Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
BPMC Meeting Sep 2014
Bradley Lake Project Management Committee ALASKA ENERGY AUTHORITY Bradley Lake Project Management Committee - Annual Meeting Notice is hereby given that the Bradley Lake Project Management Committee will hold its annual meeting on Thursda’ September 18 at 1:00 p.m. For additional information contact Teri Webster at 907-771-3074. This meeting will be conducted by electronic media pursuant to AS 44.62.310 at the following location: Alaska Energy Authority Board Conference Room, 813 West Northern Lights Boulevard, Anchorage, Alaska; a teleconference line has been set up for those unable to attend in person. Dial 1-888-585-9008, Enter conference room 467 050 126. The public is invited to attend. The State of Alaska (AEA) complies with Title II of the Americans with Disabilities Act « 1990. Disabled persons requiring special modifications to participate should contact AEA staff at (907) 771-3074 to mak arrangements. Attachments, History, Details Attachments Details BPMC 9-18-14 Agenda.pdf Department: Revision History Category: Created 9/10/2014 1:44:12 PM by tawebster Sub-Category: Modified 9/10/2014 1:50:30 PM by tawebster Location(s): Modified 9/15/2014 11:59:03 AM by tawebster Project/Regulation #: Publish Date: Archive Date: Events/Deadlines: Commerce, Community and Economic Development Public Notices Advisory Committee Meetinc Statewide 9/10/2014 9/19/2014 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING SPECIAL MEETING DRAFT Meeting Minutes proofed ay Alaska Energy Authority, Anchorage, Alaska Ter 4 April 11, 2014 “Bren 1. CALL TO ORDER Chair Griffith called the special meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 3:05 p.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson (Golden Valley Electric Association (GVEA)); Sara Fisher-Goad (Alaska Energy Authority (AEA)); Bradley Evans (Chugach Electric Association (CEA)); Joe Griffith (Matanuska Electric Association (MEA)); Richard Miller (Municipal Light & Power (ML&P)); Brad Janorschke (Homer Electric Association (HEA)) and John Foutz (City of Seward (SEW)). 3. STAFF/PUBLIC ROLL CALL Brian Bjorkquist (Department of Law); Kirk Gibson (McDowell Rackner & Gibson PC); Brian Hickey, Paul Risse, Burke Wick (CEA); Allen Gray (GVEA); Harvey Ambrose, Robert Day, Alan Owens, Carrie Buckley (HEA); Jim Brooks, David Pease (MEA); Lou Agi, Jeff Warner, Jim Trent (ML&P); Bernie Smith (Regulatory Commission of Alaska); Robin Brena, Matt Clarkson (Brena Bell & Clarkson); Daniel Hertrich (Hatch Construction); Teri Webster (AEA) and Miranda Studstill (Accu-Type Depositions). 4. APPROVAL OF PRIOR MINUTES - Jan 24, 2014; Jan 27, 2014; Feb 7, 2014 MOTION: Mr. Evans made a motion to approve prior meeting minutes of January 24, 2014; January 27, 2014; and February 7, 2014. Motion seconded by Mr. Miller. The motion passed unanimously. 5; PUBLIC COMMENTS There were no public comments. 6. AGENDA COMMENTS/MOTION FOR APPROVAL The agenda was approved. 7. NEW BUSINESS A. O&D Committee responses to queries by parties and chairman BPMC Minutes 4/11/14 Page | of 4 Chair Griffith noted a list of O&D Committee responses have been provided to the members. Chair Griffith requested Mr. Brooks, O&D Committee Chairman, provide a summary of the Committee findings. Mr. Brooks stated the O&D Committee has met several times regarding theses issues since January and examined each question. The responses were crafted in such a manner that it was stated in the responses when HEA had a view different than the majority view. Mr. Janorschke asked who is maintaining the PSS/E model. Mr. Brooks believes maintaining that model is an ongoing effort with contractor help. Mr. Brooks believes there is a subcommittee that meets regarding the PSS/E model and Jim Cross is the one from HEA who provides HEA's updated data. Mr. Janorschke asked if the model is located with a consultant. Mr. Janorschke agreed Mr. Cross has been participating in the subcommittee and noted Mr. Cross is no longer the Chairman. Mr. Janorschke asked who will replace Mr. Cross as the new Chairman and what is his level of experience. Mr. Janorschke asked who is providing the subcommittee with information that the model is current. Mr. Brooks stated,he does not have the answers to those questions and is not part of that subcommittee. Mr. Griffith commented he has asked the same questions and the most current model is the one most recently run by EPS. It was cross-checked with all information and brought current for the whole railbelt. Mr. Griffith stated*he had a contractor also run the information and returned the same results. He is confident this is the right model. Mr. Griffith stated he posed the question a year ago regarding who is responsible for maintaining the model and believes there is a committee assigned to maintaining the model. Mr. Warner stated Aung Thuya is on the System Study Subcommittee under the IMC/OC Committee and this is the group who updates and keeps the model. Mr. Janorschke asked if the model is kept at ML&P currently. Mr. Hickey stated the model is on the HEA FTP site. Mr. Warner agreed and noted each utility has access to that site. B. Committee findings - Dispute resolution MOTION: Mr. Evans made a motion to approve Resolution 14-09 findings of the Dispute Resolution Committee regarding power delivery issues. Motion seconded by Mr. Miller. Mr. Janorschke requested Chair Griffith provide additional information regarding the motion. Chair Griffith stated these are the findings created by the Dispute Resolution Committee, which includes future action recommendations for the BPMC. Mr. Janorschke stated some of the jurisdictional issues in the findings are before the Regulatory Commission. He noted number five states HEA is to receive compensation for the SQ Line under the Bradley lake agreements and historically, HEA was receiving compensation under the transmission lease agreement with CEA and has not expired. Mr. Janorschke noted number six is similar to what HEA has filed with the RCA with regard to a wheeling tariff and the participants having different opinions on the interpretation of the contracts. BPMC Minutes 4/11/14 Page 2 of 4 Chair Griffith asked Mr. Janorschke if he was making a motion to amend the motion. Mr. Janorschke stated he received the findings this morning and was not in a position to make suggestions. A roll call vote was taken and the motion passed, with Mr. Janorschke voting against and Ms. Fisher-Goad abstaining. Chair Griffith requested Mr. Gibson provide information and amendment recommendations regarding Resolution 14-10, Final Disposition of the Dispute Resolution Committee. Mr. Gibson advised the language added to Resolution 14-10 is to ensure the resolution is correct in working under the Dispute Resolution Committee's authority from the terms and conditions of the contract in the Services Agreement. BPMC, acting upon that authority from the services agreement, created the Dispute Resolution Committee and gave the Dispute Resolution Committee the ability to mediate. The amended Resolution 14-10 includes explicit clarity on where the authority comes from. MOTION: Mr. Evans made a motion to approve Resolution 14-10, Final Disposition of the Dispute Resolution Committee as amended. Motion seconded by Mr. Foutz. Mr. Evans requested explanation of the next steps, because this resolution, if passed, will not resolve the current dispute. Mr. Gibson believes this final disposition by the Dispute Resolution Committee is saying there is an impasse and mediation is no longer successful. Therefore, the dispute is being returned to the BPMC to handle in accordance with the authority given to them in the Services Agreement. Mr. Gibson stated the BPMC has a choice to go into arbitration or file under the decision-making procedures agreed to in the bylaws in Section 510. Mr, Evans asked if there is a formal document that lists what was alleged and the Dispute Resolution'Committee's finding per issue. He is concerned there were many ungrounded allegations. Mr. Gibson advised the BPMC charged the Dispute Resolution Committee to mediate these issues. The mediation was unsuccessful. Mr. Evans requested clarity if any of the allegations have been resolved, other than the SQ issue. The O&D response is not always clear if any issue was resolved or what facts, if any, were used to support the findings. Mr. Evans stated the form of the document is confusing and it is hard to understand which answer goes with which allegation. Mr. Evans does not want to amend the current agreement. He requested that another assignment be made of the O&D Committee to sponsor a resolution with the Dispute Resolution Committee stating which allegations have been resolved. Chair Griffith agreed and made that assignment to the O&D Committee. Mr. Borgeson expressed his appreciation for Mr. Evans' comments Mr. Borgeson does not agree with the statement in the document that all known issues with HEA have been resolved. He believes HEA has brought disputes to this resolution that have not been addressed fully. Mr. Borgeson requested specific information as to what has been resolved and what has not been resolved. Mr. Borgeson expressed his appreciation for the work completed by the Dispute Resolution Committee. BPMC Minutes 4/11/14 Page 3 of 4 Mr. Gibson stated it behooves the Dispute Resolution Committee to review all the issues and make a clear list of resolved issues and a clear list of unresolved issues. Mr. Gibson recommended Resolution 14-10 be tabled and revise it to include the clear list of resolved and unresolved issues because this is the final disposition. MOTION: Mr. Evans made a motion to table Resolution 14-10 to the next meeting to rectify the aforementioned issues. Motion seconded by Mr. Miller. A roll call vote was taken and the motion passed, with ML&P voting against. Cc. Committee recommendations to the BPMC Mr. Janorschke requested the Dispute Resolution Committee instruct the O&D Committee to provide their recommendations for each item in the list of disputes that HEA submitted to the Dispute Resolution Committee. Chair Griffith agreed to take the action and work with the O&D Committee. Mr. Janorschke requested that copies of the basic draft of resolutions be provided to members at least 24 hours in advance of the meeting. Chair Griffith stated he will try to get this resolution to the members by Monday afternoon. 8. MEMBERS COMMENTS Committee members welcomed Mr. Trent to the Committee. 9. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 3:45 p.m. BY: Joe Griffith, Chair of Special Committee Attest: Sara Fisher-Goad Alaska Energy Authority, Secretary BPMC Minutes 4/11/14 Page 4 of 4 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING SPECIAL MEETING DISPUTE RESOLUTION COMMITTEE MEETING DRAFT Meeting Minutes Di iS 0 Ure Alaska Energy Authority, Anchorage, Alaska April 17, 2014 Meing 1. CALL TO ORDER BPMC Dispute Resolution Committee Chair Griffith called the special meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 2:02 p.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson (Golden Valley Electric Association (GVEA)); Bryan Carey (Alaska Energy Authority (AEA)); Bradley Evans (Chugach Electric Association (CEA)); Joe Griffith (Matanuska Electric Association (MEA)); Richard Miller (Municipal Light & Power (MLP)); Brad Janorschke (Homer Electric Association (HEA)); John Foutz (City of Seward (SEW)) 3. STAFF/PUBLIC ROLL CALL Kelli Veech, Teri Webster (AEA); Brian Bjorkquist.(Department of Law); Kirk Gibson (McDowell Rackner & Gibson, PC); Brian Hickey, Mark Johnson, Lee Thibert, Burke Wick (CEA); Robert Day, Carrier Buckley, Alan Owens (HEA); Jim Brooks, David Pease (MEA); Lou Agi, Rick Miller, Jeff Warner (MLP); Ron Woolf (GVEA); Bernie Smith (RCA); Robin Brena, Matt Clarkson (Brena Bell & Clarkson); Miranda Studstill (Accu-Type Depositions); 4. PUBLIC COMMENTS There were no public comments. 6. AGENDA APPROVAL The agenda was approved. 7. OLD BUSINESS A. Dispute Resolution Committee final report Chair Griffith requested Mr. Brooks provide a summary of the last list of questions at issue. Mr. Brooks noted a telephonic meeting was held today to complete the responses to HEA's statement of disputes. The vote was not unanimous and HEA objected they did not have time to fully vet the responses. The final document was available at 8:30 this morning. All of the questions have been answered, but not all of the issues have been resolved. All parties have agreed to an interim BPMC Minutes 4/17/14 Page 1 of 4 resolution on the loss calculation issue that the methodology is accurate and satisfactory. This will need to be reexamined once the load balancing areas (LBA) and delivery points are defined. Mr. Brooks noted it was the decision of the O&D Committee that the dispatcher operated within the parameters of all of the policy documents. The plant has been dispatched in the same manner for quite some time and there has been no objection up to January Ist. Mr. Janorschke asked if he understood correctly the O&D Committee felt that enough time had passed in operating Bradley, possibly outside the latitude of the written agreements, so that the written agreements do no carry a lot of relevance. Mr. Brooks believe all parties agree the BPMC was the party responsible for the operation of the plant and the BPMC, through the O&D and the Dispatch Procedures document, established what those operating and dispatch parameters would be and had not discovered any problems suggesting there were any issues in operations until recently. MreJanorsehke asked if heqisyunderstanding correctlyjthat when HEAysubmittedstheirconcerns and addressed Specific contract language, the O&D Committee felt there is enough latitude through the BPME not to be held to the language within the agreements. Mr. Brooks believes that is an accurate characterization with respect to the dispatch and any portion of the omggations that are under the operating procedures document. a Mr. Janorschke asked when {h€lO&D Committee began addressing thé i88Ué8 contained in the summary report. Mr. Brooks informed the O&D Committee has been attempting to address the issues at different levels since they were broughtybefore the O&D Committee in January. Mr. Janorschke stated a concern that it was not until last Friday that the O&D Committee actually started delving into these issues. Mr. Brooks noted that was the last meeting, but a report document had already beg created. | Mr. Evans commented the O&D Committee had vetted the issues, presented them at the last BPMC meeting, at which Mr. Evans requested the O&D provide additional clarification and a summary of the allegations versus the vetting and findings. Mr. Evans believes it is unfair to characterize the O&D Committee has just recently addressed these issues. Mr. Janorschke stated he is asking the question because he has not seen this document before and it seemed awkward the proposed resolution yesterday for the Dispute Resolution Committee acknowledged the acceptance of the document at the O&D Committee before the O&D Committee even had their meeting. MOTION: Mr. Evans made a motion to accept the O&D Committee's responses to HEA's statement of disputes related to the January 9th letter, including the O&D Committee's former two lists of responses to establish the full record. Motion seconded by Mr. Foutz. Mr. Evans commented there are still some issues that have not been fully resolved. This work does not address the issues that still need to be vetted and resolved at the O&D level for technical issues related to these matters, including boundaries and full implementation of the LBA interface. Mr. Evans stated for the record there are issues remaining that need other decisions BPMC Minutes 4/17/14 Page 2 of 4 made and the final implementation has not been fully recognized. This document represents what the O&D has decided to date. Mr. Evans strongly disagrees with any inference that because flexibility was allowed within the established dispatch protocols, there was any implied or tacit approval to change contracts. There being no further comments and hearing no opposition, Chair Griffith stated the motion stands. Chair Griffith noted the substitute Resolution 14-10 has been provided to all parties. The intent of the substitute Resolution 14-10 is to define specifically the findings and recommendations of the Dispute Resolution Committee. MOTION: Mr. Evans made a motion to approve the revised Resolution 14-10 as amended and provided at today's meeting. Motion seconded by Mr. Miller. MreJanorschke asked how muchilead time is required)for the draftoftheresolutions:and amendments. Mr. Gibson stated the bylaws do not address that issue. It would be up to the BPMC to decide what is a reasonable amount of time, based on the subject matter, and what has been done historically with the BPMC, which is anything can happen to the motion once there is discussion. Robert's Rules of Order take over when the bylaws do not address the issue. Mr. Gibson recommended paragraph 20 should be more accurate regarding the O&D written reports. Mr. Gibson recommended the corresponding footnote be inserted, "See minutes of BPMC Special Meeting dated April 17th, 2014,"stoybe:totally accurate. Mr. Gibson stated he was not aware of the O&D report presented today when he worked on this resolution. The maker of the motion and the second agreed to the amendment. Mr. Janorschke suggested a factual change on the first page where it references that all parties had counsel present at all scheduled meetings, except Seward, to reflect HEA did not have counsel present at all the meetings. Mr. Gibson suggested the ninth line state, "All of these parties had counsel present at some of the scheduled meetings." The maker of the motion and the second agreed to the amendment. A roll call vote was taken and the motion passed, with HEA voting against and AEA abstaining. 8. MEMBERS COMMENTS Mr. Carey stated AEA supports all of the efforts to resolve disputes and since AEA is not party to the agreement, AEA abstains from some motions. Mr. Carey asked which points on Resolution 14-10 does HEA agree with and which points HEA does not agree with. Mr. Janorschke noted HEA has a list of disputes and comments on every page. Mr. Janorschke commented he is happy to review the points if that is the wish of the Committee or he could review them at some point with Mr. Carey. BPMC Minutes 4/17/14 Page 3 of 4 Mr. Janorschke expressed his appreciation to Chair Griffith for the update and to the O&D Committee for their work. Mr. Evans echoed the previous comments and expressed his appreciation for all staff working on these arduous problems. Chair Griffith noted he will introduce the report findings and recommendations from the Dispute Resolution Committee at the BPMC meeting and suggest the Dispute Resolution Committee be disbanded. 9. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 2:32 p.m. BPMC Minutes 4/17/14 Page 4 of 4 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING DRAFT Meeting Minutes Alaska Energy Authority, Anchorage, Alaska (eGu lor April 17, 2014 1. CALL TO ORDER Chair Evans called the Bradley Lake Hydroelectric Project Management Committee to order at 2:33 p.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson, (Golden Valley Electric Association (GVEA)); Bryan Carey (Alaska Energy Authority (AEA)); Bradley Evans (Chugach Electric Association (CEA)); Joe Griffith (Matanuska Electric Association (MEA)); Richard Miller (Municipal Light & Power (MLP)); Brad Janorschke (Homer Electric Association (HEA)); John Foutz (City of Seward (SEW)). 