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HomeMy WebLinkAboutREFAC Meeting public notice and minutes 10-27-2015Renewa''~ ©~srgy Fund Advisory Committee (REFAC) Meeting - A'=="4 Online Public Notices a. RG hie )6=6—h STATUS: Active Renewable Energy Fund Advisory Committee (REFAC) Meeting ALASKA ENERGY AUTHORITY Regular Meeting Public Notice Renewable Energy Fund Advisory Committee Notice is hereby given that the Renewable Energy Fund Advisory Committee will hold a regular meeting on Tuesday, October 27, 2015 from 2:00 pm to 5:00 pm. For additional information, contact Sean Skaling with Alaska Energy Authority at (907) 771-3079 or Chris Rose, Chairman. This meeting will be conducted by electronic media pursuant to AS 42.45.045 and AS 44.62.310 at the following location: The meeting is being held at the Alaska Energy Authority - Board Room, 813 W. Northern Lights Blvd, Anchorage, AK. A teleconference line has been set up for those unable to participate in person. Dial 1-888-585-9008 and enter conference room 683-021-989#. The public is invited to attend. The State of Alaska (AEA) complies with Title ll of the Americans with Disabilities Act of 1990. Persons requiring special accommodations to participate should contact AEA staff at (907) 771-3903 to make arrangements. W Attachments, History, Details Details Department: Commerce, Community and ; fs Economic Development Revision History Category: Public Notices Created 10/20/2015 12:04:30 PM by Sub-Category: Advisory Committee Meeting yminga Location(s): Statewide Modified 10/22/2015 11:08:29 AM by : Project/Regulation #: yminga [Details] Publish Date: 10/20/2015 Archive Date: 10/28/2015 Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id= 178718 11 10/20/2015 Renewat gy Fund Advisory Committee (REFAC) Meeting - /'--'-- Online Public Notices che: =— CAMA ea |= ee STATUS: Active Renewable Energy Fund Advisory Committee (REFAC) Meeting ALASKA ENERGY AUTHORITY Regular Meeting Public Notice Renewable Energy Fund Advisory Committee Notice is hereby given that the Renewable Energy Fund Advisory Committee will hold a regular meeting on Tuesday, October 27, 2015 from 2:00 pm to 5:00 pm. For additional information, contact Sean Skaling with Alaska Energy Authority at (907) 771-3079 or Chris Rose, Chairman. This meeting will be conducted by electronic media pursuant to AS 42.45.045 and AS 44.62.310 at the following location: The meeting is being held at the Alaska Energy Authority - Board Room, 813 W. Northern Lights Blvd, Anchorage, AK. A teleconference line has been set up for those unable to participate in person. Dial 1-888-585-9008 and enter conference room 683-021 -989#. The public is invited to attend. The State of Alaska (AEA) complies with Title Il of the Americans with Disabilities Act of 1990. Persons requiring special accommodations to participate should contact AEA staff at (907) 771-3903 to make arrangements. Attachments, History, Details Attachments Details None Department: Commerce, Community and Economic Development Revision History Category: Public Notices : : Created 10/20/2015 12:04:30 PM by yminga oe ees: pe eae Sprite’ Mnecag Location(s): Statewide Project/Regulation #: Publish Date: 10/20/2015 Archive Date: 10/28/2015 Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id= 178718 41 Yolanda M. Inga From: Yolanda M. Inga <yinga@aidea.org> Sent: Tuesday, October 20, 2015 12:08 PM To: aea.renewable.energy.fund.advisory.committee@list.state.ak.us Subject: [AEA.Renewable.Energy.Fund.Advisory.Committee] Upcoming Renewable Energy Fund Advisory Committee (REFAC) Meeting Good afternoon, Notice is hereby given that the Renewable Energy Fund Advisory Committee will hold a meeting on Tuesday, October 27, 2015 from 2:00 pm to 5:00 pm. The meeting is being held at the Alaska Energy Authority - Board Room, 813 W. Northern Lights Blvd, Anchorage, AK. A teleconference line has been set up for those unable to participate in person. Dial 1-888-585-9008 and enter conference room 683-021-989#. Thank you, Yolanda Inga 771-3000 AKER (me ENERGY AUTHORITY Subscribed as: yinga@aidea.org | http://list.state.ak.us/soalists/aea.renewable.energy.fund.advisory.committee/jl.htm Renewable Energy Fund Advisory Committee Meeting Minutes Page 1 of 14 January 9, 2015 Renewable Energy Fund Advisory Committee Meeting ; January 9, 2015 Alaska Energy Authority Board Room Anchorage, Alaska 10:02 a.m. to 2:15 p.m. DRAFT MINUTES i. Call to Order The Renewable Energy Fund Advisory Committee (REFAC) convened at 10:02 a.m., with Chair Chris Rose presiding. There was a quorum. 2. Roll Call (committee members, staff, public) Committee Members Present Meetings Attended of Total Meetings Chair Chris Rose 4 of 4 Representative Bryce Edgmon 4 of 4 Brad Reeve (phone) 4 of 4 Bradley Evans (phone) 2 of 4 Senator Lyman Hoffman 4 of 4 Senator Anna MacKinnon 3 of 4 Committee Members Not Present Meetings Attended of Total Meetings Jodi Mitchell 3 of 4 Kathie Wasserman 2 of 4 Representative Charisse Millett 2 of 4 AEA Staff Present: Alan Baldivieso, Shawn Calfa, Josh Craft, Sara Fisher-Goad, Emily Ford, Daniel Hertrich, Yolanda Inga, Cady Lister, David Lockhard (sp), Sandra Moller, Devany Plentovich, Sean Skaling, Rich Stromberg (phone), Unidentified Speaker, and Unidentified Speaker. Other Participants Present: Miranda Studstill, Accu-Type Depositions; Anna Sattler, Alaska Village Electric Cooperative (AVEC); Erin Whitney, Alaska Center for Energy and Power (ACEP); Eric Hanssen, Dan Wrights (sp), ANTHC; Ron Vecera, Chugach Electric; Jason Jussup (sp), City of Kotzebue (phone); Randy Walker, City of Kotzebue (phone); Unidentified Copeland (sp), Cordova Electric Cooperative (phone); Chelsea Ward-Waller, Denali Daniels & Assoc.; Rachel Gaoidhas (sp), Governor's Office; Bryce Edgmon, Legislature; Doug Johnson, Ocean Renewable Power Company (ORPC); Adam Bierg (sp), Representative Edgmon's Office; Jeff Turner, Representative Millett's Office; Pat Walker, Senator Hoffman's Office (phone); Emma Kelly, Stantec; Kord Christianson, TDX Power; Unidentified Copeland (sp) (phone); and Peter Krimp (sp) (Unidentified) (phone). 