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HomeMy WebLinkAbout5 Draft-REFAC-Minutes-01072014Renewable Energy Fund Advisory Committee Meeting Minutes Page 1 of 15 January 7, 2014 Renewable Energy Fund Advisory Committee Meeting January 7, 2014 Alaska Energy Authority Board Room Anchorage, Alaska 10:06 a.m. to 1:04 p.m. DRAFT MINUTES 1. Call to Order The Renewable Energy Fund Advisory Committee (REFAC) convened at 10:06 a.m., with Chairman Rose presiding. A quorum was established. 2. Roll Call Committee Members Roll Call: Chairman Chris Rose (1/1), Jodi Mitchell (1/1), Representative Bryce Edgmon (1/1), Brad Reeve (1/1), Senator Anna Fairclough (1/1) and Senator Lyman Hoffman (1/1). (Numbers in parenthesis represents attendance since January 2014.) Staff/Public Roll Call: Josh Craft, Emily Binnian, Helen Traylor, Sandra Moller, Devany Plentovich, Alan Baldivieso, Audrey Alstrom, Shawn Calfa, Sean Skaling, Sara Fisher-Goad, Yolanda Inga (AEA); Maggie McKay (Marsh Creek, LLC); Ron Vecera (Chugach Electric); Noel Janda (DSI); Chris Dillon (Consultant); Steve Gilbert (Alaska Village Electric Cooperative); Wyn Menefee (Department of Natural Resources); Tom Williams (Ventura Winds); Sunny Morrison (Accu-Type Dispositions) 3. Public Comments Mr. Williams, from Ventura Wind, asked if public comments could be submitted by letter. Chair Rose provided the contact information. 4. Agenda Comments The agenda was approved as presented. 5. Approval of Meeting Minutes - November 12, 2013 MOTION: Ms. Mitchell moved to approve the meeting minutes from November 12, 2013, Renewable Energy Fund Advisory Committee meeting. Seconded by Senator Hoffman. The minutes were approved unanimously. 6. Approval of Evaluation Guidelines Mr. Skaling believes this is the most important REFAC meeting of the year where feedback is received from the Committee regarding the recommendations for this year. Mr. Skaling reviewed the draft document entitled Methods for Proposal Evaluation and Grant Recommendation. He noted AEA received 86 REF Round 7 applications this year. Four of the Renewable Energy Fund Advisory Committee Meeting Minutes Page 2 of 15 January 7, 2014 applications were found ineligible. One of those was given reconsideration and allowed to advance with minor changes. Mr. Skaling noted the minimum scoring was changed from 35 to 40, setting the bar slightly higher for the technical and economic evaluations to pass Stage 2. Senator Hoffman requested the department look at ways to alter the program to differentiate between electricity applications and heat applications and give more weight to the heat applications. Senator Hoffman noted the largest amount of Alaskans' disposable income is spent on heating costs. Mr. Skaling advised there were significant changes in that arena this year. There are two separate recommendation lists; a list of heating projects and a list of recommended standard applications, which includes, electric, transmission, storage, and heat and electricity combined. We changed the formula that determines the points earned in the matching funds category and also started using the cost of heating oil for heating projects, rather than using the cost of electricity. Stage 3 is the review process for ranking the applications. This is shown in a spreadsheet format. Mr. Reeve asked how the public benefit category is judged. Mr. Skaling noted on page 13 of Appendix A, shows the scoring criteria used for the public benefit review. Stage 4 is regional spreading, which includes insights and opinions from the Committee to ensure adequate representation of the state. Mr. Skaling requested the Committee adopt the draft Methods for Proposal Evaluation and Grant Recommendation. Mr. Reeve believes one of the primary public benefits should be reducing the cost of energy for the community. There may be some regulatory oversight needed for the applications to ensure there is a public benefit factor going into the grants. Mr. Skaling responded to Mr. Reeve and believes the benefit/cost ratio and economic evaluation fairly robustly addresses Mr. Reeve's concern. Mr. Reeve commented it is not evident in his review of the documents. Mr. Skaling advised the benefit/cost ratio looks at the life cycle of the project, compares the existing infrastructure as a baseline to the total operating cost and capital cost of the new alternative. The benefit/cost ratio of 1.0 is equal benefit to the cost of the preexisting infrastructure. Mr. Reeve noted if that does not translate into reduced rates in costs or reduced cost of fuel for the community, then it may not end up being a public benefit. Mr. Skaling stated a benefit to the utility is still a benefit to the public because it should be reducing rates. Mr. Reeve commented utilities are not the only entities with projects. Mr. Skaling