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HomeMy WebLinkAboutDraft Meeting Minutes January 13 & 14, 2010Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 1 of 13   Renewable Energy Fund Advisory Committee Meeting January 13 & 14, 2010 – AEA Boardroom 10:00am to 12:00pm Draft Minutes January 13, 2010 1.) Call to Order The Renewable Energy Fund Advisory Committee convened at 10:04 a.m. Chairman Vince Beltrami presided over the meeting. 2.) Roll Call: Committee Members AEA Staff Other Participants Vince Beltrami, Chair Steve Haagenson Mike Nave, Dept of Law Chris Rose Mike Harper Mike Mitchell, Dept of Law Brad Reeve (phone) Sara Fisher-Goad Wyn Menafee, DNR Representative Bill Thomas (phone) Peter Crimp Kate Sangster, Chaninik Wind Group Jay Livey – Senator Hoffman’s Butch White Clint White, STG, Inc. Office (Phone) James Strandberg Denali Daniels, Denali Commission Devany Plentovich David Lockard James Jensen Doug Ott Rich Stromberg Lenny Landis Emily Binnian Audrey Alstrom Shauna Howell May Clark 3.) Public Comments There were no public comments. 4.) Agenda Comments There were no changes to the meeting agenda. Mr. Rose said he hoped the meetings could be completed in one day instead of the two scheduled and would also like to discuss how AEA is going to be presenting information to the opening Legislature, i.e., any requests for reports and what the plan is for disseminating information. Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 2 of 13   Chair Beltrami stated he realized it was difficult for some people to attend today and that there are difficulties for tomorrow as well, and hoped all of the business could be completed in one day. 5.) Approval of Meeting Minutes – December 14, 2009 Chair Beltrami thanked staff for timely distribution of the meeting minutes and stated they were  comprehensive as well.  MOTION: Rep. Thomas moved to approve the meeting minutes from the December 14, 2009 Renewable Energy Fund Advisory Committee. The motion was seconded by Mr. Reeve. A voice vote was taken and the minutes were passed as presented and Mr. Rose abstained. 6.) Round III Ranking Peter Crimp distributed and reviewed the “Renewable Energy Fund Round 3 Ranking All” spreadsheets and had the following remarks. The green shaded area is the top 22 projects AEA is recommending for funding for the top $25 million. The yellow shaded area shows a total of 46 projects AEA is recommending for funding for the second $25 million. The orange shaded area is the 22 projects that total $11.5 million over the $50 million. The white section are the final 23 projects not recommended by AEA not due to funding, but due to basic issues with the projects, under two recommendation categories: 1) did not pass Stage 1, and 2) Not recommended – didn’t pass Stage 2, the technical and economic review. Evaluation guidelines were tightened up. Under the “Stage 3 Review Scores Section”: 1. Cost of energy category is the cost of power in that community. It was weighted at 30% and is now at 25% and is still the highest weighted item. 2. The amount of match provided also went down by 5%. Cost of energy and match are 45 out of 100 points, which follows basic legislation and AEA regulations. We responded to the idea that inherent economics of a project should drive the selection, and increased that. 3. Technical & Economic Feasibility remained the same. 4. Readiness is up to 10 from 5. Projects that are ready to construct get more weight. Four points were assigned if a project had completed feasibility or earlier stages of project development. An additional two points were assigned if permits were ready. The full 10 if it’s in the construction phase and just needs money to proceed. Two points to order a long lead time item, feasibility is completed and they’re ready to proceed and need to put money down on a wind or hydro turbine or other equipment, for example. 5. Benefits at 10 points last time is now 15. That benefit/cost (B/C) score is part of that one and it’s around 18% of the total score in those two categories. The non-B/C benefits category was tightened up to actually list other benefits not generic to renewable energy, i.e., flat price of power or decreased greenhouse gases. Things like development were counted that would be useful for other purposes, such as a water supply in conjunction with a project, or logging from a biomass project that would create more jobs in a community up and above what they already had. 6. Local Support and Sustainability remained the same. Mr. Rose asked if any projects that have a B/C ratio of less than one are being granted money. Mr. Crimp stated that for many projects, the benefits can’t be analyzed. For example, West Cook Inlet Energy Cumulative Impacts – Studies the impacts of developing transmission and projects in general on the West Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 