HomeMy WebLinkAboutIntertie MLP Appeal 1994FEB-17-94 THU 16:38 ML&P GENERAL MAiinucR FAX NO. 9072635204 P, U2
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Cale \ Municipality of Anchorage ¥@uemicipal Light & Power A yee ‘200 East First Avenue
Anchorage, Alaska 99501-1685
&°7) 279-7671, Telecopiers: (907) 276-2961. 277-9272
February 17, 1994
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Robert Hufman, General Manager, AEG&T s Dennis McCrohan, Deputy Director (Energy), ATEDA Put 2 CEIRUAL |
Vincenzo Motolla, Superintendent, FMUS Dow mid)
David Highers, Gencral Manager, CEA
Norm Story, General Manager, HEA
Kenneth Ritchey, General Manager, MEA
RE: ML&P Appeal of IOC Decision
Gentlemen;
On January 24, 1994 ML&P submitted the attached appeal to the Chairman of the
Intertie Operating Committee (IOC). This appeal was delivered within the five
working days required by paragraph 9.3.1 of the Alaska Intertie Agreement. The IOC Chairman's reply dated 2/7/94, also attached, states in commenting on our proposed
solution, "Since this dogs not appear to be a likely outcome in the specified time
frames, I am fulfilling my obligations under this process".
Paragraph 9.3.2 of the Alaska Interlie Agreement states "If the Operating Committee is unable to agree on a matter within its jurisdiction, such matter shall be resolved by
unanimous agreement of the general managers of the Utility Participants and the Executive Director of the Alaska Power Authority, or their designated representatives.“ Paragraph 9.3.2 goes on to say if unanimous agreement cannot be reached by the
general managers and the Executive Director within 20 working days the matters shall be arbitrated in the contractually outlined manner.
Since the IOC Chairman only gave his opinion that agreement would not likely be met
and is confused as to whom the time limit applies to, it is not at all clear if the 20 working day clock has started or not. Should the IOC Chairman's opinion be taken as demonstrated fact‘the 20 working days would start 2/7/94 and end on or about 3/8/94. On the other hand if it is merely what it says it is, an opinion, then the matter should be remanded to the IOC to determine if in fact they can reach agreement or not. Since it is highly unlikely that the IOC will comply with the agreement of their own free will,
I suggest we mcet:on this matter immediately after the BLPMC on 2/24/94,
ML&P supports the energization of Stevens Substation and believes this worthwhile
project should not be impeded by efforts to abrogate the Alaska Intertie Agreement, but
nevertheless we must appeal the ill adviscd attempt to effectively bypass ML&P control and in effect change the intertie midpoint. Stevens Sub is located on the Southern one- half of the Intertie which by the Alaska Intertic Agreement is operated by ML&P.
Therefore, intertic scheduling and accounting arrangements and information exchange must be with ML&P. ML&P has appealed the [OC motion which specifically excluded
Putting Eneray [nto Anchorage
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FEB-17-94 THU 16:39 ML&P GENERAL MANAGER FAX NO. 9072635204 P, 03
ML&P Appeal of IOC Decision February 17, 1994
Page Two
ML&P and substituted GVEA. We have attached our proposed motion modification which corrects the omission and complies with the Alaska Intertie Agreement.
ML&P is the operator of the southern half of the intertie by contract. The IOC has absolutely no power to change this or to change the location of the intertie midpoint.
What we are requesting is only the minimum we require under the contract to perform
et contractual duties. We will utilize all available means to preserve our contracted
nights.
Very yours,
Aa
Thomas R. Stahr General Manager
TRS/am
Attachments
Cy Tim McConnell, Power Manager, ML&P
FEB-17-94 THU 16:40 ML&P GENERAL MANAGER FAX NO. 8072635204 P. 04
ML&P PROPOSED MOTION
‘Move that AEG&T Stevens Substation should be allowed to be
energized upon completion of the following items: Number 1
AEG&T will complete the communications and installation of
an RTU, and AEG&T CEA and GVEA and will agree on billing
procedures and accounting procedures for power and energy
through the Stevens Substation, and AEG&T and ML&P will
agree on information exchange procedures for Intertie
scheduling and accounting. In addition to these items that
have to be taken care of before energization there are a
number of items that have to be taken care of at some later
time. There will be a letter of agreement drawn up stating
the fact that these are items that need to be taken care of
at a later time. These items are that AEG&T needs to
formalize the fact that they are taking ownership of the
high side of the Stevens Substation from MEA; the
Reliability Committee of the Intertie Operating Committee
needs to make a final design review of the Stevens
Substation; the Dispatch Subcommittee needs to consider
operating procedures for the Stevens Substation; the MITCR
considerations for the Stevens Substation need to be
resolved."