3 Agenda Approval Renewable Energy Fund aavisory Committee Meeting Minutes Page 2 of 14 January 9, 2015 MOTION: A motion was made by Representative Edgmon to approve the agenda. Seconded by Senator Hoffman. The agenda was approved. 4. Public Comments Doug Johnson of ORPC expressed his appreciation to the Committee members. He informed the project in Igiugig is an extremely successful operation and has funding for the 2015 season. Mr. Johnson discussed modeling has shown turbine performance improvements of up to 30% can be implemented. This emerging technology industry is in a very precarious position and needs to continue working in the public/private partnership to bring this technology into the marketplace. Mr. Johnson believes it is important to learn more information about how to integrate renewables with the microgrid to help build the economy. Chair Rose asked if Mr. Johnson has any recommendations how the REF Committee could help. Mr. Johnson stated ORPC is between an emerging technology company and a commercial technology company. The Emerging Energy Technology Fund (EETF) was instrumental to ORPC and funded their programs. Mr. Johnson noted ORPC is not yet eligible for REF funding, which places them in a precarious position until eligibility in 2016. Erin Whitney informed she oversees ACEP's data collection efforts for EETF and REF projects. She expressed appreciation to AEA for their interactions with ACEP. Ms. Whitney noted a reimbursable services agreement (RSA) was in place at the beginning of the summer to begin infrastructure development for the data collection and management program. She believes there is an intention to fund a second RSA for field deployment of these data collection and management efforts for current REF projects. Ms. Whitney informed ACEP would like to help AEA demonstrate requirements to the Legislature, justifying the programs and showing the value of the projects. She requested an update on that process. Senator Hoffman asked if there are more than two RSAs. Ms. Whitney stated she does not know the sequence of RSAs. Kord Christianson of TDX Power informed they operate five utilities around the state. Two of those are wind-diesel and can be operated in the wind-only mode with the diesel off. REF funding has provided TDX with a flywheel energy storage system, which should increase the wind-only mode by an additional 10% to 15%. Mr. Christianson explained dispatchable loads are necessary to operate 100% diesel-off. He encouraged the Committee to review renewable combined heat and power projects as a key element for the success of high wind penetration systems. Mr. Christianson provided a handout to the Committee showing a snapshot of five years' of operations data. 5. Approval of Meeting Minutes - September 22, 2014 MOTION: A motion was made by Senator Hoffman to approve the meeting minutes from September 22, 2014, Renewable Energy Fund Advisory Committee meeting. Seconded by Representative Hoffman. The minutes were approved. Renewable Energy Fund Advisory Committee Meeting Minutes Page 3 of 14 January 9, 2015 6. REF Program Update Mr. Skaling informed all of the information regarding today's meeting is on the AEA website under the REF grant program links. Mr. Skaling provided a detailed PowerPoint presentation entitled Preliminary Status Update. AEA is in the process of compiling the updated information to present during the annual status report to the Legislature for the January 30th delivery date. A map of all the REF projects from Rounds I through VII was shown. The overall program benefit/cost ratio is 2.8. A map of the recommended projects from Round VII (R7) was shown. The bold numbers indicate recommended projects within the $15 million Governor's budget and the lighter numbers indicate recommended projects outside the $15 million Governor's budget. There have been 732 applications received through R7 and 277 were funded. Currently, there are 122 grants in place. Approximately $250 million has been appropriated to date. Mr. Skaling explained the pie charts depicting R1-7 funding amounts by size, and in terms of energy source, wind, hydro, and biomass were the largest. In terms of phase, construction, feasibility, and design were the largest. In terms of the regions of the state, Southeast is the largest, with the remaining regions represented fairly evenly. The applications received for R1-7 were predominantly wind, hydro, and biomass. For R8, the applications received were predominantly hydro, biomass, wind, and an increasing amount of heat recovery. Mr. Skaling explained the pie chart on slide 13 depicting all R8 recommended applications by funding size, and in terms of energy source, hydro, biomass, and wind were the largest. In terms of phase, construction and design are the largest. Mr. Skaling noted if a project includes design and construction, it is included as both a construction project and a design project. In terms of applications from regions of the state, Southeast is the largest, with the remaining regions represented fairly evenly. In terms of funding size by region, Southeast and Yukon- Koyukuk/Upper Tanana are the two largest, followed by the Lower Yukon-Kuskokwim. Mr. Skaling reported on the slide showing the summary of community assistance provided for each project. Representative Edgmon commented he attended the Rural Energy Conference in Fairbanks. It was obvious to him REF is playing a large