3 of 13   Cook Inlet side and doesn’t lend itself to quantification, so ISER concluded that that wasn’t appropriate. The project scored very well on public benefits in general. In 15 years if a transmission project was developed there, AEA felt it would be a sustainable operable project. Mr. Rose stated he’d been hearing from people generally that program money is being spread out too thinly, and there’s not enough projects that are actually happening right away because we’re trying to fund a lot of projects. Perhaps it would make more sense to give more money to fewer projects that have higher scores, rather than dealing with projects with lower scores that may not have the B/C ratios we want to see. It’s something we have to consider. Mr. Haagenson stated the criticism was probably on the caps we put on after the fact. Some of the green shaded fully funded projects were briefly reviewed. Mr. Rose wanted to know if there was a way to find out what percentages of the projects are reconnaissance and/or feasibility studies as opposed to construction. The balance of that is another concern he’s heard from people. Mr. Crimp stated there is, but he had just run out of time before the meeting and that will be done for the next meeting. He’d guessed it was about 70-80% construction. The projects not selected (white area) were reviewed and a brief explanation follows. Mr. Crimp stated AEA will be sending out courtesy letters to applicants not selected and they are allowed to appeal the decision. • Project #403, Delta Junction Wood Pellet Boiler. High project cost of $932,000 and relatively small amount of fuel oil displays of economics are poor. • Project #482. Turnagain Arm Tidal Electric Generation Project. Little Susitna Construction Company’s technology is pre-commercial. At $2.5 billion the project has an extremely high capital cost. Applicant requests $4 million on a low cost energy area that is capped at a maximum of $2 million. Mr. Rose would like to see a narrative on each project beyond the information provided on the spreadsheets. Project #438, The Yerrick Creek Hydro project was discussed. (Green shaded area). In Round 1 AEA recommended against funding this project because local land owner, Tanacross, Inc., indicated unwillingness to provide legal access to perform field investigations. Over the past year AT&T reached a temporary agreement with Tanacross to allow field work. However, there remains no permanent agreement with Tanacross to use their land for the project. AEA recommends funding for construction, with the provision that no funds are dispersed until AT&T provides evidence of Rights-of-Way and other development rights with Tanacross, Doyon (owns subsurface rights), DNR and other resource owners. AP&T has completed feasibility stages, a big deal when this project is compared to any others. We have been trying to emphasize orderly progression of projects. We hope they’ll ask for one year of funding instead of four so they can get moving on a project. It’s good to fund a lot of non-construction projects because that moves project forward, otherwise construction projects would dry up in future rounds. Mr. Rose asked how long we would give projects to secure Right-of-Way (ROW) agreements. There has to be a set policy with iron clad deadlines. Mr. Crimp said that was a project management issue and we probably discounted the technical feasibility somewhat and score due to the uncertainty of when the ROW agreements would be in place. A year would be a reasonable amount of time. Mr. Haagenson stated that after a year it would be up for reappropriation. If nothing’s done for a year that would be an issue, even if they had met milestones. Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 4 of 13   Mr. Menafee compared this (ROW) situation to FERC in the preliminary permit phase showing progress. Certain companies try to advance their ranking by applying to FERC for a preliminary project permit in an area like Turnagain Arm. They can lock up the area for three years meaning no other project can get a FERC permit in that area. This is something we should be aware of. Ms. Daniels inquired as to how many of the projects were Denali commission funded. She and Mr. Doug Ott of AEA will confer after the meeting to verify Denali Commission funding/matches. The Kwigillingok Flywheel project was discussed. There were three or four flywheel projects proposed using the same technology. The Homer optimization model was checked on them and the economics didn’t appear overwhelmingly good. It made sense, since there are no flywheel projects in the state associated with wind projects, to at least recommend one to be tested. Mr. Rose asked if this project could be considered more of a demo project even though it’s commercial technology; and how many other projects recommended might