House Energy, 4/16/26, 1pm

I call the House Energy Committee meeting to order. Today is Thursday, April 16th, and the time is 1:10 PM. Members present are Representative Johnson, Co-Chair Holland, and myself, Co-Chair Mears. We do not have a quorum, but we don't need one because we're just having a presentation with some Q&A today. We do have a couple members that already sent their regrets, so we'll just keep rolling.

As a reminder to folks, please silence your cell phones, and if you need to get in touch with someone with a note, do not approach the table. Get the attention of my committee aide, Griffin Plesh. And I'd also like to— I was going to thank Tim Scherer, but he went off to go do something else. The committee aide for— the committee aide with Representative Holland's office. I'd also like to thank our recording secretary, Cheryl Cole, and Zach Lawrence from the Juneau LIO.

Welcome back to the first floor. Today's agenda: we have an update on the progress of the Alaska Sustainable Energy Corporation, the state's recently established green bank. I was very happy to work on that, support that legislation just a couple years ago. We are joined by Melanie Lucas-Conwell, director of the Alaska Sustainable Energy Corporation. Please join us at the presenter's table and put yourself on the record and begin your presentation.

Thank you, co-chairs, members of the House Energy Committee. Is the sound coming through all right? Lovely. Thank you. For the record, my name is Melanie Lucas-Conwell, and I serve as director of the Alaska Sustainable Energy Corporation, which I will refer to as ASEC for short.

Thank you for the opportunity to provide an update today on ASEC's development, our financing role, and our current work to connect capital with with energy projects in Alaska. On slide 2 are the topics that I'll cover today, starting off with a brief overview of ACEC and where the corporation stands today. Second, I will explain how the financing model works, that we connect capital—public and private capital sources—to projects in Alaska. And third, I'll close off with what is ahead including current program design and next steps.

On slide 3 is our statutory role. So, under Alaska Statute 1856.086, ACEC's purpose is to provide financing or facilitate the financing of sustainable energy developments in Alaska or projects delivering energy to Alaska with a focus on residential buildings, commercial buildings, and community facilities. In practical terms, that means that ASSEC's role is not to replace private lenders, and it is not to function as a grant program. Our role is to help build financeable transactions, reduce barriers that prevent projects from moving forward, and position public capital in a way that can attract and work alongside private capital.

Slide 4 puts our statutory role into more practical terms by showing the market function that ASSEC was created to serve. This captures the essence of our role and the market gap it was created to fill. During the legislation creating ASEC, the Corporation was sometimes nicknamed the Green Bank, but that is more of a term of art or shorthand than a precise description of our work. In practice, we are a bridge between capital and project demand, helping connect public financing tools, private lenders, developers, building owners, local entities, and other partners so that viable projects have a better path to financing. In other words, ASEC is a market connector and transaction partner.

We are not a depository institution, and we are not designed to displace private lenders. Instead, we are intended to use limited public capital strategically so that private capital can participate more readily in projects that otherwise may be considered too small, too complex, too innovative, too difficult to underwrite on a standalone basis. That is a role I would emphasize for the committee. ACEC's value is in structuring, convening, and reducing friction between capital sources and sustainable energy projects in Alaska.

Slide 5 shows the key milestones that brought ACEC to where we are today. House Bill 273 was signed into law by Governor Dunleavy on July 31st, 2024, allowing Alaska Housing Finance Corporation to create a subsidiary for the purpose of financing sustainable energy developments in the state. And ACEC was later incorporated on November 5th, 2024 as a nonprofit subsidiary of AHFC. I'll make a note that unlike AHFC, ACEC's operations are funded by general funds, and we held our first annual board meeting on January 29th, 2025. I was hired on October 28th, 2024 as ACEC's first staff, and happy to share that 2 months ago was joined by the second staff member as program coordinator, which is very exciting.

The corporation has been built on a lean structure using AHFC's shared services for administrative support, accounting, human resources, and related functions, while ACEC itself can remain focused on fundraising and program development. Since incorporation, we have pursued a number of outside funding opportunities, including approximately $21 million in federal grant applications. During a period of uncertain federal funding. One award that did move forward was the ICLEI Municipal Investment Fund grant that allowed us to fund market building activities from September 2025 until a month ago. In parallel, we continue to advance opportunities with a more certain implementation path, and in November 2025 we entered into an agreement with the Alaska Energy Authority to administer their U.S. Department of Energy Energy Efficiency Revolving Loan Fund program, which I will discuss later in the presentation.

I will also note for the committee that we had explored a $10 million low-interest rate loan opportunity with the Coalition for Green Capital, but that opportunity was not pursued further due to federal funding uncertainties and ongoing litigation affecting those funds.

Slide 6 summarizes the types of projects that qualify under Alaska Statute 1856-900. The statutory definition is broad and includes building energy efficiency, renewable energy generation, electrical infrastructure, clean transportation, combined heat and power, amongst other qualifying categories of projects. For the committee, the key point is that ACEX remit is not limited to large or highly visible projects. It also includes practical improvements that can reduce energy use, lower operating costs, improve electrical systems, and help make a project financeable where traditional financing alone may not be possible or sufficient.