agreed. Ms. Fisher-Goad believes this is a really good point and Mr. Reeve's perspective as a utility manager is valuable. She noted AEA struggles with the issue of reducing the costs and whether that equates to reduced cost per kilowatt hour for residents and if it does not equate to that, what is it doing to provide benefit. Ms. Fisher-Goad reported the intent is to quantify and capture the benefits as much as possible. The benefit may not be a rate reduction, but could help provide reliability to the utility, which is clearly a benefit to the rate payers. Senator Hoffman stated heating cost is not included on the chart on page 21. The chart shows the cost of power. Senator Hoffman noted the highest cost for Alaskans is heating costs and the ranking may be different if the heating costs were shown. He requested the chart reflect heating costs, electricity power costs, and cumulative total costs. Mr. Skaling noted Senator Hoffman's Renewable Energy Fund Advisory Committee Meeting Minutes Page 3 of 15 January 7, 2014 request is possible. Mr. Skaling referenced page 21 of Appendix A and stated generally the electricity cost is representing the heat cost and where this is high cost heating, there is also high cost electricity, with the exception of Southeast. Mr. Skaling does not believe this tool is so sensitive that the rankings would change much and will include Senator Hoffman's recommendation in next year's evaluations. Chair Rose recommended having a cumulative chart for next year which includes Rounds 7 and 8, showing the balance of heating projects funded. Chair Rose noted most projects funded in the first six rounds have been electric projects. Ms. Fisher-Goad explained this chart is to demonstrate the spreading curve region based upon cost and does not reflect how projects are evaluated. Senator Fairclough asked if Senator Hoffman's comments were specific to the cumulative percentage of dollars being invested in projects in Round 1 through 7 of the chart on page 21 of Appendix A. Senator Hoffman clarified he is referring to the average cost of power category and the cost of heating is not reflected. Senator Hoffman was asking what differences the chart would show if the cumulative cost of power and heating was illustrated. He noted Mr. Skaling believes there would be very little change in the chart. Senator Hoffman disagrees. He believes the state needs to address how to make living in all parts of Alaska as affordable as possible. Senator Fairclough noted in looking at the charts on page 21, it seems 22% of the funds are being spent in Southeast, where their energy costs are already lower, to get them on renewables and displace oil and other hydrocarbon consumptions. She asked how are those projects scoring so much higher when the Legislature's intent was to displace hydrocarbon usage and lower fuel and energy costs in rural communities. Senator Hoffman commented many places in Southeast are still heavily dependent upon diesel as their primary source of heat and the charts do not show where the funds are being spent. Senator Hoffman agreed with Senator Fairclough regarding the intent of the legislation to concentrate on those areas of the state that had the highest energy costs. Senator Hoffman stated he continues to make the same comment every other meeting and again asks the question of whether the intent of the Legislature is being accomplished. He believes the Committee is moving in the right direction, but not reaching the intent. Ms. Mitchell believes the way the information is being displayed is very misleading, especially showing Southeast as having 15-cent power. She noted many communities that the Inside Passage Electric Cooperative (IPEC) serves have rates of 62 cents. Ms. Mitchell recommends, and noted she has recommended previously, separating the Southeast costs into different regions of Southeast because the average is not reflective of true costs. Mr. Skaling noted the whole purpose of this chart is to elevate those regions that have been underfunded in cumulative previous rounds. Mr. Skaling stated few applications are being received. Senator Hoffman commented not receiving applications from specific areas should not be a problem anymore because two positions have been added to specifically get applications from Renewable Energy Fund Advisory Committee Meeting Minutes Page 4 of 15 January 7, 2014 those regions. Mr. Skaling believes that has happened quite a lot this year and the chart is looking at the cumulative of Rounds 1 through 7. Every year that gap gets smaller and smaller. Chair Rose commented this is the first time a request for application (RFA) has focused more on heating projects. He asked the Committee to determine what is most important, heat or electricity, and if the Committee would like to