Legislature(1999 - 2000)

05/10/1999 09:10 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 SENATE BILL NO. 157                                                                                                            
"An Act relating to power cost equalization; and                                                                                
providing for an effective date."                                                                                               
MARY JACKSON, staff to Senator John Torgerson was invited                                                                       
to join the committee.  She explained the new spreadsheets                                                                      
dated 10 May 1999.  At the request of Co-chair Torgerson                                                                        
she explained the Governor's Commission recommendations of                                                                      
a deduction for commercial users.                                                                                               
(The committee took a brief at ease on record while the                                                                         
spreadsheet was passed out to the members.)                                                                                     
Ms. Jackson continued her explanation of the spreadsheet.                                                                       
(Pause on record.)                                                                                                              
She explained the letter as attached by Mr. Bruce Kovarik,                                                                      
Executive Director, Association of Alaska Housing                                                                               
Authorities to Senator Torgerson.  It indicated the full                                                                        
board would be meeting tomorrow.  Senator Adams said the                                                                        
letter was like a "bad headache".  He said it had to be                                                                         
approved by the native boards and United States Housing and                                                                     
Urban Development.  He felt there would be a "no" on this                                                                       
letter.  Co-chair Torgerson said there was a present                                                                            
amendment that would authorize receipt of these monies if                                                                       
it should materialize.                                                                                                          
Ms. Jackson continued with the third attachment from                                                                            
Charlie Walls, President and Chief Executive Officer,                                                                           
Alaska Village Electric Cooperative, Inc. also dated 10 May                                                                     
1999.  It contained several suggestions about how to reach                                                                      
the PCE budget of $15 million.                                                                                                  
Mr. Leman comments to the committee.  Ms. Jackson advised                                                                       
that Mr. Walls was on teleconference to respond to any                                                                          
Senator Adams commented re PCE.  He said his option was                                                                         
always looking at the bottom line.  Ways need to be found                                                                       
to fund this program.  The dividend program would have                                                                          
impact, especially to rural Alaskans.  Most rural Alaskans                                                                      
use their permanent fund dividend to pay, for instance,                                                                         
their electric bills.                                                                                                           
(The arrival of Senator Donley was noted.)                                                                                      
Senator Adams continued.  He referred to the payment by Red                                                                     
Dog Mine to the State.  He felt that proposals submitted on                                                                     
the spreadsheet should be considered.  However, he would                                                                        
object to any of the amendments being offered today on this                                                                     
LAMAR COTTEN, Deputy Commissioner, Department of Community                                                                      
and Regional Affairs was invited to join the committee.  He                                                                     
made brief comments on the Four Dam Pool situation.                                                                             
(Tape #131, Side A, switched to Side B at log #585.)                                                                            
Mr. Cotten continued his explanation to the committee.  He                                                                      
deferred to Dick Emmerman from the Division of Energy,                                                                          
Department of Community and Regional Affairs.                                                                                   
DICK EMMERMAN, Planner IV, Division of Energy, Department                                                                       
of Community and Regional Affairs continued the explanation                                                                     
regarding the Four Dam Pool situation.  The Four Dam Pool                                                                       
is now the responsibility of Alaska Industrial Development                                                                      
and Export Authority.  He did not know its current status.                                                                      
Senator Adams asked if there was objection to the amendment                                                                     
supported this amendment.  He also explained NPRA funds and                                                                     
what their impact might be.                                                                                                     
Co-chair Torgerson thanked the testifiers and said they                                                                         
would commence debate on the amendments.                                                                                        
Senator Donley MOVED amendment #1.  He offered a brief                                                                          
explanation.  Senator Adams OBJECTED.                                                                                           
By a roll call vote of 8 yeas (Torgerson, Parnell, Donley,                                                                      
Leman, Wilken, P. Kelly, Green, Phillips) - 1 nay (Adams)                                                                       
amendment #1 was ADOPTED.                                                                                                       
Senator Donley MOVED amendment #2.  Senator Adams OBJECTED.                                                                     
Senator Donley offered a brief explanation.  Senator Adams                                                                      
spoke to his objection.  Senator Donley responded that this                                                                     
was not an elimination and for the first year would be over                                                                     
the original use.  It would be reduced each year thereafter                                                                     