Slide 7 shows that Alaska is not building this model from scratch. Across the country, more than 50 similar financing programs have operated at local, state, and regional levels, and these programs have resulted in investments in excess of $25 billion in sustainable energy investments since 2011, when the first Green Bank was created. The reason this matters to Alaska is that these programs provide a track record of financing techniques that can attract private capital, lower transaction barriers, and improve the economics of capital for qualifying projects. We've been in conversations with many of these programs since inception, learning from those established models while tailoring our work to Alaska's unique needs and conditions.

Slide 8 illustrates why financing structures matters. If a project can reduce monthly energy costs, then targeted financing can allow those improvements to be paid over time while still delivering lower overall operating costs to the borrower, as this graph illustrates with solar as an example. This principle is especially relevant in Alaska, where high energy costs can make cost-saving improvements economically meaningful, but the upfront capital requirement can still prevent action. In those cases, the challenge is often not whether a project has value, but whether financing can be structured in a way that matches savings, project risk, and repayment. That is where ACEI can play a useful role by helping align project economics with financing terms and the right capital partners.

On slide 9, there are additional examples of financing techniques that program like— programs like ours have used. These include credit support, co-investment, and aggregation. Each of which can help private capital enter into a transaction under better terms than a project might achieve on its own. For example, credit support can improve lender confidence by absorbing a defined portion of risk. Co-investment can place public capital alongside private capital in a way that helps close a financing gap.

And aggregation can combine smaller projects into a larger and more efficient portfolio that is easier for capital markets or private buyers to evaluate and finance. These are examples of tools, not a representation of what we are currently offering these projects today. The broader point for the committee is that ACEC's mission is to catalyze private financing, not substitute for it, and to do so through different structures to make projects more financeable.

Slide 10 summarizes a request for information that ASSEC used and released last June to begin identifying a project demand across the state. While the responses were limited, the RFI still showed substantial demand with financing needs reported at approximately $177 million with total project size reported at about $434 million. The responses came from a range of participants, including tribal entities, community facilities, private developers, and local governments, and the projects ranged from smaller building-related improvements to much larger generation and infrastructure proposals. From our perspective, this information was important because it confirmed that the state has project demand for seeking capital and that one of ACEC's clearest role is to help organize that demand into financeable opportunities that can connect with public and private sources of capital to realize them. And on slide 11 shows where those limited responses came from across the state.

While this map only reflects the responses from the RFI and absolutely not a complete inventory of all the projects that might qualify statewide. It demonstrates that interest is geographically dispersed and not confined to one type of region or one, one type of community or region of the state. For example, Representative Edmond in District 37, there was interest in solar and wind projects combined with battery storage. And Representative Johnson, there's a waste-to-energy project that's looking for financing in District 35— sorry, 25.

The most exciting slide, I personally think, is slide 12. It is our most concrete and exciting example of our financing work. Through an agreement with the Alaska Energy Authority that I mentioned earlier, We are receiving $4.7 million to administer the Department of Energy's Energy Efficiency Revolving Loan Fund program here in Alaska. The funding's goal is to capitalize a revolving loan fund for residential energy efficiency improvements that are identified through an energy audit with terms that may extend up to 15 years, depending on the useful life of those upgrades. Some examples of improvements that are eligible with these loans are ventilation, insulation, windows, electrical panels, and possibly solar and heat pumps if they are paired with energy efficiency measures.

Because principal and, and interest come back to the loan fund over time, this structure is designed to revolve and continue supporting additional loans beyond the DOE period of performance. And as a subsidiary of AHFC, we are lucky to be able to learn from other departments in our own building, given their extensive experience with residential energy-related and loan programs. Additionally, early conversations with lenders have been very positive and encouraging. The current target launch date is the first half of 2027, and we hope that this program will be an attractive one for all of your constituents.

Slide 13 shows where you might continue to connect and meet with us in the coming months. Most notably, I will be moderating a panel at the Alaska Sustainable Energy Conference next month, and we will also share a booth with AHFC. And then in October, we'll be at the Alaska Rural Energy Conference and at that point we will have more concrete details about the energy efficiency loan program. We're also often at other events, related events in the community as best we can so that we can build better programs that meet Alaskans' needs. And of course, we're on social media, Facebook and LinkedIn specifically.

On this final slide, I will close it with at this point ACEC is intended to be an additional tool for Alaska, one that helps connect capital with sustainable energy projects by using limited public resources strategically, reducing financing barriers, and attracting greater private participation when appropriate. Thank you for your time, and I'm happy to answer any questions.

Thank you very much. Kōju Holland. I get first bite? Sure. The apple?

Wonderful. Thank you for the presentation. It's good to see you here today. I had a couple things I wanted to touch on, and I think I'll start off with kind of the big high question, or balcony. So through the co-chair, as we look at the Sustainable Energy Corporation and what it's doing, I wonder if you could clarify a little bit more, certainly for me, kind of how this sits beside AEA and ADA AHFC in terms of— some of these things seem like things that ADA could be doing or AEA could be doing, but we've got this new structure.

