HomeMy WebLinkAboutIntertie Legislative Intent 1993SENT RY: 8-12-93 + 1:04PM : CHUGACH ELECTRIC- 307 561 8998:4 1/14
Chugach ELECTRIC ASSOCIATION, INC.
5601 Minnesota Drive
iulncnps Sani, SENS FACSIMILE TRANSMITTAL SHEET
Phone: 907-563-7494
DATE: August 12, 1993
TO: Riley Snell
.
| COMPANY: AIDEA
LOCATION: — Anch.
FAX NO.: 561-8998
FROM: Dave Highers
SUBJECT: Interties
COMMENTS/MESSAGE:
TOTAL NUMBER OF PAGLS TRANSMITTING: (Includes Cover Sheet)
IF TRANSMISSION [S INCOMPLEUR, PLPASR CALL: (907) 762-4633
TIME/DATE OF TRANSMISS(ON: BY: ALAN OR JC |
CHUGACH PAX NO.: (907) 562-0027 MACHINE TYPE: DEX 740 OR CANON 850
SENT BY: 8-12-99 + 1:04PM : CHUGACH ELECTRIC- 907 561 8998;# 2/14
CHUGACH ELECTRIC
ASSOCIATION, INC.
DAVID L. HIGHERS
General Manager
August 12, 1993
XO; William R. (Riley) Snell, Executive Director
Alaska Industrial Development and Export, Authority
FROM: David L. Highers, General Manager
SUBJECT: Legislative Intent Re; New Interties
The proposed Intertic Grant Agreement contemplates joint ownership, design,
construction, and management of the Northern and Southern Interties (as a single project) -
- and of the Intertie grant funds — by all Railbelt utilities collectively. Golden Valley and
Chugach are to be “contractors” to the collective utilities for purposes of building the line,
under the direction of the collective utilities.
Although arguably lawful, and reluctantly accepted by Chugach, the scheme set forth in
the Intertie Grant Agreement represents a substantial departure from the apparent intcnt
of the Legislature in enacting the statutes that provide for the Intertie grants and authorize
AIDEA to issue bonds to complete the funding of Intertie construction. The most
straightforward reading of the legislative language is that the Legislature intended that:
(1) ‘The Northern and Southern Interties would be separate projects. SB 126,
Sections 1 and 2.
(2) The grants would be made to Chugach and Golden Valley, not to others,
although others were to benefit from the grants. Id.
(3) Chugach and Golden Valley, not others, were to “design and construct" the
Interties. Id. See also SB 106, Section 4 (necessarily implying that Chugach and Golden
Valley will both construct and own the respective Interties.)
(4) SB 126, Scctions 1(c) and 2(c) requires that Chugach and Golden Valley provide
the other utilitics who wished to participate access to the Interties, not ownership or control
of the Interties. The legislation does not require any utility to provide assured access across
its system for other utilities.
5604 Minnesota Drive « P.O. Box 196300 * Anchorage. Alaska 99519-6300
Phone 907-563-7494 * FAX 907-562-0027
SENT BY: 8-12-83 + 1:05PM : CHUGACH ELECTRIC- 907 561 8998:# 4/14
Riley Snell
August 12, 1993
Page 2
(5) Chugach and Golden Valley would own their respective Interties, albeit for the
benefit of the utilities participating in the Interties. This is an express condition of AIDEA
financing under SB 106, Sections 29 and 30. It is also implied by all the provisions of SB
126 and SB 106 already cited above. For example, if the other utilities were each intended
to own the Intertics, why didn’t the Legislature direct Chugach and Golden Valley to offer
the other participants ownership (or even "capacity") instead of access? If you need access
to my property, it is because I own it and you don’t.
Finally, the other prospective Participating Utilities have taken the position that the
failure of any of them to agree to a Participation Agreement means that the others cannot
proceed with the Intertics (this is the “one-party veto"). ‘The Legislature cannot reasonably
be understood to have intended this. A better reading of the legislation is that Chugach and
Golden Valley (and, for other lines, the specific utilities designated to receive the grants,
design and construct the lines, and own them as a condition of AIDEA financing) must offer
each relevant utility the opportunity to participate. The alternative would be to make all
Intertie construction in the Railbelt contingent upon, for example, a favorable vote of the
municipal legislative body of the City of Seward. This is absurd.
The Intertie Grant Agreement may represent a reasonable set of compromises on the
part of Chugach and Golden Valley, and it may even be defensible as a creative application
of the literal terms of the new statutes, but accepting this scheme does involve costs (¢.¢.,
the potential lost of AIDEA financing) and Jegal risks (e.g., citizen suits to block Intertie
construction and alleging failure to have complied with the requirements of the new laws).