3. STAFF/PUBLIC ROLL CALL Kelli Veech, Teri Webster (AEA); Brian Bjorkquist (Department of Law); Kirk Gibson (McDowell Rackner & Gibson, PC); Brian Hickey, Mark Johnson, Lee Thibert, Burke Wick (CEA); Robert Day, Carrier Buckley, Alan Owens (HEA); Jim Brooks, David Pease (MEA); Lou Agi, Rick Miller, Jeff Warner (MLP); Ron Woolf (GVEA); Bernie Smith (RCA); Robin Brena, Matt Clarkson (Brena Bell & Clarkson); Miranda Studstill (Accu-Type Depositions). 4. PUBLIC COMMENT There were no public comments. 6. AGENDA APPROVAL The agenda was approved. 7. OLD BUSINESS A. Dispute Resolution Committee report and findings Chair Evans requested Mr. Griffith provide the Dispute Resolution Committee's report and findings. Mr. Griffith informed the Dispute Resolution Committee has spent two-and-a half months groveling in this dispute. There have been five separate meetings of the Dispute Resolution Committee and at least five attempts by the parties of the committee to resolve the disputes, along with personal discussions, essentially to no avail. The O&D Committee was requested in January to provide a report regarding their findings of the issues, to include answers to questions provided by Mr. Griffith. There are two main resolutions that will be forwarded to the BPMC. The first Resolution 2014-09 are the findings of the Dispute Resolution Committee and Resolution 2014-10 is the Dispute Resolution Committee's final disposition. Council has been included throughout this effort, to include revising resolution writing. BPMC Minutes 4/17/14 Page 1 of 6 Chair Evans requested Mr. Gibson advise the members, relative to the overall process, what the next steps are to complete this process at the BPMC level. Mr. Gibson advised the BPMC must approve anything that comes out of a special committee. How the BPMC uses the approved findings and disposition is at the discretion of the BPMC. MOTION: Mr. Griffith made a motion to adopt Resolutions 2014-09 and 2014-10 as the outcome of a dispute. Motion seconded by Mr. Miller. Mr. Griffith stated he will refer back to his original words laying out how the Dispute Resolution Committee approached the problem, the parties that participated, and the results. It is the recommendation of the majority of the Dispute Resolution Committee that the BPMC proper address the issues that are on the back-end of Resolution 2014-10. Mr. Miller expressed his appreciation to Mr. Griffith for all of his work during the Dispute Resolution Committee. A roll’call)vote was takenand'the motion passed) with HEA voting against and ABA abstaining. Chair Evans asked Mr. Gibson if there is anything remaining to be completed that should come before the BPMC in terms of the process. Mr. Gibson stated any dispute to the dispute resolution procedures negotiated and agreed upon would go to the BPMC. The dispute resolution procedures the BPMC can incorporate and utilize are set forth in Article 12 of the bylaws. The specific disputed matters should be identified. Those specific disputed matters could be sent to arbitration, requiring the vote ofithreeutilities plus AEA, or other procedures referenced in the beginning in Article 12-1 could be utilized. This refers to the manner of acting in Section 5.10.2 including specific voting requirements. Chair Evans believes there was a recognition in the resolutions that there remains some areas that were not fully vetted or fully resolved. Chair Evans asked members and counsel what does the BPMC do next regarding those matters. Mr. Griffith provided one copy of a resolution for consideration and potential action at the next BPMC meeting. Mr. Griffith noted for the record there is now a lawsuit in place that impinges on some of the unresolved issues. Mr. Griffith believes the next step is for the BPMC to take these considerations that are listed under the resolution portion of 2014-10, making those a matter of an action resolution directing HEA and other parties to comply with the agreements. He believes that resolution will have to be crafted at the next meeting. Mr. Gibson recommended the BPMC send a letter describing to parties what has been resolved and directing specific actions from the parties. It is up to the individual utilities to enforce abiding by the contractual issues. The next steps will require groups of individual utilities to enforce the terms of the Services Agreement and if the terms are not followed, it will have to be addressed through the courts, if necessary. BPMC is providing a service to the contractual agreement. BPMC Minutes 4/17/14 Page 2 of 6 Chair Evans commented the line between the participants, the service providers, and the owners is blurry and confusing. Mr. Bjorkquist noted one of the issues, as the role of the owner, is this situation where the complexity is outside of the project. The transmission disputes are dealing with agreements where AEA, as the owner, is not a party to the agreements. AEA is actively involved before the RCA in these disputes because the consequences of what happens with honoring the two agreements could impact the Bradley Lake Project and future financing of projects. Chair Evans commented that is where the line gets blurry because there would not be a project without the Services Agreement and Transmission Agreement. Mr. Bjorkquist agreed and believes AEA has been very clear in trying to encourage all of the parties to come together and come to a resolution on these issues because having these disputes is negative to the project, negative to the legislative process for the potential for funding for other projects, negative to Battle Creek, and negative to everything associated with this project. Mr. Borgeson appreciated Mr. Bjorkquist's comments. Mr. Borgeson encouraged AEA to take an active role.and engage,their oversight, review and efforts on theseissuesas the owner of this project and as the guarantors of the bonding. Mr, Griffith believes all the utilities are bound by the bond covenants and the state is the ultimate guarantor with a moral obligation. Mr. Griffith commented AEA, as the owner, should be in the role to make things happen by virtue of telling utilities what to do. ARCTEC is hampered heavily by the current disagreements and Mr. Griffith noted he has heard comments in the Legislature the utilities cannot get along, which is coloring the entire relationship of the railbelt. There is not going to be a Battle Creek because ofthese:issues and no funding was given. Susitna-Watana could be heavily impacted by these disputes. Mr. Griffith believes these factors must be considered from a policy standpoint. B. Battle Creek update Mr. Carey informed there is a final draft for the amendment. Mr. Carey requested each utility send him an email providing the name of the person who will review the amendment and provide feedback. Chair Evans asked if the same sort of implementation that occurred at Stetson Creek has been dismissed. Mr. Carey noted Stetson Creek has a closed conduit and the flows at Battle Creek are substantially more than those at Stetson Creek. He believes there is opportunity to optimize to better the flows and lower the cost. Mr. Griffith asked if there are enough funds to make it until the next fiscal year. Mr. Carey believes there are enough funds to make it until the next fiscal year. Mr. Borgeson appreciated the update and wanted to make AEA aware he is becoming more skeptical that GVEA will be interested in participating in this project with what the costs are and the constraints on the transmission lines. Mr. Borgeson does not believe the Legislature is going to provide funding for this project. Cc. Governor Project update BPMC Minutes 4/17/14 Page 3 of 6 Mr. Carey informed there was a kick-off meeting last Friday for owner's and utilities’ representatives, including the O&D Committee, EPS and a few other interested parties. EPS sent a paper last week to HEA and then sent to Emerson regarding questions and clarifications for the work Emerson is doing. Those clarification replies came back yesterday from Emerson and EPS is currently reviewing those. The factory acceptance testing is occurring next week in Pittsburgh and in attendance will be Jim Coat from EPS, several people from HEA, and no one from CEA. The next meeting will be May 9th, immediately following the O&D meeting, at which EPS and HEA can present the findings regarding the testing. Mr. Janorschke noted he attended the recent kick-off meeting and it was a good meeting. He made a request CEA would have a representative at the factory acceptance testing and was told that CEA would have a representative in attendance. Mr. Owens commented another item that came out of the meeting with EPS was the original VA Tech logic installation had some inherent flaws initially and instead of having VA Tech rewrite theprogram;EPS workedwith'them to make some Work-arounds tomake it function Emerson believes they have corrected some of those inherent flaws and is confident they have improved the package. 8. OPERATORS REPORT Mr. Day stated they are becoming somewhat confident that the spare needle that is on the floor has been rebuilt. Tests on that needle are currently being set up. If the tests are good, then it would be swapped out with the bad needle that is»presently installed in Unit 2. This is an out-of- budget expense. Chair Evans,asked if this expense is more than 5% of the operator O&M budget. Mr. Day stated he does not know, but it is significant. Mr. Owens believes it would be more than 5%. Mr. Day is requesting BPMC to either concur or to direct HEA, as the operator, to proceed with the one needle replacement with the spare, provided the spare proves out under testing in the next week or two. Mr. Day is requesting this replacement work be accomplished through a time and materials contract with the PMRI (now NAES) contractor, who performed this work previously in 2002/2003, not to exceed $200,000. Chair Evans asked if this estimate is for repair of the needle that is being replaced. Mr. Day noted this proposal is to swap the needles out, tear down the existing needle, conduct a postmortem assessment of the needle, and possible repair of the needle if it is within the $200,000 budget. Chair Evans asked if this replacement work is time sensitive. Mr. Day stated HEA has been diligent in trying to get the needle back in service since March 11th and requested action be taken today to approve this budgeted item. MOTION: Mr. Griffith made a motion to increase the FY14 O&M budget in an amount not to exceed $200,000 for replacement and repair of the needle in Unit 2. Motion seconded by Mr. Janorschke. A roll call vote was taken and the motion passed unanimously. BPMC Minutes 4/17/14 Page 4 of 6 Chair Evans requested AEA report back at the next meeting to ensure there is no carryover of this FY 14 budget increase to the FY 15 budget. Mr. Griffith asked if the issue with the trash in the intake has been addressed. Mr. Owens stated the BPMC has approved the plan and it is in the 2015 budget. HEA has postponed the project until May of 2015 and will work with Chugach to drain the lake. Mr. Owens requested clarification as to when the operator needs to come before the BPMC to request additional funds for O&M work. Chair Evans stated the rough rule is if the request is up to 5% of the budget, it can be requested from the O&D Committee, unless there is a unique situation and common sense dictates it should be brought before the BPMC. 9. COMMITTEE REPORTS A. Budget committee - 2015 budget approval process and more efficient process ChairEvansybelieved the members felt like there was insufficient clarity tovexercise the fiduciary responsibility during the entire process of approving budgets. Mr. Woolf, Chair of the Budget Committee, noted they have not met on this issue. He believes the Budget Committee needs to do a better job of reviewing all the expenses with the managers before it is brought before the BPMC. Mr. Woolf is discussing with Ms. Veech what has worked well in the past. Chair Evans stated the main directive was to change the way the budget is presented to the BPMC so that it is aligned with how budgets are presented to parent organizations. Chair Evans would like to see more emphasis on a cost element/breakdown on the budget and what the money is being spent on, rather than how FERC wants it to be reported. The suggestion on the capital and major repair side is to give a summary presentation on the major expenses, so the Board can faithfully say they discharged their fiduciary duties. Chair Evans stated when CEA does budgets, they have the finance people, the operators and maintainers giving the budget presentation together. Mr. Woolf believes he understands the directive. B. AEA - Suggestions for reporting requirements for Bradley incidents Chair Evans noted this item is really more of an owner's report and asked if Mr. Carey had any suggestions for reporting requirement for Bradley Lake incidents. Mr. Carey noted those suggestions are still being reviewed. Chair Evans asked if AEA was working with the O&D Committee on those suggestions. Mr. Carey stated initially he has been working within AEA and HEA. Once there is more of an agreement on the document, it will be given to all parties. C. O&D - Budget items questions and which committee can answer them Chair Evans believes this was addressed earlier. - Evaluation of Mr. Day's operator report of compliance to reliability standards - Loss factor issue and driving need for change BPMC Minutes 4/17/14 Page 5 of 6 There were no updates. 10. MEMBERS COMMENTS There were no member comments. 11. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 3:43 p.m. BY; Bradley Evans, Chair Attest: DRAFT BPMC Minutes 4/17/14 Page 6 of 6 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING Alaska Energy Authority, Anchorage, Alaska May 8, 2014 1. CALL TO ORDER Mr. Janorschke called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:20 a.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson (Golden Valley Electric Association (GVEA)); Sara Fisher-Goad (Alaska Energy Authority (AEA)); Bradley Evans (Chugach Electric Association (CEA)); Joe Griffith (Matanuska.Electric Association(MEA)); Jim Trent(Municipal Light:& Power (MLP)); Brad Janorschke (Homer Electric Association (HEA)); John Foutz (City of Seward (SEW)) 3. STAFF/PUBLIC ROLL CALL Kirk Warren, Teri Webster (AEA); Kirk Gibson (BPMC); Brian Bjorkquist (Department of Law); Brian Hickey, Burke Wick (CEA); Harvey Ambrose, Rick Baldwin; Robert Day, Alan Owens (HEA); Lou Agi, Rick Miller, Jeff Warner, Ken Langford (MLP); Ron Woolf (GVEA); Bernie Smith (Regulatory Commission of Alaska(RCA)); Robin Brena, Matt Clarkson (Brena Bell & Clarkson); Mike Kreger (Perkins Coie); David Pease; Miranda Studstill (Accu-Type Depositions); 4. AGENDA APPROVAL The agenda was approved. 5. PUBLIC COMMENT There were no public comments. 6. APPROVAL OF PRIOR MEETING MINUTES - March 21, 2014 MOTION: Mr. Foutz made a motion to approve prior meeting minutes of March 21, 2014. Motion seconded by Mr. Griffith. Mr. Griffith commented the minutes are exceptionally comprehensive and well done. He questioned Mr. Gibson whether the minutes need to be completed as extensively. Mr. Gibson noted the minutes need to reflect the activities at the meeting and the level of that activity is at the discretion of the Board members. Mr. Janorschke stated this issue will be put on the next meeting's agenda to be discussed and sent to the Chair. The motion passed unanimously. 7. NEW BUSINESS DRAFT BPMC Minutes 5/8/14 Page | of 5 A. Report from counsel - Dispute resolution procedures & options under the bylaws Mr. Gibson reviewed the key points of the memorandum dated May 5, 2014 that was distributed regarding dispute resolution procedures and options available to the BPMC. Mr. Gibson noted one issue not in the memo that should be made clear is the enforcement of any action or non- action from the BPMC is up to the parties in the Services Agreement and/or the members of the BPMC. The BPMC does not have any articulated power to act, so it would require the members to support the actions of the BPMC. Mr. Gibson stated the voting requirements are determined by what area or groupings of issues are addressed. Mr. Gibson does not know at this point which voting requirements will need to be used for Resolution 14-11. If dispatch related areas are voted upon, Mr. Gibson recommends using the requirement of the affirmative vote of at least four representatives of the Purchasers whose percentage shares of Project capacity are greater than 51%. Mr. Janorschke relinquished the meeting to Chair Evans. B. Resolving the dispute between Utilities - Resolution 14-11 MOTION: Mr. Borgeson made a motion to adopt Resolution 14-11. Motion seconded by Mr. Griffith. Maker of the motion stated this was fully discussed at the last BPMC meeting and appreciates all of the effort in developing this resolution. Mr, Janorschke noted this is a lengthy resolution and requested clarification of the disputed issues. Mr. Janorschke provided a one-page list of disputed issues to the members. MOTION: Mr. Janorschke made a motion to amend Resolution 14-11, which adds a sentence on page 10, IV. Findings of Fact and Conclusions of Law, Section A., after the first sentence, to read: "For clarity, a list of the specific disputed issues is attached to this resolution," and adds the list of disputed issues to the resolution. Chair Evans asked if the Maker of the motion would permit a brief at ease to review the proposed amendment. Mr. Janorschke agreed. A brief at ease was taken at 10:39 a.m.. Chair Evans called the meeting back to order at 10:47 a.m. The motion to amend Resolution 14-11 was not seconded. The motion to amend was not considered. Mr. Janorschke noted his amendment was an attempt to clarify the disputed issues that Resolution 14-11 is referencing, because there is no agreement on what the disputed issues are. HEA "Disputed Issues" list is attached. DRAFT BPMC Minutes 5/8/14 Page 2 of 5 Mr. Griffith stated the parties' positions are as listed in III.A. of Resolution 14-11. Mr. Griffith also objects to a substantial amendment being brought in very late in the process. Mr. Griffith does not believe the list provided today is a comprehensive list of the disputed issues. Ms. Fisher-Goad stated AEA will be voting no on this resolution because the disputes arise out of the Services Agreement, but the resolution includes the Power Sales Agreement (PSA) and a reference to the bond resolution, which is a concern for AEA because it is inappropriate to include those. Ms. Fisher-Goad asked Mr. Gibson, per his procedure guidance memo, if the passage of this resolution requires the affirmative vote of AEA because it includes and is related to the PSA. Mr. Gibson stated as the resolution is written, the passage of this resolution does not require the affirmative vote of AEA. Mr. Gibson asked what is AEA's concern regarding referencing the PSA. Mr. Bjorkquist directed the members to page 11, under the first paragraph, starting with the second sentence listing certain obligations arising under the PSA andvending with’the'sentence stating, "The current disputes between the designated utilities and HEA concern each of these areas of the BPMC's authority," which is saying these disputes arise out of the specific details dealing with the Project. Mr. Bjorkquist disagrees and noted these disputes arise out primarily of the transmission of power between Soldotna Substation and Quartz Creek and is not part of the Project. Mr. Griffith commented the fact that the PSA creates the BPMC seems the PSA is inextricable from the process that is underway. Mr. Bjorkquistexplained these disputes are arising out of the Services Agreement and that needs to be clearly stated in the resolution. The Services