How do you see this being unique in its structure and its ability to do something new that wouldn't otherwise have been done by these existing organizations? Through the co-chair, Representative Holland, my best explanation would be that ASEC was created to fill a gap between all the different state agencies where ADA is very much lending from their own corpus and have a broad swath of projects that they finance. AEA is very good at the larger commercial projects and running loan— sorry, grant programs. HFC very much focused on public housing, mortgages, energy grants related. And so when looking at, um, especially in the last few years, federal grant opportunities that the state might have been able to receive, there seemed to be a gap in terms of which agency or department the state might have been able to receive those grant funds from or towards, and that's where the ASAC was created from.

Okay, great. Follow-up. Follow-up. Thank you. Through the chair, thanks for that.

Um, in terms of the projects, the spectrum seems like could run from an individual homeowner to perhaps an IPP doing a power purchase agreement to potentially utility-scale co-op project. Is there a thought or a structure in terms of how you see the projects you're looking for in this deployment of capital and catalyzing private capital, does it fit at some point in that spectrum, or is it intended to work anyplace along that spectrum from individual meter to full utility-scale project? And where do you see yourself focusing and creating value within that structure, what you can uniquely contribute? Certainly. Through the co-chair, Representative Holland, there are— there's So there's two parts to that answer, to answering this question.

One of them is statutorily, we can do the gamut of sustainable energy projects per statute. The restriction we have in the second part of the answer is it depends on the funding that we receive and what restrictions or allow— allowances it might have. So for example, the DOE's Energy Efficiency Revolving Loan Fund program was fairly specific about what it could and couldn't finance and whether we could finance projects directly or work through or be an intermediary for lenders in this case, and how could we best leverage funds to have a greater impact. And so they're somewhere in between of we can do a lot, Statute allows us to do a lot, to work with IPPs as well as residential homeowners, renters, but most funding sources have given us pretty defined box as to where we can play. Okay, great.

One more for now? Yeah. Great. Thank you. One more question through the co-chair.

Looking at slide 12 and the examples you've got there of some of the different ways the revolving loan fund can be used, I'm curious about where you see this potentially being connected with utilities in terms of on-bill financing. And I think it's a test that's maybe been done through— I think Golden Valley maybe has tried that. And I'm also interested in what maybe is a corollary piece of this with the RPACER type of approach to some of these projects. So kind of what are some of the tools you envision being able to help individual homeowners and being able to use this financing in a new way for projects and perhaps how they might pay for the loans that are created from that. Certainly.

Thank you. Through the co-chair, Representative Holland. So for this grant program specifically from DOE, it has to go through local lenders, or it has to go through lenders. So we wouldn't be able to finance on— or use it for on-bill financing mechanisms per the grant guidelines. If there were other sources of capital, mostly operational capital, that we could stand up on-bill financing, for example, we would be happy to work with utilities to make that happen.

I am not an attorney or a policymaker, so my very basic understanding of statute does allow us to do this. Um, again, if funding were there to do so and the willingness, of course, of utilities, um, to partner with us. And then specifically on RPACER, um, since I used to run the Anchorage CPACER program, which was Commercial Property Assessed Clean Energy and Resilience, um, RPACER being the residential version of that program. I'm a bit skeptical about the effectiveness and the consumer protections around such programs. There was a lot of negative press about our PACER, I want to say 2018, 2019, of homeowners not understanding what they were signing up for.

And particularly these types of financial arrangements are liens on the property, which made it very challenging for homeowners to sell or find buyers for their homes because of those liens and the understanding of what those financial mechanisms actually entailed for the homeowners. Um, so works quite well for commercial properties that, um, have financial savviness and understand complex capital stacks. However, for homeowners, I'm not sure that we're ready for that yet, and looking at other programs nationally, uh, the number of R-PACER programs keeps shrinking rather than growing. Um, particularly California has had to stop their program because there were a lot of concerns about, um, how that program was managed and run and predatory loans that happened. [FOREIGN LANGUAGE] If I'm remembering correctly, I'm trying to remember some stories about that.

There are bad actors. It's not necessarily the setup of the program, but contractors coming in, not fulfilling promises, yet those loans still being out there and stuck on folks. So, not— the concept isn't as problematic as the execution of some bad actors in other places. It's not an experience we've had here. That's right.

Okay. And there is no RPACER program in Alaska, so not a concern at this point. Perfect. Okay. Thanks for now.

Yep. I had some similar thoughts to my co-chair here about the types of projects and that illustration that whatever capital you have to do loans at is kind of like where you're— able to do work to this RFI. You mentioned a couple of different projects and the scale of those projects. Is there more of a characterization you can share with us about the types of projects that responded? Certainly.