SENT BY: 8-12-93 : 1:05PM : CHUGACH ELECTRIC- 907 561 8998:2 4/14
- {p-0hi6 32. 288 at adche KEFPPEC HURRAY CinpeRO KEMPPEL/HUPPMAN PQ02/003 = P.2”9
Homer Electric Association, Inc.
CORPORATE OFFICR Central Maalusula Gcrviee Center JOTI Lake Mtraes 240 Alrpert Way
Itamar, Alaula Q¢000-TaH0 Puuch Caaa
Phane (UO7) 246-0167 Kaaai, Atesku GOEL 6ikG0
VAL (ROY) 296-9419 Fheac (#07) 283-5631
PAX (907) SAR 7 LU
August 12, 1993
baviad L. Highera, General Manager Chugach Electric Association, Inc.
¥.0. Box 196336
Anchorage, AK 99519-6300
Dear Davai
RE: CEA’S LETTER OF AUGUST 10, 1993
The othex tla-line participants have agked ne to provide you with the following proposed changee to the draft Intertie Grant Agreement in response to the concarne vontained in CEA’s Letter ted August 10, 1993, efuily, thease changes will allow CEA to join with the other participants in executing & grant agreexent and submitting that agreement to tha State ag goon aa possible.
The Intertie Grant; Agreanent attached 149 the most recent (8/8/93) draft. Tha highlighted changes to that draft are in specifio response to CEA‘# 8/10/93 doncarns,
The change to the second paragraph of saction 5 clarifies CRA‘’a ahility to unilaterally decide not to act aa the contractor for the gouthern intertie.
The addition to section 3 clarifies CEA‘s right to withdraw from partiaipation in tha northern intertia.
CEA‘a 1(¢c) concern ig algo satisfied by tha above moditication ta Section 3 since CEA may freely alact ta withdraw from either or both intertiea ‘and refuse to execute the Participation Agreement if the latter cannot be nogotiated to CZA‘s satisfaction.
OfA‘’s, concerns with respect to access are divided into that which CRA is willing to do and that which CRA ie unwilling te commit. It is the feeling of the participants that thase things which oma ia willing to do, do not all neceagarsly have to be incorporated into the grant agreement at thie stage, but rather that those things to which CRA is unwilling to commit whould be addressed. It has never baen the intent of the participants that thay have 4 guarantee of “equal priority usa of Chugach’a system, xegardless of tha
consequence, if tha result would be to pravent Chugach from ucing
itm own system for the needs of its own wholegale and ratail
907 276 2493 08-12-93 09:44AM POO2 #04
R-96%
aa 8-12-93 : 1:06PM: CHUGACH ELECTRIC 907 561 8998:2 5/14
deci Peni i2" 785 oBEATa KeReREC TLEPAT @frneRO KEMPPBL/EURAAK P003/003 P39
David L. Highers, Ganeral Manager Paga 2 Auguat 12, 1993
austomera," and we can find nothing in the praesent draft grant agxeewent which would support auch a claim by any partiaipant. The language contained in the existing draft Intartie Grant Agreoment ia based upon the requirements of #8 126 and is arguably néecassary in order to persuade the State to release grant funds. Thia iague will, of courage, be totally reaclvad in the Participation Agreanent.
In regponaa t6 youre concern a(b) (ii). we havea aliminated that entire sentence containing restrictiona on the development of acceptable wheeling rates.
Again, we would hope that thease "final nodifications to the draft Intartia Grant Agreement will allow cRA to join with the other participants in axeouting that agreement and aubmitting dt to the State yat thie week.
Sincerely,
HOMER, ELECT ASSOCIATION, INC. U4.