and important role in Alaska, providing savings and tangible benefits to Alaskans. This deserves recognition and legislative discussion to keep the program moving forward, especially in light of the current budget reductions the state is facing. Chair Rose requested information outlining indirect benefits of the program, including job creation and economic activity. He noted ICER and other organizations are capable of providing that type of analysis. Senator MacKinnon requested an electronic version of the REF Preliminary Status Report presentation. Mr. Skaling agreed to provide an electronic version to members. up REF/PCE Interactions Renewable Energy Fund Aavisory Committee Meeting Minutes Page 4 of 14 January 9, 2015 Mr. Skaling introduced Ms. Lister, AEA's lead economist, who provided a detailed PowerPoint presentation entitled REF/PCE Interactions, Incentives, Illustrations. The PowerPoint is included on the AEA website under the REFAC Meeting 1/9/15 link. Ms. Lister advised this presentation is in response to the perception that the state PCE program is the primary beneficiary of savings associated with REF projects built in PCE communities. The presentation clarified the impacts of REF projects on PCE. Ms. Lister reviewed the PCE program, summarized the characteristics of eligible communities, discussed what happens when an REF project is introduced, and explained the distribution of REF project savings. There are currently 188 communities who benefit from approximately $40 million in annual disbursements. Approximately 28.5% of all kWhs sold are eligible for PCE. This is a weighted average across all PCE communities. Approximately 40% of all kWhs sold are PCE eligible on an unweighted PCE community average. Communities with small populations tend to have a higher percentage of eligible kWhs. Ms. Lister provided PCE definitions. The base rate is the weighted average cost per kWh in Anchorage, Fairbanks, and Juneau. This is calculated annually and currently is $0.1482. The PCE level is the state subsidy per eligible kWh, which is calculated by the Regulatory Commission of Alaska (RCA) for each community. RCA primarily uses either cost-based or rate-based calculations. The effective rate is the cost per kWh the customers will actually pay for each PCE eligible kWh. Ms. Lister explained REF projects create price stability, protecting against uncertain and uncontrollable diesel prices in the community. There is a potential for increases in non-fuel costs when a renewable energy project comes online in a community. The PCE level for that community is expected to change and depends on the ratio between PCE eligible and ineligible kWhs. In 2013, there were 26 generating REF-funded energy projects in PCE communities. Of those, 19 were electric and seven were heat. Eighty generating REF projects in PCE communities, 38 electric and 42 heat, are anticipated in five years. The large majority of savings associated with REF projects are being felt by rate payers or by facilities that benefit from heat projects. The REF projects also provided an estimated savings of $1.7 million to the state PCE program. Ms. Lister reported statewide energy consumption percentages and noted the Railbelt at 77%, Southeast at 13%, Kodiak at 2%, and the entire remainder of the state at 8%. REF funds are invested heavily in PCE communities in a larger number of small projects, covering 70% of the total project costs. REF investments outside PCE communities are in a fewer number of big projects to serve the much greater energy demands of those communities, covering 31% of total project costs, not including direct appropriations by the state. Of the 37 currently generating REF-funded projects, 26 are in PCE communities and 11 are in non-PCE communities. Most of the savings comes from Anchorage Landfill Gas, Eva Creek, and Pillar Mountain projects. Representative Edgmon asked how much of the funds stay in Anchorage or other populated areas to cover costs like administration and construction design. Ms. Lister noted the capital investment includes expenditures outside the project communities for services including consultants and engineering firms. The savings shown are place-based community savings, not including the PCE retained savings. Renewable Energy Fund Advisory Committee Meeting Minutes Page 5 of 14 January 9, 2015 Chair Rose noted the slide stating $75.6 million of state funds were spent on 37 projects. He asked if Ms. Lister knew how much additional non-state investment were spent on those 37 projects. Ms. Lister stated she has that number, but not with her today and will provide that to the Committee. It is a substantial amount. She believes approximately 50% of the total investment in non-PCE communities has been private investment and approximately 30% of the total investment in PCE communities has been private investment. Ms. Lister advised 100% of the savings from heat projects stay in the community. In 2013, the seven operating REF-funded heat projects saved an estimated $1.3 million in displaced heating fuel costs in addition to creating local jobs. This year, there will be 22 operational REF-funded heat projects, including biomass, heat pumps, and heat recovery. Senator Hoffman requested Ms. Lister review his question and provide an answer at a later date. He stated customers in communities in the YK Delta report the utilities have included fuel surcharges for years. The customers believe there could be substantial electric savings if the fuel surcharges were added to the base of the operations of the utility. Senator Hoffman requested an analysis of possible community savings if the fuel surcharges were included in the operation of the utility. He asked if the current fuel surcharge system is a result of the utilities not asking the RCA for approval or is a result of RCE not responding in a timely manner. Senator Hoffman believes the intent of the PCE program is not being fully implemented. He asked if this issue can be addressed administratively by the utilities and RCA, or if legislative policy action is necessary. Ms. Lister stated she will review the issue and work with RCA. Ms. Fisher-Goad informed a series of meetings between AEA and RCA regarding PCE issues is ongoing and she will discuss the calculation structure of the fuel surcharge. 