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HomeMy WebLinkAboutState Energy Organization, Alaska Energy Project, 1981 PRINTED INU.S.A. ISSUED TO National Headquarters 1125 President Office Seventeenth Richard S. Hodes : Conference (303) 623-6600 Street Majority Leader, Florida Suite 1500 House of Representatives ST of State Denver, Legislatures Colorado Executive Director 80202 Earl S. Mackey March 20, 1981 RELEASE 7 ‘ QO The Honorable Terry Gardiner pithorized b - House of Representatives ae Nee Alaska Legislature Pouch V Juneau, Alaska 99811 Dear Representative Gardiner: Enclosed is the initial report on State Energy Organization for the Alaska legislature. We were pleased when the legislature asked us to undertake this innovative study of how the state's energy organization is actually working and how it might be improved. As you know, this study is one part of the three-phase assistance program under our contract with the Alaska House Research Agency; the other studies concern renewable energy and energy emergency preparedness in Alaska. In general, this document: e@ establishes a framework for the study of state organizations; @ provides information based on the organizational experience of other states; @ presents a profile of Alaska's existing system for solving energy problems; and e identifies a number of issues of special interest to the legislature and options for legislative action. In addition to exploring several major issues which the legislature will want to address, the study pinpoints particular instances where respons- ibilities need to be clarified and overlaps eliminated. We would welcome the opportunity to give closer scrutiny to the problems the legislature finds most pressing. Sincerely yours, 7 Qlenfld Coe] T. Dwight Connor Program Director Energy Program TDC/ jm Report Summary Findings of an initial review of how Alaska state government manages energy activities are presented in this report. Organizational issues and options are identified. Results are based on a thorough inventory of Alaska's energy goals, policies, programs and agencies and on analyses of the processes used to formulate goals and to implement, coordinate and monitor programs. Research into the organization of energy activity in several other states also provided a basis for evaluating Alaska's unique situation. Issues that the legislature will want to consider and options addressing each issue are summarized below. Administration In Alaska, as in many other states, several agencies conduct diverse programs concerned with energy. In recent years, many states have consolidated their conduct of energy activities to achieve several benefits. Option: Consolidate Alaska's energy planning and management activities in one energy agency. Goal_and Policy Formulation Alaska's legislature, governor, and several executive agencies all formulate energy goals and policies, but periodic and formal coordination is lacking. Option: Create an executive branch energy policy development and coordinating council to propose goal and policy options to the legislature and the governor. Option: Create a legislative standing joint committee for energy policy development and coordination to serve as the lead legislative committee for energy matters. Option: Create a number of energy policy committees representing special-interest groups to advise and work closely with executive and legislative policymakers. Option: Create a single state energy policy development and coordinating council representing agencies with energy responsibilities, the legislature, and special-interest groups. Alaska's energy goals and policies do not address all the energy problems that other states address. Some energy goals and policies are relatively general, lacking the specificity needed to guide the day-to-day workings of state government. Option: Develop goals and policies addressing problems of energy conservation, public utilities, energy emergencies, and energy development, to guide current state activities and perhaps reveal the need for additional programs. Option: Formulate and adopt more specific energy goals and policies in areas where these are needed (e.g., utilities and energy emergency preparedness). Planning and Technical Support for Policy Formulation Alaska's policymakers generally rely on different agencies for the technical support required to formulate goals and policies. No single agency has the lead. Cooperation is usually limited to specific agencies working on specific projects. Alaska lacks the in-house staff members who can perform support activities that do not relate to resource development, and relies heavily on outside consultants. Option: Create an interagency interdisciplinary council of technical support staff to assist energy policymakers. Option: Give a single agency lead responsibility for technical assistance on energy matters. Energy Information Services Many Alaska agencies collect energy data for purposes other than energy planning and management. Alaska has no centralized energy information service, although the energy demand forecasting now being done for the Long-term Energy Plan could be a first step in this direction. Option: Develop a centralized state energy information system that provides information on Alaska's energy system which is suitable for energy planning and management. Policy Formulation and Planning in Resource Development Coordination among Alaska's policymakers apparently was lacking on development of Alaska's oi] and gas leasing schedule. Thus, the schedule may have been based on a relatively narrow range of considerations rather -ii- than on careful analysis of all major consequences of resource development. Now that development of Alaska's coal and land is imminent, reevaluation of how resource development policies are formulated and of the roles played by agencies with relevant concerns may be appropriate. Option: Create a policy development and coordinating council to formulate policies governing the scope and rate of energy development in Alaska. Final policies should be based on broad consideration of the long-term well-being of Alaska citizens. Option: Evaluate the mission, format, membership, and technical support arrangements of the Land Policy Committee and the Coal Policy Committee to determine whether they are taking broad considerations into account. Option: Clarify the roles in planning and policy ormulation of all agencies concerned with resource development. Public Participation and Review Development of the leasing schedule took place without benefit of a formal mechanism for public participation and review, even though the schedule is important to all Alaska citizens and formal public participation has been encouraged in other energy-related matters. Now that the distraction of the "Alaska Land Bill" is gone, the public may be attentive to issues surrounding coal development and state land distribution. Option: Structure ample opportunities for public participation in the formulation of significant state energy policies. Rural Local Government Participation Although local governments in rural areas are of special concern to the legislature, it seems that Alaska has no formal means for regularly involving these governments in the formulation of energy jpolicy. Representatives of rural communities have said they feel that state policies and programs favor Alaska's urban centers. Option: Create a formal means for involving local governments in the formulation of energy goals and policies. Communication, Coordination, and Monitoring The legislature and the governor have several mechanisms for communicating state energy goals and policies and for coordinating and monitoring implementation. However, discussions with state officials raise questions about the effectiveness of the structure, format, and use of these mechanisms. Siti Option: Use hearings, Notes of Legislative Intent, and precise legislation to inform state agencies of the legislature's clear priorities for energy policies and programs. Option: Evaluate the structure, format, and use of the udget process to determine how its effectiveness as an oversight tool might be improved. The National Conference of State Legislatures found, in its Alaska Renewable Energy Project, that the state may not be using all the means at its disposal to promote its energy goals and policies. Option: Identify all state programs that may be used to meet state energy goals. Option: Determine if Alaska has mechanisms for ensuring that all programs with potential to promote state energy goals and policies are doing so. If such mechanisms exist, determine whether they are being used effectively. If such mechanisms do not exist, consider creating them; if they are ineffective, consider improving them. Liaison with Rural Local Governments Several state agencies, the federal government, and private industry carry on activities related to energy in Alaska's rural communities. Alaska lacks mechanisms to coordinate this activity and to evaluate the effect specific projects will have on local power systems. Better coordination between state and federal agencies is necessary to prevent construction of federal housing inappropriate for Alaska's climate. Option: Examine energy programs conducted in rural communities by state agencies to consider administrative options improving their effectiveness. Option: Institute regional clearinghouses whose purpose is to plan and coordinate public and private actions in rural communities. Option: Develop energy-efficient building standards sensitive to local conditions and identify options for implementation. Research, Development, and Demonstration Four Alaska agencies conduct energy-related research, development, and demonstration projects. The newly created Alaska Energy Center also will conduct similar projects although state officials hold differing views about the role of the Center and its effect on the activities of other agencies. aye Option: Continue funding on-going research, development, and demonstration projects for the next year while evaluating their advantages and options for more effective administration. Option: Clarify the overall role of the Alaska Energy enter. Program Implementation Alaska appears to have programs addressing some energy problem areas but not others. Energy problems addressed include certain aspects of conservation, energy use by state government, and facilitation of energy resource production and conversion. Noticeably absent are programs addressing other aspects of energy conservation, utilities, and the socioeconomic impacts of energy resource development. Further investigation is required to determine if other specific energy problem areas are addressed adequately by Alaska's energy programs. Option: Examine Alaska's energy program more thoroughly o identify specific energy problem areas that may not yet have been adequately addressed. Option: Consider formulating goals, policies, and programs for energy problem areas that Alaska has not yet addressed. STATE ENERGY ORGANIZATION A report to the Alaska legislature by the NCSL Energy Program March 1981 National Conference of State Legislatures 1125 Seventeenth Street, Suite 1500 Denver, Colorado 80202 (303) 623-6600 The Alaska Project of the National Conference of State Legislatures (NCSL) is funded by a contract with the Alaska Legislature House Research Agency to provide technical assistance to the Alaska legislature. The assistance is designed to aid in the development of effective policies and state programs for solar, wind, and other renewable energy resources; energy emergency preparedness; and state energy organizations. The materials and opinions in this report are those of the authors and not necessarily those of the Alaska legislature OW cS Statin. The principal authors of this report are George Weber, Project Manager, and Jill Verdick, Senior Staff Analyst. Research Analysts Gail Prostrollo and Rick Counihan aided with research and analysis. Douglas Sacarto, Associate Director of the Energy Program and Research Coordinator, supervised preparation of the report; Staff Associate Joslyn Green undertook final editing. Production was in large part the responsibility of Pat Shearer. ACKNOWLEDGEMENTS The National Conference of State Legislatures would like to thank several individuals in Alaska for their contribution in the preparation of this report. Individuals interviewed: Alaska Legislature Representative Pat Carney Senator Mike Collette Marea Converse, Office of Senator Dankworth Mary Kvalheim, Information Officer, MAT-SU Information Office Merle Jensen, Legislative Audit Division J. H. Hogan, Director, Legislative Finance Division Milton Barker, Legislative Finance Division Elmer Lundstrom, Legislative Finance Division Duncan Read, Director, House Research Agency Jack Kreinheder, House Research Staff Jennifer Noah, Legal Services Office Bob Speed, Speaker's Office Department of Administration George Crowder, Director, Division of Data Processing Department of Commerce and Economic Development Pete Jeans, Deputy Commissioner Lois Cook, Director, Administrative Services Sharon Traylor, Director, Division of Business Loans Division of Energy and Power Development Clarissa Quinlan, Director Janice Brewer Greg Edblom Don Markle Heinz Noonan =1%— Dale Rusnel] Bob Shipley, Western SUN representative Jack Sprat, Energy Extension Service Kyle Weaver Other Agencies in Department of Commerce and Economic Development Richard Eakins, Director, Office of Special Industrial Development Jack Linton, former Exectuive Director, Alaska Housing Finance Corporation Bill Spear, Trustee, Alaska Renewable Resources Corporation Don Wold, Executive Director, Royalty Oi1 & Gas Advisory Board Gordon Zerbetz, Chairman, Alaska Public Utilities Commission Carolyn Guess, Commissioner, Alaska Public Utilities Commission Susan Knowles, Commissioner, Alasak Public Utilities Commission Eric Yould, Executive Director, Alaska Power Authority Terry McGuire, Director of Finance, Alaska Power Authority Mark Wittow, Legislative staffer, Gas Pipeline Committee Department of Community and Regional Affairs Larry Kimball, Director, Division of Community Planning Patrick Poland, Deputy Director, Division of Local Government Assistance Department of Environmental Conservation John Clark, Assistant Chief David Sturdevant Department of Military Affairs Colonel Edward Newberry Office of the Governor Ron Lehr, Director, Division of Management & Budget Hoyle Hamilton, Chairman, Alaska Oi] & Gas Conservation Commission Fran Ulmer, Director, Division of Policy Development & Planning Bruce Baker, Division of Policy Development & Planning =X- Bill Luria, Division of Policy Development & Planning Robert Walthrop, Special Assistant Department of Natural Resources Jeff Haines, Deputy Commissioner Al Carson, Deputy Director Ed Park Ross Schaff, State Geologist Glenn Harrison, Director, Division of Minerals & Energy Management Kay Brown, Division of Minerals and Energy Management Charles Behlke, Pipeline Coordinator, Division of Pipeline Surveillance Department of Revenue Chuck Logston Alaska Transportation Commission Walter Kubley, Commissioner University of Alaska Bill Wilson, Arctic Environmental Information & Data Center James Wise, Arctic Environmental Information & Data Center Miscellaneous Organizations Peg Tileston, Director, Alaska Center on the Environment John Pursley, Chairman, Alaska Energy Center Don Shira, Alaska Power Administration Eric Meyers, AKPIRG D. Gordon Howell, Solar & Wind Program, Alberta Research Council Peter Pouray, Energy Coordinator, Municipality of Anchorage Max Foster, Revenue Requirements Supervisor, Municipal Light & Power Department, Municipality of Anchorage Paula Wellen, Reserach Assistant, Community Information Center, Fairbanks, North Star Borough -xi- Phil Smith, Executive Director, Rural Alaska Community Action Program (RurAL CAP) Jim Ayerd, Deputy Director, RurAL CAP Robert Lohr, Energy Director, RurAL CAP -xii- Reviewers of Draft Document Glenn Atkins, Director, Environmental Quality Management Division, Department of Environmental Conservation BobBaker, Deputy Director, Division of Parks, Department of Natural Resources Charles Behlke, Pipeline Coordinator, Division of Pipeline Surveillance, Department of Natural Resources Dr. Helen D. Beirne, Commissioner, Department of Health & Social Services Tom Bergstrom, Director, Division of Administration & Management, Department of Natural Resources Domonic L. Carney, Director, Division of Agriculture, Department of Natural Resources Wilson L. Condon, Esq., Attorney General, Department of Law John B. Farleigh, Executive Director, Public Utilities Commission Representative Terry Gardiner, Alaska Legislature Harry Goldbar, Executive Director, Alaska State Housing Authority Deena Henkins, Director, Division of Environmental Quality Operations, Department of Environmental Conservation Claud Hoffman, Director, Division of Technical Services, Department of Natural Resources William R. Hudson, Commision, Department Commerce & Economic Development Robert M. Johnson, Director, Division of Petroleum Revenue, Department of Revenue Ron Lehr, Director, Division of Budget & Management, Governor's Office Robert E. LeResche, Commissioner, Department of Natural Resources Marshall L. Lind, Commissioner, Department of Education Lee McAnerney, Commissioner, Department of Community & Regional Affairs Ernst W. Mueller, Commissioner, Department of Environmental Conservation Edward Newberry, Director DMA/Alaska Division of Emergency Services, Department of Military Affairs Chris Noah, Executive Director, Alaska Council on Science & Technology, Office of the Governor Edmund N. Orbeck, Commissioner, Department of Labor Clarissa Quinlan, Division Energy & Power Development Ross Schaff, State Geologist, Division of Geological & Geological Surveys, Depart- ment of Natural Resources Donald F. Searcy, Executive Director, Alaska Transportation Commission -xiii- George W. Skladal, Executive Director, Alaska Pipeline Commission Ronald 0. Skoog, Commissioner, Department of Fish & Game Theodore G. Smith, Director, Division of Forest, Land & Water Management, Department of Natural Resources Bob Speed, Speaker's Office, Alaska Legislature Reed Stoops, Division of Research & Development, Department of Natural Resources Sharon Traylor, Director, Division of Business Loans, Department of Commerce & Economic Development Robert W. Ward, Commissioner, Department of Transportation & Public Facilities Charles R. Webber, Commissioner, Department of Commerce & Economic Development Thomas K. Williams, Commissioner, Department of Revenue Eric Yould, Executive Director, Alaska Power Authority -xiv- Chapter Chapter Chapter Chapter Contents Ds ASSESSING: THEA EEGAGCY OF CHANGE «o<0i6.