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MEMORANDUM
Date: 2/3/89
To: Donald L. Shira
Director. Program Development & Facilities Operations
Through: Jerry Larson Ve
Manager of Rural Projects
From: Peter N. Hansen IW
Rural Systems Engineer
Subject: Memorandum to Brent N. Petrie.
Please find attached for your review a memorandum to Brent N. Petrie regarding Galena Power.
Date: 2-4-89 1:34pm
From: DAPCBNP:MIS:APA
To: MARCEY, DON
cc: DAPCBNP:MIS:APA,MARGIE, PETER, SUE
Subj: GALENA
Return receipt: Done
BOB’S MEETING WITH NANCY GROSS ON FRIDAY, FEB. 3 IN JUNEAU SEEMS TO HAVE
GONE WELL. I ALSO SAW
NANCY BEFORE THE MEETING AND IN THE AIRPORT ON THE WAY TO ANCHORAGE.
I TOLD HER THAT WE WERE NOT AWARE OF THE CHANGED SCOPE UNTIL HER PHONE
CALL AND WERE SURPRISED AT THE EXTENT OF THE SCOPE CHANGES INDICATED IN
THE INFO THAT SHE SENT TO US. IT WAS TRULY A SURPRISE TO HER THAT WE DID NOT KNOW WHAT WAS HAPPENING. I SAID THAT SINCE THERE HAD BEEN NO REQUEST
FOR A DRAW ON THE LOAN YET WE WERE NOT AWARE THAT THEY HAD ACTUALLY
BEGUN SOME CONSTRUCTION EFFORTS.
SHE LIKES THE IDEA OF A SITE VISIT TO GALENA TO INVENTORY CURRENT STATUS
AND WOULD ALSO LIKE US TO GET A DETAILED BRIEFING FROM POLARCONSULT- -
THIS WOULD BEST BE DONE BEFORE ANYONE GOES TO GALENA.
I TOLD HER THAT ONE ALTERNATIVE WOULD BE TO STOP THE PROJECT, BAIL OUT,
AND CUT ANY LOSSES NOW. SHE DIDN’T LIKE THAT AND SAID THAT THE CITY
COUNCIL WAS COMMITTED TO COMPLETING THE PROJECT. (MY INTERPRETATION OF
THE INFO IS THAT THE COUNCIL
HAS BEEN PUBLICLY CHALLENGED ON THIS PROJECT AND IT HAS NOW BECOME A
MATTER OF ‘FACE’ FOR THEM. )
SHE SAID THAT CLARISSA QUINLAN HAD RUN NUMBERS TO ASCERTAIN RATE IMPACTS
OF THE PROJECT AND THAT THEY SHOULD BE ABLE TO HOLD THEIR CURRENT RATE
OF $0.28/KWH BUT WOULD HAVE NO FURTHER RATE REDUCTION. (THEY RECENTLY
REDUCED RATES FROM SOMETHING IN THE 30's.)
BOB SUGGESTED SHE SEE AIDEA ABOUT EXPORT/IMPORT BANK FINANCING FOR THE
MITSIBUSHI GENERATORS. SHE SAID THEY HAD ALREADY BEEN ORDERED BY GRAIG
TAYLOR . (QUESTION- WOULD CRAIG TAYLOR BE ELIGIBLE FOR EX/IM FINANCING
AND BE ABLE TO PASS ALONG ANY SAVINGS TO GALENA?)
NANCY SAID IN HINDSIGHT SHE THOUGHT MAYBE THEY SHOULD HAVE CUT AN
ARRANGEMENT WITH WAUKESHA OR VECO TO BUILD THE PLANT AND HAVE GALENA RUN
IT. (QUESTION-- IS IT TOO LATE TO STILL TRY SOMETHING LIKE THAT WITH
CRAIG TAYLOR, MITSIBUSHI OR OTHERS? IS IT TOO LATE FOR A LEASE/PURCHASE
DEAL?)
SEEMS THAT A SUBSTANTIAL PORTION OF THE EXTRA COST ($1.2 MILLION WAS
MENTIONED, BUT NEEDS TO BE VERIFIED) IS BEING PURSUED AS A DELAY CLAIM
AGAINST THE AIR FORCE. BOB MENTIONED THAT THE DELAY CLAIM WOULD BE
RECOVERED THROUGH RATES TO THE AIR FORCE--IF SO --THEY STILL NEED THE UP
FRONT FINANCING. HOWEVER AN UPWARD ADJUSTMENT IN RATES IN THE AIR FORCE CONTRACT WOULD CHANGE THE PRESENT VALUE AND MAKE THE FINANCING MORE
ATTRACTIVE.
NANCY SAID THEY HAD TO GO TO A CONTRACT RATHER THAN FORCE ACCOUNT BASIS
IN ORDER TO MEET THE NEW TIMETABLE. SHE ALSO HAD SOME CONCERNS ABOUT THE
TYPE OF GENERATORS (SHE HAS BEEN TOLD THOSE TYPES HAVE NOT BEEN USED FOR
PRIME POWER UNITS FOR COMMERCIAL UTILITY PURPOSES IN THE UNITED STATES. --
-NEED TO VERIFY.)
THAT'S ALL FOR NOW. BRENT
MEETING TO DISCUSS CONTRACTOR CONCERNS
GALENA POWER PLANT
CONTRACT F65517-~87—C-O001
Welcome.
Introduction of attendees,
Review of purpose and direction of the meeting ~ - Major Hodges.
Review of Contractor concerns identified to date ~ ~ Mr. Wyatt.
Discussion and clarification of Contractor items presented.
Additional comments.
Adjourn.
BY-PASS CONNECTION FOR COMMERCIAL POWER AT GALENA AFS
It is recommended that the equipment to be provided for connecting the
incoming commerical power at the Air Force Plant be arranged so that a dual
(parallel) cable run with 5 KV elbow type connectors can be plugged in to feed
directly into the Air Force electrical distribution system. This can probably
be done in the initial design of the connecting facilities for virtually no
additional cost. Such terminals may simplify the actual connection to the
plant bus by allowing the plant switchgear to be completely deenergized while
the connections and associated work is being done.
The connections would provide for totally by-passing the plant. This would
permit continuing service direct to the Air Force distribution system in event
there is any problems in the Air Force plant or for maintenance or repair of
the plant switchgear.
The connection point should be on the load side of the metering and on the
supply side of the tie breaker so that the incoming power would be isolated
from the Air Force bus. It is envisioned that the connection would be made
using temporarily installed cables; however, it would be possible to make it a
permanent arrangement.
Contact Maj Hodges, HQ AAC/LGCCN, 907 552-4146 or Capt Richard Henry, HQ
AAC/DEMU, 907 552-4148 if there are any questions on this recommendation.