Thank you, Co-Chair. It was a very broad swath. It was also— we issued the RFI at a time where a lot of federal funding was being terminated or paused. So we received a lot of responses from entities that were seeing the market need and having the project plans already drafted and ready to go and just waiting for grants to materialize and then didn't, at least at that point in time. So it was much larger entities that were submitting responses to it and pretty much the types of projects that I would have expected to receive answers about.

So solar paired with battery, which is costly, especially in rural areas. Cost of transportation, of course, getting those materials out there, and then cost of labor to install, maintain, operate. And then, as I mentioned, waste-to-energy plant in the Matsu Valley. So that was also An interesting one that, that one I didn't expect to see come through, but was good to see. And then some multifamily projects as well, looking for combined heat power or CHP units that they wanted to finance that have much more of those high upfront capital costs and wanting to spread out those costs.

Because from a financing perspective, why wouldn't you spread out the costs if you can find more affordable financing options over, say, 15, 30 years versus a 5-year loan. What was the scale of those CHP projects? Oof, I don't remember, but I can follow up. Like small commercial or multifamily? Multifamily.

Sorry, I missed that piece. Don't worry. So it seems like, um, from what you're describing, a lot of the— those responses are very similar, if not the same projects that we're getting responses to for the renewable energy Refund, which of course is a grant program. So as we talk about projects with REF, is that those funds are just a piece of a capital stack. So Sustainable Energy Corporation has got the opportunity to be part of that funding stack as a loan so that these projects are also having, you know, local, you know, funding going into them.

But having these pieces available makes these projects happen. Absolutely. And we would hope to be part of that capital stack. You just need some capital? It helps.

Excellent. Um, yes, Coach Holland. Thanks. I wanted to— to the coach, I want to follow up on the REF one because that was one of the areas I wanted to go. And I'm curious, I, I'm anticipating that your RFI probably touched on many communities who are also responding to REF requests as they are looking for different solutions any place they can find it, particularly given the uncertainty.

And I'm wondering what you've discovered or learned in the process of working on the RFIs in terms of how you see potentially working with the REF process becoming a part of it, or perhaps driving it, or perhaps layering that in as another option within the REF program. Have you learned anything and have any insights for us in terms of what we might look at down the road that would strengthen that connection. And perhaps given your role of trying to identify these projects and help them, maybe you're a, a new tool that sits in that place between the grants of the REIF but layering it together to be able to help these projects move further, faster, and really helping us figure out how do we take the list of projects and make them more investible. Because, you know, this year I think our current budget has us funding 3 of the projects out of— was it 28 total? Something like that.

And there's a whole bunch of additional projects on there that are probably very good investable projects, but because of the limited allocation we'll have for UGF money, those projects won't move. And I'm just wondering, how do we potentially think about your role in perhaps looking at that full list And for the ones that are below the line, maybe that's not the end of those projects in that round. Any— have you thought about that or have any insights for us or recommendations on what we might be doing in the future? Certainly. Uh, thank you, Representative Holland.

Yes, I have thought about it, and we do have a good relationship with AEA and partnering with them. I think the path forward would be Once the determination for the REF projects moves forward and is finalized, then we would collaborate with those project owners and see what additional pools of capital might we be able to bring to them and collaborate with. Nationally, there are a lot of lenders and sources of capital that are interested in doing work in Alaska, and so being that matchmaker, that bridge, is absolutely a role that I would see us playing, if not— if we had capital— being part of the capital stack itself.

Follow-up? Follow-up? Yeah, thanks. Just to kind of build on that, do you see an opportunity in the view you have of other financing that's available in the country Are there some new sources of capital you could help bring into this equation so that we're not as limited by what our UGF contribution could be and we're not limited by existing funds to perhaps work with individual applicants on there to say, this is a really valuable project, perhaps one that's through an IPP. Is— do you see a way to open up some doors to new capital so that we're not as constrained as we've been?

Thank you, Representative Holland. I do see some doors opening. I think as the dust settles on the federal level, having a sense of where those doors and those opportunities are, are starting to show up, particularly on the philanthropic side sector of private philanthropies, family offices. Wanting to place capital that might not be pure grant funding, but low interest rate loans with, in some cases, technical assistance to be able to provide projects that do need that additional funding that might not be seeing it in other avenues, play a role there as an example. And then there are a number of other lenders and capital providers nationally that are also revisiting in looking at how the federal landscape is settling, seeing what role might they be able to play, and updating their financial models to see what, what they could provide in terms of interest rates.

One more, one more, one more. You can go back for more than one more. There we go, the next one. There you go. I'm curious on the— this Slide 11, are some of these projects that have responded to your RFI, are they on the REF list?

And have you specifically tried matching up the submissions under REF to these folks to maybe give us an example of a couple where you said, "Aha, we have got another piece of the puzzle that we could help with"?

Thank you for the question, Representative. This was June 2025, and a lot has happened since then, so I can't say that I've done that matching just yet. We've been fairly heads down with the Municipal Investment Fund grant that we received in September, and now with the DOE program, so I'd have to go back and let you know later. All right, thanks. Thank you very much.