fall under the category where one could argue a demo project. Mr. Crimp stated it would be maybe 10%. Mr. Haagenson stated flywheel technology is not ‘emerging technology,’ but the integration is definitely new ground. Mr. Rose would like it made clearer as to why the projects were funded and which are in that demo category. A discussion on emerging technology followed. Ms. Daniels stated that one of the big dilemmas is articulating to the Legislature the distinction between emerging technologies and the renewable energy program; it’s important for us to know how that was contemplated, and to make sure that we don’t have a few emerging technologies slip by so that creates confusion as we try to move forward with the emerging technologies initiative. Mr. Haagenson said when the Legislature asked what our acceptable limit of failure was, the answer was zero. When you give that kind of answer you’re not going to be looking at a lot of emerging technology. Mr. Beltrami stated that one of the things in our renewable energy program we decided to emphasize was emerging technology projects. The following funded projects were identified as somewhat and emerging technology projects: Somewhat: • Atka Hydro Dispatched Excess Electrical Power • Kotzebue Electric Association High Penetration Wind-Battery-Diesel Hybrid. • District Wood Heating in Fort Yukon. • Alaska Sealife Center Phase II Seawater Heat Pump Project • Chefornak Wind Turbine Installation Emerging Techology: • Kongiganak Flywheel Energy Storage • Cook Inlet Tidal Generation Project • Solar-Thermal Collection & Storage • Kachemak Bay Tidal Power • Port Frederick Tidal • Yakutat Wave Energy Pilot Demo Mr. Reeve asked Mr. Crimp how some of the smaller villages came up with reasonable matches and what their sources were. He said we should look at some of the projects on a more specific basis to see where Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 5 of 13   the funding is coming from in order to bolster the efforts of the small villages. Mr. Crimp stated we would definitely look into that. 7.) Geographic (Regional) Spreading Mr. Crimp stated there were a number of regions that do not have projects recommended for funding within the (first) $25 million constraint: notably, Bristol Bay, Lower Yukon & Kuskokwim and the North Slope. The regional summary is based on $25 million and we haven’t assessed the impacts of going up to $50 million. Mr. Rose suggested it should be spread as if we were getting $50 million. Mr. Haagenson stated that last year when there was $50 million in the Governor’s budget and the Legislature requested we look at $25 million, we gave them a dual recommendation. He agreed we make two levels of recommendation; that statutorily we were told to make a recommendation for $50 million but that we were directed by the Governor under the budget to look at $25 million. We’ll then present two numbers. The Regional summary sheet was discussed. The percentage is a percentage of the total of $24.38 million. The protocol established in Rounds I and II were that a project would need to get at least 50% of amount of the total prorated by cost of energy. For Bristol Bay, half of the $2.25 million is $1.262 million, and there was no allocation this year so this is the additional amount we would need to recommend for funding in Bristol Bay in order to achieve that allocation. Kodiak is short. The negative numbers mean they are in good shape along that criterion. We are also short in Lower Kuskokwim and the North Slope – only considering Round III. Cumulatively, there’s a lot of funding allocated in the Lower Kuskowkim already. If you total the allocation among Rounds I through III, then you get different impacts. The only regions that are short in this case then are Bristol Bay and the North Slope. All the rest have positive numbers. We will need the Committee’s direction on this. There were no applications for the North Slope in Round I, which impacts that somewhat. Mr. Rose stated he would rather proceed on the assumption that (the Legislature) is going to come up with the $50 million they committed; they are going to make the decision on which projects get funded in the final analysis anyway, and would prefer to not tell them to take the lowest ranked of the 19 projects. It should be recognized that if only $25 million is allocated, then there’s no way we can accomplish regional spreading and meet the protocol unless we have another $3.6 million. Mr. Crimp stated we would not recommend projects if we thought they had fatal flaws. [Rep. Thomas signed off the phone at 1:15 p.m.] Mr. Crimp noted AEA staff tasks recommended to support further deliberation of the REFAC: 1) Allocate between construction and pre-construction projects, and 2) go through and make another regional allocation summary that includes the full $50 million (yellow shaded area). He will also obtain the information that Mr. Rose requested. Mr. Rose asked what the procedure would be to get the Round III information to the Legislature, and felt that they would expect updates on Rounds I and II. Mr. Crimp stated they had been busy on Round III work but certainly could get those updates. 