<\55,¢ 2208. ecimcis ees sows ] Ths ~~ “GOALS ‘ROLICTES;, “AND 2RROGRAMS:. .<: c:crs,0'2'cts 3: <010 ciovsiorysuras errs oars 11 Why Consider Goals and Policies? Conservation Utilities Energy Shortages Energy Use by State Government Energy Production and Conversion is, AGENCIES) AND FUNGI LONG 2.2% )0i5\50.0.5 cinco monies scree are scisiees og 31 Agencies Activities Energy Functions by Agency Dice) 7S SMA Ol LONS© e7eisicjs'sisiese« o16/0 21010 oro Fivie ois Gia Seleraisic.s.0 5 seuss 49 Administration Goal and Policy Formulation Planning and Technical Support for Policy Formulation Energy Information Services Policy Formulation and Planning in Resource Development Public Participation and Review Rural Local Government--A Special Case Communication, Coordination, and Monitoring Liaison with Local Governments in Rural Areas Research, Development and Demonstration Program Implementation Selected References”. ...i.s ccewicss cso .ceoe Se Diora bias Savais eiais SiapeEnaoeteeeieres 69 ADDENGIGES jisl'ec cans ccciesee mag eoetotes Wie eae eolwie iste eaee HG, So Bieiav al ho fe-Greve oe Te Appendix A: Alaska Energy Policies: Legislation and Resolutions Appendix B: Alaska Energy Policies: The Governor's Office Appendix C: Alaska Energy Programs and Activities Appendix D: Problem Areas in Need of Closer Scrutiny Assessing the Legacy of Change The last five years have brought rapid changes in the ways Alaska state government deals with energy matters. New agencies have been created, new programs have been developed, and larger amounts of state money have been spent than in earlier years. The Alaska legislature and the executive branch have recently begun to assess the impact of these changes. As part of this assessment, the legislature asked the Energy Program of the National Conference of State Legislatures to study several aspects of the energy situation in Alaska, including the organizational structure of state energy activities. Presented in this report are the findings of an initial review of how Alaska state government manages energy activities. Although the findings are based on a thorough inventory of energy agencies and energy activities, the report goes beyond compiling program titles and analyzes the processes used by state government to formulate objectives, obtain and use information, communicate, carry out programs, and monitor program results. The conclusions drawn in this report are based on two major sources of information: published assessments of the organizational structure of energy programs in other states, and study of Alaska's special situation. The experience of other states proved useful to the study of Alaska, because it provided a basis for comparison--a yardstick against which Alaska's accomplishments and problems can be measured--and because it suggested certain specific organizational methods that might work well in Alaska. From reports, interviews, and an NCSL study of state energy organizations (Energy Policy-Making in the States: The Structure Evolves), it became clear the energy problems states are confronting can be placed in some general categories: conservation, utilities, energy emergencies, the use of energy by state government, and the production and conversion of energy resources. Shown in Table I-1 are the types of programs other states have developed within these general categories, information that derives from an analysis of 150 specific state programs. From analyzing the experience of other states it also became clear that state governments characteristically perform certain key functions as they deal with energy matters. These functions, described in Table I-2, are interdependent. Study of Alaska's special situation was based on information obtained from published reports, memoranda, letters, and from telephone and on-site interviews with legislators, legislative staff, agency personnel, members of the governor's staff, representatives of local governments, and interested citizens. This information was then reviewed by a number of state officials in Alaska, whose participation the National Conference of State Legislatures gratefully acknowledges. Further study then focused on three major aspects of energy management in Alaska: e@ energy goals, policies, and programs; @ energy agencies, functions, and relationships; e@ issues and options. Goals, Policies, and Programs General goals and specific energy policies were examined for comprehensiveness, specificity, and consistency. Questions considered include: Do Alaska's energy goals and policies address all the energy problems that other state governments address? Are these goals and policies sufficiently specific to guide the day-to-day conduct of state government? Are they consistent and harmonious, or do some work at cross purposes with others? The programs for implementing Alaska's energy goals and policies were then examined in terms of many of the same values: comprehensiveness, consistency, and efficiency of administration. Questions considered include: Does Alaska have programs addressing all energy problem areas and all explicit state energy goals and policies? Are Alaska's energy programs consistent with state goals and policies? Are some programs duplicative? Is the assignment of programs reasonable, given the missions and other activities of the agencies involved? Agencies and Functions The agencies concerned with state energy problems, their relationships to one another, and the functions they perform were examined for comprehensiveness, clarity, predictability, and efficiency. Questions considered include: Taken as a whole, do Alaska agencies perform all the functions necessary to achieve the state's energy goals? Are agency roles clear and predictable? Does more than one agency perform the same functions in the same energy problem area? Is the assignment of responsibility for energy matters reasonable, given an agency's other responsibilities and its position in state government? Issues and Options The analysis of goals, policies, programs, agencies, and functions in these terms led to the identification of several organizational issues that the Alaska legislature may wish to address. The report concludes with a discussion of these issues and proposes various measures the legislature can take to improve the organizational structure of energy management in Alaska. The options offered cover a fairly broad range of possible action. Some suggested measures are fairly simple, like amending statutes to clear up minor discrepancies. Other options deal with larger issues and may take longer to accomplish, like restructuring certain aspects of energy Management. The options are as specific as possible, so that the legislature is presented with clear and definite choices about particular agencies and programs. Table I-1 ENERGY PROBLEM AREAS Conservation Transportation e Increased loads (e.g., van pooling, car pooling, heavier shipping weights) e Increased miles per gallon (e.g., speed limit enforcement, tune up/maintenance) e Alternate fuels (e.g., gasohol, methanol, ethanol, electricity) e Mass transit e Land use and transportation planning (i.e., planning roadway and land use patterns for efficient travel) e Alternative transportation modes (e.g., walking, bicycling) e Traffic management (e.g., turn on red, night-time traffic light modif ication) Building Standards and Weatherization e Weatherization and maintenance e Construction standards e Retrofitting with alternative energy source (e.g., solar) e Zoning standards to increase residential density e Lighting standards Building Temperature Restrictions e Minimum summer temperatures e Maximum winter temperatures e Thermostat regulation Utility Rates e@ New rate structures e Weatherization programs e Cogeneration Land Use e@ Planning for energy-efficient transportation and land use (e.g., bikeways, higher densities, multiple-unit dwellings, clustering residential and commercial land uses) Recycling AND STATE PROGRAMS Utilities--Electric and Natural Gas Planning (e.g., assessing need for additional facilities, facility siting) Demand forecasting Alternative technologies for producing electricity Coordination of power systems New rate structures Other regulatory functions (e.g., certification of need) Conservation Energy Shortages Planning Energy information systems Management strategies Implementation (e.g., state set-aside, rationing, emergency energy conservation, public information) Energy Use by State Governments State vehicle fleet (e.g., purchase of energy-efficient vehicles, improved maintenance, reduction of miles driven, alternate fuels) State facilities (e.g., retrofitting with insulation or renewable energy source, lighting standards, temperature standards, construction standards for new buildings, improved maintenance) Purchase of energy-efficient equipment (e.g., life-cycle costing) Energy Production and Conversion (Coal, Oil and Gas, Electricity, Geothermal and Small-Scale Hydroelectric Power, Uranium/Nuclear Plants, Renewable Sources) Facilitation of production (e.g., research, development and demonstration, construction, financial assistance, provision of information, regulatory reform) Control and mitigation of environmental and socioeconomic impacts (e.g., environmental and socioeconomic assessment, land-use planning, facility siting, technical and financial assistance, regulation and enforcement) Transport and distribution of energy resources Taxation Table !I-2 STATE FUNCTIONS Described briefly below are basic functions that state governments perform in dealing with energy-related matters. Administration State systems for providing support services and dealing with other administrative aspects of energy programs range from very dispersed, as in Colorado, to completely centralized, as in New Mexico. Formulation of Goals and Policies To guide their decisions about energy matters, states set general goals for their overall response to energy problems as well as more specific policies to guide particular programs or combinations of programs. If a state sets achieving a high degree of energy self-sufficiency as a general goal, for example, it might set increasing the production of coal as a more specific policy. Setting goals and policies is primarily the responsibility of the legislature and the governor. But refinements occur as many different levels of government supply technical support, planning, and information. Piannin Planning provides technical support for policy formulation. The process involves three interdependent steps: e identifying goals; e determining and evaluating current conditions; e developing courses of action for achieving goals. Energy Information: Services To deal with energy problems, states require information that differs somewhat from the information required for other purposes like taxation or regulation. They need to assure the availability of information describing characteristics of energy supply, storage, distribution and consumption. Monitoring Federal Activity funding sources pertaining to energy so that coordinated state response is possible. Communication and Coordination If goals and policies are to guide day-to-day activities, they must be communicated to and coordinated at every level of state government. Formal mechanisms for communication and coordination include: e hearings and analyses leading to legislation; legislation; Notes of Legislative Intent; policy statements from the governor; cabinet meetings; executive directives; budget process; inter-agency committees or councils. AND ENERGY MATTERS Monitoring Agency Performance The legislature and the governor need to determine whether agencies are indeed conducting their operations as intended. Formal mechanisms for monitoring include: e legislative hearings; e direct supervision; e@ budget-process requirements for reports and audits. Public Participation and Review As the complexity of energy problems has increased, states have sought public participation in policy formulation, recognizing that it: e allows the political acceptability of actions to be gauged in advance; identifies political opposition; produces new and useful information; increases public awareness of issues. Mechanisms for fostering public participation include: e@ public or special hearings; e@ public opinion polls; e letters; e telephone calls. The use of these mechanisms is often preceded by media events and the distribution of brochures to inform the public about the isues at hand, to heighten public awareness and to stimulate public debate. Segments of the public (e.g., local governments or consumers) may be of special concern to decision-makers, so special efforts may be made to single them out and obtain their views. Public Information and Education "Public information" refers to brief announcements that alert citizens to energy problems, actions expected of them, upcoming events, or services offered by the state. "Public education" refers to more intensive efforts of longer duration, like classes or training programs. Liaison with Local Governments Most of the energy activities of state government affect local governments. Many states have established an agency that works primarily with local governments, and is therefore familiar with local conditions, problems, and politics. Research, ‘Development: and Demonstration States often conduct or fund research, development, and demonstration projects to promote energy technologies receiving insufficient attention from private industry or the federal government. Most frequently these technologies promote the use or export of state resources, the use of renewable resources, or the improvement of energy efficiency. Program Implementation "Implementation" describes activities like the provision of technical or financial assistance, whereby strategies to achieve state energy goals are put into effect. Regulation and enforcement are other aspects of implementation. Goals, Policies, and Programs This chapter examines Alaska's current goals, policies, and programs for each energy problem area state governments now confront. This information will be the basis for analyses found in Chapters III and IV. Information about Alaska's goals, policies, and programs was obtained by taking the following actions: e identifying and reviewing Alaska's energy-related statutes, legislative resolutions, and executive orders; e identifying and reviewing publications, memoranda, and letters; e interviewing (on site and by telephone) legislative staff and staff members of state agencies and the Office of the Governor; e@ submitting preliminary findings to the Office of the Governor and agency heads for review. This process yielded the information summarized in three tables (Appendices A, B and C): "Alaska Energy Policies: Legislation and =i Resolutions," "Alaska Energy Policies: The Governor's Office," and "Alaska Energy Programs and Activities." Why Consider Goals and Policies? Energy goals and policies articulated by the legislature and the executive branch motivate and define state action; they are the base upon which programs rest. If there is no strong, consistent policy base, the machinery of government cannot move smoothly toward solving problems. The significance of comprehensive, consistent goals and policies is recognized by Alaska officials. As William Luria of the governor's staff writes in his Energy White Paper, "Do we really have a strong enough policy base on which to develop new, expanded, or modified programs which are consistent with [our] self-sufficiency goal? Are the governor's policies being implemented in a consistent manner?" Certainly the state will not reach an energy goal which is not explicitly defined. Certainly, too, judging the effectiveness of a program or an agency is difficult unless goals and policies are known. A general theme is evident in many of the specific energy policies and programs described below: energy self-sufficiency for Alaska. The Governor's 1980 Energy White Paper, for example, describes the concept as "...a desire to reach a certain degree of energy self-sufficiency in Alaska--long-term energy self-sufficiency built on the lowering of in-state energy consumption and on the accelerated development of a local and renewable energy resource base...."! 