make a recommendation of a percentage split between heat and electricity. Chair Rose noted the Committee has not advised the recommendations be split 50% heat/50% electrical or any other percentage. The advice has been only to receive more heat applications. Mr. Skaling agreed. Mr. Reeve suggested taking the cost of energy, including heat, electricity, and transportation of snowmobiles and four-wheelers, for a family of four by region, with a sub region for Southeast, to show what those costs are and relate that to an average income in the area, which would give a percentage of the cost of energy per household as an evaluation tool to see if what the Committee is doing has an effect over time. Mr. Skaling stated the information already available includes cost of power and cost of fuel. Mr. Skaling would have to determine how to get quantities. He noted he will take a look at Mr. Reeve's suggested scenario and see if it would affect the sensitivity. Chair Rose believes Mr. Reeve's suggestion would get more to the point of the total cost of energy per household. One of the problems is heating fuel usage and gasoline usage is not tracked in many places, so an average would have to be determined. Mr. Reeve noted the number would be subjective. Chair Rose commented this would provide a better sense of what people in different regions are spending, including sub regions, particularly in Southeast. Ms. Fisher-Goad wants to ensure the Committee understand the numbers that are reflected in the charts with respect to average cost of power are not the numbers used to evaluate the project. She noted the review looks at specific projects and specific communities addressing the costs associated with that specific community. These charts are trying to take all the information and demonstrate a regional representation, which is a statutory requirement. Ms. Fisher-Goad noted the spreadsheets in Item 7 are separated into two lists, the standard application of electricity or combined heat and power, and a separate list specific to heat. The development of the two lists was a direct response to discussions at this Committee led by Senator Hoffman to further emphasize and isolate the heating projects. These charts are a representation and assured the Committee 15 cents per kilowatt hour was not used to evaluate a Kake project. 7. Review of Round 7 Recommendation A. Tables of Recommendations Mr. Skaling explained the set of spreadsheets which are AEA's recommendations for Renewable Energy Fund projects for this year. Chair Rose asked if all of the recommended projects were funded, does Mr. Skaling have a sense of what the funding amount applied for would be next year or in two years to construct the projects that would have received feasibility funding in this round. Ms. Fisher-Goad believes the Project Cost column Chair Rose referenced earlier is a good indication of the project's total costs. Renewable Energy Fund Advisory Committee Meeting Minutes Page 5 of 15 January 7, 2014 Senator Hoffman asked what date is the statewide goal for renewable energy. Mr. Skaling advised it is 50% by 2025. Senator Hoffman asked if AEA tracks how that goal is going to be achieved in the next 12 years and what this appropriation will provide. Mr. Skaling noted preliminary review of the numbers has occurred, as well as tracking completed construction projects of the REF and non-REF projects. Mr. Skaling believes the 50% goal will be reached if the REF projects and non-REF projects are combined. Ms. Fisher-Goad commented this is an electrical energy goal and the impact will be seen mainly in the larger population areas. She reported the current status is 22%, depending on the hydro level. It has been as high as 24%. Ms. Fisher-Goad stated it is just as important to address the energy needs and to try to reduce the fuel costs in the small rural communities. She added AEA has the statistics and is tracking the information, along with the energy efficiency goal, which is a 15% reduction by 2020, and the tracking information can be provided to the Committee. Chair Rose commented the purchase of heating fuel and transportation fuel is not tracked within the state and so the numbers are truly estimates. He believes one of the reasons for the renewable energy goal is to stabilize costs and determine how much money is being spent on energy. Chair Rose stated he would like to see more information about the purchase of heating fuel and transportation fuel because that contributes to the total cost of energy and provides a more complete representation of energy costs that can be measured and understood. He believes it would be good for the entities that have the information, whether it is the University, AEA, or AHFC, to come together and provide the information. Ms. Fisher-Goad stated one of her