FEB-17-94 THU 16:40 ML&P GENERAL MANAUER FAX NO. 8072635204 P, Ob
WV Td \ Municipality of Anchorage fMfunicipal Light & Power
renreevnr 1200 East First Avenue
Anchorage, Alaska 99501-1685
telephone: (907) 279-7671, Telecopiers: (907) 263-5204, 277-9272
January 24, 1994
Mr. Bradley Evans, Chairman
Alaska Intertie Operating Committee
Golden Valley Electric Association, Inc.
P.O. Box 71249
Fairbanks, Alaska 99707
Dear Mr. Evans:
As provided in Section 9.3 of the Alaska Intertie Agreement,
ML&P hereby appeals the following decision of the Intertie
Operating Committee which was decided on January 20, 1994
during our meeting at ML&P:
Motion by Jim Hall of MEA, “Move that AEG&T Stevens Substation should be
allowed to be energized upon completion of the following items: Number 1
AEG&T will complete the communications and installation of an RTU, and
AEG&T CEA and GVEA and will agree on billing procedures and accounting
procedures for power and energy through the Stevens Substation. In
addition to these items that have to be taken care of before
energization there are a number of items that have to be taken care of
at some later time. There will be a letter of agreement drawn up
stating the fact that these are items that need to be taken care of at a
later time. These items are that AEG&T needs to formalize the fact that
they are taking ownership of the high side of the Stevens Substation
from MEA; the Reliability Committee of the Intertie Operating Committee
needs to make a final design review of the Stevens Substation; the
Dispatch Subcommittee needs to consider operating procedures for the
Stevens Substation; the MITCR considerations for the Stevens Substation
need to be resolved and the Intertie accounting procedures for the
Stevens Substation need to be considered.”
ML&P will withdraw this appeal if the I0c in session will
reconsider the above motion to add the following friendly
amendment to the first sentence of the above motion,"...for
power and energy through the Stevens Substation, and AEGE&T
and ML&P will agree on information exchange procedures for
Intertie scheduling and accounting." The last sentence of the above motion would then be truncated after "resolved".
Respectfully Yours, a
_—_— Ait
Cott IH e. IMAI weet ‘ Tim McConnell }
Ioc Representative, ML&P Putting Energy into Anchorage for 60 years "1932-1992"
FEB-17-94 THU 16:41 ML&P GENERAL MAinuck FAX NO. 9072635204 P, 06
i 2/14/ cc: McConnell]
GOLUOEN VALLEY ELECTRIC ASSOCIATION ING. Box 71249, Fairbanks, Alaska 99707-1249, Phone 907-452-1161
February 7, 1994
Tom Stahr
General Manager
Anchorage Municpal Light & Power
1200 E. First Avenue
Anchorage, AK 99501
Subject: Alaska Intertie Agreement
Appeal of Operating Decision
The Intertie Operating Committee (I0C), at a regularly scheduled
meeting on January 20, 1994, took formal committee action on
energization of MEA's Stevens Substation. Anchorage Municipal Light
and Power (AML&P) has formally appealed this committee action.
The appeal invokes Section 9.3 of the Alaska Intertie Agreement which
stipulates a response is required from the General Managers. Since
the position of Executive Director of the Alaska Energy Authority no longer exists, this notice is being forwarded to the Deputy Director
of AIDEA, Dennis McCrohan.
The action taken by the committce was intended to allow for
energization of the Stevens Substation. The committee agreed on
dividing the Stevens energization problem in half: 1) issues that
"must" be resolved before energization, and; 2) those issue which may
be completed after energization. Note, the I0C desired to have all
issues resolved before energization, and is not supportive of this
exception becoming precedent setting.
Attached is AML&P's formal appeal which considers a withdrawal if certain conditions are met by the IOC. Since this does not appear to
be a likely outcome in the specified timeframe, I am fulfilling my
obligations under this process. Finally, meeting minutes are not
available at this time, and it is assumed AML&P's rendering of the
motion is accurate since they now independently record the IOC
meetings. :
alee
Respectively submitted,
Brodlen Evans
Bradley Evans
Chairman, Intertie Operating Committee
NOV-24-83 WED 10:29 ML&P GENERAL MANAG.R FAX NO. 9072635204 P. 02
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___./Viunicipai Light & Power
1200 East First Avenue
Anchorage, Alaska 99501-1685
1907) 279-7671, Telecopiers: (907) 276-2961, 277-9272
November 23, 1993 BY FACSIMILE
Riley Snell, Executive Director Alaska Industrial Development and Export Authority 408 West Tudor Anchorage, Alaska 99503-6690
Dear Mr. Snell:
This communication is to give a a brief update on the progress of our last Intertie negotiation meeting held 11/18/93.