Agreement brings the BPMC into these disputes because the Services Agreement states the BPMC can.adopt dispute resolution procedures that would be used to resolve a dispute under the Services Agreement and that is the connection to the BPMC. The PSA is not needed for the BPMC to have the authority to act and operate. This is not a dispute arising out of the Project. The dispute is effecting, connected to, and could have a practical impact on the Project, but that is different than this being a dispute that arises out of the Project. Mr. Griffith requested counsel respond to Mr. Bjorkquist. Mr. Gibson asked if it would satisfy AEA's concern if the sentence on page 11 was changed to read, "The current disputes between the designated utilities and HEA generally concern each of these areas of the BPMC's authority and specifically arise out of the Services Agreement." Mr. Bjorkquist believes that is a step in the right direction. The concern is this resolution will be used later and to whatever extent it is vague or ambiguous as to what is being done, problems are created and those are problems that should be avoided. Mr. Bjorkquist recommended another further step toward clarification is to delete the specific references in the sentence in Section 13.C. Chair Evans does not see the difficulty that Mr. Bjorkquist is articulating, but understands that is AEA's position. Chair Evans believes the resolution has been out long enough for those sort of nuances to be worked into the resolution and this is the wrong place and time to be addressing those. There are always unintended consequences of making changes at the last minute. A roll call vote was taken and the motion passed, with HEA and AEA voting against. DRAFT BPMC Minutes 5/8/14 Page 3 of 5 8. OPERATORS REPORT Mr. Owens gave a brief update on the Governor Project. The factory acceptance testing was successful and any tuning will have to be done during the installation of the project. The project is on schedule. Chair Evans asked if the commissioning plan and testing plan have been established. Mr. Owens noted those plans will be discussed tomorrow at the O&D Committee meeting. Mr. Day informed the O&D meeting tomorrow is intended to be an open forum and if there are any special plans or any tests that the utilities want to include as part of the plan, please bring them forward and they will be incorporated into the test plan. Mr. Griffith asked who is in charge of the commissioning process of the test. Mr. Owens stated that will be resolved at tomorrow's O&D meeting, but he believes the decision will be made to bring in an outside oversight commissioning agent. Mr. Griffith requested the BPMC be briefed in depthonmthe commissioning plan when it is complete. Mr. Day,agreed: Mr. Borgeson asked if the project and commissioning is on budget. Mr. Owens stated the HEA budget is on schedule, but he does not know about AEA's budget for the consultants. Chair Evans commented AEA has the authority with the budget to protect the owner's interest in the project. Mr. Borgeson does not believe that is accurate and stated the approval of the consultants takes a majority vote. Mr. Borgeson believes the budget requires a majority vote and for AEA to take control of the spending would mean that proper due diligence is not occurring. Mr. Borgeson requested a comprehensive budget from AEA and if they have the authority to spend that amount. Ms. Fisher-Goad believes this is covered under the R&R fund and will get back with the members regarding a comprehensive budget. Mr. Day noted discussions have occurred regarding the advisory testing help requiring postponement of the installation. That may have a cost that will affect the budget, but the estimate is unknown at this point. Mr. Borgeson commented he is not necessarily opposed to the cost, getting assistance, or spending, but believes the approval needs to be by the BPMC and not by AEA. Mr. Owens gave a brief update on replacing a failed nozzle in June or July. This will be discussed in the O&D Committee meeting tomorrow. HEA has installed additional monitoring for generator connections and any static discharge. Unit 2, Phase A, shows a possibility there might be some insulation breakdown. Mr. Owens will update the BPMC at the next meeting. 9. COMMITTEE REPORTS A. O&D - Evaluation of operator report of compliance to reliability standards No update given. 10. COMMITTEE ASSIGNMENTS DRAFT BPMC Minutes 5/8/14 Page 4 of 5 Chair Evans stated there are task assignments, including the request for AEA's comprehensive budget and a report on the testing plan. 11. MEMBERS COMMENTS Mr. Griffith commented it has been nearly five months groveling in this dispute issue and is chagrinned it is still ongoing to these depths. Mr. Janorschke requested a copy of the recording of this meeting to understand the comments from the attorneys and others. Mr. Borgeson recognized Mr. Griffith for all of his leadership efforts. Mr. Borgeson expressed his disappointment regarding the ongoing dispute and looks forward to finding a resolution. Mr. Griffith expressed his appreciation for Mr. Borgeson's comments and Chair Evans was the one in charge. 12. NEXT MEETING DATE The next meeting date was not discussed. 13. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 11:19 a.m. BY: Bradley Evans, Chair Attest: Sara Fisher-Goad Alaska Energy Authority, Secretary DRAFT BPMC Minutes 5/8/14 Page 5 of 5 DISPUTED ISSUES The Designated Parties assert and HEA denies the truth or accuracy of the following propositions: 1, HEA does not have the legal right to recover transmission-related costs for wheeling Bradley Lake energy though a tariffed rate filed with the Regulatory Commission of Alaska (RCA). The RCA does not have jurisdiction to approve a tariffed rate which allows HEA to recover its costs of wheeling Bradley Lake energy. HEA did not have the legal right to remove from the Soldotna Substation the CEA meter used to measure the Bradley Lake power flow to that substation. The term "Soldotna Substation" as used in the Services Agreement, means the physical facility by that name located in Soldotna, Alaska unless and until changed by an amendment to the Services Agreement. HEA has a legal and/or contractual duty to permit CEA physical access to certain areas within its Soldotna Substation to enable Chugach to maintain a metering point for and to receive delivery of Bradley Lake power. HEA has a legal and/or contractual duty to permit CEA physical access to its Soldotna Substation and the transmission lines between the Soldotna and Quartz Creek Substations to enable Chugach to transmit Bradley Lake power from HEA’s Soldotna Substation to CEA’s Quartz Creek Substation. HEA has a legal and/or contractual duty to permit CEA physical access to its Soldotna Substation and the transmission lines between the Soldotna and Quartz Creek Substations to enable Chugach operate, maintain and repair the facilities. The legal and contractual rights and duties referred to in the above list arise under and by virtue of one or more of the Bradley Lake Agreements and AS 42.05.431(c). Unit Statistics: Bradley Lake BPMC September 18, 2014 Operators Report Generation Unit 1 (MWhrs) Unit 2 (MWhrs) Total (MWhrs) June 2014 17,578 6,163 23,741 July 2014 4,334 24,678 29,012 August 2014 22,713 14,219 36,932 Hydraulics Avg. Lake Level (ft) Usage (ac ft) Fishwater (ac ft) June 2014 1,134 24,054 4,346 July 2014 1,146 28,804 5,613 August 2014 1,165 36,587 6,371 Lake Level — September 16 - 1,180’ Incidents and CEA callout: June _1* — Fishwater flow at Lower Bradley River. The radio transmission signal from the LBR USGS gaging station failed in May when the station thawed. The DCS indication was not available so we were operating using the USGS website. During the morning hours of June 1* the fishwater flow dropped to 91 CFS for 3 fifteen minute updates. The operators made a flow correction when they came on duty. Replacement parts for the LBR radio system were located and the system was restored on June 10". AEA was notified on June 2". August 6'"_ @14:22 - Unit #1 trip, low hydraulic pressure. This was caused by oscillations in the divider that caused an unusually high duty cycle on the hydraulic system. The lead pump was operating and the lag pump failed to start on low pressure. It was determined the lag pump breaker mechanism was out of adjustment and the breaker did not fully close when racked in. The breaker was repaired. August 14"", @ 13:21- Unit #1 trip, low penstock pressure. Wiring technicians from Kachemak Electric were conducting installation loop I/O checks on the Unit #2 governor control installation. August 20"" and 21* — Both Bradley units experienced divider oscillations that caused the units to trip. Emerson identified an undesirable interaction between (1) the normal power PID control loops within the governor, and (2) a frequency PID loop that controls the divider position. Emerson believes, based on the signals they saw, that these two PID loops interacted improperly and caused the divider to start to oscillate with the grid frequency. The oscillations built quickly Bradley Lake Operator Report Page 1 and the unit governors tripped when the dividers went to zero position. August 21* at 9:30 pm Emerson installed logic to correct the divider error. Sept 12", Unit #2 tripped at 12:16pm. Load was 22 MW. Preliminary investigation indicates a relay action by the Jaquet overspeed detector. This is a specialized relay that will initiate a trip as a backup to the overspeed control scheme. Due to dispatch needs the unit was placed back in service which limits the ability to troubleshoot the problem. Additional alarming will be added to help trouble shoot external device failures that input into the governor trip system. Maintenance and Operation Activities: Penstock Dresser Coupling Inspection and Painting - Extreme Access Inc. was on site the week of June 9". Inspection of the coupling bolts indicated no significant degradation. The couplings and structures were cleaned and repainted. Additional rust prevention and paint was applied to structural surfaces in the Fishwater Portal Diversion Tunnel pipe and the Spillway Gallery corrugated metal tunnel surfaces. Dam Survey, July 15""-26th — Ability Survey conducted the annual Dam Safety Survey. The results will be submitted to AEA and Dow! HKM for review. Crane inspections, August 1 1'".13th — Washington Crane and Hoist conducted annual crane inspections. One limit switch on the portable JLG was found to fail intermittently. It was replaced. No other conditions were noted on plant cranes and hoists. Vibration Analysis, Sept 3" - Associated Services conducted annual vibration monitoring and predictive analysis on the plant rotating equipment. Domestic water pump P1B had elevated values in the axial measurement. This pump will be monitored and trended. All other equipment on site is operating within expected ranges. Projects: Turbine Nozzle Valve Repair — (Nozzle Picture on page 5) June 16" through June 27" — Nozzle Swap - NAES power constructors were on site to perform the Unit #2 nozzle #1 swap with the spare. Three millwrights and a project manager were mobilized to perform this work. They were part of the crew that performed the nozzle work in 2003 and the divider work in 2006. HEA provided the replacement parts and material required to install the nozzle and NAES provided the labor. The swap was performed in a six day period working mostly 12 hour days. The unit was released to dispatch on the evening of the 6" day. CEA dispatch placed the unit in condense mode and received an alarm that the nozzle would not equalize. The problem was traced to the restoring shaft that provides nozzle position feedback to the control system. The bronze bushing was too tight which would cause the feedback arm to stick at 3% when it was closed. The unit was Bradley Lake Operator Report Page 2 taken out of service one more day and the bushing has honed 3/1000ths to achieve the proper fit. Following the nozzle swap the NAES crew stayed for an additional 4 days to tear down the failed nozzle. During this exercise we also identified and cataloged each nozzle part to prepare for parts ordering and future nozzle rebuild. Preliminary inspection indicates the nozzle hydraulic leak was due damaged O- ring. It appears at some point the O-ring rolled. The damaged area was then exposed to hydraulic pressure cutting that increased flow past the damaged seal. The future benchmarks are as follows: 1. Repair Technology Inc. in Seattle has provided a preliminary estimate of $1500.00 to repair and refurbish the nozzle shaft. It will be crated and sent to them in September. 2. Order replacement parts for two nozzles this year. Negotiation and parts verification is ongoing with Voith Hydro. 3. Prepare a nozzle refurbishment plan for each unit and provide parts and labor estimates for the next budget cycle. . Governor PLC Replacement — This project is complete except for post outage monitoring and evaluation. It was completed within the scheduled time and testing proved that the governor functions properly. EPS and HEA are working with Emerson to verify one logic item that was installed after testing was complete. This was a logic adjustment to prevent the divider oscillations that occurred on August 20" and 21%. We are still gathering information to determine if additional fine tuning is required. Emerson prepared a preliminary “Operating Modes Description and Block Diagram” that will be reviewed and finalized by EPS as part of the testing contract. . Fishwater Screen and Power Tunnel Sonar Inspection — 1. Global Diving and Salvage will mobilize on September 29th to complete a Sonar inspection of the Diversion Tunnel and Power Tunnel intake structures. We will also inspect the area below the dam to help plan for equipment access to the diversion tunnel for fishwater screen debris removal in the Spring of 2015. 2. HEA will contract with a local shop to construct a replacement fishwater screen in the event one is determined to be damaged. ° Other Capital Projects that are in the works or pending — 1. Fire Protection - request for proposals to add a gaseous fire protection system to the engineering room at Bradley. This project will also seek proposals to replace the fire panels and alarm systems at the residences, crew quarters, shop, and powerhouse. 2. Purchase of replacement trucks 3. Replacement of loader, backhoe, and dump truck tires. Bradley Lake Operator Report Page 3 Inspections: Dam Inspections — ° June 20 — Dam inspection completed, no notable items found ° July 20 - Repaired one heater in diversion tunnel gate house Replaced both batteries on diesel pumps and generator ° August 27-_ Minor seepage along spillway wall, right side ° September 15 — Bradley Lake reached spill level of 1180’ at 11:28 am. (Picture of spillway on page 5) Spillway Gallery Drains Measurement — ° August 9-— Lake level at 1157’ D-18 pressure near threshold pressure ° August 14 — Lake level at 1165’ D-16 and D-18 readings meet published limits (AEA and Dow! HKM were notifed on August 14") ° September 11 — Lake level at 1174.8’ D-18 pressure reading is at the threshold value of 8.0 psi Bradley Lake Operator Report Page 4 Unit #2 nozzle #1 being removed from spiral cage wall Bradley Lake Operator Report Page 5 Bradley Lake Budget Subcommittee Expenditure Review and Budget Process Review July 14, 2014 Expenditure Review: Carrie Buckley, Deanna Hracha, Sherri L. McKay-Highers, Kelli Veech, Ron Woolf Budget Review and Budget Process Review: Bryan Carey, Rick Miller, Carrie Buckley, Deanna Hracha, Sherri L. McKay- Highers, Kelli Veech, Ron Woolf As a group we sampled vendor invoices from the Bradley Lake vendors and other expenditures charged by and paid by AEA. We noted that the labor burden seemed low on both HEA and CEA invoices. We would like to know if contracts define what is charged in the labor burden. We did a cursory review of the 2015 budget. It seemed reasonable in conjunction with the expenditures reviewed. We decided that revisiting the 2015 budget with the operators is not a good use of their time at this season when they are busy working on the Plant. We reviewed the budget process and where it went wrong this year. Rather than focus and report on what happened with the FY2015 budget, we would plan prospectively for future budgets. We noted that more communication needs to occur between the technical experts on the O&D Committee and the Budget Committee members to allow the Budget Committee to better understand the projects from a technical standpoint. Additionally, improved communications from the participants O&D and Budget subcommittees needs to occur with General Managers prior to the introduction of the proposed budget. Here is our prospective plan for the budget process: 1) The O&D Committee meets the 2nd Thursday of each month a. O&D Committee will provide agenda and call in number to the Budget Committee. b. Budget Committee will determine if they need a representative(s) to participate. 2) Have an O&D Committee meeting quarterly agenda item to review the Quarterly Budget and potential budget revisions/changes. a. Budget Committee will participate b. Per Kelli, quarterly reporting comes out 2 months after the quarter end, so review Dec quarter end in Feb, or March depending on timing, so we propose meeting with the O&D Committee to review the budget at the January, April, July, and October meetings 3) Make January O&D Committee Meeting a Joint Meeting with Budget Committee and AEA a. Start reviewing the next Fiscal Year’s budget b. O&D Committee to pass a formal resolution approving the budget before it goes to the Budget Committee 4) AEA (Kelli) will put together draft budget for Budget Committee a. Must be ready in time for Budget Committee to meet before 2™4 Thursday in February. 5) Have Budget ready for the Bradley Project Managers Committee by March 1. 6) Refine the process as it develops. Bradley Lake Project Management Committee Thursday, Sept. 18, 2014 @ 1:00 P.M. **PLEASE WRITE LEGIBLY** ORGANIZATION KIRK CIBSow McDowell Raxwor AG beon) Hakues Amakos = HE fA. BRME S997) 7 ACH Mlew Ovens HEA! BLP Wee Gp fT YEA bGUMEE Levee CE, Rav, Veoh sb Socely Garner ACA Kek wo Ver wedP fs an x REA eS arefaar GvE iow Ae 2 ht f Bik GAC RLY) ADEA aK aS Achon dems 10 v Order \o VS Reg W-0A &AYAD haat or wor (Legad ode) Meekns s[uhltes -non BRAC Cory 4 get bade Bunle Wie - opuratisns repoct update OM Meeting, ve:spull £ Ntud sel procedure 714 | -3005 ; Conf corm A Babak _ dekeeh louder - ree, eae. 255 - 837- 225 Alan propesad Rsend nt «ge en SUS Debrie remove Ssh Saveen — PSS Modal who is oornr EMautein — 4D to (ok at sp — Blan £PS to do addl worl apprmady 4 OD report Ream oye SMe 2 hy 10. 11. 12. 13. