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HomeMy WebLinkAboutAEA-REFAC_Revised_Meeting_Minutes_14JUNE2012REFAC Meeting Minutes – 6/14/2012 Page 1 of 6 Renewable Energy Fund Advisory Committee Meeting June 14, 2012 BP Energy Center Conference Room Anchorage, Alaska 1:30 pm to 3:30 pm DRAFT MINUTES 1. Call to Order The Renewable Energy Fund Advisory Committee (REFAC) convened at 1:36 p.m., with Chairman Vince Beltrami presiding. 2. Roll Call Committee Members Chairman Vince Beltrami Jodi Mitchell (phone) Jim Posey Chris Rose Brad Reeve AEA Staff Sara Fisher-Goad Peter Crimp Sean Skaling Alan Baldivieso Doug Ott Josh Craft Emily Binnian Yolanda Inga Karin St. Clair May Clark Cori West Kevin Ulrich Jake Planich Justin Crowther Helen Traylor Other Participants Chris Badger, VEIC (phone) David Hill, VEIC (phone) Ray Baker, Accu-Type Depositions Brian Bjorkquist, DOL Julie Estey, ACEP Ginny Fay, UAA ISER Pat Walker, Senator Hoffman’s Office Sandy Burd, Senator Hoffman’s Office Clinton White, STG Marianne See, URS Group 3. Public Comments Mr. White, Business Development Director for STG, offered support to the recently published audit and to the recommendations that are specific to the REFAC Committee. Mr. Posey asked Mr. White to give him an example of a programmatic change that was a detriment to his organization and the community, which Mr. White referred to in his comments. Mr. White said AEA set up guidelines on what they would allow for equipment rental reimbursement. So when Mr. White bills his clients in that process, they are unable to get their funding from their awarded grant agreement, which in turn either requires the clients to solicit financing for the public projects or Mr. White’s private entity to finance the public project while waiting for REFAC Meeting Minutes – 6/14/2012 Page 2 of 6 reimbursement from the state. Mr. Posey asked Mr. White how this has adversely impacted STG. Mr. White said the biggest impacts are financial in nature with delays in the reimbursement. 4. Agenda Comments There were no agenda comments. 5. RE Fund Program Impact Evaluation Results Mr. Hill and Mr. Badger presented a PowerPoint presentation entitled Alaska Energy Authority, Renewable Energy Grant Recommendation Program, Impact Evaluation (Preliminary Results). The Energy Savings (NPV) number of $105 M on the slide entitled RE Fund Program Performance was incorrect and should be $1,050 M. Mr. Rose asked if the cost of the grants was included in the total project cost number of $521 M. Mr. Hill said that the grants were included in the total project cost number of $521 M. Mr. Rose asked over what time the energy savings are calculated and projected. Mr. Hill said the benefits are the discounted lifetime benefits from the energy savings and it is the annual savings, but is discounted to the present value of those savings from the operational projects. Mr. Crimp asked if the $521 M of Project Costs reflect the projected cost of all 227 projects. Mr. Hill answered it is just for the 65 construction and operational projects. Ms. Fay asked if the benefit/cost ratio number is a recalculated benefit/cost ratio based on the actual performance that was after the first year or is that the model benefit/cost ratio. Mr. Hill answered that is the model benefit/cost ratio based on the estimated performance and cost of the system. Mr. Rose asked if the Total Project Benefits column is over one year. Mr. Hill answered that it is the net present value for the lifetime of the project benefits. Mr. Hill said the benefit/cost ratios are based on what was projected. Mr. Rose said it would be helpful to define the terms at the top of the RE Fund Program Operation Projects slide to clarify specifics regarding timeframe, for example, one year versus lifetime. Mr. Hill suggested adding another column of the life expectancy of each project in years. Mr. Ott commented there are different ways to measure the value of benefits on energy savings. Mr. Ott said the Chuniisax Creek Project is not operational at this time. It is expected to be operational in August of 2012. Mr. Badger said all the data is largely from an actual perspective from a spreadsheet done by ISER on behalf of AEA or the performance reporting. Mr. Rose asked if the benefit number in the RE Fund Program Performance slide is based on projected benefits over all of the years or projected benefits based on operational data in year one and then extrapolated out? Mr. Badger answered it is based over all the years. Mr. Hill commented the benefit/cost results presented are not adjusted for the operational data that was available. REFAC Meeting Minutes – 6/14/2012 Page 3 of 6 Mr. Reeve asked if there has been any thought about putting in what the total payroll is, that goes into the biomass projects as a cost/benefit for those communities. Mr. Hill answered the O&M should reflect the operational cost for the system and the number of the definite labor perspective will be represented in the full report. Mr. Badger commented it is not clear that there is a consistent and/or comprehensive characterization of the labor impacts and labor requirements