8. Wind to Heat Evaluation Mr. Skaling commented Ms. Lister has done a great job delving into questions posed to AEA regarding the wind to heat analysis. This model can be used to factor in the specifics in any one community to see what is most cost effective. AEA is also using this model to take overall view of the cost effective curve of renewable energy projects across the state. Ms. Lister gave an overview of the document provided entitled Cost Effectiveness of Using Excess Wind Power for Residential Heat. The purpose of the analysis is to provide effective guidance to communities. The amount of REF project applications received using excess wind power for residential heat has increased, but is still pretty new in rural Alaska. AEA has convened two meetings with stakeholders, including AVEC, Intelligent Energy Systems (IES, the Institute of Northern Engineering (INE), ACEP, RCA, and members from the Chaninik Wind Group. Ms. Lister advised this evaluation looks at the project cost effectiveness using three scenarios, including the full cost of the systems, but not including the cost of the turbine or any necessary powerhouse upgrades. There is not widespread agreement regarding the cost of these systems. AEA is using the best information available. This analysis shows the economics of using excess Renewable Energy Fund Aavisory Committee Meeting Minutes Page 6 of 14 January 9, 2015 wind for heat in residential units and appears challenging under most circumstances in which utilities or private parties are paying for the capital expenditures. If the project is grant funded, with no community capital cost, the project would absolutely be cost effective because there is no debt service and the rate could be set below the cost of diesel. It is important to have site- specific information for a complete evaluation. Chair Rose requested additional review of communities with high excess wind and high costs of heating diesel fuel and what it would look like to spread the institutional costs to get economies of scale. Ms. Lister stated she will review that type of scenario, but does not believe small communities would have an ability to largely reduce the capital expenditures. Chair Rose asked if more information and data points would be helpful to this analysis. Ms. Lister noted the low number of data points relates to the fact not many systems have been built. 9. REF Evaluation Process Mr. Skaling noted the Committee has been provided with the evaluation guidelines and the detailed review process document. This document is also posted on the website. Mr. Skaling requested comments from the Committee and Committee approval of these guidelines. Mr. Skaling explained the stages of review. He informed AEA reviewed 66 applications for REF Round VIII through Stage 1. Thirty-two of the applications did not pass the Stage 2 review for recommendation, and six of those are in the appeal process. Stage 3 is the process of ranking the projects in funding priority. The criteria used in this stage is outlined in statute, regulations and in the RFA. Stage 4 is the process of regional spreading, to determine if a region is underrepresented in the cumulative total since the beginning of the REF. This allows AEA to more evenly distribute funds across the state. Mr. Skaling noted the document describes responsibilities of each step of the process, the actual scoring criteria and weighting. He advised there have been a few title changes in the document and a few changes to the language have been made, making it more clear and understandable. Mr. Reeve commented it is helpful to review and update the evaluation process on a regular basis. Mr. Evans asked if this document outlines proposed changes for the next round or if these proposed changes were used in the current evaluation process. Mr. Skaling noted these guidelines were used for the current year. Mr. Evans asked if the ground rules have changed for the current applicants after they have submitted their application. Mr. Skaling informed the ground rules are established in the RFA, in regulations, and in statute. Mr. Evans asked why the applicants are not being told about the changes. He stated the proposers need to know the rules before they apply. Mr. Skaling said he would like to publish this document at the same time as the RFA. The RFA does have the specific criteria for the proposer, but not in as much detail. Mr. Evans recommended making changes to the evaluation guidelines in advance of the application submittals and then not entertaining any changes to the guidelines during the application process, unless the circumstances are overwhelming. Mr. Skaling agreed and noted that is the plan for next year. He informed this has been the process historically, and believes it Renewable Energy Fund Advisory Committee Meeting Minutes Page 7 of 14 January 9, 2015 makes more sense to change the timing of the process to make any alterations to the guidelines before the application process begins. Representative Edgmon asked if there is interfacing with the Division of Regional Affairs or local government specialists in this process, specifically regarding training and outreach. Ms. Fisher-Goad noted much communication has