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HomeMy WebLinkAboutDraft Meeting Minutes June 8, 2010(mc) Renewable Energy Fund Advisory Committee Meeting June 8, 2010 Page 1 of 5 Renewable Energy Fund Advisory Committee Meeting June 8, 2010 – AEA Boardroom 1:00 pm to 4:00pm Minutes 1.) Call to Order The Renewable Energy Fund Advisory Committee convened at 1:06 p.m. Chairman Vince Beltrami presided over the meeting. 2.) Roll Call: Committee Members AEA Staff Other Participants Chair Vince Beltrami Steve Haagenson Gene Therriault (phone) Chris Rose Mike Harper Pat Walker, Sen. Hoffman’s Ofc (phone) Jim Posey Sara Fisher-Goad Kaci Hotch, Rep. Thomas’ Ofc (phone) Brad Reeve Peter Crimp Wyn Menafee, Dept. of Law Jodi Mitchell Doug Ott Mike Nave, Dept. of Law Senator Lyman Hoffman Butch White Bob Pawlowski, Legislature Representative Bill Thomas (phone) Chris Rutz Dennis Meiners, IES Bruce Tiedeman Ona Brause, IES Emily Binnian Faon O’Connor, YRITWC Audrey Alstrom Jodi Fondy, Denali Commission James Jensen Bethany McDiffett Shauna Howell May Clark 3.) Public Comments There were no public comments. 4.) Agenda Comments Agenda Items 14 and 15 were removed from the agenda as being redundant. There were no objections. 5.) Approval of Meeting Minutes – January 13 & 14, 2010 Chair Beltrami thanked staff for timely distribution of the meeting minutes and attention to detail. MOTION: Mr. Posey moved to approve the meeting minutes from the January 13 & 14, 2010 Renewable Energy Fund Advisory Committee meetings. The motion was seconded by Mr. Reeve. The minutes were unanimously approved as presented. Renewable Energy Fund Advisory Committee Meeting June 8, 2010 Page 2 of 5 6.) Debrief of Legislative Session Mr. Haagenson stated SB220, out of Energy Bill HB306, is moving forward and the Emerging Technology Fund was established by Legislature, which will be administered by AEA. $2M was refunded to AEA from unexpended interest earned to manage the program, fund staff evaluations and economic analyses of the RE Fund. The fund was cut from $52.25 million to $25 million, and some projects were not funded. Mr. Therriault was asked by Senator Hoffman if he knew the justification as to why the Governor did not follow HB152 intent and fund the $50 million in projects that were signed into law two years ago. Mr. Therriault said the Governor viewed the extra $25 million as money beyond the $150 million for the third year which meets the intent of the Legislation. The $2M mentioned above was not vetoed. Ms. Fisher-Goad stated our original budget request had a $2 million appropriation to pay for AEA staff to administer the program. Legislature adjusted that appropriation to give us a $2M operating appropriation to pay for the program’s administrative costs freeing up additional capital monies for us to do other alternative energy efficiency programs. Mr. Haagenson stated it is AEA’s opinion that we have provided sufficient information to the LB&A and Governor’s office regarding allocations and the reason for the veto is unclear. In response to a question by Chair Beltrami, Mr. Crimp stated project regional spreading was not affected as a result of this cut. Mr. Haagenson stated $10 million was put into the Power Project Fund and with the sale of the existing bonds to AIDEA means another $21 million into the fund. The Legislature has approved $9 million for the Reynolds Creek Hydro project in Southeast Alaska. HB306 also states the PPF will be the primary funding source for renewable energy projects going forward. The Alaska Energy Pathway document is out for public comment. With the Pathway, we will try to determine what the concept for loans and grants will be (similar to the virtual G&T concept, where everyone pays the same rate across the state, an equal energy footprint). Mr. Therriault emphasized that the Pathway shows individual communities that they could step forward with alternative energy sources and not wait to be totally grant or loan funded. 