New Year's resolutions at AEA is to determine how to make the information they have been providing more useful. She wants to get feedback from the Committee on what information and data is not being collected. Ms. Fisher-Goad wants the data that is collected to be useful and lead to better projects. She wants the information available to help the Board of Directors, and the Administration make better decisions about energy policy and projects moving forward. B. Standard Application List, Summaries and Map documents C. Heat Application List, Summaries and Map documents Chair Rose asked members to provide comments and recommendations to staff regarding this list. Representative Edgmon wanted to talk about the three underserved regions, and what it would take to get the Igiugig wind project within the recommended list. Chair Rose believes there are a few ways to address the situation. The Committee can decide to move the Igiugig wind project into the first tier and move another project out and/or the Committee can recommend the entire list down to almost $25 million for the standard applications and almost $16 million for the heating applications. Chair Rose noted there is the heating application Minto project in the Upper Tanana Valley that is an underserved region and is $274,750, which is also just off of the top tier. Renewable Energy Fund Advisory Committee Meeting Minutes Page 6 of 15 January 7, 2014 Chair Rose reminded the Committee they do not have a standard or a criteria by which a specific number of heating or electric projects have to be included. He believes staff has provided a list of both heating and electric projects that add up to $20 million, but that does not necessarily have to be the $20 million worth of projects the Committee recommends. Mr. Skaling agreed. Representative Edgmon stated he does not see the analysis of recommending $25 million worth of projects as opposed to $20 million. He asked if the Committee has to recommend the Governor's proposed number. Chair Rose stated the Committee is not constrained to the Governor's proposed number and in the past has recommended far more than what has been in the Governor's budget. However, if only $20 million is appropriated and approved by the Governor, then only the projects within the first $20 million tier actually get funded. Chair Rose asked the legislators on the Committee what they think the chance is of getting more than $20 million dollars of funding. Senator Hoffman believes this year would be the worst year to anticipate additional dollars being spent, given the fact there is a huge deficit. Senator Fairclough echoed Senator Hoffman's comments and does not believe it is likely there will be more funding available for renewable energy. She understands design should be in the queue at all times, but wonders if the focus should be on completing projects versus placing new designs into the starting phase. Senator Fairclough noted Senator Hoffman has served longer than she has and she will take his lead. Senator Hoffman commented his view is to look at the changes and concentrate more on heating than on electricity. He suggested reversing the current recommendation from $12 million of electric projects and $8 million of heating projects to $8 million of electric projects and $12 million of heating projects. He believes the Committee's recommendations should reflect heating projects because people are paying the highest cost for heat. Senator Hoffman stated he would keep the current criteria and move toward funding more heating projects. Senator Fairclough asked Representative Edgmon if the project he was discussing was an ongoing project. Representative Edgmon stated the project has not started. Chair Rose gave two observations that almost all of the phases of the heating projects are either construction or design construction. Kake Community Energy is design only. He noted the heating projects are relatively small amounts of money per project compared to the electric projects. Only two projects are over a million dollars. Chair Rose believes more heating projects could be completed in less time and for less money relative to the electric projects. Ms. Mitchell suggested reducing one of the multi-million dollar electric projects by $80,000 to fund the heating project Representative Edgmon was discussing. Chair Rose asked Ms. Mitchell what she thought about the suggestion made regarding funding more heating projects than electrical. Ms. Mitchell stated that would be fine. Mr. Reeve recommended reviewing the geographic representation of the projects as well, because he believes the Igiugig Wind Project is worth funding. Representative Edgmon requested an informal comparative analysis from staff regarding the readiness category for both heat and electrical projects. Mr. Skaling