Legislature(2009 - 2010)BUTROVICH 205

01/27/2010 03:30 PM Senate RESOURCES

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03:36:06 PM Start
03:37:39 PM SB220
05:23:49 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Energy-Related Budget Recommendations
-- Public Testimony --
Bills Previously Heard/Scheduled
          SB 220-ENERGY EFFICIENCY/ ALTERNATIVE ENERGY                                                                      
3:37:39 PM                                                                                                                    
CO-CHAIR MCGUIRE announced SB 220 to be up for consideration.                                                                   
ROBERT  VENABLES,   Energy  Coordinator,   Southeast  Conference,                                                               
supported  SB  220.  He  said   their  mission  is  to  undertake                                                               
activities that promote strong  economies and healthy communities                                                               
in a  quality environment.  For over the  last dozen  years their                                                               
Energy Committee has been working  with communities and utilities                                                               
to displace diesel  as much as possible as a  primary fuel source                                                               
for  power generation.  They have  made significant  strides, but                                                               
much  work  is  left  to  be done.  He  applauded  the  work  the                                                               
legislature has  done in this regard.  The Southeastern utilities                                                               
are following  the committee's work  and look forward  to working                                                               
with them in the future.                                                                                                        
3:39:33 PM                                                                                                                    
NATHAN    SOBOLEFF,   Natural    Resources   Planner,    Sealaska                                                               
Corporation, said a  large portion of what he does  is working on                                                               
alternative energy projects for  the corporations. He thanked the                                                               
26th Legislature  for considering  important legislation  like SB
220,  which they  support.  He  said they  also  support SB  150,                                                               
creation of  the emerging energy  technology fund. He  noted that                                                               
Sealaska  has spearheaded  converting its  corporate headquarters                                                               
to a wood  pellet boiler to completely eliminate  its annual need                                                               
for 35,000  gallons of  diesel heating fuel.  A large  portion of                                                               
that, $510,000,  was funded from  the Denali  Commission Emerging                                                               
Energy  Technology Fund.  He  said the  technology  has not  been                                                               
proved in  the states, but it  has existed in Europe  for over 30                                                               
years and they hope to add credence  to it here.  He urged people                                                               
to  call Sealaska  if they  were interested  in looking  at their                                                               
"show case" project. "The door is open for anyone."                                                                             
He said Sealaska  also supports SB 71 that requires  the state to                                                               
consider  using  alternative  energy  systems  when  designing  a                                                               
public works project. This is one  of the key things to help grow                                                               
an industry and to convert buildings  off of fossil fuels to more                                                               
renewable  energies.   A  good  example  is   Canada's  Northwest                                                               
Territories'  legislative building  that  is  converting to  wood                                                               
pellets because of legislation like SB 71.                                                                                      
MR. SOBOLEFF  said Sealaska supports  and encourages SB  132, the                                                               
Southeast  Alaska  Energy Fund,  to  help  pay for  hydroelectric                                                               
projects, interties  - and tidal  projects as well. He  said that                                                               
Sealaska has  been running its  Black Bear  Hydroelectric Project                                                               
on Prince of  Wales already for a number of  years and is working                                                               
on  some  tidal  hydroelectric   projects  within  the  Southeast                                                               
3:44:36 PM                                                                                                                    
KIRK  HARDCASTLE, Operations  Manager,  Taku Renewable  Resources                                                               
Coalition, Dba Fishermen's Daughters'  Biofuels, supported SB 150                                                               
and SB 220.  He said the coalition is a  group of Alaskan fishing                                                               
families  looking for  ways to  reduce the  cost of  their energy                                                               
through  alternative  fuels.  They have  received  a  feasibility                                                               
preconstruction  grant from  the Alaska  Energy Authority  (AEA);                                                               
their research is  focused on converting fish  waste to biodiesel                                                               
and they  are the  only ones  in the state  that have  received a                                                               
grant  for this.  The  goal  is for  communities  to  be able  to                                                               
harness  any  energy wherever  it  is  available "in  this  waste                                                               
He said there  is a great need for the  state to compile emerging                                                               
technology  data to  build foundations  for  further studies,  if                                                               
deemed  feasible,  to  help  policy  and  program  managers  make                                                               
effective energy  decisions. Such  a system would  also eliminate                                                               
duplication. They  hope the access  to information  will engender                                                               
competition and collaborative business practices.                                                                               
3:46:44 PM                                                                                                                    
MR. HARDCASTLE  said they feel  if people are using  public funds                                                               
that all  of their data  and information should be  available for                                                               
others to  build upon.  He said that  many energy  research funds                                                               
are used  as a "vehicle"  to further businesses looking  to lower                                                               
their energy costs,  but he wanted to see that  money stay in the                                                               
state longer - what he  called the "vessel" concept. For example,                                                               
due to his  lack of experience in  these fields, he had  to go to                                                               
Finland  to research  the  technology and  paid  for it  himself.                                                               
Often  they have  had to  go  to the  Lower  48 for  much of  the                                                               
research, and  that migrates money out  of the state. He  said he                                                               
supported SB  220 because it will  help the state become  "not so                                                               
much a  venture capitalist,  but a  venture catalyst"  to attract                                                               
other businesses from the Lower 48 to come up to Alaska.                                                                        
3:50:53 PM                                                                                                                    
CO-CHAIR MCGUIRE  said the database  idea has come up  before and                                                               
she agreed with  him. She asked if he had  any other policy ideas                                                               
with respect to keeping investments in Alaska.                                                                                  
MR.  HARDCASTLE   said  Alaska's  apprenticeship   programs  "are                                                               
envied"  throughout the  rest of  the United  States. This  model                                                               
could be used  a little bit more by having  the "imported" people                                                               
or technologies  relay their  skills to  "sourdoughs" who  have a                                                               
