Loading...
HomeMy WebLinkAboutRenewable Energy Fund Advisory Committee Meeting_Draft Minutes_1-13-2012 REFAC Draft Minutes 1-13-12 Page 1 Renewable Energy Fund Advisory Committee Meeting January 13, 2012 – AEA Aspen Room 10:00am to 2:00 pm DRAFT MINUTES 1. Call to Order The Renewable Energy Fund Advisory Committee (REFAC) convened at 10:03 a.m., with Chairman Vince Beltrami presiding. 2. Roll Call Committee Members AEA Staff Other Participants Chairman Vince Beltrami Sara Fisher-Goad Denali Daniels, Denali Commission Jodi Mitchell Sandra Moller Julie Estey, ACEP Chris Rose Peter Crimp Gene Strong, IPEC Board Member Senator Lyman Hoffman Devany Plentovich Richard George, IPEC Board Member Brad Reeve Jim Strandberg Floyd Kookesh, Kootznoowoo, Inc. Wyn Menafee Richard Stromberg Clinton White, STG, Inc. Rep. Bill Thomas (phone) David Lockard Brian Bjorkquist, DOL Kirk Warren Brian Hirsch, NREL Alaska Josh Craft Gwen Holdmann, ACEP (phone) Jim Vail Chris Badger, VEIC PM (phone) Helen Traylor Jim Griffith (phone) Audrey Alstrom Emily Binnian Alaina Hawley (Student Mentor) Shauna Howell May Clark 3. Public Comments Gene Strong, resident of Haines, AK and non-profit IPEC (Inside Passage Electric Cooperative) board member, requested AEA’s reconsideration of $170,000 funding for the Walker Lake Hydro Project feasibility. He said at the time the application was submitted by (IPEC), much information was not revealed to AEA; specifically, the utility lines are now in place within two miles of the hydro project. He said they were unaware of an appeal deadline. He said the project is viable with the potential of producing 1.5 MW and could save up to $12 M in diesel costs. Fish & Game and miners support the project. 4. Agenda Comments The Agenda was approved as amended. REFAC Draft Minutes 1-13-12 Page 2 5. Approval of Meeting Minutes MOTION: Mr. Rose moved to approve the meeting minutes from the November 22, 2011 Renewable Energy Fund Advisory Committee meeting. Seconded by Ms. Mitchell. The minutes were unanimously approved. 6. Review AEA Round 5 Recommendations 7. Discussion of Recommendations, Geographic Spreading Mr. Crimp distributed a two-page Summary of Allocations to date from Rounds 1 to Round 4 and 5. They will be sent out to the distribution list. Page one showed a cumulative allocation of funding from rounds one through four totaling $186.9 M and representing $150 M from rounds one through three, plus a round four allocation of $36.9 M. The budget was $26.6 M with the idea that we would reallocate earlier funds to pick up the additional $10 M. We are recommending 41 projects at $43.3 M. Senator Hoffman stated the intent of the legislation was to get energy projects to those areas of the state that have the highest energy costs. When the additional funding is put in to meet the 50%, it’s misleading and does not meet the intent of the legislation. Ms. Mitchell said IPEC received significant funding under the REF, however, categorizing IPEC with an average cost of power at 14 cents ($/kWh) is not fair. They are nowhere near that and it should be shown differently. Mr. Rose referred to Senator Hoffman’s request at the last meeting to show funding by community rather than by region. Mr. Crimp said that has been done. Mr. Rose said part of the issue is that we are not getting quality projects from some of the regions, and technical assistance should be a priority. Mr. Crimp said individual project selection is based on regional allocations and on the average cost of energy. In response to Senator Hoffman’s concerns, he said we have just not seen proposals from that region. Ms. Mitchell said it’s still misleading and makes it look like we (Southeast Alaska) are being overfunded. Mr. Rose said AEA is doing a very good job and huge demands for the program exist and improvements have been made. He said Senator Hoffman’s statements are crucial and agreed the highest cost areas are not submitting projects. Senator Hoffman said if the policy isn’t there, that there should be a legislative request this year for funding so AEA could get it done as nothing has been done to rectify the problem acknowledged three years ago. He said the villages are not going to do it. The (REF) program is a success except for that area. Mr. Reeve said proposers lack assistance and technical support to follow program criteria. He said we need to find a way to address the Senator’s concerns, perhaps with a separate appropriation. Senator Hoffman said residents are paying $9/gallon for fuel in the lowest income areas of the state. It is incumbent on the program administrators to find out how those people can get assistance. The current projects are wonderful and are assisting the State, but the intent again is to help the high cost areas of the state. The program looks good on paper, but the high cost areas aren’t getting help. Mr. Rose said it’s a systemic problem, having to do with education and workplace development too. We need people to run and maintain the projects. It will take a lot of cohesive action by the state and other agencies beyond AEA to make it work. Representative Thomas said he is aware the funding can’t meet all the demands and through the