N. u. Gtory
General Manoger
NTA HON299 tevin
ca: .Ken Ritchey, MEA ‘Dave Calvert, City of Seward Vince Mottola, FHUS
Mike Keliy, QVEA Bob Hufman, AEGéT
Ron Saxton, Attorney
Dave Hutchena,| ARECA NLs-rf H/K
76 2403 08-12-93 09:44AM POO3 #04
R=«96% 907 2
SENT BY: 8-12-93 : 1:06PM : CHUGACH ELECTRIC- 907 561 8998:4 6/14
AUG 12 793 29:47AM KEMPPEL HUFFMAN GINDER P.4/9
INTERTIE GRANT AGREEMENT
This Agreement is entered into this day of August, 1993, by Golden Valley
Flectric Association, Inc. ("GVEA"), Fairbanks Municipal Utilities System ("FMUS"), Anchors
Municipal Light and Power ("ML&P"), Chugach Electric Association, Inc. ("CBA"),
Electric Generation and Transmission Coo ative, Inc. (AEG&T"), on behalf of its S enoes
(Matanuska Blectric Association, Inc, ( , and Homer Electric Association, Inc. ("HEA"),
“Additional Parties"), and City of cae Cheat) CParticip eae the meaning
of Section 2 of SB 126), and the State of Alaska, Department of A 6 ("DOA"), and the Alaska Industrial Development and Export Autharity ity CAIDEA"),
The parties agree as follows:
i: Purposs, The purpose of this Agreomont is to satisfy the statuto conditions precedent to DOA‘s yaneioe of the grant funds and to provide far tng expeditions
transfer of such funds to the grant recipients for ee - urpose of partial funding of the design and
earn - oe a a eeaiy, tween Healy drys hehe and ety te
orage and the Kei ninsu ally, this Agreement is intended to sa! conditions of SB 126 §§ 1(b) and (c) and §§ 2(b) and (¢).
2. Addidonal Agmsmenis. The Purtici Udlites hereby agree that any additional agreements (whether ee the —— pating Utilities or with other entities) that are ae out the purposes 0 gteement and SB 126 shall be negotiated in good faith. Suoh additional a, Pett shail Spavees —* participarion (“Participutivn
Agreement"), project management, and
Pursuant to this and any other necessary agreements, tho
Participating Ulises shall hold undivided ownership interest as tenants in common in the = set.forth in Attachment 1 to this em such proportions being based on the of the Participants’ '{990/1991/1999 ¢ verge neu-colncldent peal demand to the sum of the Participating Utlities’ 1990/199 U/1 tre yeat average non-coincident oem to a differci ak demands unless the Participating Utilities nt allocation of specific pro
ie acity in the:Participation t. A Parcipating Utility elect in wri ng vn 7 thdraw from partici ie either the Agios -Kenail Peninsula Intertie or the, Healy-Falrbanks Intertle prior to execution of a Participation Agreement by the remafning Participating Utilities. |
4, Statutord Conditions. F For the purpose of sec sondier of Ge weet fangs, . the Participating Utilities hereby agree to the conditions of §B 126, specifically set
iw. | |
4.1 i j The P: ting Utilities agree Ry the design and construction costs of the Healy-Fairbanks transmission intertie that rahe
3,200,000 and the design; and construction costs for the Anchorage-Kenal Peninsula tranamission intertie that rien $46,800,000 [SB 126 $§ 1(b)(1) and 2¢b)C1N.
4.2 . The\Particip Utilitie to pay the operation and maintenance (O&M) costs for the Healy- siete ea the aceomnge Kael Peninsula
intertios [SB 126 §§ 1(b)(2) or 2(b)(2)).
43 ies ‘The costs of construction of the Ancharage-Kenai Peninsula intartie in excess of $46,800,000 plus accrued intorcst, the cost of ation and maintenance of
that intartis, and other costs approved by the |Participants shall be recovered through a 1.5 mil/Wh charge for all encrey generated by @ Bradley Lake Hydroelectric Project.
R=96% 907 276 2493 08-12-93 O8:44AM POO4 HO4
SENT BY: 8-12-93 : 1:07PM : CHUGACH ELECTRIC- 907 561 8998:2 7/14
AUG 12 793 @9:48AM KEMPPEL HUFFMAN GINDER P.5/3
The costs of construction of the Healy-Falrbanks intertle la cacess of
$43,200,000 plus accrued interest, the cost,of operation and maintenance of that intertic, and other
costs approved by the Participants shall first bo recovered through a 1.5 mill/kWh charge for
cuergy generated by the Bradl i Project for the benefit of recciving utilities in
Pair' and an additional 1.5 mill/kWh charge to be paid by the receiving utility for 60 nt
of the non-Bradley Lake energy tranamitted on the existing GVBA transmission lino and the new
northern intertie between Healy and Fairbanks. i
Remuining costs of the two Interties not recovered by the above 1.5 mill/kWh charges shall be allocated among the Participating Utilities in the proportion sot forth in
Attachment 1.