vested interested in their communities.                                                                                         
CO-CHAIR MCGUIRE said that Denali  Biodiesel presented their fish                                                               
waste biodiesel project to the  committee yesterday and she would                                                               
be happy to provide him with their information.                                                                                 
MR.  HARDCASTLE  thanked her  saying  it  is very  essential  for                                                               
communities to share their information with each other.                                                                         
3:51:35 PM                                                                                                                    
JEREMY  WOODROW, Alaska  Municipal League  (AML), said  energy is                                                               
one of  their top four  priorities for this  legislative session.                                                               
He said  SB 220 is the  right step forward in  meeting this goal.                                                               
The  AML seeks  ways to  make communities  much stronger  through                                                               
things like energy efficiencies.                                                                                                
3:52:55 PM                                                                                                                    
JEDEDIAH  SMITH,  Legislative  Liaison,  Alaska  Center  for  the                                                               
Environment, University of  Alaska, supported SB 220.  He said it                                                               
encourages  development of  emerging renewable  energy technology                                                               
which  will  create economic  opportunities  for  Alaskans. As  a                                                               
recent graduate of  the University of Alaska  system, he attested                                                               
to  its importance  in  educating and  preparing  students for  a                                                               
challenging and demanding work environment  and he said that this                                                               
bill  takes  forward  steps in  meeting  Alaska's  unique  energy                                                               
challenges in a way that is innovative and efficient.                                                                           
MR.  SMITH said  that  the  savings this  bill  engenders is  "an                                                               
intelligent step"  towards a more sustainable  and stable future.                                                               
He  thanked  them for  including  additional  funding for  public                                                               
transportation   that   he   speculated  would   assist   Alaskan                                                               
communities  in  capturing  more federal  funding  for  efficient                                                               
transportation. This  would enable  Alaskans to  get to  and from                                                               
work while reducing traffic congestion.                                                                                         
3:54:42 PM                                                                                                                    
NICK HORRAS, representing himself, Bethel,  supported SB 220 as a                                                               
major step forward in addressing  critical needs in rural Alaska.                                                               
He saw  it encouraging job  creation and economic  development in                                                               
rural Alaska  as well. He  said he  is currently an  energy rater                                                               
trainee and has worked in  the low income weatherization program.                                                               
His  experience has  shown him  that  energy efficiency  programs                                                               
really  work for  all. These  programs have  been a  catalyst for                                                               
energy  efficiency so  far; he  urged them  to keep  the momentum                                                               
3:56:43 PM                                                                                                                    
WILLIAM  ROTECKI, representing  himself, Ketchikan,  supported SB
220.  He   said  that  improving  energy   efficiency  in  public                                                               
facilities will translate  into money earned in  the future. Also                                                               
because  Alaska rural  areas have  the most  to gain,  he thought                                                               
those areas should be prioritized.                                                                                              
Further,  he  said  that plenty  of  technologies  are  available                                                               
elsewhere,  but  they  need  to be  fine-tuned  for  Alaska.  For                                                               
example,  several ground  source heat  pumps have  been put  into                                                               
Juneau, but not  much is known about thermal  conductivity of the                                                               
soils here.  Each heat pump has  to be tested separately  for its                                                               
unique location, which  brings the need of a  database into play,                                                               
so people could  get "a leg up" on whether  or not their location                                                               
is appropriate for ground source heat pumps.                                                                                    
3:59:44 PM                                                                                                                    
HARVEY BOWERS,  representing himself,  Wasilla, supported  SB 220                                                               
even though  he doesn't usually  favor anything  government does.                                                               
He said he  owns a lot of  buildings in Wasilla and  is trying to                                                               
take them  to net-zero  energy, which  means the  buildings would                                                               
supply  their own  energy with  solar and  wind. He  has cut  his                                                               
energy costs by  50 percent so far. He said  a database is needed                                                               
so people can find out what  equipment works and what doesn't and                                                               
what works in what areas.  Canada and Antarctica already have net                                                               
zero buildings.                                                                                                                 
4:02:53 PM                                                                                                                    
RICH WILSON,  Alaska Ratepayers, said they  represent electricity                                                               
consumers throughout the  state and their goal  is affordable and                                                               
predictable  electric rates  for  Alaskans.  They firmly  believe                                                               
that such a  goal cannot be achieved without  a substantial state                                                               
investment  in hydroelectric  power and  other renewables  around                                                               
the   state.  From   the  perspective   of  their   children  and                                                               
grandchildren,  he said,  over-reliance on  instate natural  gas,                                                               
especially in  the case of  the Railbelt,  is a perilous  path to                                                               
take. The time for action is now.                                                                                               
MR.  WILSON said  that energy  base  load has  to be  affordable,                                                               
reliable, predictable and long-term.  The best base load resource                                                               
in the Railbelt is  hydro - the Four Dam Pool  and Bradley Lake -                                                               
much  as  small   hydro  does  elsewhere.  That   is  why  Alaska                                                               
Ratepayers  supports  immediate  legislative  appropriations  for                                                               
design, permitting, equity funding for  Susitna hydro phase 1 and                                                               
other statewide hydro development.                                                                                              
Further, he said  the state must wean Railbelt  ratepayers off of                                                               
dependence  on gas-fired  electric generation  and strive  for 50                                                               
percent renewable  energy by the  year 2020, not 2025.  He stated                                                               
that  the process  of moving  to  large hydro  generation as  the                                                               
Railbelt's  prime source  of  base load  electric  power must  be                                                               
accelerated.  "A  statewide  or  regional  entity  with  adequate                                                               