direct appropriation process has been working with the villages to reduce their energy costs. Senator Hoffman said he is not trying to change what is being recommended. Mr. Crimp said aggressive energy planning and project development is needed in rural areas. Senator Hoffman asked where the request was for supporting this work; if it’s needed he doesn’t see it. REFAC Draft Minutes 1-13-12 Page 3 Ms. Fisher-Goad said AEA has requested continuance of energy planning with Sandra Moller, AEA Deputy Director for REG, heading up the effort and has discussed holding regional meetings. We are aware of all of the issues discussed so far, including current programs and others we could combine, such as the bulk fuel and RPSU for communities that want renewable projects and getting them the technical assistance. She said Senator Hoffman’s comments will be shared with the AEA Board of Directors and the Administration. Mr. Stromberg said AEA previously offered assistance to some communities to develop wind programs and the quality of the submissions were good and there are improvements in some of the communities. Senator Hoffman asked about the status of the caps. Mr. Crimp confirmed the caps remain at $4 M for low cost areas and $8 M for high cost areas. AEA received a number of appeals and requests for reconsideration, for example, Kootznoowoo was initially recommended against funding however, based on additional information provided, AEA decided to proceed with recommending the Thayer Lake project. Ms. Mitchell introduced Mr. Floyd Kookesh, Board Chairman, Kootznoowoo, Inc. Mr. Reeve said it seemed some of the matches were lower than were proposed in the past. Mr. Rose said a major concern is that some of the communities don’t have match funds and maybe we could consider a different match system. Senator Hoffman said he disagrees with AEA’s awarding the Railbelt $12 M at 19 cents/kWh. He said he agreed with Ms. Mitchell’s comment that the Southeast number should also be amended since many of their communities have high diesel costs – reiterating, the intent is to get those high cost areas down and not to get the low areas lower. Mr. Crimp said the RFA and Legislature establishes the rules. We have not seen good quality projects come out of the rural areas and all recommended projects warrant funding. There have been many biomass projects this time around. Mr. Rose shared the frustration of not getting the quality projects we want, however, he said we cannot fund projects that are not quality and will fail. We need good projects and if there’s a need for more technical assistance, then we should ask for it. Mr. Hirsch said we will be talking about that in the START (Strategic Technical Assistance Response Team) program, which will provide three to five communities with technical assistance at the outset. AEA and the Denali Commission support the project. Mr. Crimp said we need to focus on all the projects the REF has already successfully supported. There are many construction projects and perhaps at the next meeting we could look at progression of the entire program. Senator Hoffman agreed. He said the Ms. Mitchell concern should also be addressed. In the weatherization program, allocations were done by region, which was a better distribution of funds than the REF. Ms. Fisher-Goad said AEA will be providing a program summary to legislature. Senator Hoffman asked how there can be regional distribution when four projects receive $20 M, and the other 11 regions get only $4 M. REFAC Draft Minutes 1-13-12 Page 4 Ms. Fisher-Goad said we discussed if a project was estimated over $10 M, it could possibly be under a separate RFA (program evaluation issue). She said REFAC needs to advise AEA about future recommendations, especially in the area of regional spreading. Senator Hoffman pointed out that one fourth of the money is going to areas with less than 20 cents/kWh and that’s not following legislative intent. Mr. Rose said we’d like to see the high cost areas get more money, but we have to make sure they are good projects through technical assistance. If we can figure out ways to get people into zero energy homes, a lot of money can be saved. We should focus on housing as well as on generation. Ms. Fisher-Goad said she appreciated the conversation. She pointed out the recommended projects are ranked through the RFA process. If the REFAC is contemplating some type of recommendation on regional spread, they need to clarify what AEA is to do, as there are legitimate concerns associated with the list. Mr. Rose said we should not move it around just to fund bad projects and it would be helpful to see how many feasibility or design projects proceed to construction and how much funding will be needed. Ms. Fisher-Goad said the analysis by region has been done. Mr. Reeve said we’ve developed a good process over time and said a lot of the discussion is about weighting. We should look at the weighting we have and give more credence to those extremely high cost areas. We need good solid projects and a plan to get technical assistance to the communities. Reconnaissance type work could be done by AEA; NREL has done half the job and the state knows what