for these projects. Mr. Crimp clarified the projects on the Hydro and Ocean/River Projects slide are not existing projects and are projected savings numbers represented. Mr. Rose commented the graphics are going to be the most important thing that comes out of this impact analysis in terms of the ability to get the Legislature to continue to fund this program. Mr. Rose wanted to focus on how this information can be presented more clearly and label the graphics better so people understand what is being shown. Mr. Rose suggested having a slide and graphic that shows actual performance after one year. Mr. Rose suggested adding environmental benefits that are not monetized. Mr. Rose said it is important for the legislators to know that there is so much leveraged funding and it would be good to have a slide that shows what the state is getting for its investment. Ms. Fisher-Goad said the one year of performance data has been done. Ms. Fisher-Goad said in working with Senate Finance regarding this program, they wanted to see the projected performance information of the construction funds. Ms. Fisher-Goad stated there is information for the 14 projects that have had a years’ worth of data, but Senate Finance was looking for additional information as these projects go online and continue to evaluate the actual performance versus the projected performance. This information will be used to evaluate future projects. Mr. Posey said there are several different audiences and wants to play to all of them. Mr. Posey suggested a simplified document for the Legislature, which talks about how this fund ranks in the world, what it tries to do and how it tries to accomplish it. Mr. Posey suggested providing real data to the Finance Committee without diminishing the PCE fund. Mr. Posey suggested adding specific data as an appendix for those who want to look at the report numbers in more detail. Mr. Posey commented Alaska Housing needs to be included to help solve the problem of heating because their job is to make sure places are efficiently built so that the heating load is very low. Mr. Reeve commented there are going to be specific audiences for this report and the message has to be crafted very carefully. Mr. Reeve said reduced air permit fees and other job benefits that are accruing to some of the communities need to be shown in the report. Mr. Reeve said this is an excellent program. Mr. Reeve wants to have a meeting with the staff about how to streamline some of the processes after the grants are awarded. Mr. Rose suggested examples of benefits that may not go into the benefit/cost ratio, but could be identified in the narrative. One example is the multiplier effect of money that if it is not spent on fuel, then it may stay in the community and get spent on something else. Mr. Rose stated there is some benefit to all of the resource analysis in the form of reconnaissance and feasibility studies. He said even though that is not what is being focused on now, there is a benefit to knowing what REFAC Meeting Minutes – 6/14/2012 Page 4 of 6 you’ve got and there’s also a benefit to knowing what you don’t have, in the form of bad projects that don’t get funded. Mr. Rose said he doesn’t know how to translate that into the narrative, but states it is a benefit. Mr. Hill stated he is taking notes on all of these comments and feedback and will use them. Mr. Rose said it is a great job so far and he likes the presentation and is just trying to add to it. Mr. Badger stated they have work to do to the report and some of the suggestions will need to be addressed qualitatively. Mr. Badger appreciated the comments about the different audiences and having a narrative flow that allow folks to review the report in different levels of detail. Chairman Beltrami asked when the final draft of the report can be expected. Mr. Crimp answered to expect the final draft in July. Mr. Skaling said there will be a draft out for public comment. 6. RE Fund Round 6 RFA Potential Changes Mr. Skaling stated AEA looked at the process evaluation that Vermont Energy did and one of the proposed recommendations that could have immediate action on in Round VI is breaking the RFA into three groups; reconnaissance and feasibility studies, construction and preconstruction and standardized technologies with low risk, low cost and high benefits. Mr. Skaling said they are streamlining the application process. Mr. Rose asked if there were three different requests, would they still be ranked in order of priority for recommendation to the Legislature based on a cost/benefit analysis, and if so, would they all be competing for the same 50 million dollars that hopefully the Legislature is going to provide or would certain percentages be recommended for the three different groups. Mr. Skaling stated the vision was for three different lists. Ms. Fisher-Goad said that the biomass and heat recovery projects have been a known priority. Ms. Fisher-Goad stated the goal of developing three lists is that there is a specific biomass and heat recovery list for construction projects and reconnaissance and feasibility. This would allow construction projects