222 Alaska's energy goals, policies, and programs are discussed below by energy problem area. Conservation Energy conservation is a significant goal of Alaska state government: it has been supported in the statutes, particularly the 1980 Omnibus Energy Act (Chapter 83, SLA 1980); it is recognized by the governor as "a key component"; many energy conservation programs and activities are already under way. Although some aspects of conservation have received greater attention than others, all aspects are considered below. Transportation. Conservation in transportation has to date received little attention in Alaska. In fact, research uncovered no legislative or executive policies in this area. Section 44.42.02 does direct the Department of Transportation and Public Facilities to "develop a comprehensive, long-range intermodal transportation plan for the state," but the law does not specifically require consideration of energy conservation. With support from the Federal Highway Administration, the Division of Research and Development in the Department of Transportation is currently researching and testing uses of alternative fuels like alcohol and gasohol. Two other programs concern transportation conservation: the Alternative Technology and Energy Revolving Loan Fund in the Department of Commerce's Division of Business Loans, and a study of Alaska's transportation network by the University of Alaska's Institute for Social and Economic Research (ISER). This study is partially funded by the federal Department of Transportation. -13- In view of Alaska's unique transportation problems, caused particularly by the vast distances that must be traveled and by the predominantly rural nature of the state, a more aggressive program of planning, research, and development in energy conservation in transportation may be needed. Building Standards and Weatherization. The greatest amount of activity has been conducted in this conservation area, primarily by the Division of Energy and Power Development in the Department of Commerce and Economic Development and the Department of Transportation and Public Facilities. Support for weatherization is found in Chapter 83 of the Omnibus Energy Act; and in Section 44.42.020, the Department of Transportation and Public Facilities is directed to “adopt energy performance standards for public facilities [built] after July 1, 1980." The same department also is directed to provide technical assistance in developing construction and operation standards and energy conservation measures for rural schools. The Office of the Governor has not outlined specific policies in this area, but the Governor's 1980 Energy White Paper does call for implementing and monitoring compliance with all the provisions of the Omnibus Energy Act. Existing programs in weatherization and building standards, which are largely federally funded or federally mandated, are administered by the Division of Energy and the Department of Transportation and Public Facilities. They include the Schools, Hospitals, and Public Facilities Weatherization Program, the weatherization program for low-income households, and the energy standards program for state-owned buildings. The ae Department of Transportation and Public Facilities is also conducting research and development projects that deal with energy efficiency in buildings. In view of the strong federal influence and support in this area, the concentration of activity is understandable. Building Temperature Restrictions. This study did not locate any policies or programs concerning the use of temperature restrictions to conserve energy in buildings, perhaps because such restrictions are sometimes seen as politically undesirable. Adopting a program of temperature restrictions in state-owned buildings would, however, not only conserve energy but also set an exemple for the rest of the state. Utility Rates. House Concurrent Resolution No. 100 (1976) expressed interest in the use of utility rates to provide incentives for conservaion. The Office of the Governor has set no policies in this area. The federal Public Utility Regulatory Policies Act (PURPA) requires states to consider rate changes to induce conservation, however, and the Public Utilities Commission is therefore considering the issue in hearings on the act. Land Use. Although this study discovered no specific legislative or gubernatorial goals and policies advocating energy conservation in land use, there is significant program activity by the Division of Community Planning in the Department of Community and Regional Affairs. The Division is responsible for implementing the state Coastal Management Act and provides technical assistance in land use and resource use to Alaska's coastal communities. The Division also provides the Department of Transportation -15- with information about land use planning. The apparent lack of expressed energy conservation goals and policy on which to base land use planning indicates weak support for this type of conservation. Other. Recycling by state agencies has been mandated by the 1980 Omnibus Energy Act; however, there is evidently no policy encouraging recycling by the general public. Utilities Alaska statutes give minimal attention to the position of utilities in the Alaska energy equation. However, three statute sections set out important general goals and policies concerning electric power. Section 44.56.090 requires the Alaska Power Authority (APA) to sell power at the lowest price that covers the full cost of the power. Section 44.33.030 requires the Division of Energy to supply abundant electric power at the lowest possible rates and to promote the use of electric power in industry, agriculture, and commerce. Section 44.33.040 also calls for promoting rural electrification and creating power grids and power pools. The requirement that the Division of Energy promote the use of electric power and rural electrification raises two questions: (1) How do such policies relate to the rising cost of power, especially in the bush, and to the increased emphasis other state policies place on conservation? (2) Is the Division of Energy and Power Development, which is heavily committed to conservation, the proper agency to carry out this mission? -16- Only one policy related to utilities has been set out by the governor. Ina memo of January 10, 1980, to the Public Utilities Commission and the departments of transportation, education, and environmental conservation, the governor required all new state-owned or state-funded facilities to connect with local utilities. The aim is greater support for local utilities that in turn allows greater local energy self-sufficiency. Program activities include creation of the Power Development Plan by the Division of Energy, implementation of the federal Public Utility Regulatory Policies Act by the Public Utilities Commission (PUC), and administration of the Power Production Assistance Act by the Public Utilities Commission and the Alaska Power Administration. The Power Production Assistance Program, through which the state subsidizes power costs for customers of small rural utilities, appears to be in conflict with Section 44.56.090, which calls for selling power at prices which reflect its actual cost. This issue is raised in the Governor's White Paper, which states: The intent of the legislation is that this subsidy should serve as an interim measure to hold down escalating electric costs while longer-term solutions are developed and that it would phase out over a period of time. There are, however, no concrete provisions in the statute that would accomplish this phase-out in an orderly manner.... DPDP has been instructed to develop the specific language that would make the Power Production Assistance Act truly an interim program, and to evaluate formulas which might be more equitable and less likely to encourage additional consumption.3 Natural Gas This study found little evidence of activity based on the utility aspects of natural gas. This is somewhat surprising in view of the heavy use of -17- natural gas for heat and power in the Anchorage area. Currently, the Division of Energy and Power Development, Office of Planning and Analysis, prepares an annual Oil and Gas Consumption Study which is submitted to the legislature and also used as a forecasting and planning tool. There are a number of initiatives the state could take, however, with regard to gas supply, pricing and conservation which would be consistent with existing policies. This program area appears to warrant much closer attention by both the legislative and the executive branches of government. Energy Shortages Energy shortages have been the focus of increasing activity in Alaska, particularly as they concern remote rural communities which are often highly susceptible to fuel shortages and severe weather. The governor has set a policy that the state will provide emergency fuel assistance to individuals and communities; a number of agencies are involved in related activities. The Division of Emergency Services in the Department of Military Affairs is equipped to respond to an energy emergency by flying fuel, generators or other supplies in to remote communities. The Division of Energy and Power Development is responsible for coordinating overall energy shortage response in the state. The Department of Community and Regional Affairs administers a Bulk Fuel Storage Facilities Grant Fund to communities to install bulk storage facilities that may help avert shortages. Another program, located in the Office of the Governor, is the Fuel Emergency Fund, which makes funds -18- available in case of disaster. The Division of Business Loans in the Department of Commerce and Economic Development assists Alaskan villages in obtaining loans for bulk fuel purchases. The number of agencies involved with energy emergency response, particularly bulk fuel funding and storage, raises the question of the need to consolidate or coordinate programs, particularly programs for assisting bush communities. The state's primary tool for managing emergency fuel shortages has been the State Set-Aside Program--a federal requirement that fuel suppliers set aside a small percentage of delivered fuel each month for emergency use by the state. This program, which has been administered by the Division of Energy and Power Development, was recently repealed by President Reagan, leaving a significant program gap. The scatter-shot nature of Alaska's preparation for energy emergencies may have been caused by the lack of comprehensive goals, policies, or plans. The 1980 Omnibus Energy Act does require, however, that an energy contingency component be included in the state's Long-term Energy Plan. Ideally, this plan, which is currently being developed, will establish a comprehensive program covering emergency energy conservation measures, gasoline rationing, a state system of fuel set-aside, and emergency fuel transportation systems. == Energy emergencies are discussed in detail in Energy Emergency Preparedness, a report recently prepared for Alaska by the National Conference of State Legislatures. Energy Use by State Government State officials have evidently recognized that managing the energy used by state government is a key element in Alaska's energy program. The state itself can have a significant impact by reducing consumption, increasing efficiency, conducting research and demonstration projects, and transferring technology to the private sector. The governor has set a policy that the state will incorporate energy conservation into the planning, design, and construction of state-owned and state-funded facilities. In addition, in a December 1979 memo to the Department of Commerce and Economic Development and the Department of Transportation and Public Facilities, the governor has declared that all new state facilities must use waste heat whenever possible. The legislature, in the Omnibus Energy Act, required that energy efficiency be incorporated into the design and management of public buildings. That act also requires state agencies to initiate recycling programs. The Department of Transportation and Public Facilities has been given primary responsibility for implementing these policies. Specifically, Section 44.42.065 requires the department to perform energy audits of al] public buildings and to recommend ways to improve efficiency and lower the -20- life-cycle cost of the buildings. Section 44.42.020 requires the department to develop "a comprehensive, long-range intermodal transportation plan for the state," to “supervise and maintain all state automotive and mechanical equipment, aircraft, and vessels," and to “adopt energy performance standards for public facilities of the state." The department is also to develop a comprehensive facility procurement plan that analyzes the life-cycle costs of incorporating alternative energy systems into buildings. Many of these statutory requirements are new. The Department of Transportation and Public Facilities has already established a life-cycle costing program for new state buildings, but apparently has not yet set up programs to meet the various other requirements. Energy Production and Conversion Producing energy is a very significant part of the Alaska energy equation for two reasons: (1) in-state energy production is vital to achieving the goal of self-sufficiency; and (2) energy production provides most of the state's revenue. General Policies and Programs The Office of the Governor has articulated two important general goals for energy production that bear on a number of policies and programs: (1) The state will lease resources at a moderate rate to provide a steady income... and to minimize local disruptions caused by energy deve lopment’; (2) The state will ensure that energy facilities will be developed in an economically and environmentally sound manner.” These broad goals have aoe significant implications for oil and gas leasing and coastal energy development. They should be taken into account in planning, policy formulation, and program implementation. Activities and programs related to these policies and summarized in Appendix C. Among the more important: energy resource data collection by the Division of Geological and Geophysical Survey (Department of Natural Resources), mineral leasing on state lands by the Division of Minerals and Energy Management (Department of Natural Resources), and the Coastal Zone Management Program administered by the Division of Community Planning (Department of Community and Regional Affairs). The Federal-State Clearinghouse in the Office of the Governor coordinates and reviews state and federal activities on coastal lands. For the purposes of implementing these programs, the existing organization and assignment of duties appear logical and workable. However, there evidently is a lack of program activity for ensuring that the two major goals set by the Office of the Governor are met. This issue is discussed more fully in Chapter IV. Coal Coal is generally viewed as the next major energy resource to be developed in Alaska, but policy formulation seems to be lagging behind program activity. For example, existing statutes seem to contain no policies related specifically to coal development. The governor has established a statewide Coal Policy Committee, however, with a mandate to encourage coal development in ways that offer long-term benefits like increased employment, fiscal balance, and environmentally sound development. An interagency coal 2905 development program has been established, to be coordinated by the Division of Policy Development and Planning. Current coal development activities in Alaska include a study of the Beluga coal field by the Office of Planning and Analysis in the Division of Energy and Power Development and coal research by the University of Alaska at the Usibelli Coal Laboratory. The Division of Geological and Geophysical Survey (Department of Natural Resources), which is responsible for investigating coal, has traditionally been concerned with large deposits but is reportedly reevaluating small deposits for possible use in otherwise hard-pressed villages and communities. The Governor's Energy White Paper concluded that: to help determine other potential local coal sites in Alaska, DNR's coal field investigation and mapping program should be modified....Baseline geologic and mineral resource data collection efforts should include consideration of local uses for the coal resource. These efforts should be coordinated with the APA reconnaissance studies and with DEPD's data base development. Alaska's coal will doubtless be in increasing demand in the rest of the country and abroad, as well as within the state. In terms of local use, coal may be more economical than either wood or oil. Development of this valuable resource will therefore be of vital importance for the state. Although current state activities emphasize research and coordination, other aspects of coal development also need to be addressed. Most important are policy formulation, planning, public participation and review, and technical assistance to local government in development areas. Oil and Gas Production Predictably, several agencies are carrying out a board range of activities in this area. Most heavily involved are the Department of Natural -23- Resources, Department of Commerce and Economic Development, and the Department of Environmental Conservation. (See Appendix C.) Existing policies tend to be rather general. For example, a number of legislative resolutions and statutes support development efforts such as the Alaska Natura Gas Pipeline. (See Appendix A.) The governor's policies include developing energy resources at a moderate rate to yield state income at minimum environmental and social cost. Policies for developing specific oil and gas projects appear to be formulated primarily on a project-by-project basis by the Division of Policy Development and Planning and by the Commissioner's Office in the Department of Natural Resources. Also important is the Major Project Review process, which requires the division to consult with affected state agencies and report to the governor on the socioeconomic and environmental aspects of certain projects. The Division of Policy Development and Planning also coordinates interagency planning and review of state oi] and gas leasing activities through the Agency Advisory Committee on Leasing, co-chaired by the director of the division and the Commissioner of Natural Resources. Questions about the handling of Alaska's oi] and gas development arise in three functional categories: planning, liaison with local governments, and public participation and review. First, are specific planning decisions being made, for the most part, by the Office of the Governor