energy plan has been developed to date and what available resources are in an area. Feasibility could be accomplished by state and regional planning. To reevaluate our judging criteria and sticking with the same system makes more sense. We should not start over. Our criterion is understandable and there are ways to balance that to meet the goals within our structure. We should first review where we’re at on the weighting and then maybe look at its redistribution to achieve a criterion that is skewed – allowing us to meet the intent of the legislation. Mr. Crimp reviewed the current weighting criterion: 1) Cost of Energy (25%) 2) Matching Funds (20%) 3) Economic & Technical Feasibility (20%) 4) Project Readiness (10%) 5) Public & Economic Benefit (15%) 6) Sustainability (5%) 7) Local Support (5%) He distributed and reviewed the following documents requested by the REFAC at the last meeting: 1) Number of REF Applications & Recommended Funding by Cost of Energy Score, Rounds 1-5; 2) Percentage of REF Applications & Recommended Funding by Cost of Energy Score, Rounds 1 -5; 3) Regional Summary Round 5 Ranking at the $25 M allocation; and 4) Regional Summary Round 5 Ranking at the $43.1 M allocation. Senator Hoffman pointed out that in five rounds the lower cost energy areas received more funding than the high cost areas – he said the intent of the legislation is not working. Mr. Rose pointed out that the legislation is for projects, not technical assistance, but agreed there should be a funding mechanism for that. Ms. Fisher-Goad said per the statute, the legislature directed AEA to develop three primary weighting criteria and projects in high cost areas have significant weight per match. Another significant weight is in regional spreading. AEA has attempted to follow legislative intent. Senator Hoffman said it wasn’t AEA, but legislature that set the split on the weighting. He said the problem is the low cost areas are getting most of the funding and the high cost areas are not and will never have match funds. Mr. Reeve said we have shown the program is successful and we should try and get the resource tools, REFAC Draft Minutes 1-13-12 Page 5 regional trainers, etc. to the areas that need them. Mr. Rose said we can do more energy efficiency right now. Chairman Beltrami said if rescoring wouldn’t take that long and if higher cost areas would rise up a bit as a result, maybe we should rescore now and not wait till Round 5. Mr. Rose said match credit should be given to high cost energy areas and we should not penalize them for not having match funds. Mr. Reeve agreed. Senator Hoffman said adjustments should be submitted to legislature and they can make a fair distribution, as it’s not being done (here). Ms. Mitchell said she supports increasing weighting on cost of energy and that IPEC doesn’t have cash for match funds. The REFAC revised the weighting criterion as follows: 1) Cost of Energy (35%) 2) Matching Funds (15%) 3) Economic & Technical Feasibility (20%) 4) Project Readiness (5%) 5) Public & Economic Benefit (15%) 6) Sustainability (5%) 7) Local Support (5%) Lunch break – 12:10 p.m. to 12:45 p.m. The REFAC will return to this agenda item when the adjusted weighting criterion is completed. 8. REF Program Evaluation: Introduce VEIC team Julie Estey, Business Director, Alaska Center for Energy & Power, University of Alaska Fairbanks, said that although the Vermont Energy Investment Corporation (VEIC) is managing the program evaluation project, the ACEP was sub-awarded to provide the Alaska concept. Chris Badger, project manager, participating via teleconference said VEIC is a Vermont non-profit experienced in both valuating programs and administering energy efficiency programs. He said the process evaluation looks at the REF for questions and issues raised and at the overall process, recommendations for AEA and what’s happened so far and program goals. Stakeholders will be identified, program documentation will be reviewed, as well as cost of energy issues and a qualitative program review with interviews and surveys will be developed. Ms. Estey said they will also look at how the REF is meeting legislative intent by translating the regulations, RFA, how outreach happens and support mechanisms, scoring and recommendations and legislative approval process and AEA’s involvement in grant administration. A letter will be sent out to the mailing lists and list serves introducing the program and an on-line survey will be conducted where an option will be provided for a personal interview. On January 23, 2012 the VEIC team will conduct phone and personal interviews, as well as visit rural Alaska. Mr. Badger said the first draft process evaluation should be done by February 15, 2012 and the final report should be completed in the April first-June 30 timeframe. They will look at comparisons to programs in other states and Canadian provinces. Ms. Mitchell pointed out the Alaska Power Association will be holding a Legislative Fly-In January 25 and 26, 2012 and many managers will be in attendance. Ms. Estey said they were aware of that. 9. NREL/Denali Commission START Program Denali Daniels, Manager of the Energy Program for the Denali