authority to accomplish these goals  in concert with utilities is                                                               
essential," he said.                                                                                                            
4:07:12 PM                                                                                                                    
Finally, Mr.  Wilson said,  they need urgent  action and  a state                                                               
contribution,  much as  was the  case of  the Four  Dam Pool  and                                                               
Bradley Lake,  to bring down the  initial cost of hydro  power so                                                               
that  rates  can  be  levelized  over  the  long  term.  He  also                                                               
supported the committee's $10 million  proposal for analyzing the                                                               
Railbelt's Susitna,  Chakachamna and Glacier Fork  hydro projects                                                               
as  well as  the proposal's  other hydro  projects. He  said that                                                               
Alaska Ratepayers also  support a "down payment"  of $200 million                                                               
for long-term Railbelt energy projects.                                                                                         
4:09:31 PM                                                                                                                    
CO-CHAIR  WIELECHOWSKI  said he  appreciates  his  input in  this                                                               
process of developing an energy plan.                                                                                           
4:09:52 PM                                                                                                                    
MIKE KRAFT, representing himself,  Fairbanks, said Delta Junction                                                               
is developing  a 15  mgW wind  farm and  pinning down  what costs                                                               
they  are competing  against  is  one of  their  major issues  in                                                               
moving  forward.  The interior  of  Alaska  is competing  against                                                               
diesel and he wanted an  amendment that requires public utilities                                                               
doing business in Alaska to buy  renewable energy if it can match                                                               
their actual  avoided cost. One of  the reasons he is  asking for                                                               
this is  because the City  of Fairbanks  is dealing with  bad air                                                               
quality  issues and  it has  an opportunity  to displace  about 3                                                               
million gallons  of diesel a year  through use of the  wind farm.                                                               
The wind  farm has been  able to  attract $35 million  in private                                                               
capital and  employs many people.  If they  can bring on  15 mgW,                                                               
they can offer  a long-term contract at a fixed  price which does                                                               
equate to cheaper energy and stable rates.                                                                                      
4:11:56 PM                                                                                                                    
BILL  NOLL, representing  himself, Anchorage,  strongly supported                                                               
SB 220. He  thanked the legislature for its efforts  in this area                                                               
and  said the  weatherization  programs are  needed and  accepted                                                               
gratefully.  He said  he is  a  member of  the Alaska  Ratepayers                                                               
group. He informed them that in  the 1980s, the state spent $130-                                                               
150 million for environmental and  economic studies, but when the                                                               
Ratepayers  discussed  this  with Chugach  Electric  Association,                                                               
they said the  same effort would cost $500  million today. Simply                                                               
using  inflation  makes  the  studies   worth  $325  million,  he                                                               
At any  rate, Mr. Noll pointed  out, this report is  a real asset                                                               
that  the  state can  use  as  a  "down  payment" to  get  future                                                               
financing. It would also be getting  good value for a lot of work                                                               
that was done by good Alaskans in the past.                                                                                     
He  said the  members of  Ratepayers are  very interested  in the                                                               
$10-million  appropriation to  figure out  which projects  should                                                               
have priority  and how big  they should be.  He was quick  to say                                                               
their interest in  Susitna is not an anti-gas move,  and that, in                                                               
fact, looking at value-added methane would be well-warranted.                                                                   
CO-CHAIR MCGUIRE said they greatly appreciate his board's work.                                                                 
4:17:51 PM                                                                                                                    
MARK MASTELLER,  State Director,  Cascadia Region  Green Building                                                               
Council,  Wasilla, supported  SB  220. He  said  Cascadia is  the                                                               
chapter of the  US and Canada Green Building  Council that covers                                                               
Alaska.   His  members   are  architects,   engineers,  builders,                                                               
building  owners mostly  in the  commercial building  world.   He                                                               
thanked the committee for their work on this issue.                                                                             
MR.  MASTELLER  said he  was  especially  pleased that  the  bill                                                               
includes  conservation and  efficiency  aspects  and upgrades  to                                                               
public  buildings.  He said  that  nationwide,  buildings use  40                                                               
percent of  all energy  including 70  percent of  all electricity                                                               
and they produce about 40 percent of the country's CO.  All those                                                               
things are  probably more in  Alaska. So energy  conservation and                                                               
efficiency in the  "built environment" is one of  the fastest and                                                               
cheapest ways  to save both  money and  energy, and it  creates a                                                               
lot of jobs.                                                                                                                    
MR.  MASTELLER said  the state  has  done a  great job  promoting                                                               
weatherization and  energy efficiency in the  residential sector,                                                               
but  a lot  more work  needs  to be  done in  the commercial  and                                                               
public facility  perspective for their long-term  viability. Most                                                               
importantly he said, "Conservation  and energy efficiency work in                                                               
the  built  environment  is  what   makes  the  renewable  energy                                                               
transition possible."                                                                                                           
4:20:52 PM                                                                                                                    
MARGARET SUBERS, representing herself,  Palmer, supported SB 220.                                                               
She  said  conserving  energy  first  is  crucial  and  then  the                                                               
renewable  energy  piece  can  come   into  play.  She  said  she                                                               
currently works as an energy rater  and is building her own zero-                                                               
net  home where  she recently  had a  solar tour,  and 50  people                                                               
showed up.  Everyone is  concerned and ready  to go  forward with                                                               
conservation,  sustainability  and  saving resources.  She  asked                                                               
that the simple things in weatherization be expanded.                                                                           
4:23:45 PM                                                                                                                    
DAVID  OWENS, Legislative  Liaison,  Alaska  State Home  Builders                                                               