rather than by a broad-based group representing affected agencies, legislators, and citizen interest groups? Second, do local governments have an opportunity to -24- participate in development decisions that affect them, and are they receiving the technical assistance they need? Finally, has the public been afforded the chance to participate in state decisions about oil and gas leasing, development, and production? These are important questions which will be addressed in Chapter IV. Electricity The state is currently involved in numerous electric power development activities. Two major studies are being made of power development for the Railbelt and the Kenai Peninsula. Dozens of state-funded or state-managed hydroelectric, wind, geothermal, and other power projects are under way in many different areas. The two agencies most heavily involved are the Alaska Power Authority and the Division of Energy and Power Development. The Power Authority is responsible for managing the Power Project Loan Fund, a revolving fund that assists the development of electric power facilities. The Division of Energy is responsible for the Power Development Plan, an overview of the status of power development in Alaska. Both agencies have undertaken electric generation demonstration projects. The Division of Energy and Power Development has lead responsibility for wind and geothermal projects; the Power Authority is concentrating on hydroelectric generation. Both agencies are conducting projects that involve generating power with wood and wastes. Geothermal and Small-Scale Hydroelectric Power Alaska is investigating the use of geothermal and small-scale hydroelectric energy. The National Conference of State Legislatures has identified barriers to their development and proposed several options is a November, 1980 document, Renewable Energy Development: Geothermal and Small-Scale Hydro Supplement. The Office of the Governor is administering two studies: the Lower Cook Inlet Tidal Power Study, and the Susitna Alternatives Study. Responsible for managing the studies are the heads of the Division of Policy Development and Planning, the Division of Energy and Power Development, the Division of Budget and Management, and the Alaska Power Authority. Programs potentially overlap in this energy problem area, so close cooperating in planning is essential. There may be conflicts that indicate a need for refinement of responsibilities. Uranium and Nuclear Power Plants Alaska's policymakers have chosen to forego the nuclear power option by specifically excluding nuclear development from the Alaska Power Authority's responsibilities by statute, and by excluding nuclear technology from the Alternative Energy Loan Fund program established by the Omnibus Energy Act of 1980. This decision makes local development of uranium supplies for export a matter of economic interest rather than one of in-state energy supply. Renewable Energy Sources Considerable policy support has been given to the development of renewable energy resources in Alaska. Section 37.12.015, for example, supports: =26- the development of the state's renewable resources; research into and development of new technologies and innovations; appropriate use of state resources; the stimulation of commercialization; and demonstration of new renewable resource products and industries. Supported in other statutes are: small-scale, low-cost alternatives; and geothermal energy production. The governor has committed the state to promoting alternative energy development through grants and loans and to encouraging the development of local energy service businesses through offering them priority loan zh treatment. Four renewable energy programs are housed in the Department of Commerce and Economic (1) (2) (3) (4) Deve lopment: the Alternative Technology and Energy Revolving Loan Fund, a financial assistance program in the Division of Business Loans; renewable energy research and development projects in the Division of Energy; the Solar Information Clearinghouse, a federally-funded program located at the Division of Energy; the Alaska Energy Extension Service, a technical information agency also federally funded, located in the Division of Energy and Power Development. Other activities include a program of the Alaska Renewable Resources Corporation to finance renewable energy businesses and a major renewables -27- research, development and demonstration program in the Department of Transportation and Public Facilities. It is apparent that the new Alaska Energy Center will also be heavily involved in researching and developing renewable energy sources such as alcohol fuels and solar and wind power. In view of the wide range of state activities in renewable energy, especially in research and development, centralization of effort or at least coordination will be essential. It is possible that the new Energy Center will coordinate renewable energy research and development. But policy formulation, technical and financial assistance, public participation, and planning in this program area are still widely dispersed among several agencies. Now may be the time to evaluate whether the current distribution of renewable energy activities is the most workable system or whether there is a need for a single agency in which to house these programs. Especially in rural Alaska, with its heavy dependence on expensive petroleum fuels, a coordinated state program of financial and technical assistance for making use of locally available renewable energy resources is essential, given the apparent overlap of current efforts of state and private agencies. -28- Notes Governor's 1980 Energy White Paper, page 6. Energy White Paper, page 13. Energy White Paper, page 11. Energy White Paper, page 4. Energy White Paper, page 11. Energy White Paper, page 11. See the governor's memorandum of December 31, 1979 to Commerce Commissioner Webber. -29- Agencies and Functions This chapter identifies the agencies, boards and commissions performing energy functions in Alaska and also considers the following questions: Which agencies are most heavily involved in energy-related activities? What functions do these agencies perform? Reviewing this information agency by agency lays the groundwork for analyzing whether all vital functions are being performed most efficiently and whether the present division of responsibilities makes sense. The chapter begins with a general introduction to agencies and their responsibilities, then discusses each agency individually. Agencies The Office of the Governor and at least eleven of the fourteen executive agencies in Alaska perform major energy-related functions. (See =3= Figure III-2.) Outside the executive branch, a number of other state entities undertake energy research, development, policymaking, and regulation: the legislature; two divisions of the Office of the Governor; the University of Alaska; and at least ten independent boards, commissions, and authorities. In Alaska, then, energy has become a concern in nearly every part of state government. Activities Energy activities in Alaska fall into two general categories, those that help meet state energy needs through supply management or the conservation of energy and those that help develop the state's energy resources. Activities range from leasing state oil and gas lands to offering loans for developing renewable energy technologies, and from weatherizing low-income housing to assisting rural communities in an energy emergency. Some programs are managed by an entire division and applied to the entire state; others are managed by a single person and targeted at smaller groups--communities, industries, commercial enterprises. Energy Functions by Agency Legislature The legislature carries out three major energy functions: goal and policy formulation, communication and coordination, and monitoring. Goals and policies are formulated mainly through the legislative process--through the creation, consideration, and passage of legislation. Many other state legislatures have recognized the advantages of establishing standing energy -32- legislatures have recognized the advantages of establishing standing energy committees; the Alaska legislature may want to consider this option as a method of improving its response to energy issues. Communication, coordination, and monitoring are currently part of the budget process managed by the House and Senate Finance Committees, the Legislative Budget and Audit Committee, and the Divisions of Legislative Finance and Legislative Audit. Office of the Governor The Office of the Governor has three groups performing its main energy activities: the Special Assistants, the Division of Budget and Management (DBM), and the Division of Policy Development and Planning (DPDP). The first two groups deal with energy matters as part of their general oversight responsibilities. DBM works mainly through the budget process; DPOP, however, is more heavily involved in energy production, primarily through the Federal/State Clearinghouse, the Office of Coastal Management, and the Alaska Public Forum. DPDP activities include goal and policy formulation, planning, analysis, and program coordination. Department of Administration This department is concerned with energy because it is responsible for state purchasing and because it is the administrative agent for the Alaska Energy Center. The Division of General Services purchases the equipment and supplies necessary for carrying on the day-to-day business of state government. The -33- department is implementing life-cycle costing and setting energy-efficiency criteria for major purchases like automobiles, appliances, and generators. Alaska Energy Center The Alaska Energy Center, which was established last year by the legislature as an independent energy resource development center, is currently in the planning and initial staffing phase. Its purposes, summarized from a May 1, 1980 letter of intent from House Resources Chairman Bill Miles to Speaker Terry Gardiner, are to: lead energy research and development that will complement changing energy consumption patterns; help create new industries and employment based on local resources and technologies; respond to public inquiries; and become economically self-sufficient over the next ten years. Enabling legislation empowers the Center to "conduct or sponsor applied research, development, and demonstration projects" and "do everything necessary or desirable to carry out the purposes of the Center." Subject to the availability of funds, the Center is to sponsor energy research projects; conduct and sponsor applied research, development, and demonstration projects; and manage projects for which funding has been appropriated by the legislature. The letter of intent prepared by the House Resources Committee lists the following priorities for the Center: fossil-fuel recovery and related environmental problems; renewable energy and transportation; BoAS energy conservation and building design; an Innovation Center. Acting on these priorities could involve research, development and implementation functions. Since a number of other agencies are already performing these functions, coordination with other state agencies will be essential for the Center. Indeed, it is not completely clear at this point which functions will continue to be performed by existing agencies and which will become the exclusive responsibility of the Center. Expectations for the Center are varied and perhaps contradictory, as indicated in NCSL interviews with various state personnel and in a memorandum to University of Alaska faculty from Neil Davis, the University's Energy Coordinator. His memo, written after the December 1980 meeting of the Energy Center Board, cites as contradictory "statements contained in the enacting legislation, various statements of legislative intent, statements by individual legislators...and the charge laid on the Board by Governor Hammond." Department of Commerce and Economic Development (DCED) The Department of Commerce administers more energy-related activities and programs than any other state agency. The department is a major force for implementing energy conservation in the state. It is also heavily involved in energy development, especially the production of electric power and of energy from renewable resources. Offices to promote minerals and hydro- carbon development were created when the department recently reorganized. DCED and its agencies are also concerned with regulating utilities, planning for energy shortages, and managing the state's energy use. ~-35- Energy-related functions in this department are performed by two divisions, two offices, one authority, a board, and three independent commissions located within the department. (See Department of Commerce and Economic Development chart, Figure III-1.) Discussed below are the administrative (rather than the regulatory) functions of these entities: Division of Energy and Power Development Alaska Power Authority Division of Business Loans Office of Hydrocarbon Development Office of Minerals Development Division of Energy and Power Development. The Division of Energy, which is a focal point of energy activity in the state, performs the following functions: policy formulation; planning and analysis; program implementation; research, development and demonstration; and public information and education. The division was originally created as the Alaska Energy Office in 1974, in the Office of the Governor, to manage state fuel allocation during the 1973-74 energy crisis. It was later relocated in the Department of Commerce and given additional responsibilities, particularly for federally mandated and federally funded energy programs. The division also provides for the state's energy needs under the Power Development Section of Alaska =365 statutes. The Division of Energy has undergone many changes in responsibilities, funding, and staffing during its brief history. The following is an overview of its current activities. Policy formulation, planning, and analysis. The division is involved in state-level energy planning and policy formulation through activities like the Major Project Review Process and the Susitna Alternatives Project. It is responsible for other planning activities, like the development of the long-term state energy plan. Program implementation. The Energy Management Office was responsible for federal fuel allocation and set-aside programs until these programs were eliminated by President Reagan. Research, development, and demonstration. The Projects Office funds more than a dozen energy research and development projects, from geothermal energy in Unalaska to wind power at Nelson Lagoon. Public information and education. The division conducts several programs to inform the public about solar energy, energy conservation, and weatherization. Most of these programs are federal in origin and funded by the federal government. Alaska Power Authority (APA). The APA is the state's primary agency for developing power projects; many of its responsibilities relate closely to or overlap with those of the Division of Energy and Power Development. Bey Developing power projects may require studies of feasibility, financing, construction, and ownership, or operation of the facilities. The APA also performs three other functions: implementation of the Power Project Loan Fund; implementation of the Power Production Cost Assistance Program; reconnaissance studies to assess community power needs. Division of Business Loans. The Division of Business Loans implements the Alternative Technology and Energy Revolving Loan Fund, established by statute, which provides funding for developing non-nuclear, non-fossil energy sources. Office of Hydrocarbon Development and Office of Minerals Development. The Office of Hydrocarbon Development and the Office of Minerals Development were created in 1980, as were the Office of Special Industrial Development and Office of Commercial Fish Development, from the old Division of Economic Enterprise. Their purpose is to promote development of Alaska's resources, provide information to industry, and help coordinate development activities. The relationship of these offices to the Division of Energy and Power Development and the Department of Natural Resources has not yet been determined exactly, although the offices are reported to have policymaking authority similar to that of divisions. Department of Community and Regional Affairs(DCRA). DCRA's energy activities are conducted in the Division of Community Planning and the Division of Local Government Assistance. Three main energy-related =goe activities of the Community Planning Division: review of resource development policies; implementation of the Coastal Zone Management Program; and management of planning grants for the Coastal Energy Impact Program. The Division of Local Government Assistance implements the Coastal Energy Impact Program, which is funded by the federal Office of Coastal Zone Management. This program provides communities with technical assistance in preparing plans for the disposal of solid waste, devising strategies to mitigate the impact of energy development, designing water systems, and studying the feasibility of hydropower and coal development. Department of Environmental Conservation (DEC). This department has broad involvement in the regulation of energy production and development. Most energy-related functions are performed by the Division of Environmental Quality Management and the Division of Field Operations. These divisions are responsible for controlling oil spills, assessing the potential impacts of energy development, and issuing permits aimed at maintaining environmental quality. DEC also reviews state and federal oil and gas lease sales and development, provides technical information for the Major Project Review Process, and participates in the work of the Susitna Advisory Steering Committee. For environmental reasons, the department actively supports the development of renewable energy resources. 