8.) RE Fund Report Rounds I and II Mr. White stated the Rounds I and II status spreadsheets included in the meeting handouts was prepared at the request of Senator Hoffman’s office and was also shared with other members of LB&A. 109 projects were funded for $125 million. We have obligated $67.3 million and actually dispersed $18 million. Of the 109 projects, 75 are in place, 21 are in-house (Project Managers negotiations, controller Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 6 of 13   review, etc.) and we’re waiting for information from the grantees on 13 projects. There were a couple of projects hung up because we capped them. Also included in the meeting packet is a summary of capped projects which was requested by the Committee at the last meeting. Mr. Rose asked what kinds of issues are being negotiated. Mr. White stated it was mostly funding issues, working within the scope of the original approved grant. It’s been a long process begun in 2008 and we haven’t got to some of the projects yet. Mr. Haagenson stated some of the issues concern IPP’s and are complex. While working with the RCA, most conversations were about IPP’s as opposed to the utility equal, which is a different role for them. The project issues include making sure they hit the milestone and have the right reporting and right purpose. We are doing things above and beyond to make sure there’s no failures. We know there’s people out there that want to find something wrong with the program for various reasons. We have to withstand a very high level of scrutiny. Ms. Fisher-Goad stated it’s an evolving process and we’ve addressed some issues that arose in Rounds I and II in the difficulty in getting the grants out. For the Round III application format, a lot of the information is being obtained upfront. From February until the effective date of the appropriation, we’ll be working on all of this. Once the money is available the grants go out. All that work will be done up front. Mr. Rose reiterated that a short narrative beyond the spreadsheets would be good so Legislators can see how the program has progressed and developed and they can read about it in a two or three page document. If they understand that progress is being made, that will go a long way to allay their concerns. He also stated that Legislature is considering changes to this program in the Omnibus Energy Bill. People in REAP and the Board Policy Committee have suggested there might be tweaks, so they decided at the Policy Committee level to discuss what they might suggest as changes, then come to this Committee before any suggestions are made to Legislature. There’s an active group of people within REAP who would like to be a part of the process. He invited the Committee to have this discussion at the REAP Policy Committee meeting at APA at 10:00 a.m. on January 29, 2010. Mr. Haagenson reiterated we are trying to learn from past experiences. We would like to send out a letter to all the people involved in the process and ask them how it worked for them, sooner than later, but not before the process is done. Mr. Rose stated that more capacity building needs to be done in the smaller communities to get them to the point where they can write grant proposals. If certain areas don’t turn in more applications it’s not because they have less of a need. Mr. Crimp stated AEA has had programs in place for years and now we’re seeing a lot of this type of need. An important function of those programs is to help develop projects. AEA has 10 on staff now in alternative energy and energy efficiency that can work with the entities. Mr. Haagenson stated that’s determined in the evaluation process. We don’t want to see a good grant writer with no back up. We’re not looking for perfectly written grants, but we are looking for people there to make it real. Ms. Fisher- Goad pointed out that this program was designed on a cost-reimbursable grant management process where the grantee receives the funds and builds the project. Another project management model that AEA runs through the Denali Commission is where AEA manages a project for a community though we still go through sustainability requirements. The bulk fuel tank farms and any RPSU built through AEA have been AEA managed projects. If necessary we can step in and provide that level of support to the Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 7 of 13   communities; that’s an option they have. Mr. Rose stated that was important information that could also be communicated to Legislature. Mr. Jay