I applaud Gov. Sean Parnell for his support of Senate Bill 25 and for his recognition of the Legislature's commitment to energy infrastructure in Alaska. In addition to funding for the renewable energy grant fund, weatherization and basic energy infrastructure, this year's budget also included an appropriation to endow a new, sustainable energy program in Alaska. The transfer of $125 million to the Sustainable Energy Transmission and Supply Development Fund (SETS) created by my Senate Bill 25 is an important step towards a new way of doing business in Alaska.
As chair of the Senate Energy Committee, I traveled the state with members of the House and Senate in 2009 to hear from Alaskans about the energy challenges facing communities. That effort led to the adoption of a State Energy Policy (House Bill 306) and an omnibus energy bill (Senate Bill 220) in 2010. While we accomplished a lot that session, I remained concerned that our work wasn't finished and remembered that in each community I visited, both utilities and Alaskans told me that access to capital was one of the biggest obstacles they faced in building new infrastructure. In my role on the Finance Committee, I also saw how declining throughput in the trans-Alaska pipeline will threaten funding for grant programs in the future and challenge Alaska to find new ways of doing business.
That is why this session I teamed up with Rep. Lance Pruitt, chair of the House Energy Committee, to pass Senate Bill 25: Alaska's Sustainable Strategy for Energy Transmission and Supply, or ASSETS for short. Unlike other programs that rely on government grants to fund energy projects, ASSETS builds on the partnership between AIDEA and the private sector to facilitate the financing of energy infrastructure in the State. With ASSETS, AIDEA has been granted new powers to work with the private sector to finance the construction of power lines, new generation, natural gas projects, bulk fuel tanks and energy efficiency measures.
While the bill grants new powers to AIDEA, it includes important limitations that serve to protect the state's interests. Under ASSETS, AIDEA cannot finance more than one-third of the cost of a project without additional approval from the Legislature. This provision sends a clear message that it is the intent of the Legislature that it is the private sector, not the state, that drives the development of energy projects. Further, any investment by AIDEA into a project is the obligation of AIDEA and not the state of Alaska. These provisions are important because AIDEA's failures in the past were due to the state taking all of a project's risks. With ASSETS, the private sector is in the driver's seat and has skin in the game.
By working with the private sector, ASSETS helps AIDEA grow the state's initial investment in the program and return revenues to the treasury. Twenty years ago, AIDEA was created by the Legislature and endowed with $384 million. Since inception, AIDEA has returned $324 million to the state through its annual dividend and has a net worth to the state of nearly $1 billion dollars. Each investment made under SB 25 will grow the fund and return revenues to the treasury through AIDEA's dividend, thereby creating a sustainable program that will be around when my son Grayson's generation is ready to build the next round of energy infrastructure Alaska needs.
From the Red Dog port to the FedEx facility at the airport and through millions in loans to small businesses made in partnership with Alaska's banks, AIDEA has created jobs and economic development across Alaska. With ASSETS, AIDEA has a new tool to facilitate power lines to mines and energy to our communities, creating new jobs and resource development. Although Senate Bill 25, the legislation establishing the Sustainable Energy Transmission and Supply Development Fund, awaits the governor's signature, his approval of the funding sends a clear message to investors that Alaska is open for business.
Lesil McGuire, R-Anchorage, has served in the state Senate since 2007.