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Thursday, Sept. 18, 2014 1:00 p.m. — 2:30 p.m. Alaska Energy Authority’s Board Room 813 West Northern Lights Boulevard, Anchorage, AK CALL TO ORDER ROLL CALL (for Committee members) PUBLIC ROLL CALL (for all others present) AGENDA APPROVAL PUBLIC COMMENT APPROVAL OF PRIOR MEETING MINUTES - April 11, April 17 (Dispute meeting), April 17 (Regular meeting), May 8, 2014 NEW BUSINESS A. Election of Officers B. Discussion of RCA order 10: Interim & Retroactive Rates for the Soldotna to Quartz Creek 115kv line WEA Wedadused bY Counsel Not fo Aiscuds His @ a C. HEA billing procedures for the Soldotna to Quartz Creek 115kv line COMMITTEE REPORTS “eo A. Operations & Dispatch & /\ B. Budget OPERATORS REPORT COMMITTEE ASSIGNMENTS MEMBERS COMMENTS NEXT MEETING DATE ADJOURNMENT Bradley spl To participate by teleconference, dial 1-888-585-9008 and use code 467 050 126. Bene mts, Sept 18 ©o pH ATTENDANCE - BPMC REGULAR MEETING, Map, 2014 @ $0:20-0m ome COMMITTEE MEMBERS ALTERNATE Brad Evans, Chairman CEA Burke Wick Brad Janorschke, Vice Chairman HEA _— Harvey Ambrose um Sara Fisher-Goad, Secretary/Treasurer AEA Bryan Carey Y Corey Borgeson GVEA Lynn Thompson ot Jim Trent MLP Richard Miller purty John Foutz SEW Jeff Estes “Ze Evan Joe Griffith MEA Gary Kuhn spies, Kaaelh ty —\+ ef _7 Kirk Gibson, McDowell Rackner & aoa O wad _ plane Gibson PC _AIDEA | AEA | AIDEAand AEAStaff | AIDEA | ‘AEA | AIDEAand AEAStaff | AIDEA | AEA | AIDEAand AEA Staff | __ Webster, Teri | | | pho Weo (Fe || | | - Keble Voecln Seen een Lae | eee | | | _ _Boselyn Gordned | tt | | | a | ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT aon BOARD MEETING orm BPMC 09/18/14 First Roll call from top to bottom ending with Chair Yes No Golden Valley Electric Association Homer Electric Association |Matanuska Electric Association City of Seward Alaska Energy Authority Municipal Light & Power Chugach Electric Association First Second First | Second First Second First | Second | First Second Roll call from top to bottom ending with Chair Yes No | Yes Golden Valley Electric Association Matanuska Electric Association City of Seward Alaska Energy Authority Municipal Light & Power Chugach Electric Association Homer Electric Association | Next Meeting: xxxx XXxXX XX, XXXX Agenda Item No. CITY OF SEWARD MATANUSKA ELEC ASSOC CHUGACH ELEC ASSOC HOMER ELEC ASSOC GOLDEN VAL ELEC ASSOC MUNI LIGHT & POWER ALASKA ENERGY AUTHORITY A=4+ OVER 51% B= AEA CONCUR With A alishy DATE: BRADLEY PMC VOTING A Elechon YES NO ABS YES ABS YES NO ABS 01% 14% 30% 12% 17% 26% C = UNANIMOUS D= MAJORITY VOTING METHOD A: Requiring four yeas with 51% of utilities, with no AEA vote: 1) Procedures for scheduling, production and dispatch of project power. 2) Establishment of procedures for use of each purchaser's water allocation (AEA assent required for license requirements). 3) Selection among alternative methods that do not involve AEA for funding required project work. VOTING METHOD B: Requiring 4 yeas with 51% of utilities and AEA concurrence: 1) Arranging operation and maintenance of project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) 3) Establishment of FY estimated annual payment obligation and schedule of each purchaser. 4) Determination of annual project costs after each FY. 5) Evaluation of necessity for and scheduling of required project work. 6) Determination of appropriate amount of insurance. 7) Adoption of additional minimum funding amounts for renewal and contingency reserve fund above that required by bond resolution. 8) Selection among alternate methods that involve AEA for funding required project work, 9) Adoption or amendment of procedural committee rules (except dispute resolution). 10) Adoption of project maintenance schedules. 11) Determination of rules, procedures and accounts necessary to manage project when no bonds outstanding. 12) Evaluation and approval of optional project work and compensation for such work. 13) Application of insurance claims proceeds not governed by bond resolution. 14) Approval of procedures and any individual utility agreements relating to electric power reserves for project. 15) Approval of consultants. VOTING METHOD C: Unanimous vote by all (including AEA) Majority vote (including AEA) Election of Officers CHECKLIST FOR BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETINGS Meeting Date/Time: TH she 4 pu Meeting Location: “Daacd YOomMW“ Task CONFIRMED/DATE Secure Meeting Date with Bryan Carey *3065 MAKE SURE IT’S NOT A STATE HOLIDAY ~ Secure Meeting Date with Chairman, Brad Evans (call his Exec Assistant, Connie Owens @ 762-4747) e Secure meeting room for use (block out 30 minutes prior to meeting to allow for set-up time Send email “SAVE THE DATE” to all Committee members, in Outllook Contacts “BPMC” with meeting date/time/location (ask for documents to be emailed for packet inclusion — including action items with their motions. Need five for quorum. Schedule a teleconference line with GCI (1-800-770-2121) provide them with a reference project (BPMC) and code (your | phone extension number) Draft Agenda for Bryan Carey's review. After Bryan approves, Send Draft Agenda by email to Chairman for review and approval, Brad_evans@chugachelectric.com always cc: Connie Owens connie_owens@chugachelectric.com Post to the State of Alaska’s Online Notice System 5 business days prior to the meeting. Attach agenda. Gather documents from members. They rarely have any. One week prior to meeting, email packet to members (big group BPMC) including all attachments (teleconference information /agenda /draft of previous meeting minutes/motions/general handouts) (SEND IN PDF FORMAT!) Print 5 extra copies of the full packet of information and bring to the meeting for those who did not bring their copy ALSO BRING TO THE MEETING: State Calendar, List of Reps, Sign in Sheet, Bylaws, and Minutes in final form from the last meeting for Chair's signature if they are approved! TEST RECORDING EQUIPMENT BEFORE the meeting. Following the meeting: Make sure you disconnect the phone! Stop recording. Have Chair and Bryan C. sign approved minutes. Send a pdf of the signed minutes to the committee members. Type up a draft of the meeting minutes.& send it to B Carey for review and any other speaker for review. After their edits, prepare a final draft for the next meeting. BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS ) Scompertoay Her wen rca eee eee ARTICLE 1 ARTICLE 2 ARTICLE 3 ARTICLE 4 ARTICLE 5 ARTICLE 6 ARTICLE 7 ARTICLE 8 TABLE OF CONTENTS Statement of Objectives «+--+ eee te eee eee eens i Authority of Bradley Project Management Committee -- tte e eee ee ee ee ee eee eee Z Offices -- +--+ 2s cece cece creer cere cere esece 3 Representatives ieee eG Mss ode ko eee eb oD 4 Committee Meetings ©- +--+ sete ee ee ee eee eens 5 5.1 Annual Meeting. fj vay mw) a) ‘0)rersdrem) by -01 50] By 9] &) Ae! © HE © SL 5 $2 Regular Meetings: Lo ttguasa bate SRR W aes aS 5 53 Special Meetings... +--+ sees ee ee eee eee eee 5 5.4 Notice of Meetings .---- +--+ esse erences 5 $5 Warmer al Nets ic che cas CSD Ee es 6 5.6 Place of Meetings -- +--+ eee eee eee ener eens 6 5.7 Teleconferencing pene eae Me ee wee RE SD 6 5.8 Minutes of Meetings ---- +--+ sees eee e eee 6 5.9 Quorum «+. 6 eee eee eee eee ee ee eee 6 5.10 Manner of Acting - +--+ +--+ e+e rere eee eee 6 5.11 Open Meetings «++ sess eee eee eee eee ee eee 9 COMWAIRGES cei cq cet es (NETH TID He ETH EDT 11 6.1 Designation... . 1. eee eee eee eee eee eee 1l at ERAN ie co eine =) ores ol ed 2g et eee es ee a GS) Tesi ey ere oe oe el ee ee 11 Cee oor oar 7 pe pes Gog aaa eee epee = 12 7.) Wei nc een cece hn ee tes ED RNG OO 12 7.2 Election and Tetm of Office... -. 0 se2e2s--% 12 dd TOPRIGWAL Bein die wk wo & A 1 we oT Kes BH ww yo; Ba E 19 5 i ne ae a 12 7.5 Separation of the Office of Treasurer from that of Permanent Secretary ........... 12 2:0) GHEWINAN wie wee Ue Rees ah oi swe ow ON ee 12 LAT, “Wate? CE RMASRUNEGN cho saree! ginssos) =D) ws clase la Fs ee ee eo 13 78 Secretary/Treasurer 0... cee pecan enne 13 PIETER RISER, 3p) got gee she =) ws elles esis es tees! oe! ip ns alas ini 14 i. BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1 -93) ARTICLE 9 ARTICLE 10 ARTICLE 11 ARTICLE 12 ARTICLE 13 ARTICLE 14 TABLE OF CONTENTS (cont.) Annual Budgets and Determination of Rates ......... b&b 9.1 Budget Process Prior to Project Conmigo. «ess pes aes ene cae ss awa e 15 9.2 Budget Process Following Project GompleGon cca tas pap testes ves -eseee 15 9.3 Auditing Standards and Procedures..........-.- 16 9.4 Standards for Capital Asset Acquisition OU MCOMHNNNE <7 a5 29s ago Sep cae esas 16 Committee Funds and Assets .-- 2... eeeeeescee 18 14 “Required Bonds «. 6. 22 cas ces cee eens 18 Project TSiGTONIN, nea 6) oe ES oe ST Elise 19 11.1 Coverage Limits -.........-e ee eee eeeee 19 112 Bet lmieee os 6c 65 CET RE EHR Ree 19 11.3 Insurance Claim Proceeds ...-.--+-s--- eee 19 114 seen Revi os cas ces 602 Fe eg eS Vas 19 Procedures for Dispute Resolution .---......-..-- 20 12.1 Procedural Rules ....... PR eee ea OS 20 132 Authority. 2s ined ees ws 154 denne ae se 20 IDF Jindicial Review's «cas cas cms cutee scat es @ 20 lace! AMEN, eee! os! wens HS Ee DSS URE GF 20 136 Goets Gr AtHTANGD os eas 8 io bere cs wie 20 Reimbursement of Travel and Per Diem: Hapensed << si s+ 2465s FA eo game ot 13.1 ‘Caminttke Mettings a. 3 20s 2 cs ss tw Se ss 21 13.2 Special Purpose Committee Meetings ......... 21 OBE PGHGIOS gas go Os ESE Se EB ew Se hss 22 14.1 Numbering of Resolutions ...-.-.-..------- 22 14.2 Definition of Terms «1-6... s scree eeeee 22 14.3 Amendment of Bylaws ......-...+.---4-- 22 ii - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) AO SANE ANE EON ORME OANA ANSE ESCO ASAIN Ie ak Pees cnt sini mtn ene a A nite aA ma Esha VA =. BYLAWS OF BRADLEY PROJECT MANAGEMENT COMMITTEE ARTICLE 1 STATEMENT OF OBJECTIVES The Project Management Committee (the "Committee") shall be responsible for the management, operation, maintenance, and improvement of the Bradley Lake Project (the Project"), subject to the non-delegable duties of the Alaska Energy Authority (the “Authority"). All Committee members have a substantial long-term interest in the Project. The responsibilities of the Committee evolve in accordance with the Authority's ownership of the Project, and the Purchaser's obligations to pay the Project's annual costs and right to use the Project's power production. These Bylaws set forth the procedural rules of the Bradley Project Management Committee established pursuant to the Bradley Lake Power Sales Agreement and policies adopted by the Committee. | - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 2 AUTHORITY OF BRADLEY PROJECT MANAGEMENT COMMITTEE The Bradley Project Management Committee exists and operates pursuant to the terms of the Bradley Lake Hydroelectric Project Agreement for the Sale and Purchase of Electric Power ("Power Sales Agreement" or “Agreement"). 2 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 3 OFFICES The Committee shall have no physical office but shall have a mailing address at the Alaska Energy Authority whose representative is the permanent Secretary of the Committee. 3 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) @ ARTICLE 4 REPRESENTATIVES The Committee shall consist of the Authority and the Purchasers, including as Purchasers for this purpose both Homer Electric Association, Inc. and Matanuska Electric Association, Inc., for themselves and for AEG&T as a Purchaser. represented by and through these utilities, No Committee member shall obtain an additional vote through merger with, acquisition of, or assignment from any other Committee member, and AEG&T shall have no direct vote, but shall be represented by and through Homer Electric Association, Inc., and Matanuska Electric Association, Inc., each of which shall be entitled to vote as a Purchaser member for purposes of Committee procedure. Each Committee member entitled to vote shall designate one representative and one alternate representative to the Committee. Each member shall notify all other members in writing of the names, addresses and telephone numbers of its representative and designated alternate. Any member may change its designated representative or alternate representative at any time and shall promptly provide written notice of such change to the members. The alternate representative shall serve as the designated representative in the absence of the designated representative. 4 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 5 COMMITTEE MEETINGS 5.1 Annual Meeting. The annual meeting of the Bradley Project Management Committee shall be the first regular meeting of the Fiscal Year (July 1 through June 30), for the purpose of electing officers and transacting such other business as may come before the meeting. 5.2 Regular Meetings. Regular meetings shall be held at least quarterly, with the specific date and time to be determined by the Committee. 5.3 Special Meetings. Special meetings of the Bradley Project Management Committee may be called by the Chairman or by three members of the Committee at any time by so advising the Secretary of the Committee. Business at a special meeting of the Committee shall be limited to the purpose stated in the notice of such special meeting. 5.4 Notice of Meetings. Public notice shall be given by the Secretary of the Committee for all meetings of the Committee. 5.4.1 Notice of regular meetings shall be given at least five (5) days before the date of the meeting by: (a) mailing notice to all Committee members, alternates, and persons or organizations who have filed with the Committee a written request to receive notice, and (b) publishing notice once in the designated newspaper of the Committee. 5.4.2 A notice of a meeting shall include the date, time and place of the meeting, and if the meeting is by teleconferencing, the location of a teleconferencing facility that is equipped with a speaker-telephone or similar listening device. 5.4.3. Written notice of special meetings shall be given, as reasonable, before the time specified for such meeting. Such notice of special meetings shall state the purpose or purposes for which the meeting is called. Business at a special meeting shall be limited to the purposes stated in the notice of such special meeting. 5.4.4 It is the intent of the Committee to give the best notice possible to the public of all its transactions, but the inadvertent failure to accomplish any one of the notice requirements shall not invalidate any action of the Committee. 5 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 5.4.5 The designated newspaper of the Committee is the Anchorage Daily News. 5.5 Waiver of Notice. Whenever any notice is required to be given to any member a waiver of the notice in writing, signed by the person or persons entitled to such notice, whether before or after the time ‘stated in the notice, shall be deemed equivalent to the giving of such notice. 5.6 Place of Meetings. The Chairman of the Committee may designate any place as the place of meeting for any annual, regular or special meeting of the Committee. 5.7 Teleconferencing. Attendance and participation by any or all representatives of the members at any meeting of the Committee may be by teleconference. The votes at a meeting held by teleconference shall be taken by roll call. Materials that are to be considered at a meeting that is by teleconference shall be made available at the teleconference locations. Participation by such means shall constitute presence in person at a meeting. 5.8 Minutes of Meetings. Written minutes shall be kept for all regular and special meetings of the Committee. Minutes of Committee meetings shall be mailed to each member following each meeting. The official copy of each minutes shall be signed by the Chairman and the Secretary. 5.9 Quorum. At all meetings of the Committee, the presence of the representatives of any five members shall constitute a quorum for the transaction of business, except as otherwise provided in the Power Sales Agreement. 5.10 Manner of Acting. 5.10.1 Committee actions may be taken by any reasonable voting method, provided that any member may request a public roll call vote. All actions. taken via teleconferencing shall be by roll call vote. - 5.10.2 Except for those matters which expressly require alternative voting procedures, the act of a majority of votes taken during a meeting at any time when a quorum is present, shall be an act of the Committee, and binding on the members. 5.10.3 A representative who is present at a meeting of the Committee at which action on a Committee matter is taken shall be presumed to have assented to such 6 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) action unless the representative's dissent is both indicated and recorded at the time of the action. 5.10.4 The following matters shall require the affirmative vote of at least four representatives of the Purchasers whose percentage shares of Project capacity are greater than 51%. Such matters do not require action by the Authority. 1. Adopting of procedures for scheduling, production and dispatch of Project power. 2. Selection among alternative methods that do not involve the Authority for funding Required Project Work. 3. Establishment of procedures for the use of each Purchaser's Water Allocation, except that the Authority's affirmative vote shall be required for any water allocation decision which affects performance of the Authority's obligation under its FERC license. 5.10.5 The following matters shall require the affirmative vote of at least four representatives of the Purchasers, whose percentage shares of Project capacity are greater than 51% plus the affirmative vote of the representative of the Authority. 1. Arrange for the operation and maintenance of the Project. 2. Adoption of budget of Annual Project Costs. 3. Establish for each Fiscal Year the estimated Annual Payment Obligation of each Purchaser, together with a schedule for each Purchaser of equal monthly payments that such Purchaser shall be required to make during that year. 4. Determine after the conclusion of each fiscal year the actual Annual Project Costs. 5. Evaluation of necessity for and scheduling of Required Project Work. 6. Determine the appropriate amount of and obtain insurance for or related to the Project. , 7 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) Q 7, Adoption of additional minimum funding amounts for the Renewal and Contingency Reserve Fund above that required by the Bond Resolution. 8. Selection among alternative methods that involve the Authority for funding Required Project Work. 9. Adoption or amendment of procedural rules of the Committee except for procedures for dispute resolution which shall be adopted or amended by unanimous agreement. 10. Adoption of maintenance schedules for the Project. 11. Ifand when no Bonds are outstanding, determination of rules, procedures and accounts necessary to manage the Project. 12. Evaluation and approval of Optional Project Work and the compensation for such work. 13. Application of insurance claims proceeds not governed by the bond resolution. 14. Approval of procedures and any individual utility agreements relating to electric power reserves for the Project in accordance with Section 5 of the Power Sales Agreement. 15. The approval (including possible pre-approval) of consultants. 5.10.9 In the following matters, the unanimous concurrence of all Committee members shall be necessary for an action to be taken: (a) Adoption of procedures for dispute resolution. 5.10.10 Certain matters shall require a majority of Committee votes, with each Member receiving an equal vote (including the Authority): (a) Election of officers. 5.10.11 Conduct of Meetings. Robert Rules of Order shall govern the conduct of Committee meetings except where in conflict with specific procedural rules adopted by the Committee. 8 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 5.11 Open Meetings. The Committee has determined that Alaska public policy favors openness and public access and the Committee desires to conduct its business in public in accordance with the following policies: 5.11.1 The Committee recognizes that meetings between the Authority and public utilities concerning a wholesale agreement for the sale of power or other matter exempted from review under AS 42.05.431(c) (which are contracts for wheeling, storage, regeneration or wholesale repurchase of power between the Authority and public utilities entered into between October 31, 1987 and January 1, 1988), are required to be open to the public under AS 42.05.43 1(d) and 44.62.310. 