Association (ASHBA),  said he owns  Owens Inspection  Services in                                                               
Palmer, and  supported SB 220. He  said he hated to  bring up the                                                               
subject of  code, but SB  220 mentions the  ASHRAE/IESNA Standard                                                               
90.1 on page 8, line 9, and  that can be problematic. It would be                                                               
better to assign  a specific year to the standard  and to provide                                                               
for a way to review it as it changes every three years.                                                                         
4:26:03 PM                                                                                                                    
PAUL MICHELSON,  Alaska State Home Builders  Association, Palmer,                                                               
supported SB  220. He  said he  has sat  on the  Energy Standards                                                               
Committee  of the  International  Code Conference  (ICC) for  six                                                               
years and  he thinks that  Alaska is  the premier leader  in this                                                               
area.  However,  he pointed  out  that  Alaska  has five  to  six                                                               
different  climatic  regions and  people  must  be careful  about                                                               
instituting  this   policy  because  what  might   work  well  in                                                               
Fairbanks won't work well in Ketchikan.                                                                                         
He remarked  that SB 220  sets up AHFC to  be the main  watch dog                                                               
for  energy, but  mainly  in  the residential  arena  - where  it                                                               
should  stay.  AHFC should  not  have  oversight over  commercial                                                               
building, which  should be given  to someone with "a  little more                                                               
authority." He  also mentioned that  the National  Association of                                                               
Home Builders just passed an  internal resolution urging Congress                                                               
to  acknowledge   hydro  power  as  a   renewable  resource.  The                                                               
Department  of  Energy  is  in the  process  of  discussing  that                                                               
classification.  If hydro  power  is not  listed  as a  renewable                                                               
resource, a  lot of the existing  dams in the country  will go by                                                               
the  wayside, and  getting permits  for  new dams  will be  quite                                                               
difficult. He  supported Mr. Owens'  comment that ASHRAE  90.1 is                                                               
forever changing;  and it is  very important to label  an edition                                                               
the state will follow and stay with it.                                                                                         
4:28:56 PM                                                                                                                    
CO-CHAIR  MCGUIRE  asked  what   organization  he  thought  could                                                               
oversee commercial building.                                                                                                    
MR. MICHELSON said  he would give her suggestions in  a couple of                                                               
days after consideration.                                                                                                       
SENATOR WAGONER asked  why Congress would want to  take hydro out                                                               
of the  renewable classification and  if dams would be  taken out                                                               
of service if that happened.                                                                                                    
MR.  MICHELSON replied  that is  what the  Association understood                                                               
would  happen  at its  Las  Vegas  meeting.  They are  under  the                                                               
impression that  Congress is trying to  do away with some  of the                                                               
existing  dams  and he  clarified  that  hydro is  not  currently                                                               
listed as renewable.                                                                                                            
SENATOR WAGONER said he knows  that environmentalists have wanted                                                               
to  take out  some  dams on  the Snake  and  Columbia Rivers  for                                                               
years, but that happens to be  the lowest cost electricity in the                                                               
United State right now.                                                                                                         
MR.  MICHELSON  agreed.  He  added  the  the  legislative  intent                                                               
language calls for a 10-percent  increase in energy efficiency by                                                               
2015  which  is less  than  the  15  percent increase  in  energy                                                               
efficiency by  2013 and 50  percent by  2023 that the  DOE called                                                               
for  to accept  Stimulus  money.  He asked  if  the state  wasn't                                                               
supposed   to   meet   the  International   Energy   Conservation                                                               
Coordinating Committee (IECCC) standards within seven years.                                                                    
CO-CHAIR MCGUIRE said the committee would take a look at that.                                                                  
4:33:38 PM                                                                                                                    
PAT  LUBY, Advocacy  Director, AARP,  Anchorage,  said he  didn't                                                               
claim  to have  any technical  expertise  on energy,  but he  has                                                               
97,000 members who pay energy  bills every month. These customers                                                               
need energy for safe living.  He explained that older persons use                                                               
energy differently  than younger  workers. They spend  90 percent                                                               
of their time  in their homes that tend to  be older, and usually                                                               
they  have the  least weatherization  and insulation.  Because of                                                               
their greater  susceptibility to  hypothermia, he  tells retirees                                                               
not to turn down their thermostats.                                                                                             
MR. LUBY  said that AARP  members were surveyed to  determine how                                                               
they were coping  with energy costs; 14 percent  said they turned                                                               
off  their energy  source during  the  winter. He  urged them  to                                                               
develop alternative  and less expensive  energy sources.  He said                                                               
lawmakers  need to  reduce energy  costs for  the state's  public                                                               
facilities,  health  facilities  and  citizens. He  talked  to  a                                                               
retired  math teacher  in Fairbanks  last week  and her  December                                                               
heating  bill was  $750. That  bill  made her  happy because  she                                                               
expected her  other bills to be  between $900 and $1000  a month.                                                               
She and  her husband are  concerned about being able  to continue                                                               
to afford living in Alaska.                                                                                                     
He said  SB 220  will not  only cut energy  costs, but  also help                                                               
keep older Alaskans  in the state. He said the  legislature did a                                                               
great  job  recently with  the  historic  weatherization and  low                                                               
income  energy assistance  programs, and  SB 220  is the  logical                                                               
next step that will also be historical.                                                                                         
4:35:30 PM                                                                                                                    
MAKO HAGGERTY,  Member, Kenai Peninsula Borough  Assembly, Homer,                                                               
supported SB 220.  He thanked the committee  for their leadership                                                               
and vision.  He said, "This is  exactly the type of  thinking and                                                               
action we need from our leaders down in Juneau."                                                                                