explained a formula is Renewable Energy Fund Advisory Committee Meeting Minutes Page 7 of 15 January 7, 2014 followed adding points for different levels of readiness. The closer to construction and completion the project is, the higher the points are. Representative Edgmon asked which of these projects are the closest to construction and suggested the emphasis is put on heat and electric projects that are closer to the construction stage. Chair Rose reminded the members this is the first time the projects have been listed separately in terms of heat and electrical projects. Chair Rose noted the amount of funding available for projects this year is lower than it ever has been, which makes these decisions difficult. Chair Rose advised that the members have to provide project recommendations to AEA today. The considerations include funding distribution for heating projects, electrical projects and consideration of regional spreading. Staff indicated on the electric side, the Igiugig Village Council project and a Lower YK Delta project are really close to the funding threshold. On the heating side, the Village of Minto project is very close to the threshold. The committee broke for lunch. Chair Rose stated according to the current recommendations, almost half of the total funding, about $9 million, is going to two projects, Stetson Creek Diversion and Allison Creek Hydroelectric. He noted one of the discussions at the break was finding ways to reduce the amount of funding for those two projects in a way that enables higher cost energy places to get more projects built. Chair Rose suggested reducing the funds from the Stetson Creek Diversion project more than potential reductions from the Allison Creek project. The Stetson Creek Project is a Railbelt project and the Railbelt has already had quite a bit of funding from this program. He commented if two or three million dollars were reduced from those projects, we could fund several more heating projects and probably a couple more electric projects. Chair Rose requested comments from members regarding this approach, especially from those on the phone who were not present for the discussion during the break. MOTION: Senator Hoffman moved a recommendation for discussion purposes that the proposed funding for the Stetson Creek Diversion Project, 1082, be reduced by 50%, the proposed funding for the Allison Creek Hydroelectric Project, 1015, be reduced by 20%, which will fund the Igiugig Project, 1072, Mertarvik Project, 1057, and the remainder amount will fund heating projects in proposed order. Seconded by Mr. Reeve. Senator Fairclough noted there is really no way for her to comment on the validity of the conversation in comparison to this proposal. She believes the Railbelt has had less overall funding from this program than Southeast. Senator Fairclough commented she will support the Committee's suggestions, but believes the Stetson Creek Project is going to provide lower cost energy to a larger percentage of the state than any of the other projects combined. She does not know what a 50% cut in that project will do for Chugach Electric. Senator Fairclough said her power comes from Matanuska Electric, who may buy power from Chugach. Senator Fairclough requested more discussion regarding why the only Railbelt project proposed would be reduced by 50%. Renewable Energy Fund Advisory Committee Meeting Minutes Page 8 of 15 January 7, 2014 Chair Rose commented this motion is for the sake of discussion. He believes the obvious place to look at potentially spreading out more money were the two biggest recommended funded projects, which were 1082 and 1015. They take up about half of all of the money that is being recommended, totaling about $9.5 million of $21 million. Chair Rose stated the Stetson Creek Project is almost a $22 million project and was asking for $3.5 million. He believes if that $3.5 million was reduced by 50%, it probably would not make a difference, particularly for a large utility who has access to other low cost capital. Chair Rose believes the larger reduction was proposed for the Railbelt region since they have already received quite a bit of funding from this program. He noted it is all up for discussion. Chair Rose believes the reduction from the Copper Valley region project is a relatively small percentage of the entire project and the hope is the reduction will not impact the project's ability to go forward. Chair Rose noted the monies from the reductions would go to funding four or five more heating projects. He stated this explanation covers everything that was briefly discussed while offline. Senator Fairclough noted a reference that the Railbelt has received more money from this program than any other region. She directed attention to the Cumulative Rounds 1-7 table under