occurred with the local government specialists and technical assistance outreach has been provided. She believes the team has done a very good job, but there is always room to have better communication and more coordination with other agencies. Representative Edgmon asked if these are general fund positions. Ms. Fisher-Goad agreed. Senator Hoffman advised one of the main provisions of the legislation was to try to lower the cost of energy in those areas that have the highest energy costs in the state. He does not believe the intent of this program is working. The chart on page 22 of the presentation indicates the region with the lowest cost of energy, Southeast at .15 cents per kWh, has received the most funds at $62 million, and the four highest cost regions, Yukon-Koyukuk at .62, Yukon- Kuskokwim at .56, Bristol Bay at .54, and Northwest Arctic at .53 cents per kWh, have received $20 million each. Senator Hoffman commented he has requested recommendations from AEA over the last five years regarding this same issue. He asked for additional recommendations from AEA to get this program on course to address those areas of the state that have the highest energy costs. Mr. Skaling advised AEA analyzed this issue last year and believed it was presented at a Committee meeting. He noted the chart on page 22 regarding the Southeast region is misleading. AEA split Southeast into high cost areas and low cost areas. All, but one, of the current recommendations for Southeast are in the high cost areas. The vast majority of the $62 million has gone to the high cost areas of Southeast. Senator Hoffman suggested the revised numbers be reflected in the charts for clarity. He noted even if the Southeast energy costs were .50 cents per kWh, Southeast is still at a much higher funding level than the four highest energy cost areas of the state. The funding amounts for the four highest energy cost areas of the state need to be increased. Senator Hoffman recommended including both cost of kWh and heating cost in the calculation of total energy costs. Mr. Skaling informed AEA reviewed the alternative of separating electric and heat. He noted the calculations are complex and netted similar results. It was determined the electric rates are a very good indicator of the heat rates. Mr. Skaling stated that analysis will be recirculated to the members. Mr. Evans commented it is possible the areas with the highest cost of energy submitted few or no applications, which would cause a decreased results number. He suggested addressing what it would take to get high quality and volume proposals out of the high energy cost areas so they have a better chance of getting the money that is meant to go to those areas. Senator MacKinnon expressed appreciation to staff for their work on the proposed methodology. She agrees the applicants should know as much of the evaluation criteria as possible, but it is Renewable Energy Fund Advisory Committee Meeting Minutes Page 8 of 14 January 9, 2015 important to have the advisory opinion at this stage of the process. Senator MacKinnon requested staff discuss how they can mitigate the high cost of energy area projects to fall within the criteria. She stated she was elected from an urban population to represent all Alaska. Ms. Fisher-Goad advised AEA also works with communities to address basic energy infrastructure, where it is needed, before a renewable energy source is considered. AEA works with communities holistically through the regional energy planning process and with the new affordable energy process effort. This program is very important and has a tremendous amount of impact, but it is one of several things AEA tries to do to address the energy needs in a community. Senator MacKinnon asked if the Committee will receive an update on the regional energy plans. She requested to know the status of completion for each region. Senator MacKinnon commented it is important to her to know how much diesel and carbon a project is displacing, which will contribute to better air quality throughout the state. Representative Edgmon requested AEA elaborate on the impediments and limitations of the smaller communities with regards to the REF application process. He asked if the challenge is because the smaller communities do not have the capacity or the technical wherewithal to submit an application. Ms. Fisher-Goad informed this program is targeted to the high cost areas, with the most weight to the high cost areas. The statute also weights the projects significantly for match and significantly for regional spreading. It is a complicated scoring process. AEA follows the intent of the program while selecting solid technical projects statewide. Ms. Fisher- Goad noted there are some local issues with capacity. Ms. Moller's group performs infrastructure development and project management to ensure AEA is more directly involved in the development of certain projects. AEA has to work at the local capacity to ensure the community is ready to accept the responsibilities, such as operations and maintenance, on a system coming into the area. Ms. Fisher-Goad stated AEA will research and review the impediments to receiving good applications and provide that information to legislators to determine what additional help is needed on the local level. Representative Edgmon appreciated the response. He expressed his concern that some of the current staff infrastructure could be in jeopardy because of budget cuts. Senator Hoffman requested an analysis of the four communities with the highest electrical costs over $1.00 and note if those communities have received any assistance from AEA or any REF grants. He believes a common thread for the high cost communities is remote area and a very small population. Senator MacKinnon