4:37:32 PM                                                                                                                    
LISA   HUGHES,   Legislative  Liaison,   Northern   Environmental                                                               
Research  Center, Fairbanks,  supported SB  220. She  thanked the                                                               
committee  for  all its  hard  work  and the  community  outreach                                                               
during the  Interim. Much  of the future  economy will  come from                                                               
sustainable resource and alternative  energy development, and she                                                               
said  that Alaska  has  the potential  to be  a  world leader  in                                                               
renewable energy  technologies. She  hoped the  legislature would                                                               
do  its part  to help  the  state fulfill  that role  - and  most                                                               
importantly,  help  Alaskans  find   relief  from  expensive  and                                                               
unsustainable energy options.                                                                                                   
4:39:01 PM                                                                                                                    
DAVE   MESSIER,   Renewable   Energy  Technician,   Yukon   River                                                               
Intertribal  Watershed  Council,  Fairbanks,   said  they  are  a                                                               
consortia  of over  70 tribal  and First  Nation governments  and                                                               
supported SB 220.  He was encouraged by the  mention of renewable                                                               
energy training to strengthen mobile  work forces for some of the                                                               
projects that  will be put  in place. Emphasizing  the importance                                                               
of these  trainings he noted  that over  the past two  months the                                                               
Council  has run  a number  of  them for  rural Alaskans  through                                                               
state  and federally  fund grants  and the  response from  member                                                               
tribes  has been  overwhelmingly positive.  He said,  "People see                                                               
this technology as  an answer and they want more  of it, but more                                                               
than that they want to be a part of it."                                                                                        
MR.  MESSIER suggested  that "tribal  consortia" be  specifically                                                               
listed under the  definition of eligible applicant  able to apply                                                               
for  funding   through  the   Emerging  Energy   Technology  Fund                                                               
established in the bill.                                                                                                        
4:40:47 PM                                                                                                                    
KIMBROUGH MAUREY, representing herself,  Anchorage, said she is a                                                               
property owner in  Wasilla and a citizen who goes  to extremes to                                                               
reduce her  electricity and natural  gas bills. She  supported SB
220.  Ms. Maurey  said she  studied  at Duke  University and  did                                                               
Masters  studies  at  Western  Washington  learning  the  science                                                               
behind  climate  change.  She  also works  with  non  profits  in                                                               
Anchorage  and with  TDX  Power Corporation;  and  she is  seeing                                                               
great successes  at getting  renewable energy  in the  state. She                                                               
thanked the  legislature for  what it  had done  so far.  She has                                                               
knows the  effects of these  funds are  good in other  states and                                                               
would  work wonders  in Alaska.  Passing  this legislation  means                                                               
that  Alaska is  taking  a  step forward  in  being  a leader  in                                                               
innovative and clean technologies.                                                                                              
MS. MAUREY thanked  them for recommending the  funding for public                                                               
transportation  that would  reduce traffic  on the  highways with                                                               
new forms  of public  transit. She said  these new  systems would                                                               
all contribute to new job creation.                                                                                             
4:43:53 PM                                                                                                                    
BRENDAN BABB,  Board Member, Alaska  Center for  the Environment,                                                               
Fairbanks, said they support SB  220 and he thanked the committee                                                               
for all of the valuable work it  has done and continues to do. He                                                               
said he also likes SB 121  and its stress on energy efficiencies.                                                               
When power  lines were  accidentally cut  recently in  Juneau and                                                               
electricity prices sky rocketed,  people were able to immediately                                                               
reduce  electrical use  by over  20 percent.  He said  these high                                                               
costs for electricity are what  the rural areas regularly see. If                                                               
facilities are made  20 percent more efficient,  it's possible to                                                               
save money  and energy without  turning down the heat  and making                                                               
it   painful   especially   for   older  people.   SB   121   and                                                               
weatherization will go a long way to helping that.                                                                              
MR.  BABB said  he  recently went  to a  talk  by Gwen  Holdmann,                                                               
Alaska Center  for Energy  and Power,  who mentioned  advances by                                                               
the  Denali  Commission's  Emerging  Technology  Fund,  which  is                                                               
modeled on  SB 150. He  also visited Reykjavík, Iceland,  in 2007                                                               
and saw  their amazing geothermal resources.  Ms. Holdmann's talk                                                               
reminded  him that  Iceland used  to be  run completely  on hydro                                                               
carbons and had  to import coal and oil. When  those were cut off                                                               
during WWII Iceland decided to  convert to geothermal, a resource                                                               
they had  in abundance and went  to Boise, Idaho Capital  Mall to                                                               
study  how  geothermal  was  being   used  there  and  took  that                                                               
information back to Iceland. Now  they are a leader in geothermal                                                               
energy. Alaska, if  it uses this Emerging  Technology Fund, could                                                               
be  a world  leader in  geothermal, tidal,  wave, wind  and hydro                                                               
kinetic  technologies; it  is  already a  leader  in wind  diesel                                                               
research, a  technology that can  be exported to  other countries                                                               
right now.                                                                                                                      
4:46:51 PM                                                                                                                    
SENATOR FRENCH thanked him for his testimony.                                                                                   
4:47:01 PM                                                                                                                    
THOMAS DEERFIELD, Dalson Energy, Anchorage,  Alaska, said he is a                                                               
renewable  energy consultant  and  primarily assists  communities                                                               
with  community-scale renewable  energy projects,  grant writing,                                                               
feasibility studies. He  is currently working on a  2 mgW biomass                                                               
gasification CHP  project that  is being  proposed for  the Upper                                                               
Tanana.  He supported  SB  220.  When folks  approach  him to  do                                                               