Item 6, Appendix A, page 22 and requested clarification on the percentage of total funding column. Mr. Skaling reported the Rounds 1-6 table at the tops of both pages 21 and page 22, under Item 6, Appendix A, shows the funding that has been provided thus far. Southeast has received $52 million. Railbelt has received $26 million. Lower Yukon has received $27 million. These are the absolute dollars and are not weighted by energy or population. Chair Rose reiterated the motion is for discussion purposes and if he were to provide a suggestion, it would be to recommend all of the projects equaling $41 million and specifically advocate this is an important program and these are all important projects. Chair Rose stated if the Committee is in agreement that it is unlikely the entire $41 million will be funded this year, then the idea of partially reducing the grants recommended on two projects is one way to provide for more heating projects. Senator Hoffman suggested reducing the amount of funding for electric projects to include only the first six proposed projects, which eliminates Allison Creek, 1015, and Gunnuk Creek, 1025. He recommended that additional funding be used for heating projects. Senator Fairclough stated she supports the particular concept of moving the amount of funding from electric projects to heating projects, but she does not support the motion on the table because she believes the Committee is trying to make recommendations and prioritize projects. Senator Fairclough commented AEA and staff have worked very hard to rank the projects and make these recommendations. She does support the recommendation of prioritizing heating projects by allowing $12 million of proposed heating projects and allowing $8 million for proposed electric projects in their current ranked order. She noted her first argument against the motion on the table was the comments that the Railbelt had received more funding from the program than any other region. Senator Fairclough stated there are other regions who have received more program funding than the Railbelt. She supports the concept that heating may be more of a critical issue for all Alaskans than generation of power. Renewable Energy Fund Advisory Committee Meeting Minutes Page 9 of 15 January 7, 2014 Senator Hoffman agreed with Senator Fairclough and believes the legislation intended to give priority to the areas of the state that have the highest energy costs. Chair Rose believes the Committee's general agreement is that heating is a bigger cost to most Alaskans and is very important. He believes the reasoning behind the current motion is to find a way to include more heating projects without completely eliminating some of the recommended electric projects. Senator Fairclough commented the Legislature and the state of Alaska are getting ready to face multiple projected years of downturn revenue. She noted some people may believe it is due to the change in oil taxes, but stated that is not true because the state is doing better under the new model for revenue than the old model. As revenue gets tighter, the Senate Finance Committee wants to ensure the prioritized good projects have the money to be completed. Senator Fairclough reads the spreadsheet as staff's project recommendations ranked in order of priority. The projects need to be completed so the benefits can be received from those invested dollars. Mr. Reeve stated there is some precedent in the past where the Committee has not had enough funding, has set limits on particular projects and reduced the amount of available funding for projects. Mr. Reeve commented a category that might have been good to include in this scoring criteria is the ability to finance or self-finance and to review the percent of the project cost from the grant basis. He believes this would help with the goal of the legislation to affect the highest cost areas of the state and those areas that do not have the ability to finance. Mr. Reeve noted this is not the final ranking because there is typically a geographic representation sheet that follows and there has been a precedent in the past where those projects have been included in project funding. Senator Fairclough believes Mr. Reeve made an excellent point and the projects who have the ability to bond or get other funding are scored differently than those who cannot provide for themselves. Senator Fairclough stated she thought that had already been imbedded into the criteria. She asked Mr. Skaling to clarify. Mr. Skaling stated staff has the ability to recommend partial funding of projects and the typical reason is because of milestones or cost seeming excessive. He noted staff conducted a separate analysis of the projects to determine if any of the benefit/cost ratios were so high that they could get a loan or a partial