3996 Department of Fish and Game (DFG). The department is chiefly concerned with the effects of energy production and development on fish and game habitats. Through its Marine and Coastal Habitat Protection Division, DFG provides information about fish and wildlife that is used to plan and site energy developments. It also reviews for potential impacts projects like the gas pipeline, state oil and gas lease sales, coastal zone management, and hydroelectric development. The department is also represented on the state's oil spill team. Department of Health and Social Services (HSS). The Department of Health and Social Services implements a federal financial assistance program aimed at helping consumers pay their fuel or utility bills. The Division of Public Assistance disperses funds from the federal Department of Health and Human Services to local fuel distributors to help needy citizens. Department of Law. The Civil Division of the Department of Law drafts energy-related legislation for the governor, advises state agencies on energy matters and regulations, and represents the state in litigation. The department performs communication, coordination, and monitoring functions. Department of Natural Resources (DNR). The energy activities of the Department of Natural Resources (DNR) are concentrated entirely in the area of energy production and conversion, especially in oi] and gas production. DNR's only involvement in the production of electric power and energy from renewable energy sources is to provide information for planning. The department's responsibilities include planning and conducting lease sales, -40- collecting and analyzing data, administering contracts for the state's royalty oil and gas, issuing permits for oil and gas development, and coordinating Outer Continental Shelf oil and gas development with the federal government. The Office of the Commissioner formulates policy on oil and gas leasing, bidding, and disposal of state royalty oil and gas. Eight divisions in DNR handle energy-related matters. The two divisions carrying the greatest responsibility for energy are the Division of Minerals and Energy Management and the Division of Geological and Geophysical Surveys. Programs of the Division of Minerals and Energy Management programs include: oil, gas, and coal leasing; oil and gas management; economic analyses of energy resources; and management of mineral resources on state lands. For the most part this division performs implementation and coordination functions. The Division of Geological and Geophysical Surveys collects data on Alaska's coal, oil, and natural gas for use in various state programs. The division also inventories Alaska's mineral, oil, gas, and geothermal resources. The Division of Research and Development at DNR prepares regional plans for the use of state lands, analyzing potential uses for these lands that include energy resource development. The Department of Natural Resources also regulates various aspects of energy development. The heavy involvement -41- of the Department of Natural Resources in energy development planning and policymaking raises questions about how responsive the department is to the state's citizens and whether public participation in the planning process is adequate. These questions will be discussed in Chapter IV. Department of Military Affairs. The Division of Emergency Service within this department assists communities, businesses, and individuals affected by energy shortages. In times of emergency, the department is equipped to provide emergency generators and other supplies, by airlift if necessary. The Division of Emergency Services coordinates its efforts with the Division of Energy and Power Development. Department of Revenue. This agency implements three energy-related programs: the fuel tax credit and conservation tax programs; administration of petroleum and natural gas taxes, by the Division of Petroleum Revenue; and management of Alaska's oil wealth, by the Treasury Division. The Department of Revenue also monitors state and federal laws as they affect state revenues, and provides information for policy formulation and planning. For example, the department comments on the economic feasibility of developing and marketing state energy resources. Department of Transportation and Public Facilities (DOTPF). Two divisions within this department perform a number of energy activities in three program areas: conservation, the use of energy by state government, and -42- renewable energy production. Functions performed include: research on energy efficiency in state buildings; implementation of energy efficiency measures and life-cycle costing in state facilities; and research on and demonstration of renewable technologies. The Energy and Buildings Research Program at DOTPF involves at least nine major projects ranging from a rural airport lighting project to a wind power user's manual. The University of Alaska. The University conducts several energy research and development programs within its various institutes, laboratories and departments. Some of these projects are cooperative or under contract to other state agencies. Many current projects concern energy production; somewhat fewer projects concern conservation. Activities include: (Production) geothermal energy study; coal research; solar and wind study; assessment of impact of oil development on the Outer Continental Shelf; (Conservation) transportation study by the Institute for Social and Economic Research; buildings and energy research program, by the university's department of engineering in conjunction with the Department of Transportation and Public Facilities. =432 Conclusion Energy functions in Alaska are performed throughout state government. Several agencies perform a wide variety of functions and carry out broad responsibilities. Increasing energy development, higher fuel costs, and greater emphasis on conservation and renewable energy sources create a situation in which agency responsibilities are expanding to meet new and growing state needs. This growth seems to be causing a further diffusion of responsibilities, some overlapping activity, and possible inefficiency. Questions the legislature may wish to consider are discussed in the next chapter. -44- Deputy Commissioner | Commissioner | Board Member Alaska State Housing Authority State Bond Committee State Investment Advisory Conmittee Alaska Power Authority Alaska Industrial Development Authority Division of Services | i Administrative Marine Pilots Deputy Comnissioner XXXXXXXXXAXKAXAXK Royalty Oil & __.. | «Gas Development Advisory Board RXKRKKKKRKRK Alaska European Office - Copenhagen DENMARK Alaska Asian Office Tokyo - JAPAN coc Division of Occupational Licensing Division of Banking, Securities and and Corporations r---— eee Se , 1 AXXAXKAX AX? XXXXXAKAAXXXK * Oil & Gas * Alaska * Alaska Conservation Public Transportation Conmission Utilities Commission Commission * Limited to Administrative Authority These agencies have energy functions: XXXXXXAXKAKK XXKKKKAXX, Division of Section of * Alaska * Alaska Insurance Weights Division of Industrial }---4------- Power & Measures Tourism Development Authority a Authority AAARRKKN, i PvP tort \ XXAXXXKXXXX AX * Alaska Pipeline camsesten| XXXKKKXAAKX ARM siti Division of Business Loans AXXXAXKXXKAXAXXXK Division of Energy and Power Development Division of Veterans’ Affairs Office of Special Industrial Development- XXXMAX XX ARAN KX Office of Minerals Development Office of Commerical Fish Dev2lopment XXKX XXX: Office of Hydro- carbon Development Table III-1: ALASKA DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT -9p- Table III-2: LEGISLATIVE BRANCH LEGISLATURE HOUSE OF REPRESENTATIVES Alaska Legislative Council Legislative Budget & Audit Committee SENATE DEPARTMENT OF ADMINISTRATION Division of General Services and S$ Alaska Energy Center poems DEPARTMENT OF COMMERCE AND ECONOMIC DE Division of Eneray and Power Develo Division of Business Loans Division of Economic Enterpris Office of Hydrocarbon Developme! Office of Mineral Development *0i1 & Gas Conservation Commissi *Alaska Public Utilities Commiss *Alaska Pipeline Commission *Alaska Power Authority ALASKA AGENCIES WITH ENERGY FUNCT IONS JUDICIAL BRANCH ALASKA COURT SYSTEM Judicial Council EXECUTIVE BRANCH GOVERNOR AND LIEUTENANT GOVERNOR SUPREME COURT SUPERIOR COURT DISTRICT COURT OFFICE OF THE GOVERNOR Special Assistants Division of Budget and Management Division of Policy Development and Planning DEPARTMENT OF LAW Civil Division upply DEPARTMENT OF NATURAL RESOURCES Division of Research & Development Division of Minerals and Energy Management Division of Geological and Geophysical Survey Division of Technical Services Division of Pipeline Surveillance VELOPMENT pment e nt on ion ~ DEPARTMENT OF MILITARY AFFAIRS Division of Emergency Services DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS Division of Community Planning Local Government Assistance Division DEPARTMENT OF ENVIRONMENTAL CONSERVATION Division of Environmental Quality Management Division of Field Operations atrpeci DEPARTMENT OF FISH AND GAME Habitat Protection Division DEPARTMENT OF HEALTH AND SOCIAL SERVICES Division of Public Assistance -lb- * Independent agency located under this Department. DEPARTMENT OF REVENUE Petroleum Revenue Division Treasury Division DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES Division of Public Facilities Planning Division of Research and Development ——$$$—wars UNIVERSITY OF ALASKA Geophysical Institute Mineral Industry Research Laboratory Institute of Marine Science School of Engineering Naval Arctic Research Laboratory Arctic Environmental Information & Data Center (AEIDC Institute of Social & Economic Research (ISER) Issues and Options This chapter discusses the organizational issues that emerge from an assessment of Alaska's energy policies, programs, and agencies. It also proposes options that address these issues. The issues are viewed from the perspective of the functions discussed in Chapters I and III. Public information and education are not considered, however, because significant issues surrounding them did not surface. Regulation and enforcement aspects of implementation are also not considered, because they were defined as being outside the scope of this study. Administration Many states have chosen a centralized system of administering state energy activities, because centralization offers a number of benefits--ease in coordinating and monitoring, centralized responsibility for providing energy -49- policy options and technical support to decision-makers, and the convenience of central administrative support. Alaska's legislature may consider creating a Department of Energy this session. Many officials in the executive branch have expressed strong opposition to this option; one official felt that this degree of reorganization would set back Alaska's energy activity for a number of years. Option: . Consolidate Alaska's energy planning and management activities in one energy agency. Goal _and Policy Formulation Several conclusions emerge from the analyses of Alaska's energy goals and policies (Chapter II) and from interviews with state government officials: (1) Alaska does not address through goals and policies all the energy problems that other states address. (2) The legislature, governor, and several executive agencies all formulate energy goals and policies. (3) Formal coordination among top energy policy-makers is lacking. (4) Some energy goals and policies are relatively general, lacking the specificity needed to guide the day-to-day workings of state government. (1) Alaska does not address all the energy problems that state governments can address. Comparison of Alaska's stated goals and policies with the energy problems that other state programs address reveals that Alaska's goals and policies are weak or non-existent in certain areas. Conservation Transportation Temperature restrictions for buildings Land use -50- Utilities Natural gas regulation Conservation Planning for and Managing State Energy Shortages Emergency energy conservation measures/plans Gasoline rationing Coordination between state agencies Information system Energy Production Environmental and social impacts Coal development (2) No single agency formulates comprehensive energy policy options for consideration of the legislature and the governor. Instead, various agencies develop various aspects of energy policy: the Division of Policy Development and Planning and the Division of Management and Budget in the Office of the Governor, the Division of Energy and Power Development, other agencies within the Department of Commerce and Economic Development, and the Department of Natural Resources. According to legislative staff members, any legislator (not only members of committees with heavy responsibility for energy matters) may originate legislation defining energy goals and policies. The legislature does not have a support group whose primary responsibility is energy. (3) Alaska has no formal mechanism for convening heads of agencies and other energy policy-makers at regular intervals to develop comprehensive and coordinated energy goals and policies. The governor proposed a cabinet-level energy policy council in 1977, an option that the Division of ] Policy Development and Planning has also proposed. But no action has been taken. -51- Alaska does, however, have a variety of other coordinating mechanisms, generally limited in membership and purpose. The Coal Policy Committee is one example, the "Gang of Four" is another.* (4) Some state energy goals and policies are very general--for example, those pertaining to energy emergencies and to the impacts of energy development. The Omnibus Energy Act of 1980 calls for the creation of an energy emergency component within Alaska's Long-term Energy Plan. The act does not, however, specify which issues the plan should address, or which techniques for mitigating the effects of a shortage are acceptable. For a more detailed discussion of energy emergencies, see Energy Emergency Preparedness, a report prepared for Alaska by the National Conference of State Legislatures. Alaska statutes set general environmental goals for energy development in terms of the conservation of natural resources and the preservation of wildlife habitats. Statutes that address the economic impacts of energy development emphasize economic growth and increased job opportunities. But no statutes define what levels of environmental and socioeconomic impact are acceptable for energy development or what techniques should be used to mitigate impact. *Members of the Gang are the head of the Division of Policy Development and Planning (chairman) and the heads of the Division of Management and Budget, Division of Energy and Power Development, and the Alaska Power Authority. -52- Option: Develop goals and policies that address specific problems of energy conservation, public utilities, energy emergencies, and energy development--to guide current state activities and perhaps also to reveal the need for additional programs. Option: Create an energy policy development and coordinating council to propose goal and policy options to the legislature and the governor. Members of the council could be cabinet officers and heads of major agencies that make energy policy (e.g., the Division of Energy and Power Development and the Division of Policy Development and Planning). The purpose of the council would be to ensure that Alaska's energy goals and policies are timely, comprehensive, and coordinated. Option: Create a standing joint committee for energy policy development and coordination as the lead legislative committee for energy matters. Its purpose would also be to develop timely, comprehensive, and coordinated energy policies. Membership could include legislative leaders and the chairmen of committees with significant energy responsibilities (e.g., Natural Resources, Commerce, Community and Regional Affairs, Legislative Budget and Audit). The relationship between the energy policy committee and Legislative Budget and Audit concerning the exercise of oversight powers would require careful consideration. Legislative staff could be assigned to the committee to provide technical support. Option: Create a number of energy policy committees representing special-interest groups like energy suppliers, consumers, rural communities, and native corporations. These committees could propose and review energy policies and conduct public hearings for the groups they represent, advising and working closely with the executive and legislative policy-making groups. Option: Create a single state energy policy development and coordinating council. Membership could include heads of agencies with significant energy responsibilities, legislative leaders, and representatives of special- interest groups. The council would propose energy goals and policies to the legislature and the governor. Option: Formulate and adopt more specific energy goals and policies in areas where these are needed but now lacking (e.g., utilities and energy emergency preparedness). -53- Planning and Technical Support for Policy Formulation Energy policymakers need technical assistance to identify problems, to formulate and evaluate policies that respond to these problems, and to plan for implementing policies. Because no single agency has the lead in energy, Alaska's policymakers generally rely on different agencies for different types of expertise. Cooperation is usually limited to specific agencies working on specific projects; the Gang of Four, for example, is working on alternatives to the Susitna project. Alaska lacks in-house staff members who can undertake the many energy planning and technical activities that do not relate to resource development. For example, the Division of Energy