The meeting started just after the Bradley Lake Project Management Committce adjourned around 10:00 a.m,, The Railbelt General Managers and their attorneys were all present at the start of the meeting. A sixty page draft #3 of the Participation Agreement was presented and the following open issues were put up for discussion:
Role of the Intertie Participants Group (IPG) Safety net and step up Wheeling/routing/termination points/freeway concept
Non-Participants use Oversight/contractors liability/contractors overhead Participation
APUC
I will discuss the above in the order listed even though the actual discussion sequenced otherwise. In general a double majority will be uscd for most decisions which will
require at least four votes out of the seven total voting 50% or more of the shares. Items requiring either unanimous votes or super majorities are being requested. The grant recipients would like to minimize the role of the IPG but the majority wants the IPG to play a substantial role.
The safety net concept started with GVEA offering to underwrite the Northern Intertie if others drop out after the first year. They want everyone in for at least the first year. If CEA drops out they want corresponding relief on the South, CEA proposed a
somewhat similar version in the South but it's operation is unclear because merely
dropping out is not an option for CEA's wholesale customers and ML&P is uncertain if the Services Agreement termination clause is operable by CEA if ML&P dropped out. Doug Rosenberg, ML&P's attorney is to clarify this with Redman. CEA has indicated some kind of step up should be included in the South if GVEA opted out of the South following a CEA opt out in the North.
Putting Energy inion Anchorage
NOV 24-93 WED 10:30 ML&P GENERAL MANAGER FAX NO, 9072635204 P. 03
*
Riley Snell, Executive Director Alaska Industrial Development and Export Authority
November 23, 1993
Page Two
Wheeling was discussed at great length and it appears to me that the compromise
proposal I made to CEA is, at least in principal acceptable. They would not agree to a fixed rate but to one half the Services Agreement rate with some review on what future items go into the wheeling rate base. They also want a term of less than 30 years. They could not be pinned down on details so we will attempt to get specific details in the forthcoming draft that Doug Rosenberg was charged to produce. Language was proposed to allow routing and termination decisions later by the IPG based on a double majority. CEA will have language on parameters for decision but the IPG will want a decisive role. Whether or not whecling charges are appropriate, and who charges who,
will be based on termination points unless some other agreement is reached. CEA still regards bypass as either impossible or improper but obviously is concerned. We consider it a very real possibility and the Icast expensive route we have identified so far
is a potential bypass route, I believe concern for the possibility of bypass is essential for CEA to agree to a reasonable whecling rate. Otherwise they will believe they are in a monopoly position and demand monopoly rates. This could make the overall economics untenable to ML&P.
There is general agreement to Redman's freeway concept except CBA reneges when the freeway gets to their territory. This problem should be solved by reasonable wheeling or bypass.
Non-participants use was not seriously discussed.
Construction oversight by the IPG and utility contractor (i.e. CEA or GVEA) liability issues are converging. I hope the next draft will be close enough to meaningfully discuss specifics. GVEA will have some constructive numbers on overhead and will be discussing them with CEA.
CEA is the only utility that seems undecided on participation. They say their Board does not like the Northern Intertie and is not sure on the South. Redman keeps bringing out his non-participation in paying for the South line and we all get to wheel for free if they get to use the line at no cost (or at least this is my understanding of the pea 06 but so far they have not offered cnough to make this approach economic for anybody for but them, Logic says their non-participation talk is a negotiating ploy and if not it is unfortunate.
There was not much discussion about APUC requirements.
Unfortunately Eric Redman, CEA's contract attorney, had to leave early to catch a plane leaving only Edwards, Highers having already left. It was decided with Edwards concurrence (or at least he did not object) that Doug Rosenberg was to get Redman's disc and update the draft to reflect the results of the meeting. If there were major differences alternate text would be allowed. The updated draft was to be distributed the week after Thanksgiving and
NOV-24-93 WED 10:31 ML&P GENERAL MANAL_« tak NO. 9072635204 P. 04
*
Riley Snell, Executive Director Alaska Industrial Development and Export Authority
Noveinber 23, 1993
Page Three
we are all to meet on December 6th in Portland at Ron Saxton's office. This location was chosen because several of the participants were going to be in that area then.
I feel a great deal of progress was made and critical issues like wheeling moved closer to resolution, At some point, likely after the next meeting, it would not be out of character for CEA to come back with a list of their Boards non-negotiable demands, I hope this is not the case but we saw it in the Intertie Grant Agreement and it is a negotiating tactic they have used before, but we can work our way through it if it happens. Despite all the gandy dancing I believe we are making real progress.
Very truly, yours,
LZ, sw BE
Thomas R. Stahr
General Manager
TRS/am cc; Mayor Tom Fink Joe Fouts, Executive Manager, Enterprise Activities Joe Hayes