loan. No results from that analysis were applied to the current recommendation. Mr. Skaling advised if the motion on the table passes, the proposed funded projects would include projects 1 through 26 on the table entitled Heat and Standard Combined Statewide Ranking on page 3. This brings the funded total to just under $20 million. Mr. Skaling noted the project on Line 43 of the same table, False Pass Hydrokinetic Feasibility Study, would be worth discussing because that project could be elevated due to specific language in the request for applications. Mr. Skaling asked Chair Rose if this is an appropriate time to discuss that project. Chair Rose stated he prefers to stay with the current motion. Chair Rose explained this project was the only reconnaissance or feasibility study for an emerging Renewable Energy Fund Advisory Committee Meeting Minutes Page 10 of 15 January 7, 2014 technology. The Committee approved the ability for AEA to recommend funding for emerging technology feasibility studies, even though the Emerging Technology Fund is the appropriate funding source for the construction of emerging technology projects. Mr. Skaling reported staff knew this particular application for emerging technology would not score very high in the criteria. The staff and Committee have the capability of raising this project's ranking if it provides the best location to study the emerging technology and if it has a reasonable likelihood of becoming economically viable in the future. Mr. Skaling wanted to bring this project to the Board's attention for consideration. Chair Rose requested Committee comments or questions regarding the False Pass Hydrokinetic project. Senator Hoffman stated given its ranking, he would leave False Pass out of the present discussion. Chair Rose asked Senator Fairclough if she has any suggestions about how to reduce the funding for electric projects and provide more funding for heating projects. Senator Fairclough recommended following the proposal of staff and stopping the funding line at $20 million. Senator Hoffman believes more money should be spent on heating projects. Senator Hoffman noted he went forward with the motion to accommodate Representative Edgmon. Senator Hoffman stated his first preference would be to eliminate projects 7 and 8 and having those dollars fund more of the heating project list. Senator Hoffman commented the Committee still has not addressed how to split the appropriations between heating and electrical projects. Senator Fairclough agreed with the statements made by Senator Hoffman focusing on heating projects. Senator Fairclough stated this process has become complicated and she does not want to be responsible for cutting a project that is outside of the Railbelt. Chair Rose believes regional spreading has occurred almost every year, in which an amount of proposed funds were taken from one region and placed in another region, even though the project whose funds were reduced had a higher score. Chair Rose believes there is a fundamental tension within the statue giving the highest weight to the highest cost energy areas while including regional spreading. Ms. Mitchell called for the question. The motion to recommend funding for the top $20M of projects as presented with project 1082 Stetson Creek Diversion Project partially funded at approximately 50%, and project 1015 Allison Creek Hydroelectric Project partially funded at approximately 80% in order to fully fund heating projects 1021, 1043, 1032, 1053, 1073, and 1041, and further to fund a one electrical project identified as a stage 4 regional spreading priority project, 1072, passed five to one, with Senator Fairclough voting no. Chair Rose asked staff if the motion that was just passed addresses all recommendations staff requested from the Committee. Mr. Skaling stated his understanding is if the funding is limited to $20 million, the approved motion is the Committee's recommendation, and Mr. Skaling understood Chair Rose requested staff nominate the entire AEA recommended project list to the Renewable Energy Fund Advisory Committee Meeting Minutes Page 11 of 15 January 7, 2014 Legislature. Senator Hoffman believes it is unrealistic to anticipate additional funding will be provided. Chair Rose asked if Senator Hoffman proposes to recommend the amount determined by the passed motion. Senator Hoffman agreed. Ms. Mitchell asked if the Legislature will be able to see that there are other good, staff recommended projects that could have been funded beyond $20 million. Mr. Reeve believes that issue should be a very strong component of the presentations given by AEA to the Legislature. Mr. Reeve requested Mr. Skaling and Ms. Fisher-Goad convey the message to the Legislature that there is a lot more that needs to be done and a lot more that could be