4.4 Access and Wheeling. All Participating Utilities agree to provide the other Participating Utilities access both on thc ncw intortic and over tho Participating Utilities’ systems to and from the intertie for the purpose of assured acccss to resources, economy energy transactions, and other similar uses on terms and at rates to be resolved in the pation Agreement, Charges for access to other Participants' capacity rights will be addressed in the
Participation Agreement. [The terms, conditions, and rates for access will be calculated on a eens and required basis.] Resulting rates will be submitted to the Alaska Public tilities Commission, if required.
5S; Design.and Constmction Management. The Participating Utilities agree to contract with GVEA to design and construct the Healy-Fairbanks power transmission intertie and agree to contract with CEA to design and construct the Anchorage-Kenai Peninsula powor transmission intertie, subject jo the availability of adequate financing and in accordance with
Prudent Utility Practices and construction agreements which contain provisions for adequate
oversight to maintain — and cost control, and to cnsure that total project costs do not exceed amounts budgeted by the Participants' Group and its Participating Utility members.
Consistent with the above conditions, it is agreed and understood that GVEA and CEA, as contractors, will be free to subcontract all or any portion of the work associated with the
design and construction of the abave projects. If, for any reason, GVBA and/or CEA fare unable to construct] elect not to act.as the contractors of the interties, the Participating Utilities oe contract for constraction with one or more of the other Participating Utilities or Additional artios. i ]
6. _ Intertie Participants Group. As common owners of the interties, the Participating Utilities agree to form the Intertie Participants Group (IPG) for the purpose of exercising thelr rights and responsibilities as owners. Each Participating Utility shall be represented on the IPG, and the IPG shall form a technical advisory subcommittes on which cach Participating Utility shall be represented, except that MEA and shall be on the IPG and any subcommittees, each of-which shall be a voting member, and &T shall not be additionally represented, The reaene Agreement shall resolve and adopt voting rights and procedural rules for the operation of the IPG.
Total project cost and financing shall be addressed in the Participation Agreement. Intertie design, construction, construction management, and operation and maintenance, among other issues, shall be resolved by the IPG in uccurdance with its rules and procedures.
Relative to de: and construction issues, the IPG and its technical advisa: subcommittee shall be responsible for oversight of GVEA and CEA construction efforts. Su oversight shall include approval of at least project scope (including routing and points of
j
INTERTIC GRANT AGREEMENT !
Pago2
R=96% 907 276 2493 08-12-93 09:44AM POO5 #04
SENT BY: 8-12-93 + 1:08PM : CHUGACH ELECTRIC- 907 561 8938:# 8/14
AUG 12 793 @9!49AM KEMPPCL HUFFMAN GINDER P.6/9
interconnection), cost estimates and budget, approval of construction agreements, significant change orders, receipt and review of at least monthly reports, and auditing of dosign and
construction funds. Neither the IPG nor any individual ab gta Utility shall attempt to make
claims against GVEA and CEA for any decisions made by the IPG.
Upon completion and commercial operation of the interties, the IPG shall be
responsible for all decisions relating to the ongoing operations, maintenance, repair, and
improvement of the interties.
7. Transfer of Grant Funds. DOA hereby transfers the grant funds of
$43,200,000 to GVEA and $46,800,000 to CEA, together with all interest carnings on such funds trom the ettective date of the legislation. GVEA ae eee in trust accounts for the benefit of all Participating Utilitics in agreed-upon financial institutions with instructions to the trust officer that no funds are to be released, encumbered, asgi , or ledged until & Parcipation Agreement has been executed by all of the Participating Utili The Bardcipating Utes ‘agree to negotiate in good faith with the intent of executing a Participation Agreement by November 1, 1993. In the event that the Healy-Falrbanks is not, for any reason, constructed, OVBA agrees lo return any unexpended funds and any interest earned thereon to DOA. In the cvent that the Anchorage-Kenai Peninsula intertie Is not, for any reason,
constructed, CBA to rerum any funds and any interest camed therton to DOA. No Participating Utility shall unreasonably delay progress toward compledon of the intertics.