I appreciate, Co-chair Holland, that you've got more of a mind on financing stuff and that you're able to have that conversation and we're able to have that conversation here. It's not a world I've spent so much time in, so I appreciate that that's able to happen. I'm just thinking a little bit more globally as we do have discussions in here about how reliant Alaska is on imported fuel. Of all sorts all throughout the state. And the more we can do for ourselves with renewable energy projects and storage is helpful.

And the more we can reduce our need just in general through conservation is important. And I'm grateful that you exist and that the legislature had the foresight to include that in part of the suite of tools that we've now have employed from the state's perspective to support private development and those interests as well. I don't really have a question on that. I'm just sort of like thinking a little bit more globally. Are there any further questions from the committee?

Representative Johnson. Thank you, Madam Chair. Thank you, Melanie, for coming today. Appreciate it. Your mic, Representative Johnson.

Good to have you here. I guess I imagine over time here that— I mean, you alluded to it— there's been a change in national policy, and I imagine that that's made your job a little more challenging. But— and I suspect— and so I want to say how much I appreciate I think what you're trying to do, and maybe we haven't— maybe we as a legislature haven't given you as many tools as we could. So— and I also recognize— I just want to recognize that I know it's a challenge to get this stood up and to try to figure out exactly where this is really going to go and what the mission really is. So I guess I would like to hear from you a little bit.

What do you see kind of on the horizon? And I know that's— I mean, I'm not— I'm asking you to be a fortune teller, but maybe you can give an educated guess on some of it. Also, what do you feel like we as a legislature, what should we be looking at to make what you're trying— what you're doing and what we've tasked you with a mission tasked you with this and where, you know, what do we need to do next to make this something that's more viable? When you talk about— it sounds like— because what it sounded like to me is you have— you are in this position and you're being able to be an interface between, you know, whomever's coming to look for for grants and money and so on. But maybe you don't actually have access to the money yourself, or is that correct?

Correct. So I know there's a lot wrapped up in there, but if you have, I guess I'd like to hear just some of your thoughts. Thank you, Representative Johnson, through the co-chair. Oh, there are a lot of things I would like to see. And thanks to our statute being so broadly written, We do have a lot of tools that we can leverage and make possible for the state.

And so being this intermediary connecting the capital to project demand is the lowest hanging fruit since that is generally emails, conversations, connections, and reviewing documents other than operating dollars for our time, of course. It doesn't require capital ourselves. And so that's been where we started, why we issued the RFI to see what is happening in the state, who might be interested in our type of financing.

Paired with that, there is a lot of education around what financing versus grant funding looks like, and I'm not sure if that's a— the education piece, how, to what extent do we fit into that education aspect? I think that is a very important one, and it's a necessary one to play. And we certainly want to be part of that. And there's a bit of that being that bridge between capital and project demand. There's education on both sides, particularly since most of the capital is out of state educating lenders about the unique aspects of Alaska, um, and that you might get a barge once a year in some communities.

That's not obvious to a lot of folks out of state. And so educating capital providers about what makes Alaska different and unique, but also why it's a great investment opportunity. And then on the flip side, with our local project demand, being that education partner but also helping them structure deals, projects, and shifting from a grant writing mindset to a financing mindset, that, that is a shift for folks. And so being there and supporting that So that's one aspect of what I would like us to continue to do. I wish I had examples of success just yet, but we are in our first year and a half of existence, so hopefully we will start seeing more of those successes come through since a lot of these conversations take years.

One, to build the relationships, the trust, and then to execute on the financing. Eventually, so we have the Department of Energy funding right now. As those funds revolve past our period of performance, I hope that we can expand the scope a bit. Of course, depending on federal closeout requirements and details there, which we won't know for years, or as closeout, or the end of the grant happens. So, I hope that we can keep this fund going over time and that this will be a great example of success of— we will have worked with a large number of lenders in Alaska, and so far I'm hopeful that we might have quite a good cohort of lenders to partner with on this program, building that model so that it can be replicated into other areas.

So this is focused on energy efficiency, and solar and heat pumps are part of it if paired with energy efficiency. But how might we be able to build such a program for renewables on the residential side, and then taking this model and expanding it to commercial, for example? Um, we might also, if we had additional capital to make our own loans, then, and financing, as long as it's paired with sufficient operating dollars to run an operation. One of our challenges with this revolving loan fund is that we only have 2 staff members and limited operating budget at this point in time, which, as the loans pay back, we will have more corpus to administer the program with. But we have to be lean and we have to rely— we will rely on lenders to do the origination, underwriting, servicing of these loans.

And so setting up a full financing institution is capital intensive and for good reasons. But I'm confident that with the right successes through this program and additional programs that we will be able to get there. And start expanding the scope of our corporation's work. And a lot of other ideas, but I'll leave it there. Thank you, Madam Chair.