5.11.2 All formal meetings of the Committee and its special purpose committees shall be open to the public except as otherwise provided in these Bylaws. 5.11.3 Executive Sessions. If any subjects to be discussed at a meeting are subjects that may potentially be discussed in an executive session, the meeting shall first be convened as a regular or special meeting and the question of holding an executive session to discuss matters that come within the exceptions contained in Section 5.11.4 of this rule shall be determined by a majority vote of the Committee. No subjects may be considered at the executive session except those mentioned in the motion calling for the executive session unless auxiliary to the main question. Formal action may not be taken during the executive session. Only members of the Committee, designated alternates, and attorneys for members of the Committee may attend an executive session, unless the motion calling for the executive session specifies other persons whom the Committee wishes to attend. 5.11.4 The following excepted subjects may be discussed in an executive session: 1. Matters the immediate knowledge of which would clearly have an adverse effect upon the finances of the Authority or the Project. 2. Subjects that tend to prejudice the reputation and character of any person; provided, however, the person may request a public discussion; 3. Matters which by law, municipal charter or ordinance are required to be confidential. 4. Matters discussed with an attorney for the Committee or a member of the Committee, the immediate knowledge of which 9 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) could have an adverse effect on the legal position of the Committee or the Authority. 5.11.5 Sections 5.11.2, 5.11.3, 5.11.4 and 5.11.5 shall not apply to: 1. Meetings at which a quorum is not present; 2. Informal discussions, by telephone or otherwise, among members of the Committee, at which votes are not taken and official business is not conducted; or 3. Meetings and discussions, formal or informal, of Committee members in which all participants indicate they are acting individually as representatives of the Parties to the Agreement and not as the assembled Committee, and at which no Committee business is conducted and no votes are taken. 10 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 6 COMMITTEES 6.1 Designation. The Committee may appoint special purpose committees from time to time, subject to such conditions as may be prescribed by the Committee. The designation of any such committee shall not relieve the Committee or any member of the Committee of any responsibility imposed by law or the Agreement. 6.2 Powers. Special purpose committees may only act upon Committee matters when given prior authorization by the Committee. The Committee will formalize the authorization by adopting a resolution which details the scope of the special purpose committee's authority to act. Decisions made by a special purpose committee shall be by affirmative vote of a majority of the members of a special purpose committee, unless otherwise directed by the Committee. 6.3 Term. The members of each special purpose committee shall serve from the date of appointment until the date of the next annual meeting of the Committee. 11 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (2-1-94) ARTICLE 7 OFFICERS 7.1 Number. The officers of the Committee shall initially consist of a Chairman, a Vice Chairman, and a Secretary/Treasurer. Under subsection 7.5., below, the Committee may later decide to separate the offices of Secretary and Treasurer. The offices of Chairman and Secretary shall not be held by the same person. The Committee may elect such other officers and agents as it shall deem necessary, who shall hold office for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Committee. The Committee may, by separate resolution, provide for the indemnification of its officers, members and the members of any special purpose committees appointed by the Committee. 7.2 Election and Term of Office. Initially only the Chairman and Vice Chairman shall be elected by the Committee at its annual meeting. The Authority representative shall be the permanent Secretary/Treasurer. In the event that the office of Treasurer is separated from that of Secretary under the provisions of 7.5., below, the Treasurer will become an annually elected officer, while the Authority representative will retain the position of permanent Secretary. Only Committee members or alternates shall be eligible to serve as officers. Each officer shall hold office until a successor is elected and accepts office unless the officer resigns or is removed by the Committee. 7.3 Removal. Any officer elected by the Committee may be removed upon the vote of five members of the Committee. 7.4 Nacancies. In the event any vacancy occurs in any elected office of the Committee, the remaining members of the Committee shall elect a successor to the office at the next regular meeting of the Committee. 7.5 Separation of the Office of Treasurer from that of Permanent Secretary. Upon the vote of a majority of the Committee members (unweighted for percentage share), the offices of Secretary and Treasurer shall be separated, and an election held to fill the Treasurer's office until the next regular election of officers. Upon separation of those offices, the Treasurer shall become an annually elected office, retaining only the “Treasurer duties" of 7.8.2. Upon separation of these officers, the representative of the Authority will remain the permanent Secretary, retaining only the "Secretary duties" of TB.1, 7.6 Chairman. The Chairman shall preside at all meetings of the Committee and shall perform such other duties and have such other powers as the Committee may pre- scribe, subject to the limitations set forth in the Power Sales Agreement. 12 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 7.7 Vice Chairman. The Vice Chairman shall act under the direction of the Chairman, and in the absence or disability of the Chairman or if the office of the Chairman is vacant, shall perform the duties of the Chairman, and from time to time shall perform such other duties and have such other powers as the Chairman or Committee may prescribe, subject to the limitations set forth in the Agreement. 7.8 Secretary/Treasurer. The following duties will be assigned to the SecretaryITreasurer until such time that the Committee determines they should be separated under the provisions of 7.5., at which time the Secretary will retain only the Secretary Duties and the Treasurer shall retain only the Treasurer Duties. 7.8.1 Secretary Duties The Secretary/Treasurer shall act under the direction of the Chairman in regards to secretarial duties. Subject to the direction of the Chairman or the Committee, the Secretary/Treasurer shall attend all meetings of the Committee and keep a record of the proceedings. In the Secretary/Treasurer’s absence, the Chairman shall designate another member of the Committee to keep a record of the proceedings. The SecretaryITreasurer shall perform like duties for committees when required. The SecretaryITreasurer shall give or cause to be given notice of all meetings of the Committee and special meetings of the Committee and shall perform such other duties as may be prescribed by the Chairman or the Committee. The Secretary/Treasurer may incur reasonable expenses associated with keeping a record of the proceedings, including the compensation and travel costs incurred to retain a person to keep such records. 7.8.2 Treasurer Duties. The Secretary/Treasurer shall act under the direction of the Committee in regards to Treasurer duties. Subject to the direction of the Committee, the SecretarylTreasurer shall have control of the Committee funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Committee, and shall immediately deposit all monies and other valuable effects in the name and to the credit of the Committee in such depositories as may be designated by the Committee. The SecretaryITreasurer shall disburse the funds of the Committee as may be ordered by the Committee, taking proper vouchers for such disbursements, and shall render to the Chairman and the Committee at its regular meetings or when the Committee so requires, an account of all the Secretary/Treasurer’s transactions as SecretaryITreasurer and of the financial condition of the Committee. The Committee shall secure. a bond in an adequate amount to cover the actions of the SecretaryITreasurer. 13 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 8 INDEMNIFICATION To the extent legally permitted and financially able to do so from Committee- controlled assets, the Committee shall indemnify and hold its Committee members and officers harmless against all claims and liabilities which they or any of them incur as a party defendant to any proceeding (other than a proceeding filed by or in the right of the Committee), based on any authorized action of any such person as a Committee member or as an officer of the Committee within the scope of the Committee member's office. For purposes of this provision, "Committee member" means a Committee representative, an alternate Committee representative, an authorized agent of the Committee who is otherwise employed by the Committee, the Purchasers or any authorized employee of the Committee. 14 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) tarot ARTICLE 9 ANNUAL BUDGETS AND DETERMINATION OF RATES 9.1 Budget Proce: ior to Project etion. 9.1.1 Prior to Project completion, the Power Sales Agreement does not require any "budget process." The Purchasers determine what expenses to incur and how to fund them (the Authority is not a party to these decisions or payment obligations). The only Committee expenses during this period will be those related to Committee activity or costs incurred by individual Purchasers and agreed to be shared by other Committee members. No Authority costs will be eligible for utility payment during this period, nor will the Authority have any obligation to share in the payment of Committee expenses. 9.2 Budget Process Following Proiect Completion. The Agreement and Bond Resolution provides for a formal budget process following completion of the Project. Prior to Project completion and the sale of Project bonds, the Committee shall adopt a detailed budget process. 9.2.1 The annual budget shall include: 1. Amounts required for debt service on any outstanding bonds; 2. Amounts required for reserve funds created by bond resolution; 3. Costs of producing and delivering power including: (a) O&M; (b) Insurance; (c) Authority's Project specific administrative and general costs; (d) Costs of Committee; (e) Any individual utility cost to be reimbursed by the Committee; and (f) Any other cost approved by the Committee. 4. The budget may, in the future, include amounts for non-bond funding of additional Project work, as well as Excess Payments following final payment of all bonds. 15 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 5. The annual budget shall be based on a 12-month period starting July Ist of a calendar year through and including June 30 of the succeeding calendar year. 9.2.2 For purposes of 9.2.1(3): 1. The Authority shall provide annual budget detail listing personnel requirements by work function, their gross payroll, payroll burdens and the estimated percentage of each work function to be required for operation and maintenance. The estimated costs for materials, supplies, engineering and other costs shall be provided in sufficient detail to allow the Committee a reasonable basis to analyze the budget in the approval process and to provide a basis for the annual audit of actual costs. 2. The Authority shall provide annual budgets detailing the estimated costs relating to FERC license requirements and property insurance and the Project specific administrative and general costs and to be paid to the AEA. 9.3 Auditing Standards and Procedures. 9.3.1 An annual audit shall be performed by qualified independent auditors selected by the Committee, to be completed on or before the first day of December of each year. 9.3.2 The primary purpose of the audit is to verify expenses. The scope of the audit shall include the operating and maintenance costs relating to the Facilities, the annual Project-specific costs of the AEA, and the AEA and Committee assets, liabilities and costs including all funds administered by the AEA and the Committee, necessary to establish a true-up of the annual Project cost. 9.3.3 The annual financial statements shall disclose the comparison of actual operating results to the annual budget. 9.3.4 The members shall make available to the auditors such records and schedules required in their examination of the financial statements in a timely manner. for Capital Asset uisition and A nting. To provide for a comprehensive, consistent policy of ownership and control, the Committee has designated the AEA as owner of all capital assets which benefic the Project while retaining the right to control all capital assets associated with the Project. 16 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 9.4.1 Capital assets include an asset acquired for the benefit of the Project that has a value of $500 or more, a useful life of at least one year, and substantially comprises a Retirement Unit as listed in the Federal Energy Regulatory Commission List of Retirement Units, as amended from time to time. 9.4.2 The Committee shall transfer ownership of any assets held in trust for the Project to the AEA. 9.4.3 The Committee will have control and management of all capital assets purchased with the state or utility funds, and the Committee shall manage all proceeds derived from sales upon retirement of these capital assets and to purchase additional capital assets for the benefit of the Project. 9.4.4 To the extent that purchase costs can be minimized through the State of Alaska's purchasing power, the AEA may make purchases on behalf of the Committee as the "Purchasing Agent". To the extent other purchasing alternatives are preferable, the Committee may use those procedures. The Committee is under no obligation to follow the State Procurement Code for acquisitions with any of the funds. 17 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) - ARTICLE 10 COMMITTEE FUNDS AND ASSETS 10.1 Required Funds. The following funds are required to be established by the Bond Resolution: Construction Fund Debt Service Fund, consisting of an Interest Account and a Principal Account Capital Reserve Fund Renewal and Contingency Reserve Fund Excess Investment Earnings Fund Revenue Fund Operating Fund Revolving Construction Fund 18 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) a, ARTICLE 11 PROJECT INSURANCE 11.1 Coverage Limits. Insurance shall be secured and maintained in types and amounts as are "customary" for facilities of similar types and sizes as the Project. The initial determination of "customary insurance" shall be made by the Committee in concert with the insurance consultant employed by the Authority. 11.2 Self-Insurance. The amounts and types of insurance determined “customary,” including the minimum amounts required in the Bond Resolution, may be maintained through self-funded insurance methods. 11.3 Insurance Claim Proceeds. Disposition of insurance claim proceeds for damage or destruction of the physical facilities is governed by Section 715 of the Bond Resolution. Application of any other insurance proceeds accruing to the Project shall be determined by the Committee. 11.4 Annual Review. The Authority and the Committee together shall review annually the insurance types and amounts carried with respect to the Project. 19 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 12 PROCEDURES FOR DISPUTE RESOLUTION 12.1 Procedural Rules. The Project Management Committee shall perform its decision-making responsibilities consistent with the Power Sales Agreement and any duly adopted procedural rules. 12.2 Authority. In the event the authority of the Committee to act is at issue, the Committee shall first make a finding as to its authority. If the Committee determines that it has authority to consider the matter, it shall decide the issue on its merits. If the Committee determines that it does not have authority to consider the matter, the matter will be subject to immediate judicial resolution. If the court determines that the Committee in fact had authority to consider the matter, the matter shall be remanded for Committee action. 12.3 Judicial Review. Any action, or failure to act, of the Committee shall be subject to judicial review. The reviewing court shall (a) set aside any Committee action found to be arbitrary, capricious or otherwise not in accordance with law or with the terms of the Agreement, and (b) order the Committee to take action if such action has been unreasonably withheld or delayed. Failure of any party to appeal any Committee decision shall not constitute a waiver of the right to appeal any future decision. Judicial review shall be governed by the laws of the State of Alaska and shall be filed in the Alaska Court System. 12.4 Arbitration. Upon agreement of the Committee representatives of the Authority and any three utilities, the Committee may refer any matter within the Committee's authority to arbitration. Unless otherwise unanimously agreed to by the members of the Committee, arbitration shall be conducted before an arbitrator selected under the guidelines of the American Arbitration Association and the arbitration shall be conducted in accordance with the commercial arbitration rules of the American Arbitration Association then in effect. In addition, the arbitrator must have education and experience in the particular matter being arbitrated. The arbitrator shall have no authority, power or jurisdiction to alter, amend, change, modify, add to or delete any of the provisions of the Agreement and the decision of the arbitrator shall be subject to judicial review as a Committee decision, in accordance with Section 12.3, above. 12.5 Costs of Arbitration. The costs incurred in connection with the arbitration shall be apportioned by the arbitrator as she or he deems appropriate. 20 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 13 REIMBURSEMENT OF TRAVEL AND PER DIEM EXPENSES 13.1 Committee Meetings. The Committee has established a policy for reim- bursing the cost of travel and per diem expenses with respect to attendance at meetings of the Committee as follows: 13.1.1 Each party shall be reimbursed for the cost of travel and per diem necessary for its representative and alternate to attend meetings of the Committee, subject to the following policy: (a) Travel must be by the most direct route and will be reimbursed based on actual ground transportation, agreed upon mileage, or standard airfare. Total travel costs shall not exceed a maximum amount determined by airline coach fare. (b) Reimbursement of actual costs exclusive of transportation costs will not exceed $150.00 per day for a maximum of two days' travel and actual meeting days for each duly convened meeting of the Committee. 13.1.2 Application must be made to the Secretary of the Committee for reimbursement. 13.2 Special Purpose Committee Meetings. The Committee has established a policy for reimbursing the cost of travel and per diem expenses with respect to attendance at meetings of the special purpose committees as follows: 13.2.1 Each Special Purpose Committee Member shall be reimbursed for the cost of travel and per diem necessary to attend special purpose committees created by the Project Management Committee, subject to the following policy: (a) Travel must be by the most direct route and will be reimbursed based on actual ground transportation, agreed upon mileage, or standard airfare. Travel costs shall not exceed a maximum amount determined by airline coach fare. (b) Reimbursement of actual costs exclusive of transportation costs will not exceed $150.00 per day for a maximum of two days' travel and actual meeting days of the special purpose committee. 