Lawmakers divided on alternative energy plan

Posted: Wednesday, July 23, 2008

KENAI - Lawmakers representing the Kenai Peninsula are giving mixed reviews about creating a huge alternative energy grant program, an idea floated recently by House Speaker John Harris.

Harris, a Republican from Valdez, proposed expanding the renewable energy fund created earlier this year to nearly $21 billion. The money would be used to fund certain alternative energy projects recommended by the Alaska Energy Authority.

An advisory committee would review proposed projects for the authority, which would then make recommendations to the Legislature regarding possible grants.

John Bitney, Harris' chief of staff, said Fairbanks North Star Borough Mayor Jim Whitaker approached Harris about possible state funding for a project near Fairbanks that would turn coal into liquid fuel. He said a rough estimate put the project at between $1 billion and $2 billion.

Harris has voiced support in the past for other energy big-ticket generation proposals, including a dam on the Susitna River, nuclear power and the Chakachamna hydro tunnel.

The big-ticket proposals would require access to a large funding source.

Coal may be a realistic approach to solving the state's energy crisis, because Alaska has one of the world's largest reserves, said Sen. Tom Wagoner, R-Kenai.

Clean-coal technology, geothermal and hydroelectric dams are likely viable long-term fixes, he said.

"I don't believe in a shotgun approach on energy issues," Wagoner said. "I think we should pick one or two, put resources into them and see what happens."

Hydro projects give us "free fuel," and geothermal "is perpetual," he said.

Wind energy is a different matter, Wagoner said.

"If people want to do wind, let the private sector do it," he said.

Rep. Mike Chenault, R-Nikiski, expressed concern about how the Legislature might spend fund money. For instance, he suggested millions of dollars - perhaps even more - could be wasted investigating power production schemes proven uneconomical that are never built.

He said he's been working with utility companies looking for ways to affect consumer energy rates in the short term. For a longer-term fix, a dam on the Susitna River should be considered.

"That is something the state could build," he said.

Rep. Kurt Olson, R-Soldotna, said he sees one problem with Harris' proposal.

"It uses coal. That's not considered by a lot of people as a renewable energy source," he said.

Sen. Gary Stevens, R-Kodiak, said lawmakers were "looking seriously" at many energy issues, including expanding the Power Cost Equalization program, low-income energy assistance, possible changes in state taxes on fuel oil and maritime fuels, and cash payments to Alaskans withering under rapidly rising energy costs.

Stevens said Alaska is "doing enormously well" because of the high price of oil and has an obligation to help Alaskans facing rising energy costs. It is up to lawmakers to find a fair way to share the largess with the public, while also saving sufficient money to meet state needs when oil revenues decline, he said.

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