8, Use_of Funds. The parties agree to uso funds in the trust accounts described in paragraph 7 solely for the purposes of design and oonstruotion of the Healy-Pairbanks andj Anchorage- i Peninsula interties, including all acts necessary for completion of these rojects. The parties further agree to retum to the State any unexpended grant funds and an’
ional camed thereon not needed for this purpose. /
9. Tax Considerations The parties agree Kospeneiaaty determine whether the receipt of funds pursuant to this ement is inconsistent the tax-exempt status of the Participating Utilities or will rosult in the grant being subject to taxation, In the event that any of the Participating Litilities determine a tax status issue 1s raised, DOA and AIDEA agree to permit the immediate retum to DOA and/or AIDEA of any grant funds received by the Participating Utilities including any interest earned thereon and to work in good faith to effect the grant transfers in a manner which prescrves the tax-exempt status of all of the Participating Utilities and the grant funds and fucther agree that the Participating Utilities may terminate this Agrocment, and any Participating Utility may withdraw from this Agrecment, if a satisfactory resolution is not achievable for the utilities as ara oc any Peceepsing Utility individually. A Participating Se ee ds for purposes of avoiding bec: a taxable by reason of such receipt but will be permitted, wo the greatest extent possible, to have the same rights and responsibilities as other Participating Utilities under this and other related agreements. However, the existence of unfavorable tax consequences for one or more Participating Utilities shall not prevent reccipt of the grant and constcuction of the linc by ume or more of the other signatories to this Grant Agreement. :
INTERTIE GRANT AGREEMENT
Page 3
R=96% 907 276 2493 08-12-93 09:44AM POOG #04
SENT BY: 8-12-93 : 1:08PM : CHUGACH ELECTRIC- 907 561 8998:# 9/14
AUG 12 799 @9:5@AM KEMPPEL HUFFMAN GTNDER P79
IN WITNESS WHEREOE, the partics have caused this Agreement to be oxcouted on the date first above written.
STATE OF ALASKA, DEPARTMENT OF ADMINISTRATION
By ee
ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY ADMINISTRATION
By:
PARTICIPATING UTILITIES:
— VALLEY ELECTRIC ASSOCIATION,
By:
FAIRBANKS MUNICIPAL UTILITIES SYSTEM
By:
ANCHORAGE MUNICIPAL LIGHT & POWER
By:
INTERTIE GRANT AGREEMENT
Page 4
R-96% 907 276 2493 08-12-93 09:44AM POOT #04
SENT BY: 8-12-98 : 1:09PM : CHUGACH ELECTRIC- 907 561 8998:#10/14
AUG 12 793 @9:SQAM KEMPPEL HUFFMAN GINDER P.6/9
CHUGACH BLECTRIC ASSOCIATION, INC.
By:
ALASKA ELECTRIC GENERATION & TRANSMISSION COOPERATIVE, INC.
MATANUSKA ELECTRIC ASSOCIATION, INC.
By:
HOMER ELECTRIC ASSOCIATION, INC.
By:
Attechment 1
INTERTIE GRANT AGREEMENT Page 5 .
R~9B% @07 276 2493 08-12-93 09:44AM POOS #04
SENT BY: 8-12-93 : 1:09PM : CHUGACH ELECTRIC- 907 561 8998:#11/14
: AUG 12 ’SQ) @9tS1AM KEMPPEL HUFFMAN GINDER P.9/9
Attachment 1
INTERTIE OWNERSHIP INTERESTS
Golden Valley Blectric Association, Inc. 15.26%
Fairbanks Municipal Utilities System 4.65%
Anchorage Municipal Light and Power 22.25%
Chugach Electric Association, Inc. 32.04%
Alaska Blectric Gencration & Transmission
Cooperative, Inc. 24.56%
Matanuska Electric Association, Inc. 13.35%
Homer Electric Association, Inc. 11.21%
oy of Seward, \ : j 124%
TOTAL ' 100.00%
NOTE: The above percentages shall apply unless otherwise agreed to in the Participation Agreement = Beotion 3 of this Agreement).
R=-95% 907 276 2493 08-12-93 09:44AM POOS #04
SENT BY: 8-12-93 > 1:09PM : CHUGACH ELECTRIC- 907 561 8998:#12/14
CHUGACH ELECTRIC
ASSOCIATION, INC.
DAVID L. HIGHERS
Generat Manager
August 12, 1993
Norman L. Story
General Manager
Homer Electric Association, Inc.
3977 Lake Street
Homer, Alaska 99603
VIA Facsimile - 235-3313
Dear Norm:
Thank you for your letter of today's date, offering a revised draft of the Intertie Grant Agreement.
Chugach appreciates the effort you and the other prospective participants have made to
accommodate the concerns expressed in Chugach's letter of August 10. For the most part, that
effort has been successful. The Intertie Grant Agreement still contains many provisions that
Chugach considers ill-advised or unfavorable. But based on the changes you have made in the
most recent draft, and subject to a satisfactory resolution of the matters discussed in this letter, I
will recommend to the Board that Chugach (1) execute the Intertie Grant Agreement, and (2)
proceed to negotiate a Participation Agreement. Chugach will attempt to resolve its remaining
concerns -- which, as you know, are numerous -- in the latter Agreement.