and Power Development has a Planning Section with a staff of only three--an operations and research analyst, an energy specialist II, and an administrative assistant I.The state is relying almost entirely on outside consultants for its Long-term Energy Plan and for studying Susitna alternatives. This lack of in-house planning capability has several possible disadvantages. The state may not have enough technical staff in energy planning and management to provide the support that policymakers need--and often need quickly. By relying extensively on outside consultants, the state may be paying for duplicative efforts. Consultants used for the first time must spend time getting acquainted with issues, role players, and data sources, but much of the on-the-job experience they acquire necessarily remains with them rather than with the state. The use of consultants is appropriate on many occasions, but the state must have some minimum in-house capability for that use to be wise. -54- If a state decides to improve its in-house energy planning capability by establishing a planning agency, that agency requires a clearly defined and stable mission, adequate and stable funding by the state, and a suitable position within state government. If the planning agency is located within a department, its mission and the department's mission should be compatible so that planning activities receive appropriate priority. Stable and sufficient funding is a prerequisite for building and maintaining technical support capability. If the head of a planning agency is to interact effectively with energy policy-makers, he or she needs a position in state government that confers stature equal to that of other role players. Option: Create an interagency interdisciplinary council of technical support staff to assist energy policy-makers. This group would work closely with an energy policy council if one were formed. Option: Give a single agency lead responsibility for technical assistance on energy matters. The agency could be an existing one that has significant energy responsibilities, like the Division of Energy and Power Development or the Alaska Energy Center. It could also be a new agency. (See also options for resource development.) Two relatively minor overlaps of planning activities are now called for by statute. The Alaska Power Authority is required to do reconnaissance studies to identify regional energy demand. But, as part of the Long-term Energy Plan, the Division of Energy and Power Development is forecasting regional energy demand, which would seem to make the Authority's regional assessments unnecessary. The Department of Natural Resources is required to forecast annual oil and gas demand. But the Division of Energy and Power Development is also doing these forecasts. The two agencies have informally -55- agreed that henceforth only the Division of Energy and Power Development will perform this function. Option: Amend the statutes to remove overlapping requirements. Energy Information Services Although many Alaska agencies collect energy data, usually for a tax or regulatory purpose, energy planning and management require a good base of information that differs somewhat from the information required for other government purposes. The need for a good energy data base is recognized in Alaska Energy Issues--Options for State Action, prepared by the Division of Policy Development and Planning in the Office of the Governor. But Alaska has no centralized energy information service. The energy demand forecasting capabilities that are being developed as part of work on the Long-term Energy Plan do, however, represent a first step in the direction of building a good data base. In other states, the lack of a centralized energy information system has resulted in several problems. Data collected for a variety of uncoordinated purposes are usually: o collected at irregular and infrequent intervals; o of inconsistent quality; o unsuitable for comparison; oO unpublished, and not easily accessible or machine-readable; and o duplicative (which makes collection unnecessarily expensive). (See Energy Supply and Demand Forecasting, prepared by the National Conference of State Legislatures in 1980.) -56- Alaska's nearly total reliance on consultants for energy planning has consequences for the collection and use of information about energy. Since knowledge of the quality of the data and how to manipulate it remains with consultants, state decision-makers probably have less understanding of the limitations of the information than if the same data were consistently collected and used by state personnel. Option: Develop a centralized state energy information system that provides periodic, consistent information on Alaska energy supply, storage, distribution and consumption. The system could include information on the development and conversion of energy resources. The state of New Mexico is in the process of developing such a system, which many people consider the most comprehensive in the country. Either the Division of Energy and Power Development or the Alaska Energy Center would see likely candidates for developing and maintaining this system. Policy Formulation and Planning in Resource Development One important area in which formal coordination among policymakers apparently was lacking was in the development of a schedule for leasing Alaska's oil and gas. The Department of Natural Resources developed a schedule and the legislature approved it. But decisions seem to have been based on a relatively narrow range of considerations rather than on careful analysis of all major consequences of resource development. Now that development of Alaska's land and coal is imminent, re-evaluation of how policies governing resource development are formulated may be appropriate. -57- The roles to be played by the several agencies that are knowledgeable about and responsible for resource development may also merit re-evaluation. Policies defining the scope and rate of energy resource development should be based on a broad range of considerations. Four of the most important are: 0 optimizing the economic well-being of Alaska citizens; . o meeting the revenue requirements of state government; o using Alaska's resources to meet Alaska's energy needs; and o keeping environmental and socioeconomic impacts at acceptable levels. Although some of these considerations directly concern the Department of Natural Resources, others require action by the Office of the Governor and a number of other departments: Environmental Conservation, Community and Regional Affairs, Commerce and Economic Development, and Revenue. Alaska's citizens may be better served if resource development policies are formulated with the open participation of all appropriate agencies. The formation: of the Land Policy Committee and the Coal Policy Committee suggests that decision-makers perceive the need for broader participation in the formulation of resource development policy. But it may still be too soon to judge how well these committees meet this need. Option: Create a policy development and coordinating council to formulate policies governing the scope and rate of energy development in Alaska. Final policies should be based on broad considerations of the long-term well-being of Alaska citizens. Consider options for providing the council with technical support. (See the discussion of "Planning and Technical Support for Policy Formulation" elsewhere in this chapter.) Option: Evaluate the mission, format, membership, and technical support arrangements of the Land Policy -58- Committee and the Coal Policy Committee to determine whether these committees are taking broad considerations into account. Option: Clarify the roles and responsibilities of all agencies concerned with policy formulation and planning for resource development. The more important agencies are: Department of Natural Resources, Division of Energy and Power Development, Department of Revenue, Alaska Power Authority, Office of Minerals Development, Office of Hydrocarbons Development, Division of Policy Development and Planning, Division of Management and Budget, and Department of Community and Regional Affairs. Public Participation and Review Development of the leasing schedule took place without benefit of a formal mechanism for public participation and review, even though the schedule is important to all Alaska citizens and formal public participation in other energy-related matters has been encouraged (as, for example, in work on the Long-term Energy Plan). Apparently, the lack of opportunity for participation and review went largely unnoticed by a public concerned with the "Alaska Land Bill." Now that this particular distraction is gone, the ~ public may be more attentive to issues surrounding coal development and the distribution of state lands. Option: Structure ample opportunities for public participation in the formulation of significant state energy policies. A variety of means could be used to inform citizens about energy issues and to stimulate debate--letters, public meetings, polls, and the Teleconferencing system. Rural Local Government--A Special Case It seems that Alaska has no formal means for regularly involving local governments in the formulation of energy policy. Yet local governments, especially those in the bush, are of special concern to the legislature -59- because of their unique problems and relative isolation from affairs in Anchorage and Juneau. Discussions with RurAL CAP indicated a feeling that state policies and programs favor Alaska's urban centers over rural communities. Option: Create a formal means for involving local governments in the formulation of energy policy, perhaps through the establishment of regional councils of government similar to Florida's Regional Energy Action: Committees. The Department of Community and Regional Affairs, whose staff members are familiar with rural communities, conditions, and personalities, is one department that could conduct the program. Communication, Coordination, and Monitoring The legislature and the governor have several mechanisms for communicating state energy goals and policies and for coordinating and monitoring implementation. But discussions with state officials raise questions about the effectiveness of the structure, format, and use of these mechanisms. e Several staff members stated their desire for more specific energy goals and policies to guide their activities. e State officials are uncertain about the role and objectives of the Alaska Energy Center and its impact on other state research, development, and demonstration programs. e@ Although the Long-term Energy Plan could be a tool for coordinating energy policy, the Division of Energy and Power Development received inadequate funding in 1980 for work on the plan, because confusion apparently surrounded the original budget submissions and subsequent fiscal note. The Conservation/Outreach Section of the division had insufficient time to develop a fiscal note analyzing the funding requirements for conservation activities required by the Omnibus Energy Act. e No Note of Legislative Intent was prepared for the Omnibus Energy Act. At least one agency head felt this forced the agency to decide unilaterally which of several programs would receive top priority. -60- e The Department of Natural Resources was dissatisfied with the state budget process so it developed and now uses another process. e The Department of Natural Resources did not respond to a request from the Budget Review Committee for a Memorandum of Understanding defining its responsibilities in coal development vis-a-vis the responsibilities of the Department of Commerce and Economic Development. The legislative process, the specific language of legislation, and the budget process are potentially the most effective mechanisms for the legislature and the governor to use in directing the machinery of state government . Legislative hearings, Notes of Legislative Intent, and precise legislation can make explicit the legislature's intent and priorities, if they are used properly and aggressively. The budget process links state energy goals and policies to specific activities and fuels the machinery of government. (It requires expectations to be stated explicitly, in measurable terms.) The process also requires reports and periodic audits so that actual accomplishments can be monitored by the legislature (through the Legislative Audit Division) and by the governor. Option: Use hearings, Notes of Legislative Intent, and precise legislation to inform state agencies of the legislature's clear priorities for energy policies and programs. The legislature should probably use Notes of Legislative Intent in most instances, and certainly when legislation is as complex as the Omnibus Energy Act. Option: Evaluate the structure, format, and use of the budget process to determine how its effectiveness as a legislative and executive oversight tool might be improved. Examine the budget system used by the Department of Natural Resources to determine if it has features that might beneficially by adapted to the state process. -61- The National Conference of State Legislatures found in its Alaska Renewable Energy Project that the Alaska Housing Finance Corporation is not giving preferential treatment to loan applicants whose homes meet the requirements for energy efficiency and the use of alternative energy sources set in Section 1:(3) of the Omnibus Energy Act. Apparently, the legislature and the Housing Finance Corporation differ as to the applicability of this requirement. But two important questions nonetheless arise. Does Alaska have the means to ensure that all state programs, not only those clearly related to energy, are being used to promote state energy goals and policies? If the means exist, are they being used effectively? Option: Identify all state programs that may be used to meet state energy goals, especially programs affected by Section 1:(3) of the Omnibus Energy Act of 1980. Option: Determine if Alaska has mechanisms for ensuring that all programs that can promote state energy policies are doing so. If such mechanisms exist, determine whether they are being used effectively. If such mechanisms do not exist, consider creating them; if they are ineffective, consider improving them. Liaison with Local Governments in Rural Areas State agencies, the federal government, and private industry carry on activities related to energy in Alaska's rural communities. The Division of Enegy and Power Development, the Department of Community and Regional Affairs, the Department of Military Affairs, the Alaska Power Authority, and the Public Utilities Commission provide technical assistance, assist communities with energy emergencies, and take part in the production and distribution of electric power. Federal agencies that are active in rural communities, especially in housing, include the Department of Housing and 62 Urban Development and the Bureau of Indian Affairs. Private industry makes significant demands on local energy systems. No formal mechanism coordinates the work of state agencies in rural communities although, according to people interviewed in state government and in RurAL CAP, the coordination of day-to-day activities could be improved. Alaska has no regional clearinghouses for evaluating and coordinating projects in rural communities--particularly in terms of how projects affect local energy supply and demand. But the need for clearinghouses has been expressed by the Division of Management and Budget and by Alaska officials interviewed in the course of this study. The Department of Community and Regional Affairs provides technical planning assistance to rural communities and has acquired an understanding of the problems and sensitivities of rural communities. It has also established working relationships with many rural officials. Some department staff are concerned, however, that their expertise has been used too infrequently by the other agencies that provide energy-related services to rural communities. Making the federal government aware of conditions in rural Alaska may be particularly important. The Department of Housing and Urban Development and the Bureau of Indian Affairs have, for example, built tin-roofed and energy-inefficient housing in Chevak and Emmonak that is inappropriate to local conditions. -63- Option: Examine energy programs conducted by state agencies in rural communities. Consider whether the dispersed responsibility for administering these programs is reasonable or whether program objectives would be achieved more effectively by other means; e.g., the consolidation of similar programs. (Bulk fuel storage programs, for example, could be successfully consolidated.) If dispersed responsibility appears warranted, consider formal means for improving coordination among rural programs. Consider formal means for using the liaison capabilities of the Department of Community and Regional Affairs. Option: Institute regional clearinghouses whose purpose is to plan and coordinate public and private actions in rural communities, especially actions that have an impact on local energy demand. Administration of the program could be assigned to the Department of Community and Regional Affairs. Option: Develop energy-efficient building standards w BUILD: sensitive to local conditions and identify options for implementation. Research, Development, and Demonstration The Division of Energy and Power Development, the Department of Transportation and Public Facilities, the Department of Natural Resources, and the University of Alaska have all undertaken research, development, and demonstration projects related to energy. The Alaska Energy Center, created in 1980, is also to undertake major projects of this sort. This seems another instance of the confusion regarding the role of the Center and the roles of other agencies that has resulted from the range