suggested Senator Hoffman's original question be placed on the agenda for the next meeting, so it can be discussed and have a higher level of reference. Senator Hoffman noted another factor to review is the amount of the average disposable income in a community being spent on energy. Senator MacKinnon requested more information from Ms. Fisher-Goad regarding what is specifically being done in small communities with state funding. If budget pull-backs occur, Senator MacKinnon wants to ensure those pull-backs do not affect the sole assistance the communities receive. Senator MacKinnon stated her staff will be contacting Ms. Renewable Energy Fund Advisory Committee Meeting Minutes Page 9 of 14 January 9, 2015 Fisher-Goad. She noted AEA and AIDEA are on the agenda early in the session to provide that type of report. Chair Rose requested a report at the May meeting describing the resources in the different regions. He also requested a list of the completed projects that are actually producing energy, heat or electricity, showing the estimated diesel savings and carbon benefits for each project on a per year basis. Chair Rose requested the amount of leveraged funding received from this state program. Senator MacKinnon believes the Senate Finance Committee would like to know where the state investment makes the largest difference for individual people and cost savings for communities. Mr. Evans commented he was not suggesting the rules be changed for scoring, rather that the problem was outside the scoring process and separate from this program. MOTION: A motion was made by Representative Edgmon to adopt the draft methods of proposed evaluation and grant recommendations dated January 29th, 2015, included in the Committee packet. Seconded by Senator MacKinnon. Senator Hoffman commented he is inclined to vote yes, but if he votes no, then maybe some action on this issue will occur. He hopes he will not have these same concerns next year. Senator Hoffman informed the legislation was rewritten and the Senate Finance Committee made a few minor amendments on the floor. This legislation has made drastic change to many people's lives in Alaska and there are many more still struggling. The motion was approved without objection. 10. Lunch Break: 11:56 a.m. to 12:21 p.m. 11. EETF/REF gap discussion Mr. Skaling advised this issue has been included on the agenda for discussion purposes and to inform the Committee of the issues surrounding the two programs. The EETF received diversified applications and filled a gap to develop new energy technologies, including renewables. The EETF is intended to fund technologies that are expected to be commercial within about five years. The REF is a competitive program for known, understood, and producing technologies. Hydrokinetic is one of the technologies that fall within the gap between EETF and REF programs. Mr. Skaling asked if the REF should be reaching back to those technologies within the gap to advance projects that could be viable into the future or if the EETF should try to fill the gap and push forward the promising technologies for Alaska. Chair Rose informed this Committee reviewed this issue a couple of years ago and decided it would make sense for the REF to fund resource assessments for tidal wave and hydrokinetics because the EETF specifically does not fund resource assessments. That was one clear gap that has been resolved. Chair Rose believes the primary issue is determining how to nurture this industry that Alaska has first-mover advantage in, with the competitiveness of these programs and less funding available. Renewable Energy Fund Advisory Committee Meeting Minutes Page 10 of 14 January 9, 2015 Senator MacKinnon stated she does not see where additional funds would come from and does not want to see a decrease of REF project funds. She expressed understanding of the gap, but the current fiscal situation does not seem to allow for new money becoming available, without reducing or diverting monies from other programs. Mr. Evans noted it sounds like the technologies within the gap need an angel source of funding and he would have a hard time displacing a project that could actually produce kilowatt hours and diluting the goals and efforts of the existing program to provide angel funding. Ms. Fisher-Goad stated AEA has seen good companies working on hydrokinetics in the state who are showing significant progress, but AEA does not believe REF is necessarily the right program to continue to advance this technology. Ms. Fisher-Goad noted there is great value in the hydrokinetic technology and ACEP has done a great job in their work, but it is not fitting very nicely into the REF program. She expressed recognition there is a gap and it is an issue. Senator MacKinnon asked if ORPC is the entity who falls within the gap. Mr. Skaling agreed ORPC is one of a few companies who have made the request to address this issue. Their request is for $2 million. Chair Rose discussed the possibility of getting the Department of Energy or other entities to provide matching funds for the EETF. Alaska has a unique situation to develop this hydrokinetic technology because of the actual need and resource. Representative Edgmon requested a briefing from an EETF committee member to learn more about the program and see if there is a possibility for EETF and REF to work in tandem. Mr. Reeve believes there needs to be more funding for emerging energy technologies. It is important to have separation between EETF and REF. The REF program needs to implement fully mature technologies to provide the best chance of success. 