Livey, from Senator Hoffman’s Office asked if the allocation was meant to apply to rounds cumulatively and would they remain in place even though the monies haven’t been spent yet. Mr. Crimp confirmed that the allocation remains and that our assumption is that over the next year or two the money will be spent, that all projects budgeted will move forward. Mr. White cited examples of successful grant writing in a community that at first could not move forward, then came back and were successful a second time after receiving help. Another grantee argued successfully to run their own project. Mr. Rose stated it would be helpful for others, not just for the Legislature, to understand where the help and building capacity can be found, so they know it exists and can ask for the help when they need it. The Denali Commission’s sustainability standards are part of the criteria we’ve been using when looking at project readiness and community support. Mr. Crimp stated when we look at the sustainability score, our rule of thumb is that in 15 years if the project is developed what is the likelihood it’s going to be up and running, which integrates other factors, i.e., will there be substantial fish & wildlife habitat impacts or operational complexity, will there be a load or market for the energy to be made, and most important will the community still be there. Sustainability is not documented in any certain way, and is that something the Committee would like to see. Chair Beltrami asked if there’s an ability to align with the Denali Commission on this. In trying to prioritize what communities we’ll work with, we’ve always said communities under 100 won’t be considered that had problems, but there are some special small communities out there. Mr. Crimp stated we can expand our evaluation guide to emphasize sustainability, and assign point scores for different facets to include that other than point scoring. 9.) Review AEA Proposed Reallocation of Round I & II Funding Round I projects: Mr. Haagenson clarified that per the LB&A, any monies left over (for example, if a Round I project was cancelled), the monies would be returned to the Round I RE Fund. We are done recommending projects of the Round I list, the last one being Takatz Lake Hydro that can now be fully funded. AEA does not have the authority to move funds around. He did not think there were any cancellations yet for Round II. Mr. Crimp stated there was a $400,000 error (too much) made for the Akutan project and will have to be revised. Ms. Fisher-Goad said she and Mr. Haagenson are traveling to Juneau the week of 1/18/2010 to meet with Legislature on this matter. There’s a few issues to work out on how the money would cycle back into the RE Fund. Mr. Rose asked if they are going to recommend that any leftover Round II money that may need to be reappropriated go to future rounds rather than a past round, and is Ms. Fisher-Goad asking the Committee’s advice to agree or disagree. Ms. Fisher-Goad stated it made sense to ask the committee’s advice at this point; hence Chair Beltrami and Mr. Rose agreed, and hoped that Mr. Posey would be in attendance at the Jan. 14th meeting so enough members will be present to vote on this, as Senator Hoffman and Representative Thomas would be in Legislative meetings. The Mr. Rose suggested that one group of projects we may want to consider giving the money to are those capped in Round II that are having trouble getting the rest of their funding. Ms. Fisher-Goad said it would be a problem if we made a decision to cap at $2 million and there’s a recommendation in the same application to add above those caps; especially in Round III where it’s in the RFA. It’s not fair to other Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 8 of 13   potential applicants and it wouldn’t be fair to others who mange it some other way. We have to be careful going above $482,000. Mr. Haagenson said LB&A instructed us to ‘fill up the bucket’ on Round I and we’re assuming everything left over will be allocated to Round III. Mr. Rose asked if there is any way that we could change the program so we’re not evaluating millions of dollars worth of projects before we know how much money we will have. Ms. Fisher-Goad clarified it’s a grant recommendation program. We’re supposed to do the work up front in order for Legislature to decide on what projects they will appropriate for. The spreadsheet showing “Round I projects not able to get underway because grant amount was capped” was reviewed and discussed. Of the 14, the only ones really stalled and ‘dead in the water’ are Nome Joint Utility’s Newton Peak Wind Farm and MOA’s Anchorage Landfill Gas to Electric projects. The Takatz Lake Hydro Project in Sitka applied in Round III. They have their permit now and are going through the study phase and it will take a year plus to layout and