I guess I was just wondering, I know probably some— a lot of the things on the horizon from the federal government may have— maybe a negative impact, but do you see anything coming along that's maybe different or, you know, that would be a little bit inspiring right now? I mean, what's out there? Hmm. Through the co-chair, Representative Johnson, I am hopeful that there is a renewed interest in financing versus grant funding as a result of the macroeconomics of our country at this moment in time. Although that makes things very challenging and certainly changes the economics of a lot of projects and has had large impacts on Alaska in various ways, it has opened up people's willingness to talk about loans.

And so to me, that's been a positive, although not necessarily the most positive way to get to this point. But has certainly helped us as a corporation and hasn't closed doors immediately as soon as we come in and say, we have loans. Like, nope. But now those doors are staying at least a little bit more open than they might have been previously.

Just one, just a final thought. I really appreciate you being here. I mean, clearly I need to educate myself a little bit more on this. I've I find it fascinating, very much fascinating, and I know that you guys have— you've been given quite a task. So I really appreciate having you here and just scratching the surface a little bit, just enough to know what I don't know.

But thank you very much. Thank you. For the record, I'm lately noting that Representative Edgman joined us, and quite some time ago, and he has a question. Yes, thank you, Madam Co-chair, and thank you, Ms. Conwell, for being here. Um, so I'm trying to put all this into perspective because for years we tried to get a bill through to establish a green bank in Alaska, and politically that was never achievable.

We had to settle for what I would call a hybrid model here, which It's very interesting to me because I was part of the effort to get a green bank established, and any conversation with former REAP Director Chris Rose and others did a lot of research on the side and went to some conferences and had a sense of how much private sector matching money was out there, which seemed to be quite significant. But we pivoted to this model, and My sense sitting here, and I would ask you to maybe expand or perhaps even openly just sort of rebut what I'm about to say, is that here we are about a year and a half later with something that's very fledgling. And you're not able to attract the capital that I thought, and I think others thought, would be out there if we'd established a green bank. And it feels to me like this effort, well-intentioned, may get off the ground. But it's more future-oriented now, even after the bill was passed and signed into law.

And I think you came on— let's see, it was 2024, and you came on in 2025. Is that correct? Something— October '24. Yeah. Um, and, and this is directed more towards residential housing or to that effect, maybe not exclusively, but I'm just sort of floundering here in my thought process.

As I compare this to what a green bank would have actually accomplished at this point. And unfortunately, and I don't mean to be partisan, but the term green bank just couldn't find the political favor to get through the legislature. I don't think it could today still yet, or, you know, I don't know if the governor would actually support it, but it feels like we're not where we should be with all this. And I know you have maybe your supervisor or somebody else within HFC that could, you know, have a higher pay grade to actually respond to some of what I'm offering, but I just sit here and I feel like this in some sense is not achieving to what it should be and isn't the conduit for that private sector capital that is out there or maybe not, maybe in the You know, it's been a couple of years since I've really been able to dig into this. It's not quite as available as it once was.

But I remember in finance, Representative Johnson was the co-chair, I think, at the time. We were both co-chairs. There was— we had $10 million in the budget, and then it got stripped out or vetoed or something happened to it as a state matching funds. And now that the federal money vis-à-vis the change in the executive administration's back, the presidential sort of, you know, the different philosophies, feels like it's not there anymore. So here you are in year 2 or about to enter into year 2 and you're still trying to find your footing.

And I don't know, I'm not trying to be critical here, but I guess I'm being more you know, just sort of wistful about what this could have been had we stayed the course with the green bank model and be able to, you know, compete with states like Connecticut and Virginia and other states who put pure green banks together and they call them green banks. But unfortunately here in Alaska, it's a pejorative term to some extent, which I find really sort of perplexing. But anyway, a hodgepodge of thoughts and comments, and maybe some of them are actually on the mark. But I— if you have the opportunity to respond, it'd be great to hear what your comeback would be. Thank you, Representative.

Through the co-chair, um, I completely understand what you're sharing and that experience. And part of it, what makes green banks successful in other states— and I'm using that more as a term of art than exactly what these corporations do.

They all have seed capital that they can start off with and be able to leverage other funds. And in our case, it was relied upon for federal funds to come and be that seed capital, which didn't materialize. So to some extent, this program, the DOE Energy Efficiency Revolving Loan Fund program, is our first seed capital from the feds to be able to start a program, and given the guidelines of the program, will be a residential program. Um, if we had other sources of capital that we could leverage, then that would absolutely open up doors to additional programs, um, commercial programs that were commercial projects that we could leverage public funds with and attract private capital, since that's the, the basis of these programs is small public funds invested to then leverage private funds and de-risk those transactions. So the mission is still there.

The missing piece is the capital to do more than the DOE program that we will be running.

Follow-up? Yes, thank you. That was a very artful response because I would still maintain that I hope in the future we can establish a true green bank in Alaska, that we can go headlong after that private sector money, and that the state could chip in $10 million or whatever money that would sort of qualify to be seed money. Because it feels like me, we've let a lot of money go by that we might have been able to harness at this point to complement the work that's being done in Alaska Energy Authority, which I would love to see actually house the Green Bank as opposed to HFC, which is— I think this is very admirable and I hope it takes off and you get to attract more outside capital But I guess I'll go back to my earlier comment about being a little bit almost remorseful sitting here feeling like we could have done more. Representative Medgin, I appreciate your legislative background on that because I wasn't involved in the legislation in the 33rd and part of those conversations.