grants,  he asks  them if  they have  determined how  much energy                                                               
they use and  if they have dealt yet with  the energy they waste.                                                               
Third he  asks what energy resource  is feasible to use  in their                                                               
location. He  advises clients  that no  granting agency  in their                                                               
right mind  will give grants  for renewable energy  projects when                                                               
the applicant hasn't determine what  their energy use is. He also                                                               
advises that  it would be  "virtually immoral" to  spend anyone's                                                               
money  on  renewable technology  for  a  building that  is  still                                                               
wasting energy.                                                                                                                 
MR.  DEERFIELD  related that  he  didn't  think renewable  energy                                                               
technology  is  on  a  level   playing  field  with  conventional                                                               
energies  and therefore  he advises  that universally  cheaper is                                                               
not the  correct goal for  energy. If renewables  stabilize costs                                                               
and   create   local  jobs   and   are   renewable  rather   than                                                               
unsustainable  and   they  are  environmentally  clean,   why  be                                                               
obsessed with  cheaper, he  reasoned. "Cheaper  today is  a short                                                               
sighted  concept."  Fossil fuels  are  volatile  and will  surely                                                               
escalate  again sooner  or later  because oil,  coal and  gas are                                                               
finite  resources.  They  should  focus  on  cost  stability  and                                                               
consider where the money goes.                                                                                                  
If all costs are considered  included PCE reductions reduction in                                                               
wildfire fighting costs  and the benefits of  localization of the                                                               
economy  and whatever  value can  be attached  to non-local  fuel                                                               
sources -  things like biomass  energy do become  less expensive,                                                               
Mr. Deerfield  stated. Also the  emerging technology  industry in                                                               
renewables is looking for testing  ground to try out new projects                                                               
and  Alaska can  be  a  leader with  its  high conventional  fuel                                                               
prices  and very  challenging climate,  off-grid communities  and                                                               
skilled labor force.                                                                                                            
MR. DEERFIELD  said the  best investment Alaska  can make  in its                                                               
future is  to do  essentially three things:  1. Fully  assess the                                                               
renewable  resources of  biomass, wind,  solar, hydro,  tidal and                                                               
the appropriate locations for each  of those, 2. Reduce our waste                                                               
especially state  buildings; and  3. Support and  incentivize the                                                               
development  and  deployment  of sustainable  site  specific  and                                                               
right sized renewable energy systems.                                                                                           
4:51:12 PM                                                                                                                    
JASON   MEYER,  Program   Manager,  Emerging   Energy  Technology                                                               
Program,  Alaska   Center  for   Energy,  University   of  Alaska                                                               
Fairbanks,  supported SB  220, particularly  the Emerging  Energy                                                               
Technology Fund  on page  5, line  21. He  said he  believes this                                                               
piece of  legislation is critical  to meeting the  state's stated                                                               
goals  of  sustainable energy  for  Alaska  because it  fills  an                                                               
important funding  gap for energy development.  He explained that                                                               
technology is a  development process that moves from  idea to the                                                               
lab to demonstrations then  to commercialization. This transition                                                               
is known as  "Death Valley" to many in the  industry. Great ideas                                                               
or potential  solutions cannot receive funding  or be implemented                                                               
because they have  not been proven and they have  not been proven                                                               
because they  have not received  funding. This, in  effect, locks                                                               
up many  of Alaska's great  energy resources - wave  power, tidal                                                               
energy, solid  waste energy, underground  coal gasification  - as                                                               
there is no proven method of utilizing them.                                                                                    
MR. MEYER said that for the  most part, Alaska imports all of its                                                               
energy solutions,  but the state  could change that  by promoting                                                               
innovative energy  solutions and  the Emerging  Energy Technology                                                               
Fund is  such an  example. He said  some of  Alaska's communities                                                               
emerging  energy projects  include waste  heat recovery  from the                                                               
Tanana   Chiefs  region,   biomass  digesters   for  Cordova,   a                                                               
commercial-scale wood  pellet boiler for Juneau,  a seawater heat                                                               
pump in Seward, and solar  thermal system for elders in Kotzebue.                                                               
He  related  that the  most  valuable  element of  funding  these                                                               
projects through public funding is  having access to the data and                                                               
analysis,   reports  and   lessons  learned.   It  is   an  early                                                               
opportunity to analyze technologies  especially if future funding                                                               
decisions or large spending initiatives are being considered.                                                                   
He  echoed  the  gentleman  from Ketchikan's  comments  that  the                                                               
current  bill  addresses his  concerns  about  state spending  on                                                               
noncommercial  energy  technology.   Finally,  he  said  Alaska's                                                               
energy needs  and infrastructure,  particularly in  rural Alaska,                                                               
will be  largest growing market of  energy demand in the  next 50                                                               
years along  with the developing world.  By developing home-grown                                                               
technology and expertise  Alaska has the opportunity  to become a                                                               
world leader in these technologies.                                                                                             
4:55:05 PM                                                                                                                    
CO-CHAIR  MCGUIRE thanked  him for  his testimony  and said  they                                                               
look forward to having him as a resource.                                                                                       
4:55:23 PM                                                                                                                    
MIRA  KOHLER, President  and CEO,  Alaska Village  Electric Co-op                                                               
(AVEC), said they  serve about 53 rural Alaska  villages and that                                                               
they  support   SB  220.  She   said  the  state  has   needed  a                                                               
comprehensive energy  policy for  many years. She  echoed others'                                                               
comments about  conservation standards and improvements  and said                                                               
the Emerging Energy  Technology Fund has been very  near and dear                                                               
