into it. REPRESENTATIVE JOSEPHSON stated the Tenth Amendment debate is something he has spent a lot of time looking at and teaching. While he hears the sponsor's argument, he said the Tenth Amendment also doesn't say that "we can have an air force, but we have an air force." He inquired whether it is the sponsor's position that if it isn't written there very specifically, that there is no breadth of power under the Commerce Clause or the Necessary and Proper Clause or any of the other clauses the founders wrote. MR. BANKS responded that while perhaps the Interstate Commerce Clause could be applied for the Lower 48 because the electric grid goes through various state lines, Alaska is completely isolated and so he does not believe the Interstate Commerce Clause would be in effect here. 1:10:49 PM CO-CHAIR TALERICO said he appreciates Representative Josephson's question because he thinks the representative is referring to Title 42 of the U.S. Code, Section 111(d). He said his biggest concern is that five power plants in Alaska have been tentatively put on the list for carbon reductions of 26 percent: Unit 1 in Healy; George M. Sullivan Generation Plant in Anchorage, an Anchorage Municipal Light & Power's plant; Beluga Power Plant, a Chugach Electric Association power plant; Southcentral Power Plant, a Chugach Municipal Light & Power combo-plant; and Nikiski Co-Generation Plant in Nikiski. To the best of his knowledge, those plants are very well run. Hundreds of thousands of Alaskans rely on those power plants. As those prices go up, he is concerned because many of the people in his district rely on overhead costs remaining consistent and reasonably low in order for their goods and services to be delivered. Even people not connected to the grid can be impacted by those costs. REPRESENTATIVE JOSEPHSON inquired what the timeline is for these requirements and what costs can be anticipated if the state complies with the requirements. CO-CHAIR TALERICO answered he is unsure there is anything in concrete as far as the actual compliance to the plan. He deferred to Mr. Banks in regard to the timeframe. MR. BANKS offered his belief that the EPA will finalize its plan by the end of summer 2016 and from there he believes the state will have a year to create its plan. He said he is unaware of any anticipated costs for compliance. REPRESENTATIVE JOSEPHSON surmised there surely are some costs and said he suspects they're likely in the millions. 1:14:42 PM CO-CHAIR NAGEAK opened public testimony, then closed it after ascertaining no one wished to testify. 1:15:32 PM CO-CHAIR NAGEAK inquired whether there is any objection to reporting CSHJR 8(ENE) from committee. REPRESENTATIVE JOSEPHSON stated he will not object to reporting the resolution because he thinks it will be moved by the committee. However, he said, he comes from the school of thought, "Is an Alaskan first, and I guess an American second?" Alaska joined the union and has its representation. The state has a clean air problem, a carbon footprint problem, and the state must contribute to finding a solution. He said he has respect for the concern and the uniqueness of Alaska and that Alaska is obviously not the greatest contributor, but he will be marking the resolution as "do not pass." CO-CHAIR NAGEAK again asked whether there is any objection to reporting the resolution from committee. There being no objection, he said he will entertain a motion to move the resolution. 1:18:13 PM CO-CHAIR TALERICO moved to report CSHJR 8(ENE) out of committee with individual recommendations and the accompanying [zero] fiscal notes]. There being no objection, CSHJR 8(ENE) was reported from the House Resources Standing Committee.