So I appreciate that background. I think it really highlights that if we're able to do more capitalization here, capitalization of the Renewable Energy Fund, those projects will go further that, you know, capitalization allows you to have the loans to have the communities put in. But we're at a point like what consumes my thoughts a lot these days is wondering about what's going to happen to energy in Alaska in next winter. We've got a global disruption to energy supplies, and having more renewable energy projects deployed in Alaska makes us more resilient and less dependent. And if we keep letting these opportunities pass by, then we're just stuck with importing fuel.

And to that end, we'll have more of a conversation on that next Thursday. But before we get into that, I believe Co-Chair Holland had more to the conversation. Yeah, thanks, Co-Chair. I wanted to build on some of the conversation we've just had, actually, so it was kind of a nice setup. You know, as I understand it, there was some discussion about capitalizing this at $10 or $20 million to provide the original launch for this, and we've already kind of talked about that that didn't materialize as originally planned, was conceived, but I'm wondering for context, if you had, we'll say $10 million right now, maybe it's $20, but if you had that money, from what you've learned now, what would you do with it first?

What can you share that maybe would help motivate us to find the money with some clarity on how it would be used and the benefit that we would get from it? Because I think right now there's an intent that we would want you to have the money, do something with it. But if we had more clarity from what you've learned on what you'd actually be doing, maybe it would help spur on finding it and get us off the bubble, because there's lots of money sitting around. It's just stuck in different places. And I'm wondering how we could dislodge it if we knew more about what you do with it if you had it.

Thank you, Representative. There— gosh, I would probably have to come back with a full proposal with ideas. My initial thoughts are that given our current operational setup, we would absolutely be looking at outside lenders to be able to leverage funds efficiently, um, rather than doing our own direct loans so that we can de-risk those transactions and attract more pools of money than the $10 million might be able to provide. For example, if we provided loan guarantees or a loan loss reserve for these projects, we could be able to leverage these funds 10 to 1, 20 to 1, um, and so therefore unlocking a lot more dollars than just the $10 million. Um, we— if we were to run our own loan program in-house, we would need a lot more operations to be able to originate, underwrite, service those loans, um, or even to sell them out So that would take up a larger chunk of that capital if we were to set up our own in-house lending operations.

So from a speed to market perspective, I would probably lean towards the first aspect of being that market connector, being that bridge between lenders and projects so that we can address problems. Hopefully this winter, but realistically it will take us a little bit to set up both the relationships, the trust, and the financial mechanisms to be able to guarantee those loans and then track them to the state. Follow-up? Follow-up? So I'm perhaps maybe missing a piece of the puzzle, but it seems like we have a lot of loan guarantee programs already available in the in the state through ADA, through AAA, through DCCED.

It seems like there's no shortage of loan guarantee mechanisms already in place. So I'm wondering if you can clarify, is there yet another loan guarantee structure of money that's needed, or are you saying really it's more of being in an operational role in the middle to help do more to do matchmaking? Because I'm assuming that if you came up with a really investable energy project and you develop the trust, the relationships, you could probably walk over to ADA that can do these loans already and do the loan guarantees and perhaps using their capitalization be able to put a deal together. So do you need a new source of capital to do that, or is it operational money that you need to be able to put the time in to develop the deals to then take them to the sources of capital we already have. Do we need new capital or do we just need the resources to access capital we already have?

Thank you, Representative. All of the above, I would say. But these are purely illustrative examples that I have not researched or put pen to paper on at this moment in time. Okay. Well, I would— following up through the co-chair, I would invite you to help us figure this out because, you know, I am standing with the fact that we've got an immense amount of working capital sitting around right now.

I'm not convinced that we need to go find yet another bucket of money to put into another place. We need to figure out how to align those investable deals and marshal the folks and get them all lined up to do the deals that are already there. And if you can come back with an analysis of the REF list, the RFIs you've got, and be able to say, you know, here are some places where the rubber could really— where we could really get the rubber on the road and move these things ahead, I would really love to see what your recommendations would be for us and how we could move this ahead. Because I think to Representative Edgemon, the Speaker's position, the potential of what this could do is something we're all still seeing out there. I'm just wondering how to move it ahead.

So, I guess the last little piece I just wanted to ask, I'll just throw it in now, given what you've done at this point, is there any new or different statutory authority you've found you need now that you've kind of exercised the structure you were given? Any recommendations for us and policy work we need to do that would help you. Thank you, Representative Holland. At this point, we, we have received authority from both federal and are working on SDPR statutory designated program receipts as well, which opens up our receipt authority sources. Between those two, I feel pretty confident that we are well set up at this moment in time.