I note, first, that the draft Grant Agreement is now very ambiguous on the issue of the one-party
veto. This has important implications. On the one hand, Section 7 still requires that the
Participation Agreement must be signed by all the Participating Utilities (a defined term which
includes all of us), or otherwise no funds may be spent, all funds must be returned to the State,
and the Interties may not be built. On the other hand, the change you have made to Section 3
seems to imply that the other utilities can proceed to spend the funds and construct the Interties
even if one or more of the utilities listed as a Participating Utility declines to execute a
Participation Agreement with respect to the Northern Intertie, or the Southern Intertie, or both --
in other words, one utility's refusal to execute the Participation Agreement does not veto either
the Agreement or the Interties for the other utilities. We are unclear as to which of these results
you intend. Assuming that you intend to let a utility decline to participate in one or both lines
without that action bringing the Participation Agreement and the Interties to a halt, the Grant
Agreement must make clear that (1) the utility which drops out is not liable for any costs, and (2)
that utility's percentage share of costs and of Intertie capacity will be reallocated among the
remaining Participants, who agree to be responsible for 100 percent of those costs.
To accomplish the foregoing, we ask that Section 3 be amended by adding the following sentence
at the conclusion thereof:
5601 Minnesota Drive = P.O. Box 196300 * Anchorage, Alaska 99519-6300
Phone 907-563-7494 * FAX 907-562-0027
SENT BY: 8-12-93 + 1:10PM ; CHUGACH ELECTRIC- 307 561 8998:#13/14
"If any utility that executes this Agreement does not execute a Participation Agreement
with respect to the Anchorage-Kenai Peninsula Intertie or the Healy-Fairbanks Intertie, or
both, then that utility shall have no liability under Section 4 hereof, or otherwise, for any
costs associated with the Intertie(s) in which that utility has not agreed to participate, and
all such costs shall instead be bome by those Participating Utilities who have executed
Participation Agreements with respect to such Interties."
This clarification is necessary not only for the protection of Chugach and other utilities who may
decline to participate in one or both Interties, but also in order to comply with the statute and to
protect the State, since otherwise there would be no clear assurance of 100 percent of the relevant
costs being covered by those utilities who elect to participate in the Interties. (Note that this
clarification also necessarily implies that there is no longer any one-party veto of the Participation
Agreement.)
If the foregoing clarification is made to the Agreement, J will recommend to the Board that
Chugach execute it. In so doing, however, I want to make clear to you and the other prospective
Participants that Chugach interprets the draft Agreement in the following manner, and expects the
Participation Agreement to be consistent with these points, Please let me know if there is any
disagreement on this.
(1) Section 4.4, "Access and Wheeling," does not as written require of Chugach any
commitment that Chugach indicated in its August 10 letter that Chugach is unwilling to make at
this time.
(2) Chugach intends to submit to the Alaska Public Utilities Commission for review and
approval any proposed terms, conditions, and rates for either assured or non-firm wheeling
services over Chugach's system for power transmitted across that system to/from the Intertie.
(Chugach will first attempt to negotiate such terms, conditions, and rates with the other
prospective Participating Utilities.)
(3) Chugach will make every reasonable effort to accommodate the wheeling needs of
other utilities if Chugach can do so without interfering with the use of its own system for its own
wholesale and retail customers, but Chugach does not interpret SB 126 or the Intertic Grant
Agreement as requiring Chugach to provide assured access to other utilities for the transmission
of power to/from the Intertie across Chugach's system.
(4) If funds must be returned to the State under Section 7, the return will be from the
trust accounts mentioned in that Section, and not by Chugach and/or Golden Valley from any
other source.
Finally, we note that the computations used to produce the percentage interests shown in
Attachment | must be re-checked, and, if appropriate, the percentage interests must be adjusted
accordingly, before the Grant Agreement is finally executed by all parties and becomes effective.
SENT BY: 8-12-93 + 1:11PM = CHLGACH ELECTRIC- U7 561 6996+414/14
Chugach's percentage interest as shown in Attachment 1 may be too high because it apparently
includes the loads of Seward, which should be netted out of Chugach's total (and not double-
counted).
I hope the foregoing is satisfactory to the other prospective Participants. If so, please contact me
so that we can take the appropriate steps to memorialize our agreement.
David L. Highers
General Manager
CC: RUG Managers
Chugach Board of Directors