Parnell signs two energy policy bills

HB 306 sets out a broad “energy road map” for Alaska, while the omnibus SB 220 institutes several new energy-related programs

Eric Lidji

For Petroleum News

No state in the country needs a tailor-made energy policy more than Alaska, and as a result, perhaps no state in the country has more tailor-made energy policies than Alaska.

On June 16, Gov. Sean Parnell signed two new ones into law. House Bill 306 creates a broad “road map” to guide the decisions of government, lawmakers, energy producers and the public. Senate Bill 220, the Alaska Sustainable Energy Act, is an omnibus bill designed to make energy more affordable and reliable through a variety of programs.

HB 306, the smaller of the two bills, came from an advisory panel representing a broad spectrum of energy players in the state, from state and local government officials, to various energy industry advocates, to researchers and academics. The resulting policy is just as broad, promoting both renewable and non-renewable forms of energy, conservation and efficiency, energy research and streamlined government involvement.

The bill also sets out goals to improve efficiency by 15 percent between 2010 and 2020, and to have half of all electricity in the state produced from renewable fuels by 2025.

SB 220 includes similar broad policy goals, and includes similar targets for efficiency and renewable power, but ultimately goes much further in making concrete prescriptions.

The bill, which grew out of a series of field hearings across the state in 2009 following the record high fuel prices in the summer of 2008, sets up near-, mid- and long-term goals.

The near-term goals are mostly policy guidelines and new funding programs. The Energy Efficiency Revolving Loan Fund will provide loans for improvements to public buildings like schools and city halls. A new supplement to the federal Low-Income Heating Assistance Program ties household energy subsidies to the price of oil. A proposed fuel cooperative would allow rural communities to coordinate bulk purchases at lower rates.

State buildings a near-term target

Hoping to chisel into the $55 million spent annually to heat and light state buildings, the bill gives the Department of Transportation and Public Facilities one year to prioritize inefficient state buildings with the goal of retrofitting 25 percent of them by 2020.

The bill directs the DOT&PF to look into converting state vehicles to compressed natural gas, a move that could help anchor industrial demand from a major in-state of out-of-state natural gas pipeline, but would only stress declining supplies further without a pipeline.

The bill also asks the Parnell Administration to create a plan by November 2010 on ways to consolidate existing energy departments and programs to eliminate duplication.

The mid-term goals set up a tax credit for new renewable energy projects and loans of up to $50,000 to help small businesses become more energy efficient. They also try to level the playing field for nuclear projects by allowing them to be considered among other alternative power projects, and by offer state funding to small-scale nuclear projects.

The long-term goals revolve around the Emerging Energy Technology Fund, a research and development program for emerging technologies to improve energy use across Alaska, technologies that could also be exported to rural communities around the world.

A mix of new and newish ideas

Some of the elements of the policies, though, predate the record prices from that summer.

The 50 percent goal for renewable energy in power production comes from the Palin administration, while elements of SB 220 date back to February 2008 recommendations of the Tri-Borough Commission, representing the mayors of the Municipality of Anchorage, the Matanuska-Susitna Borough and the Kenai Peninsula Borough.