Okay, thank you. Thank you, Representative Johnson. Thank you, Madam Chair. So I kind of going on with Representative Edgeman's thoughts, interpreting them, however, or expanding on— maybe not on them, just that this spurred me to think so. And I too, you know, was thinking, well, you know, it's great to think about what you're doing and considered a possibilities.

Um, and so then, then I was thinking, well, okay, I, I'm, I'm going to be, I'm going to be excited that because you are— we did get this passed and we did get something, and we got something in place, even if it's just the beginning, you know. I know, I know it seems kind of, kind of— then I think, you know, well, you know, we talk about this a lot. Do you do something in its entirety, or do you start with, you know, some baby steps and try to get the container in place and then go from there? So I'm going to say that I'm happy that we got where we are. I guess one of the things I was wondering, and going off the co-chair's thoughts maybe a bit too, do you have the— if we were ever to this point, but you have the authority under this —corporation as it was established or your subsidiary to issue bonds?

We do. That's right. Okay. And so can you— how do you have the— to have the backing for that? I mean, you would— I mean, could you do some kind of crossover into some other AHFC-backed— I mean, that would be within the same corporation, or could you go to, like, get an ADA backing for a bond?

I'm just kind of curious about that. Maybe it's not possible. Additional legislation. Anyway, I do like to think that about the possibility— I know that you're kind of, you know, getting started, and I am pleased that you're here, and it does open up some possibilities. And honestly, I need to learn more about it, exactly what you're doing.

But yeah, I was just curious on the bonding, what if you had, you know, any kind of backing, if you wanted— were able to issue bonds, what— how that would be, you know, how that would be backed. Certainly. Through the co-chair, Representative Johnson, um, we have a separate corporation. Uh, ASSEC is intentionally separate from AHFC, so if we were to issue bonds, they would be separate from AHFC's bond issuances, and we cannot bind— ASSEC cannot bind AHFC to any debt instruments or other— can't bind AHFC in any way. So we could work with AHFC, we could work with ADA, we could work with the state bond bank as well, all in similar fashions in that way.

As a new entity that has no track record, We do need to build up that track record and show that we can set up loan funds and are showing some successes.

I'm not sure that the bond market would be the right place for us to start since we are such a new organization and need to show our chops first before we can go and do that, but that is in the cards. At a later time. Just comment on that, you know, as a legislator, we're always looking at places that things might be able to be done at. I was just kind of curious. So very good, thank you.

Thank you, um, Director Lucas-Gomwell. Thank you very much for joining us here today. Uh, it seems like it was a timely and necessary conversation for, uh, following up on some, some work we did as a legislature not that long ago. Really appreciate the conversation and the context here today. And I think we might have a little direction on some things that we can do to help support this effort.

So that concludes our business for today. I want to touch base a little bit on next week. On next Tuesday, we'll have the Regulatory Commission of Alaska in front of us. We're going to have a little bit more context from them on, on what they do and how they do it, and some current projects that are, are out there that— and what their timelines are. We, we talk about things pretty generally in here, but they'll be able to enlighten us on that, some of that process.

I know that it's a bit of a black box, and as I'm learning more, I realize it takes a bit, a bit to understand the work that they do. So we'll have opportunity to dig into that discussion a little bit more, why their timelines are what they are and the work that they do when we don't see them in public hearings. And then Thursday, as I alluded to, that, you know, we are looking at having a discussion about supply chain and energy in Alaska as things are— problems are starting to come to light with our current energy prices and how that's starting to affect communities. So I'm not sure at this point where the conversation will lead to a solution, but first we have to define the problem and then we can work on solutions. So we'll see how far down that solution path we can get next week.

Uh, Coach O'Holland, did you have anything else you wanted to add on that at the moment? Um, since you asked, um, you know, I, I just, I just want to highlight, you know, in terms of the Tuesday discussion, if you go back to February here in Committee, we kicked off a really, I think, important discussion about the LNG import facility issues where we've got multiple facilities. We asked the RCA, you know, how do you look at multiple projects coming along? The RCA opened up an iDOCKET to begin looking at that, and I thought it was a significant move. So anybody who's concerned about Cook Inlet energy and gas issues, I think, should be very interested in this discussion we're going to have next week to learn more about how do they use these iDOCKETS as a tool to be able to do investigatory work, which is a little different than the normal siloed docket for a particular project.

I think I'm really looking forward to that project. The Thursday discussion about the supply chain, I think there's a growing awareness with the instability and volatility of the fuel market. Do we have the ability to ensure that the fuel supply we need, particularly for refueling in the summertime, is going to be available and what's the cost that's going to be. So I think it's a really critical discussion that we're going to have next week. I'm looking forward to, you know, my— for myself, learning more about the issue, learning about who's involved in that issue and what we're doing to make sure that we're protecting the communities.

I'm looking forward to next week's discussions. Uh, thank you. And, you know, this is an evolving conversation, so anybody in the room, anybody watching, um, that can help us to find the problem and solutions forward. We're open to that. It's a pretty open topic, and we'll see what work we need to do on that.

That again concludes our business for today, and with no business— further business before the committee, this meeting is adjourned at 2:14 PM.