of viewpoints state officials and the legislature bring to the idea of a center. Option: Continue to fund on-going research, development, and demonstration activities for the next year. Identify the types of activities desirable for Alaska and the options for organizing these activities. Recommendations should clarify the roles of the Alaska Energy Center and other state agencies. Option: Clarify the overall role of the Alaska Energy Center. Obtain and consider the views of the Board of -64- Directors and others involved with the Center before preparing any new legislation. Consider expanding the role of the Center. Program Implementation In general, Alaska appears to be implementing an adequate number of programs addressing specific conservation areas (developing alternate transportation fuels, weatherization, energy efficiency standards for new buildings), energy use by state government, and energy resource production and conversion. Alaska does, however, lack programs in other energy problem areas, most noticeably in certain aspects of energy conservation, utilities, and the socioeconomic impacts of energy production. In these energy problem areas, Alaska also lacks specific goals and policies. Specific energy problem areas where Alaska lacks programs, or where a more thorough examination of programs is required, are displayed in Appendix D. Option: Examine Alaska's energy programs more thoroughly to identify specific energy problem areas that may not yet have been adequately addressed. A comprehensive yet specific set of state energy goals and policies is a prerequisite for a comprehensive set of programs. Goals and policies alone, however, do not result in effective programs. Policymakers must also choose implementation strategies, identify the agencies responsible for implementation, provide sufficient time and resources for implementation, and monitor results. Option: Consider formulating goals, policies, and programs for energy problem areas that Alaska has not yet addressed. -65- 1. Notes Division of Policy Development and Planning, Alaska Energy Issues--Options for State Action, 1980, p. 160. -66- Selected References ALASKA DOCUMENTS Alaska Council on Science and Technology. Information and Guidelines for Grants for Developing Northern Technology in Alaska, Summer, 1980. Alaska Council on Science and Technology. News Letter, October/November, 1980. Alaska Energy Extension Service. Appropriate Energection. September- October, 1980. Alaska Growth Policy Council. Report to the Governor, 1980. Alaska Science Conference. Agenda '80's, September 17-19, 1980. Budget and Audit Committee. Summary of State Loan Program, July 23, 1980. Budget and Audit Committee. State Legislative Appropriations Process, 1975. Department of Commerce and Economic Development. Detail Budget Submission Category--Development, November 21, 1980. Department of Commerce and Economic Development. Jobs and Power for Alaskans: A Program for Power and Economic: Development, July, 1978. Department of Commerce and Economic Development, Division of Economic Enterprise. Organization Review, March 31, 1980. Department of Commerce and Economic Development, Division of Energy and Power Development. Community Energy Survey, 1979. Department of Commerce and Economic Development, Division of Energy and Power Development. Appendix B, Work Statement--Phase 1, Task 1, December 9, 1980. Department of Education, Division of State Library and Museum. Alaska Blue Book, 1979. Department of Natural Resources. Department Order 81/001, Department Management System, (Geoffrey Haynes, Deputy Commissioner) , July 1, 1980. Department of Natural Resources, Division of Research and Development Land and Resource Planning Section, (Jim Allaway), Draft, North Slope Inventory and Policy Plan Contents, August 26, 1980. Division of Economic Enterprise. Alaska Economy Year-End Performance Report, 1979. Division of Energy. Long-Term Energy Plan: Request for Proposal, September, 1980. Division of Energy. Alaska Regional Energy Resources Planning Project, Volume II--Hydreziectric Development, January, 1979. -69- page two, Alaska Documents Division of Legislative Audit. Legislative Audit Division Handbook, Revised, January, 1980. Division of Legislative Audit, Review of the Department of Revenue, Alaska Renewable Resources Corporation, June 30, 1979. Division of Legislative Audit. A Performance Review of the Department of Administration's Division of Data Processing, June, 1980. Division of Legislative Audit. Summary of State Loan Programs, July 23, 1980. Division of Policy Development and Plannning, (Dona K. Lehr, Economic Policy Analyst). Power Production Assistance Program, December 11, 1980. House of Representatives Research Agency. Energy: An Inventory of Alaska's State Agencies and Programs, Prepared during the Second Session, Eleventh State Legislature, 1980. House of Representatives Research Agency. List of Research Request Studies, July 15, 1980. House of Representatives Research Agency Memo. Organizational Study for Alaska Energy Center, March 2, 1980. Legislative Affairs Agency. Basic Budget Manual for Legislators, 1976. Legislative Affairs Agency. Directory of State Officials, August, 1980. Legislative Affairs Agency Office of the Executive Director. Handbook on Alaska State Government, October, 1978. Legislative Finance Division, (Milt Barker, Fiscal Analyst). HCS for CSSB 438 (Finance)--Fiscal Notes, May 12, 1980. Office of the Governor, Division of Budget and Management. Policy Budget--Forms and Instructions, FY 82, (no date). Public Utilities Commission. Tlingit and Haida Regional Electric Authority Revenue Requirements Study and Operations Audit, November, 1979. Rural Community Action Program. Electricity and Fuel Cost Data for Alaska, September 24, 1980. Rural Community Action Program. Energy Advocacy Objectives and Related State Legislation, July, 1980. Rural Community Action Program (CAP). Rural CAP Crisis Intervention Fuel Loan Program, 1979. 2702 OTHER SOURCES Alberta Department of Energy and Natural Resources. Annual Report, 1979. Alberta, Government of. Alberta Profile, February, 1980. Alberta Treasury. Alberta in Perspective, June, 1980. Anchorage Community College. A Proceeding of the First Alaska Alternative Energy Converence, November 9-11, 1979. Anchorage Times. "Congress May Spar Over Reserve", September 17, 1980. Anchorage Times. "State Treasury Gets 0i1 Lease Boost", September 17, 1980. Arctic Environmental Information and Data Center. Alaska Solar Radiation Analysis, (Jim Wise, State Climatologist), February, 1979. Arctic Environmental Information and Data Center, (Jim Wise, State Analysis of Solar Radiation Measurements on an Inclined Surface in Anchorage, April, 1980. Bristol Bay Native Association. Energy and Bristol Bay, June, 1980. California Joint Committee on Energy Policy and Implementation. Energy Administration and Regulation in California: An Analysis, March, 1979. Colorado Energy Coordinating Council. Report to the Governor and the Colorado General Assembly, Research PUblication No 247, December, 1979. Colorado Energy Research Institute. Review of Selected State Energy Organizations, eptember 15, 1978. "Crisis in the Villages: Energy in Rural Alaska." Tundra Times, October, 1979. "Canada Needs Energy Alternative and Alberta Has It.'! Denver Post, March 10, 1980. "Alternative Energy Sources Needed for Remote Villages." Energy Users' Report, April 10, 1980. "U. S., Canadian Groups Discuss Goals, Barriers in Transition to Solar Base." Energy Users' Report, August 21, 1980. Energy and Environmental Analysis, Inc., Arlington, Virginia. An Evaluation of the State Energy Conservation Program from Program Initiation to September, 1978 Final Report, March, 1980. "The Energy Crisis." MaClean's--Canada, November 12, 1979. Florida State Energy Office, Department of Administration. Annual Report to the Legislature: 1978, January, 1979. =7i4 Geophysical Institute, University of Alaska. Geothermal Potential of Pilgrim Springs, Alaska: Report to U. S. DOE, January, 1980. Hall and Van Vactor, Consultants. Alaska State Energy Planning: Pre- liminary Report, August, 1980. Intergovernmental Committee of the Illinois Energy Resources Commission. Illinois Energy Reogranization Options, 1978. Institute for Social and Economic Research. Comprehensive Publication List, September, 1979. Institute for Social and Economic Research. Economic Analysis of Demonstration Project Alternatives for Pilgrim Springs Geothermal Site, July, 1980. Institute for Social and Economic Research. Electric Power Consumption for the Railbelt: A Projection of Requirements, June, 1980. "Legislature Orders Alaska Officials to Develop Long-Range Energy Strategy," Energy Users' Report, August 8, 1980. Management of Alaska State Government: The Governor's Policy Themes. A_Summary of Remarks Made to the Council of State Planning Agencies, New Orleans, September 26, 1980. Matanuska Electric Association. Paper on Deregulation by P.U.C. of Rural Electric Associations, September, 1980. McBride, Stewart. "Frontier Fantasies." Geo, September, 1980. Minister of Industry, Trade and Commerce, Statistics, Canada Informa- tion Division. Canada Handbook, 1977. Northwest Federal Regional ‘Council--Seattle. Guide to Micro-Hydro Development _in Alaska, August, 1980. Oil and Gas Association. "The Alaska Oil and Gas Story", January, 1978. Pepter Brown Energy Law Institute. Memo to Files on November, 1979, Meetings in Alaska, (no date). "Periling Alaska's Lands". New York Times, September 23, 1980. Solar Energy Research Institute. Alaska-Hawaii Solar Energy Education Directory, February, 1979. Solar Energy Research Institute, Market Development Branch and Policy Analysis Branch. State Solar Energy Incentives Primer: A Guide to Selection and Design, December, 1979. 72- "State, Local Governments Eyeing 0i1 as Tax Bonanza." Oil and Gas Journal, September 1, 1980. Turner, Wallace. "Discord on Alaska Gas Plant", New York Times, July 28, 1980. United States Department of Energy. 1977-78 Annual Report, Alaska Power Administration, June, 1979. Van Vactor, Samuel A. Forecasting World Oil Prices, (Notes from an address before the International Association of Energy Economists), October 21, 1980. Washington State Senate Energy and Utilities Committee, (Senator Ted R. Bottiger). Organizational Structure of Energy Agencies in the United States, March, 1980. : Uae Appendices iT. Appendix A ALASKA ENERGY POLICIES: LEGISLATION AND RESOLUTIONS CONSERVATION Ie Transportation None. as Building Standards Chapter 83, SLA 1980, provides incentives for design and modification of the residential, commercial and industrial buildings to accomplish maximum energy efficiency. ae Temperature Restrictions None. 4. Utility (1) House Concurrent Resolution No. 100, 1976, requests the Legislative Affairs Agency to study electric and gas utility rate structures; methods to insure equi- table treatment of all consumers; and the provision of incentives for energy conservation. (2) Sec. 44.33.030 calls for conservation and the develop- ment and use of hydroelectricity and other types of electric power. ss Land Use None. 6. Others None. UTILITIES ie Electricity (1) Sec. 44.56.090 requires the Alaska Power Authority to sell power at lowest reasonable prices that cover the full cost of the power or services provided. (2) Sec. 44.33.030 calls for the Division of Energy to supply an abundant amount of electric power at lowest possible rates, and for promotion of electric power for industry, agriculture, and commercial purposes. -J7- Alaska's Energy Policies : Legislation and Resolutions Page two (3) Sec. 44.33.040 calls for the promotion of rural electrification and central-station electrical service; improved central-station service; and the creation of power grids and power pools. as Natural Gas None. 3 Carriers None. III. PLANNING FOR AND MANAGING ENERGY SHORTAGES Chapter 83 requires an eneray contingency component in the long-term energy plan. IV. ENERGY USE BY STATE GOVERNMENT Chapter 83, SLA 1980, requires energy efficiency in the design and management of public buildings, and calls for recy- cling by state agencies, and calls for encouraging energy con- servation in in-state use. Vi ENERGY PRODUCTION AND CONVERSION Ie Coal None. 2 Oil and Gas (1) (2) (3) House Resolve Number 5, 1977, supports oi] and gas exploration and development in the Beaufort Sea and urges that exploration proceed as soon as practical. Legislative Resolve Number 98, 1977, requests a study of whether or not the state can facilitate the financ- ing of an all-Alaska gas pipeline and of a state-con- structed and financial royalty and pipeline to the Interior and tidewater areas. Sec. 44.82.010 - 2.00 declares the Alaska Natural Gas Pipeline Project to be essential to the development of the state's natural resources and the long-term growth of the state's economy. -78~- Alaska's Energy Policies: Legislation and Resolutions Page three (4) (5) (6) (7) Senate Concurrent Resolution Number 85, 1976, urges that the impact on Alaska's tax base be considered in the gas pipeline siting decision. Senate Concurrent Resolution Number 66, 1976, urges potential North Slope gas producers to support a trans- Alaska natural gas pipeline route. Sec. 42.06.010 declares the transportation of ore or gas by pipeline to be in the public interest and creates the Alaska Pipeline Commission to insure nondiscrimina- tory, efficient, and economical pipeline transportation at reasonable rates. Chapter 78, 1977, declares the importance of using highly skilled pilots familiar with local waters for moving large oi] tankers through Alaskan waters to avoid oil pollution. a Refineries (1) Sec. 38.06.070 allows the Alaska Royalty Oil] and Gas Development Advisory Board to require that state royal- ty oil or gas be refined or processed in the state and may provide for this under contract before sale of the oil or gas. 4. Electricity (1) (2) (3) Senate Resolve Number 3, 1978, requests a report from the Special Committee on the Alaska Permanent Fund on how the Permanent Fund could be used to further develop- ment of hydroelectric projects. Legislative Resolve Number 7, 1979, requests that Small Hydroelectric Plants program funds be used for assessing potential hydroelectric sites in rural Alaska. Sec. 44.56.010 sets lower consumer power costs and long-term economic growth as goals to be achieved through power projects. bs Uranium/Nuclear Power (1) (2) Chapter 83 excludes nuclear power from development under the Alternative Energy Loan Fund. The Alaska Power Authority statute specifically ex- cludes nuclear development. =79= Alaska's Energy Policies: Legislation and Resolutions Page four 6: Alternative/Renewable Energy Development (1) (2) (3) (4) (5) Sec. 37.12.015 supports the development of the state's renewable resources; research into and development of new technologies and innovations; appropriate use of state resources; the stimulation of commercialization and demonstration of new renewable resource products and industires. Sec. 1, Ch. 56, SLA 1979, supports the development of small-scale, appropriate, low-cost alternatives in building design, load production, recycling, trans- portation, energy generation and waste disposal. Sec. 38.05.181 declares the importance of geothermal energy for electricity generation, central heating, and reducing the use of fossil fuels. It urges ex- Pploration and urges its development. Sec. 45.88.020 supports the development of technologies that are more efficient, less costly, less energy inten- sive, and more appropriate. House Bill 779 declares that the discovery, develop- ment, and production of geothermal resources with max- imum efficiency are in the public interest. VI. ENERGY DEVELOPMENT IMPACTS ie Environmental (1) (2) (3) Sec. 16.05.185 requires the preservation of fish and wildlife's natural habitat. Sec. 46.03.010 declares conservation of natural re- sources and the environment and the control of pol- lution in the public interest. Sec. 46.03.758 finds oi1 pollution to be a threat to fish, other renewable resources, to the state's beauty, and the state's economy. 2s Economic Impacts (1) (2) Sec. 38.06.010 seeks to promote private economic growth through wise development and disposition of the state's oil and gas royalty interests. Sec. 44.61.010 declares the establishment of in- dustrial and manufacturing plants in Alaska to be essential to long-term economic growth. -80- Alaska's Energy Policies: Legislation and Resolutions Page five (3) Sec. 44.61.010 supports increasing job opportunities and encouraging economic growth through manufacturing and industry. 3: Social Impacts None. Laie Note: He Heleles ING Appendix B ALASKA ENERGY POLICIES: THE GOVERNOR'S OFFICE These policies are listed as "Existing State Energy Policies" in the Governor's Energy White Paper published in the fall of 1980. CONSERVATION lis Transportation None. a Building Standards None. RE Temperature Restriction None. 4. Utility None. NG Land Use None. 6% Others (T) State to offer technical and educational assistance on conservation to individuals and communities. (2) State seeks to encourage energy conservation through grants and loans. UTILITIES All new state public facilities (owned or funded by) must connect with local utilities. New facilities should be sited to facilitate this action. PLANNING FOR AND MANAGING ENERGY SHORTAGES State will provide emergency fuel assistance to individuals and communities. ENERGY USE BY STATE GOVERNMENT ie State to incorporate energy conservation into the planning design, and construction of state-funded and state-owned facilities. -82- Alaska Energy Policies: The Governor's Office Page two Z: Use of waste heat in new state facilities is mandatory; use of waste heat should be investigated for existing state fa- cilities. ¥: ENERGY PRODUCTION AND CONVERSION Ts General (1) The state will lease resources at a moderate rate to provide a steady income to the 1990's and beyond and to minimize local disruptions caused by development. (2) The state will give the highest priority in disposi- tion of the state's royalty oil and gas to processing inside the state. : (3) State to ensure that energy facilities along Alaska's coast are developed in an economically and environmental- ly sound manner. 