implement the expensive studies. Round III monies will allow them to move ahead smoothly. Round II Projects: Round II Projects were discussed. Mr. Rose felt we should emphasize there’s $50 million worth of good projects. It’s important Legislators perceive the entire program favorably, and the program is moving forward in a good way, especially bringing notice to potential projects in their districts. This should be in the narrative. Public comment: Mr. Clint White, STG, Inc. reported on the Wind for Schools Program at Unalakleet High School, where they, in conjunction with Northern Power, are preparing to launch a public view monitoring system. It will make production data publicly accessible by anyone. The Program is national and NREL has also participated. The curriculum is not completely developed, but is basically one time sessions that may be integrated into specific math and science lesson plans. Mr. Rose stated that REAP is also part of the Winds for Schools Program and is working with the Alaska Center for Energy & Power (ACEP). He stated he had not taken a position on the matter of ACEP request for RE funding. Mr. Rose commented that it would be helpful for the Committee to start to condense all of their protocols into one policy document that they could reference in future meetings. Mr. Haagenson reminded Mr. Rose he wanted to discuss reporting to the Legislature. He said that had not been discussed too much in house yet. Mr. Rose reiterated that more information should be included in the narratives to send to the Legislators i.e., how regulations affected each round, work completed so far to show the program is really working, other than the spreadsheets with the list of recommended projects. Representative Thomas stated we need to have a plan as to how we are going to reappropriate the money for projects not going forward. One or two years may be too long and we may end up losing the funds. Eighteen months may be the timeline to show significant progress on a project. A timeline should be in place. Ms. Fisher-Goad thought 18 months may be short for Alaska, but could be determined on a case by case basis. Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 9 of 13   Mr. Crimp introduced Audrey Alstrom, who has joined AEA as an Assistant Hydro Project Manager. Mr. Rose thanked staff for all the work accomplished over the holidays. The meeting recessed at 1:30 p.m. until noon on January 14, 2010. Attachment: ‘Renewable Energy Fund Round 3 Ranking All’ handout from Mr. Crimp) Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 10 of 13   Renewable Energy Fund Advisory Committee Meeting January 13 & 14, 2010 – AEA Boardroom 10:00am to 12:00pm Draft Minutes January 14, 2010 1.) Call to Order The Renewable Energy Fund Advisory Committee reconvened at 12:12 p.m. Chairman Vince Beltrami presided over the meeting. 2.) Roll Call: Committee Members AEA Staff Other Participants Vince Beltrami, Chair Steve Haagenson Mike Nave, Dept. of Law Chris Rose Mike Harper Mike Mitchell, Dept. of Law Jim Posey Sara Fisher-Goad Denali Daniels, Denali Commission Brad Reeve (phone) Peter Crimp Jodi Mitchell (phone) Butch White Representative Bill Thomas James Strandberg & Kaci Hotch (phone) Devany Plentovich Jay Livey – Senator Hoffman’s David Lockard Office (Phone) James Jensen Linda Hay – Senator Stedman’s Doug Ott Office (Phone) Audrey Alstrom Shauna Howell May Clark 9). Round III Ranking - Continued Chair Beltrami acknowledged receipt of the printout showing a short narrative of all of the AEA recommended projects. Mr. Rose asked Mr. Crimp what the rough project percentages of studies relative to construction would be. Mr. Crimp stated the projects are shown in the Development Phase column and were broken down into three phases; 1) reconnaissance/feasibility, 2) final design/permitting and 3) construction. That information sheet was e-mailed to members along with a revised Regional Summary, a scenario that shows what the impacts of geographic spreading would be, assuming a $50 million allocation. Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 11 of 13   Development Phase breakdown: The sheet showing Round III ranking with Development Phase breakdown was reviewed. In the top $25 million (green shaded) projects there are 76% construction, 8% final design/permitting and 16% for reconnaissance and feasibility. About 4% of the recon/feasibility total are geothermal exploration or drilling (Mt. Spurr and Pilgrim Hot Springs Geothermal). Geothermal resource assessment is a physical activity that doesn’t get stale with time. In the yellow shaded projects, 46% is construction, 18% final design/permitting and 36% reconnaissance and feasibility. Cumulatively, a combination of the green and yellow shaded areas, the results are: 61% construction, 23% final design/permitting, and 26% for reconnaissance/feasibility. 