7.) & 8.) Round 0-I-II-III Grant Updates Mr. White stated Round 0 is included in the handout as the projects carried forward to Round I. We have committed $79 million of the $100 million as grants and have disbursed $26 million in project funds for Round I. For Round II, of $25 million, $10 million was awarded and $1 million disbursed. Due to the veto, we are looking at 22 projects across the state in Round III and should have the grant agreements out in early July. Mr. Haagenson said the Committee needs to define when a project is stalled, what we can do about it, and whether the PPF could be utilized to get these projects moving. Mr. Posey agreed with this approach, as opposed to cutting them off. In response to a question from Mr. Rose, in Rounds I and II, Mr. Crimp stated both the South Fork Hydroelectric and Fishhook Hydroelectric construction projects are not moving forward. South Fork was given the grant for signature in January and one issue has been the maximum allowable cost of power in the Power Purchase Agreement (Mike Hubbard’s work on the cost based rates). Fishhook has permitting and finance issues. Regarding the Bethel Wind Power Project, Mr. Crimp stated AEA requested information from the City in January with no response and requested guidance from the Committee on this matter. Mr. Haagenson said we need to write to the City and find out what their intentions are. Bethel Utilities is not interested in buying power from the City wind turbines as it will lower the rates. The Utilities may be up for sale, but are not interested in selling to the City. Mr. Posey suggested a report to the RCA would prompt them and the Legislature to investigate this matter. Senator Hoffman met with the City four months ago and if nothing can be worked out with the Utility, they are interested in seeking Legislative direction. In response to a question about what authority AEA had in moving monies around in the RE Fund, Ms. Fisher-Goad stated Legislative authorization is needed to move funds from one round to another; Round Renewable Energy Fund Advisory Committee Meeting June 8, 2010 Page 3 of 5 II funds remain in Round II, etc. Senator Hoffman pointed out that we need to keep regional balancing in check. 9.) Construction Project Schedule Review Mr. Crimp distributed a timeline construction schedule which showed our best estimate as to when projects will complete construction, except for those seven that are already completed. He said by the end of 2010, 21 projects should be completed, with the remainder being completed by 2012, not including projects that are stalled. Mr. Posey commented that having a completed project sheet is a good exhibit and is important that the project duration timeline shows that renewable energy projects take time and are not quick. Mr. Rose commented that the NREL integration experts will be meeting in Anchorage at the end of June. Mr. Crimp stated the Nome Newton Peak Wind Farm Project grant is almost in place and was short- funded. We will proceed with the grant, final design and permitting and make a determination at that time. This is a good example of a stalled project. Mr. Posey inquired as to the status of the Anchorage landfill gas to electricity power project. Mr. Crimp stated the LB&A approved a landfill gas to electricity power project to serve the Railbelt. The grant funds will not be available for a compressed landfill gas and buss system or other. This project is moving forward though not yet in place, but is not stalled. Project mobilization, exploration and over cost estimates were discussed and need to be caught early during the review status. We will continue to revise the construction project review schedule. 10.) Draft Questionnaire Review – RFA Period Mr. Crimp stated we have committed to ask the customers their thoughts about the RE Fund process and two months ago began work on a questionnaire requesting input into managing our projects; however, we got bogged down very quickly, and are now proposing an RFP to contract out this task within the next month, with survey results in two months. Mr. Haagenson said it’s good to ask how we are doing, i.e. timing and backup vs. justification. Chair Beltrami asked about the timeframe for the questionnaire project and Mr. Crimp said it would be out in about one month. Mr. Posey said that due to summer activities, it might be prudent to collect the information later in the fall, as more people might participate. Mr. Haagenson stated we are trying to get Round IV Request for Applications out by July 28 so having the survey information in hand before then would be useful to tweak the next application process. Mr. Crimp stated the RFA’s will go out on July 28 with September 8 as the due date for responses. He said we could utilize the survey information received up until then and keep the survey response date open longer. Mr. Posey reiterated that we want to collect as much data as possible. Various dates for the survey and the RFA