12. Round VIII Recommendations 12A. Heat and Standard List Review 12B. Regional Spreading 12C. Committee Recommendations to AEA Mr. Skaling discussed the REF R8 funding recommendations for the heat and standard applications. The three spreadsheets show heat applications only, standard applications only, and heat and standard applications combined. The top darker colored sections for the heat and standard applications lists are recommended in ranked order and fall within the Governor's $15 million budget. The lightly colored sections in the middle are recommended, but fall outside the budget. The bottom white section of listed projects are not recommended. For each project, the Committee packet contains a two-page project description, including the recommendations and comments of economists, DNR, and AEA, as well as the Stage 3 scoring. The soft goal set for this year was to have 30% of the total funding toward heating projects. That Renewable Energy Fund Advisory Committee Meeting Minutes Page 11 of 14 January 9, 2015 goal has been exceeded and approximately 50% of the total funding recommended is for heating projects. Chair Rose disclosed a staff member of Renewable Energy Alaska Project (REAP) provided technical assistance on the Hoonah Indian Association's application. This is a recommended project. REAP has no financial interest in the project. Mr. Evans asked if the infrastructure being heated is assessed during the evaluation and does that have any scoring consideration. Mr. Skaling informed the infrastructure being heated is evaluated and higher scores are given for energy efficiency measures completed or promised. The engineering estimates do consider production, heat loads, and demand loads, but does not use a standard benchmark. Ms. Plentovich advised the energy efficiency is weighed into the scoring, but a project will not be eliminated if there is need for energy efficiency work. Chair Rose asked if staff has considered increasing the scoring weight for energy efficiency measures. Mr. Skaling stated the energy efficiency requirements have increased over the last couple of years, mainly giving more points for having performed efficiency measures. Mr. Skaling believes the requirements could still increase and would like to implement those changes slowly. He requested the Committee provide recommendations at the next meeting for next year's request for applications. Mr. Evans asked if there is an evaluation or ranking of the sustainability of the biomass source. Mr. Skaling advised sustainability of the biomass source is required to be included in the plan. Mr. Skaling explained the project phases are reconnaissance, feasibility including conceptual design, design, permitting, and construction. The different ways to measure regional balance include total dollars per region equally, weighting by population, and weighting by cost of energy. The current method is weighting by cost of energy. Senator MacKinnon requested the Committee have a high level conversation about whether the focus should be on completing construction projects already in the queue, rather than investing in design projects that may not be funded over the next 24 months due to budget cost cutting. Chair Rose believes that high level discussion should occur in May and the Committee can determine whether or not to support feasibility studies in the next round. Mr. Evans suggested the total cost of energy, combined heat and electricity, should be part of the scoring criteria for the next round. Senator MacKinnon asked if AEA has pursued a federal energy match for REF or EETF programs based on the historic investment. Ms. Fisher-Goad noted the high cost RUS grants have been very effective on funding coming in for powerhouses. The Denali Commission has federal dollars for funding bulk fuel tank farms for the high cost areas. The federal money coming in is not particularly for the REF or EETF programs, but more on the preparation and development of some of the initial work on the projects. Ms. Fisher-Goad believes the Tribal Renewable Energy Fund Advisory Committee Meeting Minutes Page 12 of 14 January 9, 2015 Energy Office has done a very good job in the state to coordinate with some of these projects. She believes AEA could take advantage of additional federal funding opportunities. Chair Rose asked if average weather temperatures of a region for heating needs are factored as part of the scoring equation. Mr. Skaling noted the cost of fuel is part of the economic evaluation and not the weather temperatures. Chair Rose suggested discussing this issue further in the May meeting. Chair Rose asked if staff can report on the track record of projects that have been funded in the past that started out with a B/C ratio of less than one. Mr. Skaling stated he cannot provide a specific answer at this meeting. Ms. Fisher-Goad requested the Committee provide staff with specific direction and recommendations regarding the objective criteria going forward, for example not recommending projects with a B/C of less than one or not recommending feasibility projects. She noted the B/C ratios for feasibility projects have a low range of accuracy and have previously suggested feasibility projects do not include a B/C ratio or at least get explained with an asterisk. Ms. Fisher-Goad believes the best place for state grant funds are the feasibility and design projects, because there are no loan programs that will provide funding for that initial risk. There are loan programs that will provide funding for construction projects. Senator Hoffman noted two other recommendations for consideration; 1) do not fund projects above the $1.5 million level, and 2) no region should exceed their equal regional funding percentage. Senator MacKinnon suggested criteria consideration for the amount of match provided and for a cost ratio above one. Mr. Evans requested the criteria incorporate efficiency measures to evaluate