13.2.2 Application must be made to the Secretary of the Committee for reimbursement. 21 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 14 OTHER POLICIES 14.1 Numbering of Resolutions. The Committee has established that all resolutions and actions adopted by the Committee shall be assigned a number. The first part of the number shall be the last two digits of the year in which the resolution or action is adopted (e.g., Resolution No. 88- ). The second part shall be a sequential number reflecting the order in which the resolution or action was adopted, beginning with the number "1," and increasing by one with the adoption of each subsequent resolution oraction. The Secretary of the Committee shall establish and maintain an official journal for recording resolutions [and actions] of the Committee. 14.2 Definition of Terms. Except as otherwise provided, terms included in these Bylaws shall take the meaning specified in the Power Sales Agreement. 14.3 Amendment of Bylaws. These Bylaws may be altered, amended, or repealed and new Bylaws may be adopted by the Bradley Project Management Committee at any regular or special meeting, subject to the voting requirements set out in Article 5.10 of these Bylaws. 22 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) os BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING SPECIAL MEETING DISPUTE RESOLUTION COMMITTEE MEETING DRAFT Meeting Minutes Alaska Energy Authority, Anchorage, Alaska April 17, 2014 I. CALL TO ORDER BPMC Dispute Resolution Committee Chair Griffith called the special meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 2:02 p.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson (Golden Valley Electric Association (GVEA)); Bryan Carey (Alaska Energy Authority (AEA)); Bradley Evans (Chugach Electric Association (CEA)); Joe Griffith (Matanuska Electric Association (MEA)); Richard Miller (Municipal Light & Power (MLP)); Brad Janorschke (Homer Electric Association (HEA)); John Foutz (City of Seward (SEW)) 85 STAFF/PUBLIC ROLL CALL Kelli Veech, Teri Webster (AEA); Brian Bjorkquist (Department of Law); Kirk Gibson (McDowell Rackner & Gibson, PC); Brian Hickey, Mark Johnson, Lee Thibert, Burke Wick (CEA); Robert Day, Carrier Buckley, Alan Owens (HEA); Jim Brooks, David Pease (MEA); Lou Agi, Rick Miller, Jeff Warner (MLP); Ron Woolf (GVEA); Bernie Smith (RCA); Robin Brena, Matt Clarkson (Brena Bell & Clarkson); Miranda Studstill (Accu-Type Depositions); 4. PUBLIC COMMENTS There were no public comments. 6. AGENDA APPROVAL The agenda was approved. Te OLD BUSINESS A. Dispute Resolution Committee final report Chair Griffith requested Mr. Brooks provide a summary of the last list of questions at issue. Mr. Brooks noted a telephonic meeting was held today to complete the responses to HEA's statement of disputes. The vote was not unanimous and HEA objected they did not have time to fully vet the responses. The final document was available at 8:30 this morning. All of the questions have been answered, but not all of the issues have been resolved. All parties have agreed to an interim BPMC Minutes 4/17/14 Page | of 4 resolution on the loss calculation issue that the methodology is accurate and satisfactory. This will need to be reexamined once the load balancing areas (LBA) and delivery points are defined. Mr. Brooks noted it was the decision of the O&D Committee that the dispatcher operated within the parameters of all of the policy documents. The plant has been dispatched in the same manner for quite some time and there has been no objection up to January Ist. Mr. Janorschke asked if he understood correctly the O&D Committee felt that enough time had passed in operating Bradley, possibly outside the latitude of the written agreements, so that the written agreements do no carry a lot of relevance. Mr. Brooks believe all parties agree the BPMC was the party responsible for the operation of the plant and the BPMC, through the O&D and the Dispatch Procedures document, established what those operating and dispatch parameters would be and had not discovered any problems suggesting there were any issues in operations until recently. Mr. Janorschke asked if he is understanding correctly that when HEA submitted their concerns and addressed specific contract language, the O&D Committee felt there is enough latitude through the BPMC not to be held to the language within the agreements. Mr. Brooks believes that is an accurate characterization with respect to the dispatch and any portion of the operations that are under the operating procedures document. Mr. Janorschke asked when the O&D Committee began addressing the issues contained in the summary report. Mr. Brooks informed the O&D Committee has been attempting to address the issues at different levels since they were brought before the O&D Committee in January. Mr. Janorschke stated a concern that it was not until last Friday that the 0&D Committee actually started delving into these issues. Mr. Brooks noted that was the last meeting, but a report document had already been created. Mr. Evans commented the O&D Committee had vetted the issues, presented them at the last BPMC meeting, at which Mr. Evans requested the O&D provide additional clarification and a summary of the allegations versus the vetting and findings. Mr. Evans believes it is unfair to characterize the O&D Committee has just recently addressed these issues. Mr. Janorschke stated he is asking the question because he has not seen this document before and it seemed awkward the proposed resolution yesterday for the Dispute Resolution Committee acknowledged the acceptance of the document at the O&D Committee before the O&D Committee even had their meeting. MOTION: Mr. Evans made a motion to accept the O&D Committee's responses to HEA's statement of disputes related to the January 9th letter, including the O& D Committee's former two lists of responses to establish the full record. Motion seconded by Mr. Foutz. Mr. Evans commented there are still some issues that have not been fully resolved. This work does not address the issues that still need to be vetted and resolved at the O&D level for technical issues related to these matters, including boundaries and full implementation of the LBA interface. Mr. Evans stated for the record there are issues remaining that need other decisions BPMC Minutes 4/17/14 Page 2 of 4 made and the final implementation has not been fully recognized. This document represents what the O&D has decided to date. Mr. Evans strongly disagrees with any inference that because flexibility was allowed within the established dispatch protocols, there was any implied or tacit approval to change contracts. There being no further comments and hearing no opposition, Chair Griffith stated the motion stands. Chair Griffith noted the substitute Resolution 14-10 has been provided to all parties. The intent of the substitute Resolution 14-10 is to define specifically the findings and recommendations of the Dispute Resolution Committee. MOTION: Mr. Evans made a motion to approve the revised Resolution 14-10 as amended and provided at today's meeting. Motion seconded by Mr. Miller. Mr, Janorschke asked how much lead time is required for the draft of the resolutions and amendments. Mr. Gibson stated the bylaws do not address that issue. It would be up to the BPMC to decide what is a reasonable amount of time, based on the subject matter, and what has been done historically with the BPMC, which is anything can happen to the motion once there is discussion. Robert's Rules of Order take over when the bylaws do not address the issue. Mr. Gibson recommended paragraph 20 should be more accurate regarding the O&D written reports. Mr. Gibson recommended the corresponding footnote be inserted, "See minutes of BPMC Special Meeting dated April 17th, 2014,".to be totally accurate. Mr. Gibson stated he was not aware of the O&D report presented today when he worked on this resolution. The maker of the motion and the second agreed to the amendment. Mr. Janorschke suggested a factual change on the first page where it references that all parties had counsel present at all scheduled meetings, except Seward, to reflect HEA did not have counsel present at all the meetings. Mr. Gibson suggested the ninth line state, "All of these parties had counsel present at some of the scheduled meetings." The maker of the motion and the second agreed to the amendment. A roll call vote was taken and the motion passed, with HEA voting against and AEA abstaining. 8. MEMBERS COMMENTS Mr. Carey stated AEA supports all of the efforts to resolve disputes and since AEA is not party to the agreement, AEA abstains from some motions. Mr. Carey asked which points on Resolution 14-10 does HEA agree with and which points HEA does not agree with. Mr. Janorschke noted HEA has a list of disputes and comments on every page. Mr. Janorschke commented he is happy to review the points if that is the wish of the Committee or he could review them at some point with Mr. Carey. BPMC Minutes 4/17/14 Page 3 of 4 Mr. Janorschke expressed his appreciation to Chair Griffith for the update and to the O&D Committee for their work. Mr. Evans echoed the previous comments and expressed his appreciation for all staff working on these arduous problems. Chair Griffith noted he will introduce the report findings and recommendations from the Dispute Resolution Committee at the BPMC meeting and suggest the Dispute Resolution Committee be disbanded. 9. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 2:32 p.m. BY: Joe Griffith, Chair of Dispute Resolution Committee Attest: Sara Fisher-Goad Alaska Energy Authority, Secretary BPMC Minutes 4/17/14 Page 4 of 4 Unit Statistics: Bradley Lake BPMC September 18, 2014 Operators Report Generation Unit 1 (MWhrs) Unit 2 (MWhrs) Total (MWhrs) June 2014 17,578 6,163 23,741 July 2014 4,334 24,678 29,012 August 2014 22,713 14,219 36,932 Hydraulics Avg. Lake Level (ft) Usage (ac ft) Fishwater (ac ft) June 2014 1,134 24,054 4,346 July 2014 1,146 28,804 5,613 August 2014 1,165 36,587 6,371 Lake Level — September 16 - 1,180’ Incidents and CEA callout: June 1° — Fishwater flow at Lower Bradley River. The radio transmission signal from the LBR USGS gaging station failed in May when the station thawed. The DCS indication was not available so we were operating using the USGS website. During the morning hours of June 1* the fishwater flow dropped to 91 CFS for 3 fifteen minute updates. The operators made a flow correction when they came on duty. Replacement parts for the LBR radio system were located and the system was restored on June 10". AEA was notified on June 2". August 6", @14:22 - Unit #1 trip, low hydraulic pressure. This was caused by oscillations in the divider that caused an unusually high duty cycle on the hydraulic system. The lead pump was operating and the lag pump failed to start on low pressure. It was determined the lag pump breaker mechanism was out of adjustment and the breaker did not fully close when racked in. The breaker was repaired. August 14"", @ 13:21- Unit #1 trip, low penstock pressure. Wiring technicians from Kachemak Electric were conducting installation loop I/O checks on the Unit #2 governor control installation. August 20" and 21° - Both Bradley units experienced divider oscillations that caused the units to trip. Emerson identified an undesirable interaction between (1) the normal power PID control loops within the governor, and (2) a frequency PID loop that controls the divider position. Emerson believes, based on the signals they saw, that these two PID loops interacted improperly and caused the divider to start to oscillate with the grid frequency. The oscillations built quickly Bradley Lake Operator Report Page 1 and the unit governors tripped when the dividers went to zero position. August 21* at 9:30 pm Emerson installed logic to correct the divider error. . Sept 12", Unit #2 tripped at 12:16pm. Load was 22 MW. Preliminary investigation indicates a relay action by the Jaquet overspeed detector. This is a specialized relay that will initiate a trip as a backup to the overspeed control scheme. Due to dispatch needs the unit was placed back in service which limits the ability to troubleshoot the problem. Additional alarming will be added to help trouble shoot external device failures that input into the governor trip system. Maintenance and Operation Activities: ° Penstock Dresser Coupling Inspection and Painting - Extreme Access Inc. was on site the week of June 9". Inspection of the coupling bolts indicated no significant degradation. The couplings and structures were cleaned and repainted. Additional rust prevention and paint was applied to structural surfaces in the Fishwater Portal Diversion Tunnel pipe and the Spillway Gallery corrugated metal tunnel surfaces. e Dam Survey, July 15""-26th — Ability Survey conducted the annual Dam Safety Survey. The results will be submitted to AEA and Dow! HKM for review. ° Crane inspections, August 1 1'".13th — Washington Crane and Hoist conducted annual crane inspections. One limit switch on the portable JLG was found to fail intermittently. It was replaced. No other conditions were noted on plant cranes and hoists. ° Vibration Analysis, Sept 3'¢ — Associated Services conducted annual vibration monitoring and predictive analysis on the plant rotating equipment. Domestic water pump P1B had elevated values in the axial measurement. This pump will be monitored and trended. All other equipment on site is operating within expected ranges. Projects: e Turbine Nozzle Valve Repair — (Nozzle Picture on page 5) June 16" through June 27" — Nozzle Swap - NAES power constructors were on site to perform the Unit #2 nozzle #1 swap with the spare. Three millwrights and a project manager were mobilized to perform this work. They were part of the crew that performed the nozzle work in 2003 and the divider work in 2006. HEA provided the replacement parts and material required to install the nozzle and NAES provided the labor. The swap was performed in a six day period working mostly 12 hour days. The unit was released to dispatch on the evening of the 6" day. CEA dispatch placed the unit in condense mode and received an alarm that the nozzle would not equalize. The problem was traced to the restoring shaft that provides nozzle position feedback to the control system. The bronze bushing was too tight which would cause the feedback arm to stick at 3% when it was closed. The unit was Bradley Lake Operator Report Page 2 taken out of service one more day and the bushing has honed 3/1000ths to achieve the proper fit. Following the nozzle swap the NAES crew stayed for an additional 4 days to tear down the failed nozzle. During this exercise we also identified and cataloged each nozzle part to prepare for parts ordering and future nozzle rebuild. Preliminary inspection indicates the nozzle hydraulic leak was due damaged O- ring. It appears at some point the O-ring rolled. The damaged area was then exposed to hydraulic pressure cutting that increased flow past the damaged seal. The future benchmarks are as follows: 1. Repair Technology Inc. in Seattle has provided a preliminary estimate of $1500.00 to repair and refurbish the nozzle shaft. It will be crated and sent to them in September. 2. Order replacement parts for two nozzles this year. Negotiation and parts verification is ongoing with Voith Hydro. 3. Prepare a nozzle refurbishment plan for each unit and provide parts and labor estimates for the next budget cycle. ° Governor PLC Replacement — This project is complete except for post outage monitoring and evaluation. It was completed within the scheduled time and testing proved that the governor functions properly. EPS and HEA are working with Emerson to verify one logic item that was installed after testing was complete. This was a logic adjustment to prevent the divider oscillations that occurred on August 20" and 21*. We are still gathering information to determine if additional fine tuning is required. Emerson prepared a preliminary “Operating Modes Description and Block Diagram” that will be reviewed and finalized by EPS as part of the testing contract. ° Fishwater Screen and Power Tunnel Sonar Inspection — 1. Global Diving and Salvage will mobilize on September 29th to complete a Sonar inspection of the Diversion Tunnel and Power Tunnel intake structures. We will also inspect the area below the dam to help plan for equipment access to the diversion tunnel for fisnhwater screen debris removal in the Spring of 2015. 2. HEA will contract with a local shop to construct a replacement fishwater screen in the event one is determined to be damaged. . Other Capital Projects that are in the works or pending — 1. Fire Protection - request for proposals to add a gaseous fire protection system to the engineering room at Bradley. This project will also seek proposals to replace the fire panels and alarm systems at the residences, crew quarters, shop, and powerhouse. 2. Purchase of replacement trucks 3. Replacement of loader, backhoe, and dump truck tires. Bradley Lake Operator Report Page 3 Inspections: Dam Inspections — June 20 — Dam inspection completed, no notable items found July 20 - Repaired one heater in diversion tunnel gate house Replaced both batteries on diesel pumps and generator August 27- Minor seepage along spillway wall, right side September 15 - Bradley Lake reached spill level of 1180° at 11:28 am. (Picture of spillway on page 5) Spillway Gallery Drains Measurement — August 9 - Lake level at 1157’ D-18 pressure near threshold pressure August 14 — Lake level at 1165’ D-16 and D-18 readings meet published limits (AEA and Dow! HKM were notifed on August 14") September 11 - Lake level at 1174.8’ D-18 pressure reading is at the threshold value of 8.0 psi Bradley Lake Operator Report Page 4 Unit #2 nozzle #1 being removed from spiral cage wall Bradley Lake Spillway Sept 15"". Lake level 1180’ Bradley Lake Operator Report Page 5 Bradley Lake Budget Subcommittee Expenditure Review and Budget Process Review July 14, 2014 Expenditure Review: Carrie Buckley, Deanna Hracha, Sherri L. McKay-Highers, Kelli Veech, Ron Woolf Budget Review and Budget Process Review: Bryan Carey, Rick Miller, Carrie Buckley, Deanna Hracha, Sherri L. McKay- Highers, Kelli Veech, Ron Woolf As a group we sampled vendor invoices from the Bradley Lake vendors and other expenditures charged by and paid by AEA. We noted that the labor burden seemed low on both HEA and CEA invoices. We would like to know if contracts define what is charged in the labor burden. We did a cursory review of the 2015 budget. It seemed reasonable in conjunction with the expenditures reviewed. We decided that revisiting the 2015 budget with the operators is not a good use of their time at this season when they are busy working on the Plant. We reviewed the budget process and where it went wrong this year. Rather than focus and report on what happened with the FY2015 budget, we would plan prospectively for future budgets. We noted that more communication needs to occur between the technical experts on the O&D Committee and the Budget Committee members to allow the Budget Committee to better understand the projects from a technical standpoint. Additionally, improved communications from the participants O&D and Budget subcommittees needs to occur with General Managers prior to the introduction of the proposed budget. Here is our prospective plan for the budget process: 1) The O&D Committee meets the 2nd Thursday of each month a. O&D Committee will provide agenda and call in number to the Budget Committee. b. Budget Committee will determine if they need a representative(s) to participate. 