to their hearts for a  long time. The renewable energy production                                                               
tax credit  is going to catalyze  a lot of major  projects in our                                                               
state, and she said she is  very interested in what may transpire                                                               
with renewable energy as it develops across the state.                                                                          
She said  Alaska needs  a viable  long-term energy  solution that                                                               
impacts  the entire  state; she  didn't  want our  regions to  be                                                               
pitted  against each  other for  scarce  resources. The  resource                                                               
should be local, indigenous, and perpetual.                                                                                     
4:57:58 PM                                                                                                                    
IAN DUTAN,  Alaska SeaLife Center, Seward,  strongly supported SB
220.  He  said  that  the  Center  is  Seward's  largest  private                                                               
employer and the  state's only public aquarium.  They believe the                                                               
action  it  takes  is  practical  and the  targets  it  sets  are                                                               
realistic  and achievable.  He specifically  said  that he  would                                                               
like  to   see  Section  18.15.310   on  page  2,  line   27,  on                                                               
efficiencies  in public  facilities,  to be  expanded to  include                                                               
non-profit partner institutions like the Alaska SeaLife Center.                                                                 
He explained that they were initially  funded by a grant from the                                                               
Exxon  Valdez Oil  Spill Trust  Council  and it  operates in  the                                                               
exactly  the same  manner  as a  public  library, the  University                                                               
research center  or a  tourism visitor center  and yet  it enjoys                                                               
none of  the privileges of  public support that  those facilities                                                               
enjoy.   For   instance,   under  the   American   Recovery   and                                                               
Reinvestment  Act,  the  Center  is  specifically  excluded  from                                                               
receiving any  funding for energy  conservation because  they are                                                               
designated as a public aquarium.  This exclusion has made it very                                                               
difficult  for  them to  compete  for  critical funding  and  has                                                               
undermined  their  ability  to  not only  retain  staff,  but  to                                                               
maintain  their  position  as  a  leading  state  marine  tourism                                                               
He  added  that  this  limitation  has  served  to  dampen  their                                                               
willingness  to   invest  in   emerging  energy   technology  and                                                               
mitigation  research.  This brought  him  to  a second  point  in                                                               
section 44.99.115 on page 13,  lines 25-27, that the state energy                                                               
policy   should  not   limit  the   range  of   renewable  energy                                                               
technologies that  qualify for  this act  and suggested  adding a                                                               
reasonable  "current   options"  -  specifically   ocean  thermal                                                               
energy, which is comparable to geothermal energy.                                                                               
MR.  DUTAN  explained that  over  the  years,  with the  help  of                                                               
Senator  Stevens, the  Seward community,  and most  recently with                                                               
the support of the Denali  Commission, he has developed a project                                                               
to  implement ocean  thermal energy  using ambient  seawater from                                                               
Resurrection Bay. That  same technology is widely  used in Europe                                                               
already, he  said, and has  provided heating in  communities with                                                               
up  to  40,000  people  in   Scandinavia.  So,  it  is  a  proven                                                               
technology that has never been applied in Alaska.                                                                               
He said  the SeaLife  Center has received  some funding  from the                                                               
Emerging Technology Fund  to implement what would  be the largest                                                               
scale application  of this project  in Alaska. It will  save them                                                               
around  57,000 gallons  of fuel  oil  each year  and will  reduce                                                               
their green house gas emissions  by more than 1.2 million pounds;                                                               
but  most  importantly  this  technology  would  enable  them  to                                                               
maintain their  year-round work force  of more than  80 full-time                                                               
equivalent  staff  keeping the  cost  to  the visitors  down  and                                                               
critical marine research going.                                                                                                 
They  also  believe  that  this  project  has  enormous  leverage                                                               
potential, because this technology  could be applied in Southeast                                                               
Alaska,   Southcentral  Alaska,   and  Southwestern   Alaska.  He                                                               
mentioned there would be a TV show about it soon.                                                                               
CO-CHAIR MCGUIRE asked him what  channel and what time the showed                                                               
would be on.                                                                                                                    
MR. DUTAN  answered it  is scheduled  to be on  channel 11  at 10                                                               
p.m. on Friday night.                                                                                                           
5:02:39 PM                                                                                                                    
BRAD   REEVE,  General   Manager  and   CEO,  Kotzebue   Electric                                                               
Association,  said  he is  also  president  of the  Alaska  Power                                                               
Association.  Both organizations  support  SB 220,  he said.  The                                                               
bill   has   a  lot   of   good   elements:  energy   efficiency,                                                               
sustainability, and  renewable portions  that can  fund long-term                                                               
renewable  energy  technologies.  The addition  of  the  Emerging                                                               
Energy  Technology Fund  will allow  new things  to be  tried. He                                                               
said that  Kotzebue is the  recipient of a solar  thermal project                                                               
that will  be successful because  of the high refraction  rate it                                                               
gets. These technologies will lead  to new jobs and a sustainable                                                               
5:05:04 PM                                                                                                                    
CHARLES  DEARDON, representing  himself, Ketchikan,  supported SB
220. He said  he found "no exception" to any  comment that anyone                                                               
before him had  made. He thanked them for their  efforts. He said                                                               
that Ketchikan  liked the  energy efficiency,  weatherization and                                                               
rebate  program. They  have also  adopted the  International Code                                                               
Council energy codes, a big step, that includes commercial work.                                                                
5:06:23 PM                                                                                                                    
MONTE  WORTHINGTON,   Director  of  Project   Development,  Ocean                                                               
Renewable Power Company (ORPC Alaska),  supported SB 220. He said                                                               
they  were selected  as one  of the  recipients for  the Emerging                                                               
Energy Technology  Grant for their  Nenana Hydro  Kinetic Project                                                               
on the Tanana  River in collaboration with the  Alaska Center for                                                               