Commission said their primary focus has been on rural Alaska in upgrading fuel facilities and rural power system upgrades. They have also been REFAC Draft Minutes 1-13-12 Page 6 working on integrating renewable alternative energy in rural areas and have invested seed funding in the REF and EETF. The REFAC has evolved into the START (Strategic Technical Assistance Response Team) Program. The Denali Commission’s Energy Advisory Committee (DCEAC) recommended $300,000 funding to renewable energy technical assistance in the first work plan draft, partnering with the DOE/NREL. Mr. Hirsch said the DOE/NREL is based in Golden, CO and he is the Alaska Project Leader in Anchorage. He said the START Program began as DOE’s newly-created office of Indian Energy Policy and Programs (Indian Energy). They asked for program ideas and NREL suggested a rural technical assistance program. Applications for technical assistance from the communities are due January 15, 2012. They expect 20- 30 submissions with five selected by the review committee about January 31 and February 1. On behalf of REFAC, Mr. Rose will assist in the application review. The Denali Commission and the Office of Indian Energy will make the final determination on which communities will receive the assistance. Other agencies involved in the program include AHFC, RURALCAP, EPA, DOI, USDA and ANTHC. The technical assistance process will take place in the next six to eight months and hopefully the selected communities will be prepared to submit REF application(s) in the fall. Return to Agenda Item 6 - Review AEA Round 5 Recommendations Mr. Crimp reviewed the ranking spreadsheet with the adjusted weighted scores. The differences were not significant. In terms of energy sources, the highest heat recovery projects are the highest rated projects mostly due to excellent benefit to cost ratio and technical feasibility. Senator Hoffman agreed the changes were minor, but said maybe the next go around we could reevaluate the caps, with higher caps given to higher cost areas. AEA should make those recommendations. Mr. Reeve said the cap level is based on the amount funded and we should think about it that way. Senator Hoffman said the legislature is reducing the amount of funding and AEA needs to analyze whether we are going to reach the state’s goal of 50% renewable energy by 2025. He said short-funding would cause an unrealistic goal. Mr. Crimp said the potential to set aside funds for construction versus pre-construction activity was raised by Ms. Fisher-Goad, which may be easier to work with, as the caps generally apply to construction. Mr. Rose said if this is about future changes, it may be possible to give each region their share to spend at their own pace over time, based on the proposed regional plan. Mr. Crimp said the REF is a project financing tool, however, identifying a full set of good projects to be financed have eluded us and the regional energy plans are the best way to accomplish that since they address energy efficiency too. Ms. Fisher-Goad said we are keeping track of the grantees’ progress, which could make funding available for reallocation if they are not progressing on a project. 10. Round 6 Funding Discussion Mr. Rose said a Round VI would be possible if the program doesn’t end until June 30, 2013. Program dates, timing and funding were discussed. Ms. Fisher-Goad said this has not yet been discussed with DOL, but it’s assumed we wouldn’t have a program in 2013. Senator Hoffman said he discussed this with Representative Thomas and they each intend to introduce (a bill) in their respective finance committees and see them all the way through the process. Chairman Beltrami referred to the IPEC Walker Lake Hydro issue, stating AEA will continue to assist with the project. Ms. Fisher-Goad said she spoke with IPEC and they discussed other project options. She noted the draft Southeast Integrated Resource Plan is out for comment and it contains REFAC Draft Minutes 1-13-12 Page 7 recommendations for additional reconnaissance of Southeast projects, including Walker Lake. She said out of 65 projects not recommended for funding, nine appeals were received. Ms. Mitchell said she was out of the office for three weeks in December and did not know how they were notified of the appeal deadline. Ms. Fisher-Goad said the notification was sent by email to 65 applicants for project not recommended for funding as per usual. Staff will check on where the email was sent. Mr. Reeve said it would be helpful to look through the projects and identify at what stage the projects are to get them to feasibility and through the legislative process. 11. Next Meeting Date The next meeting will be held in conjunction with the Emerging Energy Technology Fund Advisory Committee (EETFAC) and the AEA board, possibly the last week of February. The board will be polled for availability and future board meetings will be held off site. Mr. Crimp suggested an update on EETF projects at the next meeting. He said AEA is preparing a project status report for Legislature, which the REFAC will be copied. Chairman Beltrami thanked staff for their support. 12. Adjournment The meeting was adjourned at 1:44 p.m.