2) Have an O&D Committee meeting quarterly agenda item to review the Quarterly Budget and potential budget revisions/changes. a. Budget Committee will participate b. Per Kelli, quarterly reporting comes out 2 months after the quarter end, so review Dec quarter end in Feb, or March depending on timing, so we propose meeting with the O&D Committee to review the budget at the January, April, July, and October meetings 3) Make January O&D Committee Meeting a Joint Meeting with Budget Committee and AEA a. Start reviewing the next Fiscal Year's budget b. O&D Committee to pass a formal resolution approving the budget before it goes to the Budget Committee 4) AEA (Kelli) will put together draft budget for Budget Committee a. Must be ready in time for Budget Committee to meet before 2™4 Thursday in February. 5) Have Budget ready for the Bradley Project Managers Committee by March 1. 6) Refine the process as it develops. Ae Sf S&S 10. 11. 12. 13. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Thursday, Sept. 18, 2014 1:00 p.m. — 2:30 p.m. Alaska Energy Authority’s Board Room 813 West Northern Lights Boulevard, Anchorage, AK CALL TO ORDER ROLL CALL (for Committee members) PUBLIC ROLL CALL (for all others present) AGENDA APPROVAL PUBLIC COMMENT APPROVAL OF PRIOR MEETING MINUTES - April 11, April 17 (Dispute meeting), April 17 (Regular meeting), May 8, 2014 NEW BUSINESS A. Election of Officers B. Discussion of RCA order 10: Interim & Retroactive Rates for the Soldotna to Quartz Creek 115kv line C. HEA billing procedures for the Soldotna to Quartz Creek 115kv line COMMITTEE REPORTS A. Operations & Dispatch B. Budget OPERATORS REPORT COMMITTEE ASSIGNMENTS MEMBERS COMMENTS NEXT MEETING DATE ADJOURNMENT To participate by teleconference, dial 1-888-585-9008 and use code 467 050 126. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING SPECIAL MEETING DRAFT Meeting Minutes Alaska Energy Authority, Anchorage, Alaska April 11, 2014 1. CALL TO ORDER Chair Griffith called the special meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 3:05 p.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson (Golden Valley Electric Association (GVEA)); Sara Fisher-Goad (Alaska Energy Authority (AEA)); Bradley Evans (Chugach Electric Association (CEA)); Joe Griffith (Matanuska Electric Association (MEA)); Richard Miller (Municipal Light & Power (ML&P)); Brad Janorschke (Homer Electric Association (HEA)) and John Foutz (City of Seward (SEW)). KS STAFF/PUBLIC ROLL CALL Brian Bjorkquist (Department of Law); Kirk Gibson (McDowell Rackner & Gibson PC); Brian Hickey, Paul Risse, Burke Wick (CEA); Allen Gray (GVEA); Harvey Ambrose, Robert Day, Alan Owens, Carrie Buckley (HEA); Jim Brooks, David Pease (MEA); Lou Agi, Jeff Warner, Jim Trent (ML&P); Bernie Smith (Regulatory Commission of Alaska); Robin Brena, Matt Clarkson (Brena Bell & Clarkson); Daniel Hertrich (Hatch Construction); Teri Webster (AEA) and Miranda Studstill (Accu-Type Depositions). 4. APPROVAL OF PRIOR MINUTES - Jan 24, 2014; Jan 27, 2014; Feb 7, 2014 MOTION: Mr. Evans made a motion to approve prior meeting minutes of January 24, 2014; January 27, 2014; and February 7, 2014. Motion seconded by Mr. Miller. The motion passed unanimously. 5: PUBLIC COMMENTS There were no public comments. 6. AGENDA COMMENTS/MOTION FOR APPROVAL The agenda was approved. 1. NEW BUSINESS A. O&D Committee responses to queries by parties and chairman BPMC Minutes 4/11/14 Page | of 4 Chair Griffith noted a list of O&D Committee responses have been provided to the members. Chair Griffith requested Mr. Brooks, O&D Committee Chairman, provide a summary of the Committee findings. Mr. Brooks stated the 0&D Committee has met several times regarding theses issues since January and examined each question. The responses were crafted in such a manner that it was stated in the responses when HEA had a view different than the majority view. Mr. Janorschke asked who is maintaining the PSS/E model. Mr. Brooks believes maintaining that model is an ongoing effort with contractor help. Mr. Brooks believes there is a subcommittee that meets regarding the PSS/E model and Jim Cross is the one from HEA who provides HEA's updated data. Mr. Janorschke asked if the model is located with a consultant. Mr. Janorschke agreed Mr. Cross has been participating in the subcommittee and noted Mr. Cross is no longer the Chairman. Mr. Janorschke asked who will replace Mr. Cross as the new Chairman and what is his level of experience. Mr. Janorschke asked who is providing the subcommittee with information that the model is current. Mr. Brooks stated he does not have the answers to those questions and is not part of that subcommittee. Mr. Griffith commented he has asked the same questions and the most current model is the one most recently run by EPS. It was cross-checked with all information and brought current for the whole railbelt. Mr. Griffith stated he had a contractor also run the information and returned the same results. He is confident this is the right model. Mr. Griffith stated he posed the question a year ago regarding who is responsible for maintaining the model and believes there is a committee assigned to maintaining the model. Mr. Warner stated Aung Thuya is on the System Study Subcommittee under the IMC/OC Committee and this is the group who updates and keeps the model. Mr. Janorschke asked if the model is kept at ML&P currently. Mr. Hickey stated the model is on the HEA FTP site. Mr. Warner agreed and noted each utility has access to that site. B. Committee findings - Dispute resolution MOTION: Mr. Evans made a motion to approve Resolution 14-09 findings of the Dispute Resolution Committee regarding power delivery issues. Motion seconded by Mr. Miller. Mr. Janorschke requested Chair Griffith provide additional information regarding the motion. Chair Griffith stated these are the findings created by the Dispute Resolution Committee, which includes future action recommendations for the BPMC. Mr. Janorschke stated some of the jurisdictional issues in the findings are before the Regulatory Commission. He noted number five states HEA is to receive compensation for the SQ Line under the Bradley lake agreements and historically, HEA was receiving compensation under the transmission lease agreement with CEA and has not expired. Mr. Janorschke noted number six is similar to what HEA has filed with the RCA with regard to a wheeling tariff and the participants having different opinions on the interpretation of the contracts. BPMC Minutes 4/11/14 Page 2 of 4 Chair Griffith asked Mr. Janorschke if he was making a motion to amend the motion. Mr. Janorschke stated he received the findings this morning and was not in a position to make suggestions. A roll call vote was taken and the motion passed, with Mr. Janorschke voting against and Ms. Fisher-Goad abstaining. Chair Griffith requested Mr. Gibson provide information and amendment recommendations regarding Resolution 14-10, Final Disposition of the Dispute Resolution Committee. Mr. Gibson advised the language added to Resolution 14-10 is to ensure the resolution is correct in working under the Dispute Resolution Committee's authority from the terms and conditions of the contract in the Services Agreement. BPMC, acting upon that authority from the services agreement, created the Dispute Resolution Committee and gave the Dispute Resolution Committee the ability to mediate. The amended Resolution 14-10 includes explicit clarity on where the authority comes from. MOTION: Mr. Evans made a motion to approve Resolution 14-10, Final Disposition of the Dispute Resolution Committee as amended. Motion seconded by Mr. Foutz. Mr. Evans requested explanation of the next steps, because this resolution, if passed, will not resolve the current dispute. Mr. Gibson believes this final disposition by the Dispute Resolution Committee is saying there is an impasse and mediation is no longer successful. Therefore, the dispute is being returned to the BPMC to handle in accordance with the authority given to them in the Services Agreement. Mr. Gibson stated the BPMC has a choice to go into arbitration or file under the decision-making procedures agreed to in the bylaws in Section 510. Mr. Evans asked if there is a formal document that lists what was alleged and the Dispute Resolution Committee's finding per issue. He is concerned there were many ungrounded allegations. Mr. Gibson advised the BPMC charged the Dispute Resolution Committee to mediate these issues. The mediation was unsuccessful. Mr. Evans requested clarity if any of the allegations have been resolved, other than the SQ issue. The O&D response is not always clear if any issue was resolved or what facts, if any, were used to support the findings. Mr. Evans stated the form of the document is confusing and it is hard to understand which answer goes with which allegation. Mr. Evans does not want to amend the current agreement. He requested that another assignment be made of the O&D Committee to sponsor a resolution with the Dispute Resolution Committee stating which allegations have been resolved. Chair Griffith agreed and made that assignment to the O&D Committee. Mr. Borgeson expressed his appreciation for Mr. Evans' comments Mr. Borgeson does not agree with the statement in the document that all known issues with HEA have been resolved. He believes HEA has brought disputes to this resolution that have not been addressed fully. Mr. Borgeson requested specific information as to what has been resolved and what has not been resolved. Mr. Borgeson expressed his appreciation for the work completed by the Dispute Resolution Committee. BPMC Minutes 4/11/14 Page 3 of 4 Mr. Gibson stated it behooves the Dispute Resolution Committee to review all the issues and make a clear list of resolved issues and a clear list of unresolved issues. Mr. Gibson recommended Resolution 14-10 be tabled and revise it to include the clear list of resolved and unresolved issues because this is the final disposition. MOTION: Mr. Evans made a motion to table Resolution 14-10 to the next meeting to rectify the aforementioned issues. Motion seconded by Mr. Miller. A roll call vote was taken and the motion passed, with ML&P voting against. Cc. Committee recommendations to the BPMC Mr. Janorschke requested the Dispute Resolution Committee instruct the O&D Committee to provide their recommendations for each item in the list of disputes that HEA submitted to the Dispute Resolution Committee. Chair Griffith agreed to take the action and work with the O&D Committee. Mr, Janorschke requested that copies of the basic draft of resolutions be provided to members at least 24 hours in advance of the meeting. Chair Griffith stated he will try to get this resolution to the members by Monday afternoon. 8. MEMBERS COMMENTS Committee members welcomed Mr. Trent to the Committee. 9. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 3:45 p.m. BY: Joe Griffith, Chair of Special Committee Attest: Sara Fisher-Goad Alaska Energy Authority, Secretary BPMC Minutes 4/11/14 Page 4 of 4 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING DRAFT Meeting Minutes Alaska Energy Authority, Anchorage, Alaska April 17, 2014 1. CALL TO ORDER Chair Evans called the Bradley Lake Hydroelectric Project Management Committee to order at 2:33 p.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson, (Golden Valley Electric Association (GVEA)); Bryan Carey (Alaska Energy Authority (AEA)); Bradley Evans (Chugach Electric Association (CEA)); Joe Griffith (Matanuska Electric Association (MEA)); Richard Miller (Municipal Light & Power (MLP)); Brad Janorschke (Homer Electric Association (HEA)); John Foutz (City of Seward (SEW)). 3. STAFF/PUBLIC ROLL CALL Kelli Veech, Teri Webster (AEA); Brian Bjorkquist (Department of Law); Kirk Gibson (McDowell Rackner & Gibson, PC); Brian Hickey, Mark Johnson, Lee Thibert, Burke Wick (CEA); Robert Day, Carrier Buckley, Alan Owens (HEA); Jim Brooks, David Pease (MEA); Lou Agi, Rick Miller, Jeff Warner (MLP); Ron Woolf (GVEA); Bernie Smith (RCA); Robin Brena, Matt Clarkson (Brena Bell & Clarkson); Miranda Studstill (Accu-Type Depositions). 4. PUBLIC COMMENT There were no public comments. 6. AGENDA APPROVAL The agenda was approved. Te OLD BUSINESS A. Dispute Resolution Committee report and findings Chair Evans requested Mr. Griffith provide the Dispute Resolution Committee's report and findings. Mr. Griffith informed the Dispute Resolution Committee has spent two-and-a half months groveling in this dispute. There have been five separate meetings of the Dispute Resolution Committee and at least five attempts by the parties of the committee to resolve the disputes, along with personal discussions, essentially to no avail. The O&D Committee was requested in January to provide a report regarding their findings of the issues, to include answers to questions provided by Mr. Griffith. There are two main resolutions that will be forwarded to the BPMC. The first Resolution 2014-09 are the findings of the Dispute Resolution Committee and Resolution 2014-10 is the Dispute Resolution Committee's final disposition. Council has been included throughout this effort, to include revising resolution writing. BPMC Minutes 4/17/14 Page | of 6 Chair Evans requested Mr. Gibson advise the members, relative to the overall process, what the next steps are to complete this process at the BPMC level. Mr. Gibson advised the BPMC must approve anything that comes out of a special committee. How the BPMC uses the approved findings and disposition is at the discretion of the BPMC. MOTION: Mr. Griffith made a motion to adopt Resolutions 2014-09 and 2014-10 as the outcome of a dispute. Motion seconded by Mr. Miller. Mr. Griffith stated he will refer back to his original words laying out how the Dispute Resolution Committee approached the problem, the parties that participated, and the results. It is the recommendation of the majority of the Dispute Resolution Committee that the BPMC proper address the issues that are on the back-end of Resolution 2014-10. Mr. Miller expressed his appreciation to Mr. Griffith for all of his work during the Dispute Resolution Committee. A rollcall vote was taken‘and'the motion passed, with HEA voting against and AEA’ abstaining: Chair Evans asked Mr. Gibson if there is anything remaining to be completed that should come before the BPMC in terms of the process. Mr. Gibson stated any dispute to the dispute, resolution procedures negotiated and agreed upon would go to the BPMC. The dispute resolution procedures the BPMC can incorporate and utilize are set forth in Article 12 of the bylaws. The specific disputed matters should be identified. Those specific disputed matters could be sent to arbitration, requiring the vote of threevutilities plus AEA, or other procedures referenced in the beginning in Article 12-1 could be utilized, This refers to the manner of acting in Section 5.10.2 including specific voting requirements. Chair Evans believes there was a recognition in the resolutions that there remains some areas that were not fully vetted or fully resolved. Chair Evans asked members and counsel what does the BPMC do next regarding those matters. Mr. Griffith provided one copy of a resolution for consideration and potential action at the next BPMC meeting. Mr. Griffith noted for the record there is now a lawsuit in place that impinges on some of the unresolved issues. Mr. Griffith believes the next step is for the BPMC to take these considerations that are listed under the resolution portion of 2014-10, making those a matter of an action resolution directing HEA and other parties to comply with the agreements. He believes that resolution will have to be crafted at the next meeting. Mr. Gibson recommended the BPMC send a letter describing to parties what has been resolved and directing specific actions from the parties. It is up to the individual utilities to enforce abiding by the contractual issues. The next steps will require groups of individual utilities to enforce the terms of the Services Agreement and if the terms are not followed, it will have to be addressed through the courts, if necessary. BPMC is providing a service to the contractual agreement. BPMC Minutes 4/17/14 Page 2 of 6 Chair Evans commented the line between the participants, the service providers, and the owners is blurry and confusing. Mr. Bjorkquist noted one of the issues, as the role of the owner, is this situation where the complexity is outside of the project. The transmission disputes are dealing with agreements where AEA, as the owner, is not a party to the agreements. AEA is actively involved before the RCA in these disputes because the consequences of what happens with honoring the two agreements could impact the Bradley Lake Project and future financing of projects. Chair Evans commented that is where the line gets blurry because there would not be a project without the Services Agreement and Transmission Agreement. Mr. Bjorkquist agreed and believes AEA has been very clear in trying to encourage all of the parties to come together and come to a resolution on these issues because having these disputes is negative to the project, negative to the legislative process for the potential for funding for other projects, negative to Battle Creek, and negative to everything associated with this project. Mr. Borgeson appreciated Mr. Bjorkquist's comments. Mr. Borgeson encouraged AEA to take an active role.and engage,their oversight, review and efforts on these.issues as the owner of this project and:as the guarantors of the bonding. Mr, Griffith believes all the utilities are bound by the bond covenants and the state is the ultimate guarantor with a moral obligation. Mr. Griffith commented AEA, as the owner, should be in the role to make things happen by virtue of telling utilities what to do. ARCTEC is hampered heavily by the current disagreements and Mr. Griffith noted he has heard comments in the Legislature the utilities cannot get along, which is coloring the entirerrelationship of the railbelt. There is not going'to be a Battle Creek because of these issues andno funding was given. Susitna-Watana could be heavily impacted by these disputes. Mr. Griffith believes these factors must be considered from a policy standpoint. B. Battle Creek update Mr. Carey informed there is a final draft for the amendment. Mr. Carey requested each utility send him an email providing the name of the person who will review the amendment and provide feedback. Chair Evans asked if the same sort of implementation that occurred at Stetson Creek has been dismissed. Mr. Carey noted Stetson Creek has a closed conduit and the flows at Battle Creek are substantially more than those at Stetson Creek. He believes there is opportunity to optimize to better the flows and lower the cost. Mr. Griffith asked if there are enough funds to make it until the next fiscal year. Mr. Carey believes there are enough funds to make it until the next fiscal year. Mr. Borgeson appreciated the update and wanted to make AEA aware he is becoming more skeptical that GVEA will be interested in participating in this project with what the costs are and the constraints on the transmission lines. Mr. Borgeson does not believe the Legislature is going to provide funding for this project. Cc. Governor Project update BPMC Minutes 4/17/14 Page 3 of 6 Mr. Carey informed there was a kick-off meeting last Friday for owner's and utilities! representatives, including the O&D Committee, EPS and a few other interested parties. EPS sent a paper last week to HEA and then sent to Emerson regarding questions and clarifications for the work Emerson is doing. Those clarification replies came back yesterday from Emerson and EPS is currently reviewing those. The factory acceptance testing is occurring next week in Pittsburgh and in attendance will be Jim Coat from EPS, several people from HEA, and no one from CEA. The next meeting will be May 9th, immediately following the O&D meeting, at which EPS and HEA can present the findings regarding the testing. Mr. Janorschke noted he attended the recent kick-off meeting and it was a good meeting. He made a request CEA would have a representative at the factory acceptance testing and was told that CEA would have a representative in attendance. Mr. Owens commented another item that came out of the meeting with EPS was the original VA Tech logic installation had some inherent flaws initially and instead of having VA Tech rewrite the program, EPS worked«with them to make some work-arounds to: make it function” Emerson believes they have corrected some of those inherent flaws and is confident they have improved the package. 