done. Chair Rose suggested saying the Committee supports the funding of the entire AEA list of projects totalling $41 million, but the Committee recommends the funding of the $20 million. Senator Fairclough believes it would be good to share with Legislature that the Committee has held to the $20 million the Governor has proposed. She suggested if more funding is requested from the Legislature, the funding should go to the projects whose funding was reduced. An explanation should be provided stating the Committee understands that Alaska's revenues are seeing a dip and this Committee has done everything in its power to stay within the Governor's desired appropriation amount and communicating the amount by which the two recommended projects' funding was reduced. She also suggested the amount of qualified projects and dollar amounts not funded should be provided to the Legislature so they understand the Committee limited its recommendation to the number proposed by the Governor due to fiscal constraints. Senator Fairclough believes this shows the Legislature the Committee recognizes there is a limit in the amount of available funding. She stated there are 13 legislators that may not be interested in regional spreading for the Railbelt and may see their communities are disadvantaged by reducing the Railbelt project's funding in half. Senator Fairclough believes if the recommendation to the Legislature includes the $20 million first and then if there is any additional funding available, it could go to fully funding the two projects that were reduced. MOTION: Senator Hoffman moved to follow Senator Fairclough's suggestions. There was no second. Motion failed. Mr. Skaling requested returning to Item 6 to ensure the Committee approved the draft evaluation guidelines as they are stated. Chair Rose asked for a motion to that effect from the Committee. Senator Fairclough asked if Senator Hoffman's question regarding the balance of heating projects get addressed in the evaluation guidelines. Chair Rose noted Senator Hoffman was shaking his head in the negative and did not get his question answered. Senator Fairclough commented she is not ready to vote for approval of those guidelines until the heating project balance is incorporated. Chair Rose does not believe there is a rush in approving the evaluation guidelines because the recommendation is already going forward. He asked Mr. Skaling if the approval of the evaluation guidelines can be taken up at the next meeting and staff can address the questions and issues voiced by the Committee. Mr. Skaling agreed the approval can occur at the next meeting. He explained it is nice for applicants to see a formalized process. Mr. Skaling noted he will post the evaluation guidelines as a draft. Renewable Energy Fund Advisory Committee Meeting Minutes Page 12 of 15 January 7, 2014 Mr. Reeve suggested adding as part of the public benefit, criteria which provides the ability to measure different categories, including jobs created or reduction in fuel surcharges. Mr. Skaling advised this year the application took a step in that direction by asking the question; what is the anticipated impact on rates? He noted there are future steps to take to get more in depth analysis. 9. Data Collection Progress Update, ACEP Tabled to the next meeting. 10. Analysis of Not Recommended Applications & Technical Assistance Update Tabled to the next meeting. 11. Committee Member Comments Representative Edgmon stated this was a good meeting and the phone transmission was good on his end. Senator Fairclough expresses her appreciation to staff for all of their hard work toward providing energy and lowering the cost of energy and heat to Alaskans. She thanked all the Committee members for their service on this Committee. Ms. Mitchell commented the regional spreading is important, but is not an easy process. She believes the Committee has made the right decision and expressed her appreciation to everyone for working through these decisions. Mr. Reeve expressed his appreciation to staff for their great job presenting all the information to the Committee. He requested an update at some point on how the additional staff are helping the smaller utilities and if better technical applications are being provided. Chair Rose expressed his appreciation to staff for the complicated preparations they have undertaken to pull this information together for the Committee. He noted it is not easy to cut project funding when there is not enough money for full funding and appreciated the work completed today. 12. Next Meeting Date, Tentative: May 13, 2014, Kodiak Senator Fairclough requested extending an invitation on the May 13th meeting to the Representatives and the Senators in Kodiak. Chair Rose agreed. 13. Adjournment The meeting was adjourned at 1:04 p.m.