Energy. They  are also  pursuing a tidal  energy project  in Cook                                                               
Inlet  in   conjunction  with  researchers  at   UAA  to  develop                                                               
materials  testing  and  environmental  modeling  and  monitoring                                                               
techniques for this project.                                                                                                    
MR.  WORTHINGTON  said his  company  relies  on both  public  and                                                               
private funding  sources to  develop these  projects in  a timely                                                               
manner. Passing this bill and  establishing particularly the EETF                                                               
will go a  long way to not only provide  clean emissions and free                                                               
power to Alaskans, but also establish  Alaska as a leader in this                                                               
field.  He  supported  the  renewable   tax  credits  in  section                                                               
43.20.046  because  production  based  tax  credits  and  feed-in                                                               
tariffs are important aspects of  renewable energy development as                                                               
it helps transition technologies  from the emergent phase through                                                               
to being competitive  in the market phase. He  also supported the                                                               
University's involvement with renewable research.                                                                               
SENATOR WAGONER asked where his tidal project is.                                                                               
MR. WORTHINGTON answered off of Fire Island.                                                                                    
5:10:04 PM                                                                                                                    
CATHERINE KEITH,  Wind Diesel  Application Center,  Alaska Center                                                               
for Energy and  Power (ACEP), University of  Alaska, supported SB
220  and specifically  the Emerging  Energy Technology  Fund. She                                                               
said  many things  can be  done  to improve  performance of  wind                                                               
diesel systems and energy storage systems for them.                                                                             
5:11:17 PM                                                                                                                    
TOM  LAKOSH, representing  himself,  supported SB  220. The  most                                                               
important aspect of improvement would  be the codification of the                                                               
energy  conservation and  renewable energy  goals. The  reason is                                                               
because it  is necessary for  all of  the state agencies  to have                                                               
codified statute  in order to  apply the policy the  committee is                                                               
promoting. The  RCA, in particular, needs  codified guidance from                                                               
the legislature  in order to  make its  rulings. They need  to be                                                               
able to look to a codified  energy efficiency goal in order to be                                                               
able to  "decouple" energy production  from rates; they  need the                                                               
codified goal  of renewable generation  sources in order  to rule                                                               
on projects  that are  submitted by  utilities and  private power                                                               
producers in  deciding what  which projects  will go  forward and                                                               
approving rates for them.                                                                                                       
He added that energy storage is  needed; and while ACEP wanted it                                                               
for  wind/diesel,  money  could   more  effectively  be  kept  in                                                               
communities if  storage for wind/biogas or  wind/biodiesel backup                                                               
were developed.  This should be  an energy policy goal  and could                                                               
be included as a  tax credit of up to 15 percent  of the per unit                                                               
cost of that particular fuel source.                                                                                            
MR.   LAKOSH  said   the  levels   for  conservation   should  be                                                               
substantially improved and  should at least match  the 15 percent                                                               
improvement  in   energy  efficiency  by  2015   and  20  percent                                                               
improvement by 2020. The renewable  energy generation goal should                                                               
be improved  as well,  but should have  some short-term  goals so                                                               
that  that   planning  for  the   renewable  projects   could  be                                                               
undertaken immediately to have the most long-term effect.                                                                       
He said  AEA and the DOE  should be tasked with  generating those                                                               
Alaska-specific commercial and  residential building codes suited                                                               
to each of  Alaska's climate zones so that  substitutes that will                                                               
meet or  exceed the  ASHRAE standards  will be  in place.  To the                                                               
extent that there is  any subsidy in a PCE or  in an energy grant                                                               
fund,  those  communities and  utilities  should  be mandated  to                                                               
adopt  those  specifically  tailored commercial  building  codes,                                                               
because it makes no sense to pour state money into a sieve.                                                                     
5:17:02 PM                                                                                                                    
PAUL  KENDALL, representing  himself,  thanked  everyone for  the                                                               
comments and  stated for the record  that he had no  conflicts of                                                               
interest. He supported  SB 220. He said he had  started a website                                                               
labeled "MFH2O"  that stands for  "magnetic fields" where  he has                                                               
compiled a  series of stories about  energy technologies relating                                                               
to residential  use; reasoning  that all  business comes  down to                                                               
families eventually.  He thought they  need to start  a "Personal                                                               
Residential  Life Essential  Clean Energy  Needs Committee."   He                                                               
talked about  how home  fueling stations  are being  developed by                                                               
different  companies and  remarked  that the  children of  Alaska                                                               
have a chance to lead the world overnight.                                                                                      
MR. KENDALL warned them, however, that  the state was going to go                                                               
through a repeat  of 1981 when the price of  fossil fuels dropped                                                               
so much  that it  decimated funding  and markets  for alternative                                                               
energy. Now, technology  is emerging at a pace that  he has never                                                               
seen before,  and the  gas [pipeline]  is so far  out that  it is                                                               
unpredictable. He  hoped that whatever the  legislature does that                                                               
it brings  the oil companies to  the table so some  kind of legal                                                               
foundation could  be built. He  urged them  to focus on  the TAPS                                                               
line being two-thirds empty and  that companies might be "looking                                                               
to finagle some hydrogen or something down that line."                                                                          
5:23:49 PM                                                                                                                    
CO-CHAIR MCGUIRE noted  that the committee had run  over its time                                                               
limit  and thanked  everyone for  their testimony.  She adjourned                                                               
the meeting at 5:23 p.m.                                                                                                        

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