13% of the total would be geothermal on site exploration. The further down (in the orange area) the less construction projects there are. 8% construction, 42% final design/permitting and 51% reconnaissance/feasibility. IPEC has proposed a $2.6 million geothermal exploration project in the Tenakee area. There were no further comments or questions on the Development Phase breakdown. Cost of Power Protocol: The regional summary Round III Ranking, Cost of Power allocation was discussed. In Rounds I and II the Committee first established a protocol that they would look at the average cost of power and allocate the amount of funding by the relative magnitude of the cost of power number and that the region should get at least 50% of that number. In Round II it was decided to go further down on the list to retrieve projects and bring them up in an attempt to meet additional funding needed to reach the 50% constraint, but only using the projects recommended. That is why we don’t go in and add funding for projects not recommended. In Round II that’s reflected in the ranking submitted and approved by the Legislature. The blue highlighted areas in the Cost of Power column under “Additional Funding Needed to Reach 50%,” are the areas that are short in Round III (Bering Straits, Bristol Bay, Kodiak, Lower Yukon-Kuskowkim, and the North Slope. The bottom table shows cumulative Rounds I through III for $50 million (Bristol Bay and the North Slope are short). As expected smoothing in the allocations was achieved by bringing in more proposals. In Round I there were no North Slope submittals. Mr. Livey asked if there were any other recommended projects that could have been brought forward for Bristol Bay in Round III, of which he was told there was only one, Port Alsworth ($150,000). As for Rounds I and II the only project not included was the Bristol Bay Fish Waste Assessment project, which was recommended in the yellow in Round II. Mr. Posey commented that the projects were very well balanced. The ratio of urban to rural is maintained, some regions are over represented, but that’s where the high costs are. More smoothing may damage the concepts we are trying to stay with. Considering what’s happening in the Lower 48 states, with no federal money involved, we’re doing better than most states. He asked Representative Thomas how he felt about the process so far. Representative Thomas stated he was happy with where we were at. We need to let the people know this is important to them. We have come a long way. Mr. Rose wanted to know from the Committee’s standpoint what message we should be sending to the Legislature. We should give them the whole project list and explain how it was broken out so they can clearly take the first $25 million, but we should start out by requesting $50 million. Representative Thomas agreed with this. He said this is the year we have money and it’s an election year. The higher the better. We can Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 12 of 13   recommend $50 million in keeping in tune with the legislation and say we want to match it, and offered to make the motion stating that. Chair Beltrami stated he would entertain any motion. MOTION: Representative Thomas moved that the Renewable Energy Fund Advisory Committee submit up to $50 million in projects. The motion was seconded by Mr. Rose.   Following a voice vote, the motion carried. Mr. Rose stated the motion is reflecting the Committee’s statement that they are comfortable with AEA’s scores and ranking and agree as such for the projects to be submitted. Representative Thomas stated he was confident with AEA through previous years’ experience and you have to have confidence in the people around you. Mr. Crimp asked if the Committee wanted to add on the North Slope and Bristol Bay projects which may cause us to slightly go over the $50 million. Mr. Rose stated we should ask for all the wind projects, if it’s over the $50 million, that’s what we submit. Chair Beltrami asked if he was amending the motion to go over the $50 million. MOTION: Mr. Rose amended the original motion to include the two wind projects. The motion was seconded by Chair Beltrami. With no opposition from Representative Thomas, the maker of the original motion, and following a voice vote, the motion carried.   