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Energy issues to dominate 2010 legislative session

Posted: Sunday, January 17, 2010

The 2010 legislative session kicks off Tuesday in Juneau, and assuming lawmakers stick to the 90-day session limit set out in state law, adjournment will come April 18.

Legislators could change the 90-day limit by passing a bill to amend the law, and many would like to do that because the tight schedule breeds sloppy work, many lawmakers say.

But it's an election year, and legislators running for re-election will be sensitive as to how constituents could view a longer session. Bottom line: It's likely to still be 90 days this year.

If the 90-day session limit were repealed, a 120-day limit set in the state constitution would still be in effect.

Except for energy issues, 2010 may be a low-key session, with no really big issues on the table. Former Gov. Sarah Palin, a source of controversy in past years, is off to other things outside Alaska. There is a calmer hand at the helm in Gov. Sean Parnell.

There are several legislators running for statewide office. Parnell is running for election to his own term as governor as he finishes out Palin's, who resigned last summer.

Sen. Hollis French, D-Anchorage, and Rep. John Harris, R-Valdez, are running for governor, and Rep. Jay Ramras, R-Fairbanks, is running for lieutenant governor. Rep. Harry Crawford, D-Anchorage, is running for Congress, hoping to capture the seat held now by Republican Congressman Don Young.

Their candidacies will add some spark to the session. French and Crawford have called for legislation to enshrine the permanent fund dividend in the state constitution, an idea sure to grab attention but unlikely to pass the Legislature.

What will hang over the Legislature in its 2010 session will be uncertainty over the results of gas pipeline open seasons planned by two competing groups, Denali and TransCanada Corp. The gas pipeline is essential to the state's economy.

The results of the open seasons, periods in which the pipeline developers solicit customers for their projects, won't be known during the legislative session, but will be known by the November elections, however.

Lawmakers are nervous as to how controversial proposals that they voted for, like Palin's Alaska Gasline Inducement Act and her changes to the oil and gas production tax, may affect the outcomes of the open seasons.

Other energy issues are high on the Legislature's priority list. There will be extensive discussion about changes to the state's controversial net profits oil production tax, but oil taxes are politically sensitive. Legislators and the governor say they want to see evidence that the tax is impeding new oil investment before considering changes.

Initiatives to secure natural gas supplies for Alaska communities will also be on the table. For example, French has introduced a bill in the Senate to grant tax incentives for gas storage facilities.

Legislators will also consider legislation, sponsored by the governor, to help electric utilities jointly build badly needed new power generation facilities and will consider $25 million in additional funding for renewable energy projects, mainly in rural communities.

Investments in renewable energy over the last two years have totaled $125 million. If this year's appropriation is approved, the total will reach $150 million, and be the most ambitious renewable energy program of any state.

Lawmakers will also consider adoption of a state energy policy to guide future public investment.

Just after the Legislature convenes, energy policy and other energy legislation will be introduced by the House and Senate Energy committees, chaired by Rep. Charissee Millet, R-Anchorage, and Sen. Lesil McGuire, R-Anchorage.

Conservation of energy will be a key part of the initiatives, building on an investment of $350 million the state has made in the last two years in weatherization and residential building retrofits.

Ramras is sponsoring legislation in the state house encouraging a bullet gas pipeline, a 24-inch pipeline from the North Slope to Southcentral Alaska through the Interior, near Ramras' hometown of Fairbanks. Ramras has pre-filed a bill granting tax incentives for the project, which an option for the state to pursue if a large-diameter gas pipeline project is delayed.

As for revenue and available money -- which is what concerns most people -- there seems to be enough of it this year, thanks for crude oil prices remaining in the $70 to $80 per barrel range. Oil pays for about 85 percent of the state budget.

The state Department of Revenue even predicts a $500 million revenue surplus, but a lot of people, including Gov. Parnell, have ideas for using the surplus. Parnell wants at least part of it to fund his proposed student tuition assistance program. Legislators have their ideas, too.

Parnell has proposed a suspension of the state fuel tax, which just kicked back in after a previous suspension. The proposal is widely seen as a campaign gesture by the governor and is considered unlikely that lawmakers will approve it.

As always, the state capital budget will draw intense scrutiny as legislators examine projects planned in their districts.

Parnell has proposed the first increment of a multi-year commitment to catch up on major maintenance needs on public buildings around the state, a proposal that is expected to find favor in the Legislature because the projects are widely dispersed geographically.

Tim Bradner can be reached at tim.bradner.@alaskajournal.com.



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