ranked against construction projects and reconnaissance and feasibility ranked against each other. Information will be provided for all projects that are recommended for a level of funding and they will be prioritized and ranked. Ms. Fisher-Goad said the assumption is the caps would be the same as last time, $4 M and $8 M. Mr. Posey commented there was a discussion about taking the caps off and he stated the committee should still think about that. Mr. Posey recommends having a long discussion with all of the representatives about the caps. Mr. Posey stated it doesn’t need to be decided now, but he thinks the caps ought to come off. Mr. Rose commented he is still trying to figure out how to work with three lists. Mr. Rose said that within the lists, projects should complete against the same types of projects. Mr. Rose asked Mr. Crimp how the funding would be prioritized. REFAC Meeting Minutes – 6/14/2012 Page 5 of 6 Mr. Crimp answered the original allocation between the construction and preconstruction of 80% and 20%, might be a way to address the prioritization. Mr. Rose said there is a third pile, which is heat. Mr. Rose said the public and the applicants need to know before the RFP goes out, what the process is going to be; the process needs to be developed and stated before the applications are received. Mr. Posey said there are two piles for funding. The feasibility portion is 20% and the projects compete for the other 80%. Ms. Fisher-Goad stated in previous rounds there were $63 M worth of recommended projects for funding and all that information was provided to the Legislature. Ms. Fisher-Goad said the Legislature is conducting an independent evaluation in the negotiation of the capital budget and how far they want to rank the list of projects. Ms. Fisher-Goad stated AEA’s responsibility is to develop the projects in a list, or two or three lists, or by recommendation. Mr. Reeve agreed with Mr. Rose the selection process should be explained to the people writing grants. Mr. Posey reminded the Committee this money is used for the purpose of getting renewable energy out into Alaska. Mr. Reeve asked Mr. Crimp if there is a way to find out how many feasibility projects are rising to the next level, to be construction ready. Mr. Reeve also asked Mr. Crimp if there were enough projects for heat and electricity in the rural areas. Mr. Crimp answered the feasibility projects have not been tracked very well. Mr. Crimp stated the preconstruction activities often take more than a year and some have continued to the next phase and some have gotten snagged and not continued. Mr. Badger stated it has been hard to track some of the feasibility grant numbers to the funded construction project grant number. Mr. Reeve wants to determine the impediments to the program by having an open hearing and have people that have been doing project construction come and discuss how the processing of grants could be more streamlined. Mr. Rose asked Mr. Skaling if he wanted the Committee’s ideas, thoughts or approval on the notion of the three different solicitations. Mr. Skaling agreed and he asked what happens if there are only a certain number of applications in one area that’s under the dollar amount. Mr. Rose stated the wording could be, “No more than 20% for reconnaissance and feasibility.” Mr. Skaling said he wants to have the flexibility to meet the application pool that comes in and is recommended. Mr. Crimp commented the review criteria should be kept the same to retain the current flexibility. Mr. Crimp stated the third group, the quick response group, could be listed in the RFA and the applicants could be asked to note if they want to be considered for the third group. Mr. Crimp commented on the idea of removing the caps and suggested considering how that might interact with the numbers of projects that could potentially be funded. Mr. Posey said the issue on whether to have caps or not is for another meeting and should be made by the whole group, especially with the legislators attending. Mr. Posey asked if people really need to be told about having caps and that he didn’t think so. Mr. Rose disagreed that we don’t need to know about the caps or no-caps before the RFP is sent out. Mr. Rose thinks people should be told whether or not there is a limit on how much they can ask for. Mr. Rose agreed the caps issue doesn’t have to be decided today, but wanted to know the timing to discuss the cap issue. Mr. Skaling said the RFA’s will be sent out on July 2. REFAC Meeting Minutes – 6/14/2012 Page 6 of 6 Mr. Posey suggested to compromise and leave the caps on and give AEA a chance to get the RFA out and for now, agree to disagree until later. Chairman Beltrami said his concern is the two rural legislators aren’t here and he doesn’t want to address the issue about the caps until they are present. Mr. Rose asked if the only change suggested by Mr. Skaling was the three solicitations. Mr. Skaling answered in the affirmative. 7. NEXT MEETING DATE The next meeting was tentatively scheduled for either November 7, 2012, or the week of November 12, 2012. 8. ADJOURNMENT The meeting was adjourned at 3:55 p.m.