2s Coal (1) To encourage development in a manner that offers long-term net benefits to all Alaskans. Ie: in- crease employment, contribute to fiscal balance, be environmentally sound, not contribute to boom/ bust cycles, etc. 3 Oil and Gas (1) State seeks to lease at a moderate rate to provide a steady income for state and minimize development impacts. 4. Refineries (1) The state will give the highest priority in disposi- tion of the state's royalty oil and gas to processing inside the state. 5: Electricity (1) State will promote accelerated development of state's hydroelectric capacity. Os Uranium/Nuclear Power None Te Alternatives /Renewables (1) State to promote individual and community alternative energy development through grants and loans. =85— Alaska Energy Policies: The Governor's Office Page three (2) To move Alaska toward energy self-sufficiency. (3) To encourage local energy service businesses. Wie ENERGY DEVELOPMENT IMPACTS lie Environmental None. as Economic (1) Alaska's energy development dollars can help to finance high energy costs in the state until re- newable energy resources can provide alternatives to fossil fuel. oe Social (1) State to provide technical assistance to communities impacted by large-scale energy development. VII. OTHER 1% The state seeks to make its energy resources available in-state at a fair and equitable price. ae Products processed inside the state should be distributed first within the state. Se State will offset rising electric prices via short-term subsidization of power production costs. 4. To assist in reducing the cost of fuel to Alaskan communi- ties (through fuel storage and fuel purchase grants and loans.) By To make the state's energy resources available in-state at a fair and equitable price. 6. To encourage coordination among the many agencies involved in energy production, distribution and regulation. Ts To ensure the availability of an adequate energy data base and analytical capability for decision-makers. -84- Appendix C ALASKA ENERGY PROGRAMS AND ACTIVITIES Program or Activity Description Agency CONSERVATION--Transportation Alternative Technology Makes loans to develop renewable energy DCED and Energy sources and more energy-efficient Division of Revolving Loan Fund industrial production and transportation Business Loans technologies appropriate to Alaska. Energy and Buildings Studies the feasibility of producing DTPF Research Program alcohol in Alaska and using it as a Division of transportation fuel. Research and Development CONSERVATION--Building Standards and Weatherization Institutional Federal program administered by state DCED Buildings to increase energy efficiency in public Division of Grants Program buildings such as schools and hospitals. Energy & Power Development, Energy Grants Administration Section Low Income Federal program administered by state. DCED Weatherization Weatherizes low-income housing. Division of Program Energy & Power Development, Energy Grants Administration Section Alaska Energy Survey Distributes do-it-yourself energy DCED Program survey weatherization workbooks for Division of homes, apartments and commercial Energy & Power buildings. Development, Conservation/ Outreach Section Alaska Energy-Efficient Developing statewide energy efficiency DCED Building Standards building standards. Division of Energy & Power Development, Conservation/ Outreach Section Program or Activity Description Agency CONSERVATION--Building Standards and Weatherization (continued) Residential Energy Conservation Program Alternative Technology and Energy Revolving Loan Fund Energy and Buildings Research Program CONSERVATION--Utility Implementation of Public Utility Regula- tory Policies Act CONSERVATION--Land Use Land Use Planning CONSERVATION-+Other Energy and Building Research Program Energy Conservation Education Program Provides energy audits, grants and loans for energy conservation improve- ments in residential buildings. Will eventually apply to commercial buildings. Auditor Training--Outreach/ Conservation Section Audits, Grants--Grants Administration Section Loans--Division of Business Loans Makes loans to develop renewable energy sources and more energy-efficient industrial production and transportation technologies appropriate to Alaska. Does research on the energy efficiency of buildings. Is developing building energy performance standards. Federal law that requires states to to consider certain rate changes that affect conservation and renewable energy use. Makes recommendations on land use planning to Dept. of Transportation. Researching low-cost, energy-efficient airport lighting. Provides educational programs to the public. -86- DCED Division of Energy and Power Deve lopment DCED Division of Business Loans DTPF Research and Devel. Section DCED Public Utility Commission DCRA Division of Community Planning DTPF Division of Research and Deve lopment DCED Div. of Energy and Power Deve lopment, Conservation/ Outreach Sect. Program or Activity Description Agency GONSERVATION--Other (continued) Alaska Energy Extension Service Alternative Technology and Energy Revolving Loan Fund Alaska Rural Energy Education Program Rural School Districts Grant Program Appropriate Technology Grants Western SUN UTILITIES--Electricity Long-Term Energy Plan Implementation of the Public Utilities Regu- latory Policies Act Power Production Assistance Program Federal program, implemented by states to provide technical information on renewable energy services and energy conservation. Makes loans to develop renewable energy sources and more energy-efficient industrial production and transportation technologies appropriate to Alaska. Produced an energy conservation workshop for rural communities. Presents this to different communities. State-funded program to make grants to rural school districts to plan, develop and implement design standards and energy conservation measures for educational facilities. State-funded program to make grants to match grants made by the federally funded Appropriate Technology program. Annual statewide planning effort which includes energy development, conservation and emergency planning. Federal law requires states to consider certain rate changes that affect conservation and renewable energy use. Legislative program administered by Alaska Power Authority to subsidize utility bills of customers of small, high-cost utilities. =o72 DCED Division of Energy & Power Deve lopment, Conservation/ Outreach Section DECD Division of Business Loans DECD Division of Energy & Power Production DCED DEPD DCED DEPD DCED Division of Energy & Power Development, Planning and Analysis Sect. DCED Public Utility Commission DNR Alaska Power Authority and Public Utility Commission Shortage Response Coordination Energy Emergency Contingency Plan Long-Term Energy Plan Bulk Fuel Storage Facilities Grants Fuel Inventory Loan Program federal, state and local levels to aid rural villages in an energy shortage. Development of a plan to manage an emergency energy shortage. Annual statewide planning effort which includes energy development, conservation and emergency planning. Grant program for villages to acquire bulk fuel storage facilities. Loans to villages to purchase fuel. -88- Pragram or Activity. Description Agency UTILITFIES--Natural Gas 0i1 & Gas Consumption Annual study for Legislature. DNR Study Office of Commissioner PLANNING FOR AND MANAGING ENERGY SHORTAGES State Set Aside Provides a state reserve fuel supply DCED Program for gasoline and middle distillates. Division of Energy, Energy Management Section Emergency Response Provides emergency supplies of fuel and Dept. of generators. Has airlift capacity. Military Affairs Community Energy Coordinates government response at DCED Division of Energy, Energy Management Section DCED Division of Energy, Energy Management Office DCED Div. of Energy and Power Development, Energy Manage- ment Section DCRA DCED Division of Business Loans Rragram or Activity Description Agency MANAGEMENT OF STATE GOVERNMENT ENERGY USE Life Cycle Costing Programs Intergovernmental Coordination Uses life cycle costing methods to evaluate new state buildings. Also analyzes energy efficiency of existing buildings. Coordinates efforts to reduce energy consumption by the state and local governments. ENERGY PRODUCTION AND CONVERSION--General State Resource Inventory Alaska Land and Resources System Land Use Permitting Long Range Resource Planning Mineral Leasing on State Lands Management & Technical Assistance Program Mineral Resource Fund Board Inventory of the state's surface and sub-surface resources. System provides a data base on Alaskan resources Grants permits for secondary deve lop- development activities on state land, such as road building, power line rights of way, and subsistence woodcutting Responsible for all mineral leasing, including petroleum and geothermal resources, on state lands Reviews state and federal oil and gas leasing and development Buys and sells minerals and locates markets for their sale Egon DTPF Div. of Public Facilities Planning DECD Div. of Energy and Power Deve lopment DNR Div. of Geo- logical and Geophysical Survey DNR Division of Research and Deve lopment DNR Div. of Forest Land and Water Management DNR Div'?oF Research and Deve lopment DNR Div. of Minerals and Energy Mgmt., Leasing Sec. DEC Environmental Quality Mgmt. Division DNR Pragram or Activity Bescription ENERGY PROBUCTION AND SONVERSION--General Consistency Review/ Coastal Land Use Coastal Zone Management Program Coastal Energy Impact Grants Program Alaska Regional Energy Resources Planning Project Habitat Protection Provides standards for coastal energy development which encourage careful siting of energy-related facilities and concurrent use of existing facilities wherever possible, and require coastal governments to identify suitable sites for energy-related facilities. Provides grants for communities to develop local plans for managing coastal resources. Grants to minimize development impacts. Provides a statewide energy assessment of Alaska's energy needs and opportunities. Works with lessors and industry to insure continued high level of produc- tion of fish, wildlife, and human harvest on lands and waters scheduled for energy development. ENERGY PROBDUGTIGN AND CONVERSION--Coal Usibelli Coal Laboratory Coal Resource Surveys Researches the properties of Alaskan coal. Conducting the Northwest Coal Resource Study and the Coal Creek Study. ENERGY PRODUGTION AND GONVERSION--Gi1 0i1 and Gas Production Taxes -90- Agency Office of Governor Federal-State Clear inghouse DCRA Div. of Com- munity Plann'g DCRA Div. of Com- munity Plann'g DCED Div. of Energy and Power Deve lopment DF&G Habitat Division DNR Division of Geological & Geophysical Survey, and University of Alaska Mineral Industry Research Lab. DCED Alaska Power Authority DR Petroleum Revenue Div. Rrogram ar Activity Description Agency —————— OO e——e——e—e———e———eEee————————— ENERGY «PRODUCTION «AND -GONVERSION+-011 (continued) Conservation of Oi] and Gas Production Alaska Public Forum Oi] and Gas Royalty Oversight Oi] & Gas Transport Regulation Management and Technical Assistance Program 0i1 Pollution Control Program Oil Spill Response Team Prevents waste in oil and gas production. Information program concerning oil pipeline. Evaluates plans for disposal of royalty in oil and gas to serve public interest. Also promotes in-state development of royalty oi] and gas refining and processing. Promotes and oversees development of oi] and gas pipeline and transportation systems at reasonable costs. Sets final and interim intrastate tariffs. 1) Reviews state and federal oil] and gas lease sales and development 2) Oversees environmental impacts of outer continental shelf explora- tion and development. Coordinates state agencies for land and water spills. Rescues wildlife and cleans up oil spills. -9l1- Office of Governor, Alaska Oil and Gas Conserva- tion Comm. Office of Gov. Div. of Policy Deve lopment and Planning DCED Alaska Royalty Oil & Gas Deve lopment Advisory Board DCED Alaska Pipeline Commission DEC Environmental Quality Management Division DEC Environmental Quality Mgmt. Division Water Quality Mgmt. Section DFG Habitat Sec. of Marine and Coastal Habi- tat Protection Division Rragram or Activity Description __ Agency ———————————————— <== ne ENERGY sPRODUC TION AND <CONVERSION--Natural Gas Oil and Gas Royalty Oversight Pipeline Surveillance Program Oil and Gas Taxes Conservation of Oi] and Gas Production Alaska Natural Gas Transportation System Pipeline Financing Pipeline Regulation Evaluates plans for disposal of royalty from oil and gas to serve public interest. Promotes in-state develop- ment of royalty oi] and gas refining and processing. Surveys impacts on fish and game. Prevents waste in oil and gas production Administers leases, rights-of-way, permitting and training programs. Assists financing of above Regulates intrastate common carrier natural gas pipelines. ENERGY PRODUCTION AND GONVERSION--Electricity Power Project Loan Fund Adminsters a revolving loan fund to finance power production facilities, transmission and distribution systems. Has bonding authority to construct power plants. -92- DCED Alaska Royalty 0i1 and Gas Deve lopment Board DFG & DNR Division of Pipeline Surveillance Petroleum Revenue Div. Office of Governor Alaska 0i1 and Gas Conservation Commission DNR Office of Pipeline Surveillance Alaska Natural Gas Pipeline Financing Authority OCED Alaska Pipeline Commission DCED Alaska Power Authority Rregram ar Activity Description Agency eeaeee——e—e—e—e—e—e—e———————>>—>>>——————————— Tee ENERGY PRODUCTION AND CONVERSION--Electricity (continued) Power Project Deve lopment Power Deve lopment Plan Tidal Power Generation Identifies, evaluates and develops electrical power production facilities utilizing the most appropriate technol- ogy from among those commercially available. Provides an overview of the status of power development in Alaska. Provides funds for studies of the feasibility of tidal power generation in Cook Inlet. ENERGY PRODUCTION AND CONVERSION--Renewab le -Energy Alternative Technology Makes loans for energy production using and Energy Revolving Loan Fund RD&D Solar Information Clearinghouse Alaska Energy Extension Service Renewable Resource Financing renewable energy sources. Also applicable to develop methods for more energy-efficient industrial production and transportation. Undertakes 18 renewable energy research development and demonstration projects in geothermal, wind, wood, peat, waste heat, micro-hydro, hydrogan and active solar technologies. Part of Western SUN effort. Federal program, implemented by states to provide technical information on renewable energy and conservation. Provides financing for businesses that are based on renewable resources. =934 DCED Alaska Power Authority DCED Division of Energy & Power Deve lopment Office of Governor “DCED Division of Business Loans DCED Div. of Energy and Power Deve lopment DCED Div. of Energy and Power Deve lopment, Conservation/ Outreach Sect. DCED Div. of Energy and Power Deve lopment, Conservation/ Outreach Sect. Alaska Renewable Resources Corporation Program-or Activity Description Agency ENERGY PRODUCTION AND CONVERSION--Renewable Energy (continued) RD&D OTHERS Energy Assistance Program Community Energy Survey Alaska Energy Center Conducts six research, development and demonstration projects on wind, solar heating (both active and passive), alcohol fuels and the gas-sorptive properties of zeolites. Distributes federal funds to help pay heating bills of the poor. Annual energy supply survey for Alaskan communities. Various functions, new and not set up. -94- DTPF Division of Research and Deve lopment DHSS Div. of Public Assistance DCED Div. of Energy and Power Deve lopment Planning and Analysis Off. Public Corporation Appendix D PROBLEM AREAS IN NEED OF CLOSER SCRUTINY Conservation Transportation e Increased loads (e.g., van pooling, car pooling, heavier shipping weights) e Increased miles per gallon (e.g., speed limit enforcement, tune-up/ maintenance) e Mass transit e Land use and transportation planning (i.e., planning roadway and land use patterns for efficient travel) e Alternative transportation modes (e.g., walking, bicycling) e Traffic management (e.g., turn on red, night-time traffic light modi- fication) Building Standards and Weatherization e Retrofitting with alternative energy source (e.a., solar) e Zoning standards to increase residential density e Lighting standards Building Temperature Restrictions e@ Minimum summer temperatures e Maximum winter temperatures e Thermostat regulation in public buildings Utility Rates e New rate structures e@ Weatherization programs e@ Cogeneration Land Use e Planning for energy-efficient transportation and land use (e.g., bikeways, higher densities, multiple-unit dwellings, clustering residential and commercial land uses) Recycling @ Encouraging recycling by public Utilities--Electric and Natural Gas e Planning (e.g., assessing need for additional facilities, facility siting) e@ Coordination of power systems New rate structures Conservation -95- ‘ Energy Shortages Energy information systems Management strategies Implementation (e.g., rationing, emergency energy conservation, public information) Energy Use by State Government. e State facility lighting standards, temperature standards Energy Production and Conversion (Coal, Oi1 and Gas, Electricity, Geothermal and Small-scale Hydroelectric Power, Uranium/Nuclear Plants, Renewable Sources) e Facilitating production through regulatory reform e Control and mitigation of socioeconomic impacts -96-