Mr. Rose wanted to finalize the subject brought up yesterday in that the narrative will be written describing the program and other information, he asked who would be transmitting the information to Legislature and in what form would it be, i.e., official letter, spreadsheets. Mr. Crimp stated we had already agreed to write the narratives and they have been started. Mr. Haagenson stated there were different levels of information we would share and we would be working on that. He asked if the Committee members would want to travel to Juneau to support the effort. Chair Beltrami said he would be there next week. Mr. Haagenson reminded the Committee that last year all we did was send a cover letter with the list and there were no hearings held, but then met with the LB&A a couple of times after that. Mr. Crimp stated he would need to have a fair amount time to get a good presentation together that would be the coordination of two messages, what we’re proposing and what we have done. Ms. Fisher- Goad stated there’s already a draft in the works. The Narrative can be written to have committee support, whether Mr. Haagenson signs it as Executive Director or not. A lot of people need to know more about the program details and we need to tell that story. Perhaps two messages can be sent, an overview and financial. Having a couple of Committee members present to testify would be helpful. Mr. Posey stated that relaying two messages would not be good, that a good technical report will keep it on track. Mr. Haagenson asked if the finance committee held hearings, would we want to have recipients testify about their projects. Mr. Rose stated it would be a good idea, although we shouldn’t just pick the best projects, but should have a variety presented. The AHFC Report on Energy & Weatherization Programs was included in the meeting packed and briefly discussed, including the subject of contractor payments that may be encountered in RE Fund program and other comparative issues. Renewable Energy Fund Advisory Committee Meeting January 13-14, 2010 Page 13 of 13   Public Comment: A member of the public, Kim Bromeny, introduced herself with questions for the Committee. She said she was a volunteer with some organizations in town. She commended the Committee for all their work, and stated she heard rumors that AEA is slow in allocating funds and actually getting the money where they need to be so certain projects can’t get started. She asked if AEA had a way of monitoring Rounds I and II per administrative process, are things moving or are the rumors of micromanaging and money not going out true. Chair Beltrami stated they are rumors and turned the floor over to Mr. Haagenson. Mr. Haagenson reported that they may not be rumors. He is on the record as saying zero failures. If you just want to get the money out the door, we can get it out fast, that’s not the problem, but we’re trying to do it responsibly and AEA is held accountable for the results. It’s a grant reimbursement program, not just a grant program. We are making sure we’re putting money into good projects in our second year. The first bottleneck was the grant writing itself and understanding the milestones, though that’s moving along well now. It then turns into monitoring. We’ve also heard a rumor that we’re being too aggressive in reviewing receipts. As a public agency we have to scrutinize every receipt and we’re being restrictive on where the money’s spent to make sure it’s for the proper purpose. That was set up by Legislature. You don’t want us to rush through things. Ms. Fisher-Goad pointed out that we have to pay invoices in 30 days, typically they are paid within two weeks upon receipt. Grantees have the responsibility to report on their project, usually when they submit an invoice. A delay is rare. Contractors are not paid directly in this program, Grantees are. Mr. Crimp stated when milestones are set for a construction project, before funds are released they have to show permitting is done. We use our judgment on this and are faced with those decisions all the time. Ms. Bromeny asked what happened if a small village doesn’t have the funds to pay, do they just go into the red. Mr. Crimp stated we have the ability to make advanced payments. Once a grant is signed, they can invoice to get moving on a project. Ms. Fisher-Goad said another example for advance payment is for material delivery, to make a barge schedule, etc. but then if a milestone is not met after that, the payment is repaid to AEA, all the while following the state procedures. Mr. Posey also pointed out that Legislative auditors also audit the program. Chair Beltrami explained the composition of the Committee and that they have expressed the same type of concerns and have been satisfied by AEA staff resolutions on every issue raised. The Committee stands behind the process developed over the last year. Mr. Rose pointed out that in the past similar questions have been posed to him and he has always transmitted them to Mr. Haagenson with results. Mr. Haagenson suggested Ms. Bromeny call him directly if there were any other complaints. Ms. Bromeny thanked the Committee for their time. 10.) Next Meeting Date The next meeting date will be at the call of the Chair. 11.) Adjournment The meeting was adjourned at 1:25 p.m. on January 14, 2010. Attachment: ‘Narrative of all AEA Recommended Projects’ handout from Mr. Crimp)