by about 25 kilowatt hours.  Senator Adams said the average                                                                     
per homeowner usage varies according to temperature and                                                                         
area.  Senator Kelly briefly commented to the amendment.                                                                        
Co-chair Torgerson said he concurred.  He appreciated the                                                                       
efforts by Senator Donley but did not feel this was the                                                                         
best way to resolve the issue.                                                                                                  
Senator Leman said he would support a reduction at 500 kWh.                                                                     
He said he would oppose the amendment as is.  The impacts                                                                       
are greater than what is being anticipated.                                                                                     
By a roll call vote of 1 yea (Donley) and 8 nays                                                                                
(Torgerson, Parnell, Leman, Wilken, Adams, P. Kelly, Green,                                                                     
Phillips) amendment #2 FAILED.                                                                                                  
Senator Donley MOVED amendment #3.  He offered a brief                                                                          
The committee took a brief at ease.                                                                                             
Co-chair Torgerson reconvened the committee.                                                                                    
WITHOUT OBJECTION amendment #3 was WITHDRAWN.  Senator                                                                          
Donley advised he would not offer amendment #4.                                                                                 
Senator Parnell MOVED amendment #5.  Co-chair Torgerson                                                                         
offered a brief explanation.  WITHOUT OBJECTION it was                                                                          
Senator Adams MOVED amendment #6.   Senator Parnell                                                                             
OBJECTED.  Senator Adams offered a brief explanation.                                                                           
The committee took a brief at ease.                                                                                             
Co-chair Torgerson reconvened the committee at                                                                                  
approximately 10:45 a.m.                                                                                                        
RANDY SIMMONS, Executive Director, Alaska Industrial                                                                            
Development and Export Authority joined the committee                                                                           
offnet from Anchorage.  Co-chair Torgerson asked an                                                                             
explanation from AIDEA regarding amendment #6.  Mr. Simmons                                                                     
responded.  Any amount taken out of the dividend would not                                                                      
be problematic for the authority.  However, if it were to                                                                       
be appropriated that would cause difficulties.  If the                                                                          
amendment was written to take a specific amount of the                                                                          
dividend it would not be a problem.  Anything outside of                                                                        
the dividend language would be a problem.  Mr. Simmons                                                                          
advised however, they did not have a copy of the amendment                                                                      
of the amendment up immediately.                                                                                                
In response to a question by Senator Green Mr. Simmons                                                                          
replied that they pay all expenses from their income.  A                                                                        
certain percentage of their dividend goes to the State.                                                                         
Senator Green asked if the amount could be predicted.  Mr.                                                                      
Simmons said they did not predict the amount but they do                                                                        
forecast out a couple of years.  They try to analyze how                                                                        
much was needed for loans and how much would be expended on                                                                     
Co-chair Torgerson said this would take approximately $8                                                                        
million out of their dividend calculation.  Mr. Simmons                                                                         
said it would have a larger impact than this.  In order to                                                                      
sell bonds the public wants to know there is stable                                                                             
security.  Going outside this program would make the public                                                                     
nervous.  AIDEA is also worried about what will happen to                                                                       
their overall program.                                                                                                          
Mr. Simmons referred to HJR 10,  which asked AIDEA to                                                                           
negotiate regarding the sale of Four Dam Pool.  They have                                                                       
not spoken with the community directly.  He foresaw this                                                                        
probable sale as complicated and does not imagine it would                                                                      
be happening soon.  He said the Legislature should not                                                                          
regard this is money in the bank for at least the next two                                                                      
Co-chair Torgerson requested Mr. Simmons to review the                                                                          
amendment and respond to his office in writing.  The                                                                            
committee would look at the bill again this evening at 5:00                                                                     
p.m.  Senator Adams asked specifically Mr. Simmons look at                                                                      
lines 10 and 22, page 1 of amendment #6.                                                                                        
Mr. Wilken also asked for a current status of a proposal                                                                        
for the purchase of the Four Dam Pool.  Mr. Simmons said                                                                        
they have not yet received a formal proposal.                                                                                   
Co-chair Torgerson recessed the committee at approximately                                                                      
10:55 a.m. until 5:00 p.m. today.                                                                                               
SFC-99 -8- 05/10/99                                                                                                             

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