Renewable energy bill gets unstuck
Published Friday, March 28, 2008
JUNEAU — A popular bill aimed at developing renewable energy in Alaska is getting attention again after going without a hearing since last year.
The bill, HB 152, would set up a state fund for renewable energy projects and a system for evaluating proposals and awarding grants and loans.
The idea is that some projects that make sense economically won’t get built without a little help simply because of the high up-front costs. The ultimate goal is to lower the overall cost of electricity in Alaska.
Rep. Bill Thomas, a Republican from Haines and co-sponsor of the bill, pitched the idea at a hearing on Wednesday.
He said the cost of energy is getting so high in Alaska that people are having a hard time making ends meet. They don’t have as much money to buy other things, and that has a negative impact on the whole economy.
Alaska is known for its non-renewable resources, he added. “However, it’s also an excellent source of renewable energy. We have wind — lots of wind — geothermal, solar and hydro.”
The Senate Finance Committee, which has had HB 152 since last May, heard the bill Wednesday and Thursday.
One of the people who testified Wednesday was Chris Rose, the executive director of the Renewable Energy Alaska Project, a coalition of utilities and other groups supporting renewable energy.
Rose said renewable energy has the benefit of stabilizing electricity prices (because there’s no fuel cost to go up or down), and said the bill would set up a system for picking the best projects and getting them going.
“We’re looking at viable projects,” he said. “This is not a research and development fund.”
He added that grants from the system would leverage federal and other funds.
The bill has broad support from Republicans and Democrats in both bodies of the Legislature, and it passed the House last year without opposition. More than half of all lawmakers have signed on as co- or cross-sponsors.
In December, Gov. Sarah Palin proposed putting $250 million into an alternative energy fund like the one envisioned in HB 152, and she defended the idea in her state of the state address in January.
“These projects cannot even flirt with snake-oil science — they will be real, doable and economic,” she said in a written version of her speech.
The lawmaker responsible for holding up the bill is Sen. Bert Stedman, R-Sitka, the co-chair of the Senate Finance Committee, who deals with finance-related bills.
Stedman’s staffer Darwin Peterson said last week that Stedman generally didn’t like the idea of creating new funds for things because they limited the flexibility of lawmakers to appropriate the state’s money.
Peterson said Thursday that Stedman still has a “philosophical concern” about creating funds, but added, “Sometimes really good ideas come along.”
The other committee co-chair, Sen. Lyman Hoffman, D-Bethel, said during the hearing that he wholly supported the concept of the bill but wondered if there was a way to fund some projects right away.
“It seems to me that we need to take advantage of, or respond to, these oil prices by implementing these alternative energy projects now,” he said.
With its broad support, the bill seems likely to pass.
But some questions are still unanswered, including how much money lawmakers will put into the fund and what role they will play in awarding grants from it.
Thomas said Wednesday the original idea was to put $100 million into the fund. Palin then proposed $250 million, and the state ended up with a big budget surplus. So now sponsors are asking for $300 million.
Assuming a return of 5 to 7 percent, a $300 million fund would spin off $15 million to $21 million a year for grants.
John Bitney, a staff member to the bill’s sponsor, House Speaker John Harris, R-Valdez, testified that even $21 million probably wouldn’t meet the demand for grants.
When the Alaska Energy Authority teamed up with the Denali Commission this year to offer grants for “cost-effective” alternative energy projects (up to $5 million worth), it got 89 proposals asking for a total of $118 million. AEA is still reviewing the proposals, which include everything from biofuel made from fish oil to “run of the river” hydropower and energy harnessed from ocean waves.
With the renewable energy fund, lawmakers said they want some control in how the grants are awarded. HB 152 leaves it up to AEA to develop a system for allocating money from the fund, but Bitney said grants would be awarded as they are for things like village safe water projects — in a way that lawmakers would have a chance to approve or disapprove them.
Committee members are currently working with Harris on a substitute version of the bill.
The bill comes on top of another energy-related investment aimed at making homes more energy efficient. In a budget bill already approved, lawmakers put $300 million toward weatherization and energy efficiency programs.
Palin has expressed support for the idea.
For more news from the capital, visit www.newsminer.com/weblogs and look for Capital Focus.
Contact staff writer Stefan Milkowski at 388-6141.
Comments
I'm glad to see renewable energy is finally getting looked at. Of course, the ideas have been around for a long time, and those darn environmentalist, sky-is-falling liberals have been promoting the ideas, but most people prefer to put their heads in the sand until they can't ignore the issue any longer.
Renewable energy will always be "looked at".
Does any one remember the Rampart Dam?
There are other viable strategies to help the energy picture. At present most people lose about 30 to 40% of their energy just by burning to convert to electricity. The Fairbanks power plant does much better than that. What is needed is better power plant siting so that the combustion energy can be maximized through cogeneration. (heat and electrical power). And to think its head was on the block 10 years ago.
Also, just as soon as "alternative energy" becomes the same or cheaper than oil and gas, or even gets within range, there will be plenty of investment capital. So tank up, people, we will get there sooner.
Bravo for coverage of a sustainable energy idea! HB152 is a bill which provides long-term clean solutions for Alaska. It's exciting to read how popular this one is down in Juneau. The other bill mentioned is senate bill 289 Home energy conservation and efficiency. This bill can assist just about everyone in Alaska, and most importantly,can provide relief right away!! This is what the Interior needs, immediate action on the energy crisis Mayor Whitaker refers to. Contact your representative in Juneau and ask him/her to support this important bill. The session is over in a couple of weeks and it needs to pass now so we can weatherize before next winter! Retrofits and Renewable energy - solutions for Fairbanks! The legislators are getting it right.
Practical application of science...nothing like a hungry belly, shivering in the cold and sitting in the dark to get people moving.
Wonder if any one has been thinking about what is going to happen when the fishers and farmers find they can't afford the HIGH fuel prices? And in many cases the transportation cost exceed the raw/processed food value costs, now. A run-on the grocery stores for food is a whole lot more exciting than a run-on the bank for money.
Renewable energy projects are a GREAT IDEA that are long over due, but if the individual home owner simply converts the energy savings from more efficient housing into higher costs for food; it might be a NO-NET-GAIN.
The Legislature is moving in the right direction...now lets hope they address the bigger picture of getting the higher energy cost down in to the budget of Alaskan families.
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