the production of energy per dollars spent. Mr. Reeve believes with the reduced funding available, it makes sense to fund the best construction projects and get those functioning to show the Legislature the state's money is being invested wisely. Representative Edgmon suggested the cost of energy be given more weighting in the scoring process. Chair Rose suggested identifying a specific match amount, depending on the size of the community and their ability to pay. Chair Rose agreed with Ms. Fisher-Goad that if the REF budget decreases, for example to $5 million, the best use of the funds would be to provide risk capital to communities, who could then go out for private loans for construction. Chair Rose recommended further discussion on this issue at the May meeting. Senator MacKinnon asked if Ms. Fisher-Goad has spoken with the Governor's Administration to ensure grant funding for this program is still available, given the deficit the state is facing. Ms. ~ Renewable Energy Fund Advisory Committee Meeting Minutes Page 13 of 14 January 9, 2015 Fisher-Goad stated the REF funds are currently in the operating budget and she has not had any recent conversations with O&B regarding operating budget reductions. Senator MacKinnon requested staff take the comments made by the Committee and provide objective ways to balance the project recommendations so the Southeast region is not overrepresented. She suggested a specific percentage of the projects be in the risk capital feasibility stage. Chair Rose suggested the staff create scenarios based on the Committee's recommendations to present to the Legislature, that would include, for example, a recommended list with no feasibility projects, a list with no benefit/cost ratios below one, and a list of an increased amount of electric projects. Ms. Fisher-Goad believes that would be a good start to provide the Legislature with additional filters from which to choose, and the easiest scenario to create is the regional spreading. She commented there is a great deal of difference between the costs of electricity and heat in Angoon and in Ketchikan. The concern is there are Southeast communities with very high energy costs. Representative Edgmon requested the filters be created by REFAC to provide the best recommendations for this year and maintain the goal of having a more methodic process going forward in light of the budget reduction. 13. Next Meeting Date (May 11-14) Senator MacKinnon discussed the short-term plan could be staff provide the current recommendation to the Legislature per the statutory deadline. She noted the Governor indicated a revised operating budget will not be released until February 18th. The REFAC could meet again in February, while staff is already in Juneau to testify in front of the Senate Finance Committee, to review the staff-prepared regional spreading suggestions for REFAC endorsement. Senator MacKinnon's staff could confirm the date with AEA and staff would inform REFAC. Chair Rose agreed to the next meeting in February outlined by Senator MacKinnon. He informed the meeting will have a single agenda item to review staff recommendations on regional spreading. A subsequent meeting was tentatively scheduled for May 14th, 2015. 14. Committee Member Comments Mr. Evans expressed appreciation to staff for accommodating his questions. Senator MacKinnon expressed appreciation to staff for their work in helping the Legislature make better decisions. Representative expressed appreciation for all of the work during this meeting and difficult process. Renewable Energy Fund Advisory Committee Meeting Minutes Page 14 of 14 ‘ January 9, 2015 Mr. Reeve expressed appreciation to staff for their diligent work. He noted concern regarding the grant budget reduction from $50 million to $25 million to $15 million. It is important to discuss how to provide the greatest benefit possible for the decreasing available funds. Mr. Skaling expressed appreciation to the Committee for the tough and important discussion on how to improve the program. Ms. Fisher-Goad stated she looks forward to the continued discussion. Chair Rose echoed the comments to staff regarding their dedication and hard work. 15. Adjournment The meeting was adjourned at 2:15 p.m. Yolanda M. Inga From: OpenVoice <DO.NOT.REPLY @citrixonline.com> Sent: Tuesday, October 27, 2015 6:28 PM To: Yolanda M. Inga Subject: OpenVoice Conference Information | Important OpenVoice Notification OpenVoice Dear Yolanda Inga, The following is a summary of a conference you held. Information in this report is based on the time zone setting on the My Account page. Date of conference call: 10/27/2015 Conference Room #: 683021989 Conference Call Detail Report: Calling Party | Called Number silled As Sie ]a mm Bele B MU Tlale lca) +19074653777 | 18885859008 US Toll-free | 03:01 PM PDT 47 +19074655047 | 18885859008 US Toll-free | 03:00 PM PDT 43 +19073607438 | 18885859008 US Toll-free | 04:39 PM PDT 2 +19075861325 | 18885859008 US Toll-free | 02:54 PM PDT oF. +19074508608 | 18885859008 US Toll-free | 03:26 PM PDT 64 +13607822418 | 18885859008 US Toll-free | 02:59 PM PDT OT +19077713994 | 18885859008 US Toll-free | 02:52 PM PDT 98 +13603851733 | 18885859008 US Toll-free | 03:40 PM PDT 50 +19072690243 | 18885859008 US Toll-free | 02:58 PM PDT 92 +19072766664 | 18885859008 US Toll-free | 04:57 PM PDT 2 +19072766664 | 18885859008 US Toll-free | 04:59 PM PDT a Unknown 18885859008 US Toll-free | 03:08 PM PDT 112 +19076026574 | 18885859008 US Toll-free | 03:19 PM PDT 45, +19076173773 | 18885859008 US Toll-free | 03:09 PM PDT 49 +19073607438 | 18885859008 US Toll-free | 04:41 PM PDT 1 Total Minutes: 797 Number of Callers: 15 Visit My Conferences to see your minute usage. 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