Volume 2 Issue 14

Session Wrap-Up Installment #3

The Alaska Sustainable Energy Act

May 14, 2010

The recent off-shore oil rig explosion and spill in the Gulf of Mexico has presented horrible environmental and economic problems all along the Gulf Coast. It wasn't so long ago that a failure to test pipeline for erosion caused the largest oil spill on the North Slope. Twenty-one years after the Exxon Valdez oil spill, Prince William Sound still has not recovered. The fact of the matter is that as dependent as we are on oil in this country and as much as Alaska should be a leading producer - oil is an environmentally dangerous and limited resource.

While we need to work to make sure that disasters like these never happen again, we also need to look to the future - and the future is alternative and renewable energy sources paired with energy efficiency and conservation. This way, Alaska can also be a leader in renewable and alternative energy sources.

This year, the Legislature passed two pieces of legislation that move Alaska forward in alternative and renewable energy development and energy conservation and efficiency. In this newsletter, I'll talk about one of those bills, the Alaska Sustainable Energy Act. I reviewed the other bill, which establishes a statewide energy policy, in the March 19 issue.

And on our own renewable energy source front - AEL&P has filed with the Regulatory Commission of Alaska to raise Juneau's rates by 22%. I'll tell you where to comment and talk about what the Juneau delegation is doing to make sure that there is sufficient public input into this process.

Thank you for reading my newsletter. I appreciate hearing from you, so please stop by the office, call, write or email.

Last summer I had the opportunity to visit the Lake Dorothy hydroelectric facility during construction.

The Alaska Sustainable Energy Act (SB 220) was crafted by a bipartisan-led committee after receiving input from citizens across the state. During the 2009 interim, three committees (Senate Resources, Senate Energy and House Energy) met throughout the state specifically to hear from citizens on energy issues, challenges and solutions. This information was compiled into the Draft State Energy Policy and Program Recommendations (caution: this is a 50 page document and may take a while to load). From these recommendations, the Senate Resources Committee, co-chaired by Democratic Senator Bill Wielechowski and Republican Senator Lesil McGuire, drafted the Alaska Sustainable Energy Act.

I’m sharing a compass piece by Senators Wielechowski and McGuire below that explains the highlights of the legislation. But first, there is one piece they don’t mention that is especially important to Southeast Alaska, the expansion of the Southeast Energy Fund. This expansion opens up more grant opportunities for the construction of hydroelectric generation and transmission projects in Southeast Alaska – allowing us to take better advantage of the burgeoning hydroelectric potential of the region.

Alaska Poised for Greater Energy Independence by Senators Wielechowski and McGuire

Alaskans want to live and work where energy is reliable and affordable. That is why we crafted the Alaska Sustainable Energy Act, which passed unanimously on the last day of the legislative session. This bipartisan legislation will pave the way for lower energy costs, greater energy efficiency and increased use of renewable energy in Alaska. It will help Alaskan families, businesses, schools, and communities to cut their costs and find more sustainable ways of meeting their energy needs.

The Act includes a broad range of policy tools designed to stimulate the economy and improve Alaskans’ standard of living. They include:

·         A New Energy Efficiency Revolving Loan Fund: School districts, municipalities, state agencies, and the University of Alaska will have access to low-interest loans to upgrade their facilities. Based on observations of the State’s Weatherization and Home Energy Rebate programs, this fund will likely foster 1,500 to 2,000 jobs in the construction industry in Alaska. It will also save millions of dollars annually in heating and lighting costs around the state.

·         Help for Alaskan Families When Fuel Prices Soar: The Act links benefits from the state’s Heating Assistance Program to the price of oil, providing additional assistance to families when fuel prices are high, Alaskans need help the most, and the state enjoys a significant surplus. This program is a supplement to the federal Low-Income Heating Assistance Program, which benefits families in every Alaskan community.

·         Loans for Alaskan Businesses: The Act revitalizes a dormant alternative energy loan fund within the Department of Commerce and Economic Development. The new program will provide loans of up to $50,000 to businesses for energy efficiency and alternative energy upgrades, enabling them to become more profitable and competitive.

·         Educating Alaskans on Low-Cost Ways to Save Energy: The Act provides new authority to the Alaska Energy Authority to promote energy conservation, energy efficiency, and alternative energy through training and public education. The state plans to kick off a public education campaign in the coming year with the goal of helping Alaskans to cut their energy bills by taking simple, affordable steps, such as caulking windows and weather-stripping doors.

·         Emerging Energy Technology Fund: With the high cost of energy in many of our communities, Alaska provides a unique opportunity for innovation. The Alaska Sustainable Energy Act creates a fund that will provide grants for testing energy technologies in Alaska. This fund will foster innovation and enable Alaskans to develop solutions to our energy challenges, creating high-tech jobs and spurring investment in our economy.

·         Coordinate and Consolidate State Energy Programs: The Act tasks the Governor with evaluating how best to coordinate the state’s energy departments and programs in order to avoid duplication and make it easier for the public to access state services, such as weatherization and heating assistance. The Governor is directed to provide recommendations to the legislature by January of 2011.

·         Leading by Example: The Act requires the state to retrofit at least 25% of the largest state buildings by 2020 to reduce energy costs. The Department of Transportation and Public Facilities has already begun to upgrade those buildings most in need. While annual saving for the first 8 buildings was expected to be $278,000 a year, savings have averaged $497,000, making this new requirement a significant money-saver for the state. By retrofitting additional buildings, an estimated $2.5 million could be saved each year, money better spent on meeting on critical needs.

Energy is the keystone of our economy and the foundation of our modern life. We were pleased that Democrats and Republicans alike from both the House and the Senate came together this session to pass such substantial legislation. Alaskans contend with some of the highest energy costs in the nation. The Alaska Sustainable Energy Act will help ease that burden and move us towards greater energy independence and sustainability.

AEL&P has filed for a 22% rate increase with the Regulatory Commission of Alaska (RCA). A more than 50% increase has been in place for interruptible power for the Greens Creek Mine since August and AEL&P has filed for a 50% rate increase for interruptible power for Princess Cruise Lines. You can submit comments on the 22% increase here, however the 50% increase has not been posted yet.

Your Juneau legislative delgation has written a letter to the chair of the RCA to request a public hearing on this filing. It is important for the public to be part of this process, especially given our recent history.