application/review period were discussed. Senator Hoffman said that moving the dates around too much confuses people. Mr. Posey pointed out that we are now going into Round IV and the proposers are more comfortable and informed with the process. The RFA period will be July 21-September 15, 2010 and advertising will begin as soon as possible. Ms. Fisher-Goad said that we can begin working on the Emerging Energy Technology Fund regulations, but there’s a 90-day effective date from when the Governor signs it. Renewable Energy Fund Advisory Committee Meeting June 8, 2010 Page 4 of 5 11.) Initial Reaction to Changes in Round IV 12.) Proposed Round IV Schedule (these two items were discussed simultaneously) Ms. Fisher-Goad stated each RFA has been improved from the prior one. Caps were in place, and although they were done, caps were applied after the fact for Rounds I and II, and it made it difficult for us to get grants in place. This is not the case for Round III, since people submitted applications knowing what the caps were. For Round IV, we should identify program changes and notify the applicants up front. It needs to be decided to change the cap amount, and/or limit Round IV funding for projects that received prior round funding. The RFA should specifically state that permitting and financing should be in place for construction projects. Although we could consider implementing deadlines to get a grant in place that could be extended for a good reason, Mr. Crimp pointed out that hydro projects especially are time consuming. 13.) Performance Driven and/or Strategic Grant Making A discussion was held on how to attract the good projects, and getting local and regional planners involved. Senator Hoffman pointed out that most small communities don’t have the resources to go it alone and most don’t have planners. Ms. Fisher-Goad pointed out that this is a grant recommendation program and project list recommendations presented to the Legislature for funding are not adjusted. She concurred that many communities rely on AEA for technical assistance. Mr. Rose stated that we will need to define “emerging technology” and “strategic grant making” industry standards. Mr. Crimp stated planning issues and AEA technical assistance are important aspects, reiterating regional spreading and assisting smaller villages to find good projects. Buying and building locally was discussed. The Pathway is a good first step. It puts together a plan for each community in Alaska – where community action is key. AEA should push wind diesel forward and make a plan now. The Committee proposed recommendations as follows: 1. INCORPORATE DEPLOYMENT TARGETS Establish renewable deployment targets to increase the application of renewables in Alaskan communities. Generic deployment strategies exist in Appendix 4 of the Alaska Energy Pathway. These targets or standards could be used in the evaluation of RE Fund projects and could advance integration of renewables through a competitive process. For instance, we should not limit equipment to specific vendors, but instead establish a range of equipment that could be selected in a community. All software should be non-proprietary. This concept should be incorporated in Round 5 and may require program changes. 2. DEFINE CRITERIA FOR WHEN A PROJECT IS “STALLED” The definition of a stalled project should incorporate the reasons for the stall, such as lack of: permits, financial plan, power sales agreements, project readiness (specific phases, i.e., feasibility, final design, construction). Do not allow “war chests” to be built. 3. HEAT RECOVERY Recognizing that thermal energy costs are the greatest burden to rural residents; staff will make recommendations on means to develop thermal projects, such as diesel heat recovery following the Pathway. 4. SUBMIT LETTER TO RCA REGARDING BETHEL ELECTRIC UTILITY AQUISITION Mr. Haagenson will first discuss with Chairman Pickett the interconnection of renewable projects in Bethel and opportunities to lower costs through the utility structure and ownership. Renewable Energy Fund Advisory Committee Meeting June 8, 2010 Page 5 of 5 5. ADVERTISE RFA ASAP The Round IV Request for Application period will be advertised as soon as possible. Chair Beltrami requested that the list of recommendations be distributed to the Committee as soon as possible. 16.) Next Meeting Date The next meeting date will be Friday, August 13, 2010 in Fairbanks, AK. 17.) Adjournment The meeting was adjourned at 3:58 p.m.