8. OPERATORS REPORT Mr, Day stated they are becoming somewhat confident that the spare needle that is on the floor has been rebuilt. Tests on that needle are currently being set up. Ifthe tests are good, then it would be swapped out with the bad needle that is presently installed in Unit 2. This is anout-of- budget expense. Chair Evans asked if this expense is more than 5% of the operator O&M budget. Mr. Day stated he does not know, but it is significant: Mr. Owens believes it would be more than 5%. Mr. Day is requesting BPMC to either concur or to direct HEA, as the operator, to proceed with the one needle replacement with the spare, provided the spare proves out under testing in the next week or two. Mr. Day is requesting this replacement work be accomplished through a time and materials contract with the PMRI (now NAES) contractor, who performed this work previously in 2002/2003, not to exceed $200,000. Chair Evans asked if this estimate is for repair of the needle that is being replaced. Mr. Day noted this proposal is to swap the needles out, tear down the existing needle, conduct a postmortem assessment of the needle, and possible repair of the needle if it is within the $200,000 budget. Chair Evans asked if this replacement work is time sensitive. Mr. Day stated HEA has been diligent in trying to get the needle back in service since March 11th and requested action be taken today to approve this budgeted item. MOTION: Mr. Griffith made a motion to increase the FY14 O&M budget in an amount not to exceed $200,000 for replacement and repair of the needle in Unit 2. Motion seconded by Mr. Janorschke. A roll call vote was taken and the motion passed unanimously. BPMC Minutes 4/17/14 Page 4 of 6 Chair Evans requested AEA report back at the next meeting to ensure there is no carryover of this FY 14 budget increase to the FY 15 budget. Mr. Griffith asked if the issue with the trash in the intake has been addressed. Mr. Owens stated the BPMC has approved the plan and it is in the 2015 budget. HEA has postponed the project until May of 2015 and will work with Chugach to drain the lake. Mr. Owens requested clarification as to when the operator needs to come before the BPMC to request additional funds for O&M work. Chair Evans stated the rough rule is if the request is up to 5% of the budget, it can be requested from the O&D Committee, unless there is a unique situation and common sense dictates it should be brought before the BPMC. 9. COMMITTEE REPORTS A. Budget committee - 2015 budget approval process and more efficient process Chait Evans,believed the members felt like there was insufficient clarity to exercise the fiduciary responsibility during the entire process of approving budgets. Mr. Woolf, Chair of the Budget Committee, noted they have not met on this issue. He believes the Budget Committee needs to do a better job of reviewing all the expenses with the managers before it is brought before the BPMC. Mr. Woolf is discussing with Ms. Veech what has worked well in the past. Chair Evans stated the main directive was to change the way the budget is presented to 'the BPMC so that it is aligned with how budgets are presented to parent organizations. Chair Evans would like to see‘more emphasis on a cost elementybreakdown on the budget and what the money is being spent on, rather than how FERC «wants it to be reported. The suggestion en the capital and major repair side is to give a summary presentation on the major expenses, so:the Board can. faithfully say they discharged their fiduciary duties. Chair Evans stated when CEA does budgets, they have the finance people, the operators and maintainers giving the budget presentation together. Mr. Woolf believes he understands the directive. B. AEA - Suggestions for reporting requirements for Bradley incidents Chair Evans noted this item is really more of an owner's report and asked if Mr. Carey had any suggestions for reporting requirement for Bradley Lake incidents. Mr. Carey noted those suggestions are still being reviewed. Chair Evans asked if AEA was working with the O&D Committee on those suggestions. Mr. Carey stated initially he has been working within AEA and HEA. Once there is more of an agreement on the document, it will be given to all parties. C. O&D - Budget items questions and which committee can answer them Chair Evans believes this was addressed earlier. - Evaluation of Mr. Day's operator report of compliance to reliability standards - Loss factor issue and driving need for change BPMC Minutes 4/17/14 Page 5 of 6 There were no updates. 10. MEMBERS COMMENTS There were no member comments. 11. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 3:43 p.m. BY: Bradley Evans, Chair fo i ) H 4 i x = 3 os & i *. E BPMC Minutes 4/17/14 Page 6 of 6 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING SPECIAL MEETING DISPUTE RESOLUTION COMMITTEE MEETING DRAFT Meeting Minutes Alaska Energy Authority, Anchorage, Alaska April 17, 2014 1. CALL TO ORDER BPMC Dispute Resolution Committee Chair Griffith called the special meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 2:02 p.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson (Golden Valley Electric Association (GVEA)); Bryan Carey (Alaska Energy Authority (AEA)); Bradley Evans (Chugach Electric Association (CEA)); Joe Griffith (Matanuska Electric Association (MEA)); Richard Miller (Municipal Light & Power (MLP)); Brad Janorschke (Homer Electric Association (HEA)); John Foutz (City of Seward (SEW)) 3. STAFF/PUBLIC ROLL CALL Kelli Veech, Teri Webster (AEA); Brian Bjorkquist (Department of Law); Kirk Gibson (McDowell Rackner & Gibson, PC); Brian Hickey, Mark Johnson, Lee Thibert, Burke Wick (CEA); Robert Day, Carrier Buckley, Alan Owens (HEA); Jim Brooks, David Pease (MEA); Lou Agi, Rick Miller, Jeff Warner (MLP); Ron Woolf (GVEA); Bernie Smith (RCA); Robin Brena, Matt Clarkson (Brena Bell & Clarkson); Miranda Studstill (Accu-Type Depositions); 4. PUBLIC COMMENTS There were no public comments. 6. AGENDA APPROVAL The agenda was approved. 7. OLD BUSINESS A. Dispute Resolution Committee final report Chair Griffith requested Mr. Brooks provide a summary of the last list of questions at issue. Mr. Brooks noted a telephonic meeting was held today to complete the responses to HEA's statement of disputes. The vote was not unanimous and HEA objected they did not have time to fully vet the responses. The final document was available at 8:30 this morning. All of the questions have been answered, but not all of the issues have been resolved. All parties have agreed to an interim BPMC Minutes 4/17/14 Page | of 4 resolution on the loss calculation issue that the methodology is accurate and satisfactory. This will need to be reexamined once the load balancing areas (LBA) and delivery points are defined. Mr. Brooks noted it was the decision of the O&D Committee that the dispatcher operated within the parameters of all of the policy documents. The plant has been dispatched in the same manner for quite some time and there has been no objection up to January Ist. Mr. Janorschke asked if he understood correctly the O&D Committee felt that enough time had passed in operating Bradley, possibly outside the latitude of the written agreements, so that the written agreements do no carry a lot of relevance. Mr. Brooks believe all parties agree the BPMC was the party responsible for the operation of the plant and the BPMC, through the O&D and the Dispatch Procedures document, established what those operating and dispatch parameters would be and had not discovered any problems suggesting there were any issues in operations until recently. Mr, Janorschke asked if he is understanding correctly that when HEA submitted their concerns and addressed specific contract language, the O&D Committee felt there is enough latitude through the BPMC not to be held to the language within the agreements. Mr. Brooks believes that is an accurate characterization with respect to the dispatch and any portion of the operations that are under the operating procedures document. Mr. Janorschke asked when the O&D Committee began addressing the issues contained in the summary report. Mr. Brooks informed the O&D Committee has been attempting to address the issues at different levels since they were brought before the O&D Committee in January. Mr. Janorschke stated a concern that it was not until last Friday that the O&D Committee actually started delving into these issues. Mr. Brooks noted that was the last meeting, but a report document had already been created. Mr. Evans commented the O&D Committee had vetted the issues, presented them at the last BPMC meeting, at which Mr. Evans requested the O&D provide additional clarification and a summary of the allegations versus the vetting and findings. Mr. Evans believes it is unfair to characterize the O&D Committee has just recently addressed these issues. Mr. Janorschke stated he is asking the question because he has not seen this document before and it seemed awkward the proposed resolution yesterday for the Dispute Resolution Committee acknowledged the acceptance of the document at the O&D Committee before the O&D Committee even had their meeting. MOTION: Mr. Evans made a motion to accept the O&D Committee's responses to HEA's statement of disputes related to the January 9th letter, including the O&D Committee's former two lists of responses to establish the full record. Motion seconded by Mr. Foutz. Mr. Evans commented there are still some issues that have not been fully resolved. This work does not address the issues that still need to be vetted and resolved at the O&D level for technical issues related to these matters, including boundaries and full implementation of the LBA interface. Mr. Evans stated for the record there are issues remaining that need other decisions BPMC Minutes 4/17/14 Page 2 of 4 made and the final implementation has not been fully recognized. This document represents what the O&D has decided to date. Mr. Evans strongly disagrees with any inference that because flexibility was allowed within the established dispatch protocols, there was any implied or tacit approval to change contracts. There being no further comments and hearing no opposition, Chair Griffith stated the motion stands. Chair Griffith noted the substitute Resolution 14-10 has been provided to all parties. The intent of the substitute Resolution 14-10 is to define specifically the findings and recommendations of the Dispute Resolution Committee. MOTION: Mr. Evans made a motion to approve the revised Resolution 14-10 as amended and provided at today's meeting. Motion seconded by Mr. Miller. Mr, Janorschke asked how much lead time is required for the draft of the resolutions and amendments. Mr. Gibson stated the bylaws do not address that issue. It would be up to the BPMC to decide what is a reasonable amount of time, based on the subject matter, and what has been done historically with the BPMC, which is anything can happen to the motion once there is discussion. Robert's Rules of Order take over when the bylaws do not address the issue. Mr. Gibson recommended paragraph 20 should be more accurate regarding the O&D written reports. Mr. Gibson recommended the corresponding footnote be inserted, "See minutes of BPMC Special Meeting dated April 17th, 2014,".to be totally accurate. Mr. Gibson stated he was not aware of the O&D report presented today when he worked on this resolution. The maker of the motion and the second agreed to the amendment. Mr. Janorschke suggested a factual change on the first page where it references that all parties had counsel present at all scheduled meetings, except Seward, to reflect HEA did not have counsel present at all the meetings. Mr. Gibson suggested the ninth line state, "All of these parties had counsel present at some of the scheduled meetings." The maker of the motion and the second agreed to the amendment. A roll call vote was taken and the motion passed, with HEA voting against and AEA abstaining. 8. MEMBERS COMMENTS Mr. Carey stated AEA supports all of the efforts to resolve disputes and since AEA is not party to the agreement, AEA abstains from some motions. Mr. Carey asked which points on Resolution 14-10 does HEA agree with and which points HEA does not agree with. Mr. Janorschke noted HEA has a list of disputes and comments on every page. Mr. Janorschke commented he is happy to review the points if that is the wish of the Committee or he could review them at some point with Mr. Carey. BPMC Minutes 4/17/14 Page 3 of 4 Mr. Janorschke expressed his appreciation to Chair Griffith for the update and to the O&D Committee for their work. Mr. Evans echoed the previous comments and expressed his appreciation for all staff working on these arduous problems. Chair Griffith noted he will introduce the report findings and recommendations from the Dispute Resolution Committee at the BPMC meeting and suggest the Dispute Resolution Committee be disbanded. 9. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 2:32 p.m. BY: Joe Griffith, Chair of Dispute Resolution Committee Attest: Sara Fisher-Goad Alaska Energy Authority, Secretary BPMC Minutes 4/17/14 Page 4 of 4 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING Alaska Energy Authority, Anchorage, Alaska May 8, 2014 1. CALL TO ORDER Mr. Janorschke called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:20 a.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson (Golden Valley Electric Association (GVEA)); Sara Fisher-Goad (Alaska Energy Authority (AEA)); Bradley Evans (Chugach Electric Association (CEA)); Joe Griffith (Matanuska Electric Association (MEA)); Jim Trent (Municipal Light & Power (MLP)); Brad Janorschke (Homer Electric Association (HEA)); John Foutz (City of Seward (SEW)) 3. STAFF/PUBLIC ROLL CALL Kirk Warren, Teri Webster (AEA); Kirk Gibson (BPMC); Brian Bjorkquist (Department of Law); Brian Hickey, Burke Wick (CEA); Harvey Ambrose, Rick Baldwin, Robert Day, Alan Owens (HEA); Lou Agi, Rick Miller, Jeff Warner, Ken Langford (MLP); Ron Woolf (GVEA); Bernie Smith (Regulatory Commission of Alaska (RCA)); Robin Brena, Matt Clarkson (Brena Bell & Clarkson); Mike Kreger (Perkins Coie); David Pease; Miranda Studstill (Accu-Type Depositions); 4. AGENDA APPROVAL The agenda was approved. 5s PUBLIC COMMENT There were no public comments. 6. APPROVAL OF PRIOR MEETING MINUTES - March 21, 2014 MOTION: Mr. Foutz made a motion to approve prior meeting minutes of March 21, 2014. Motion seconded by Mr. Griffith. Mr. Griffith commented the minutes are exceptionally comprehensive and well done. He questioned Mr. Gibson whether the minutes need to be completed as extensively. Mr. Gibson noted the minutes need to reflect the activities at the meeting and the level of that activity is at the discretion of the Board members. Mr. Janorschke stated this issue will be put on the next meeting's agenda to be discussed and sent to the Chair. The motion passed unanimously. 7. NEW BUSINESS DRAFT BPMC Minutes 5/8/14 Page | of 5 A. Report from counsel - Dispute resolution procedures & options under the bylaws Mr. Gibson reviewed the key points of the memorandum dated May 5, 2014 that was distributed regarding dispute resolution procedures and options available to the BPMC. Mr. Gibson noted one issue not in the memo that should be made clear is the enforcement of any action or non- action from the BPMC is up to the parties in the Services Agreement and/or the members of the BPMC. The BPMC does not have any articulated power to act, so it would require the members to support the actions of the BPMC. Mr. Gibson stated the voting requirements are determined by what area or groupings of issues are addressed. Mr. Gibson does not know at this point which voting requirements will need to be used for Resolution 14-11. If dispatch related areas are voted upon, Mr. Gibson recommends using the requirement of the affirmative vote of at least four representatives of the Purchasers whose percentage shares of Project capacity are greater than 51%. Mr. Janorschke relinquished the meeting to Chair Evans. B. Resolving the dispute between Utilities - Resolution 14-11 MOTION: Mr. Borgeson made a motion to adopt Resolution 14-11. Motion seconded by Mr. Griffith. Maker of the motion stated this was fully discussed at the last BPMC meeting and appreciates all of the effort in developing this resolution. Mr. Janorschke noted this is a lengthy resolution and requested clarification of the disputed issues. Mr. Janorschke provided a one-page list of disputed issues to the members. MOTION: Mr. Janorschke made a motion to amend Resolution 14-11, which adds a sentence on page 10, IV. Findings of Fact and Conclusions of Law, Section A., after the first sentence, to read: "For clarity, a list of the specific disputed issues is attached to this resolution," and adds the list of disputed issues to the resolution. Chair Evans asked if the Maker of the motion would permit a brief at ease to review the proposed amendment. Mr. Janorschke agreed. A brief at ease was taken at 10:39 a.m.. Chair Evans called the meeting back to order at 10:47 a.m. The motion to amend Resolution 14-11 was not seconded. The motion to amend was not considered. Mr. Janorschke noted his amendment was an attempt to clarify the disputed issues that Resolution 14-11 is referencing, because there is no agreement on what the disputed issues are. HEA "Disputed Issues" list is attached. DRAFT BPMC Minutes 5/8/14 Page 2 of 5 Mr. Griffith stated the parties' positions are as listed in III.A. of Resolution 14-11. Mr. Griffith also objects to a substantial amendment being brought in very late in the process. Mr. Griffith does not believe the list provided today is a comprehensive list of the disputed issues. Ms. Fisher-Goad stated AEA will be voting no on this resolution because the disputes arise out of the Services Agreement, but the resolution includes the Power Sales Agreement (PSA) and a reference to the bond resolution, which is a concern for AEA because it is inappropriate to include those. Ms. Fisher-Goad asked Mr. Gibson, per his procedure guidance memo, if the passage of this resolution requires the affirmative vote of AEA because it includes and is related to the PSA. Mr. Gibson stated as the resolution is written, the passage of this resolution does not require the affirmative vote of AEA. Mr. Gibson asked what is AEA's concern regarding referencing the PSA. Mr. Bjorkquist directed the members to page 11, under the first paragraph, starting with the second sentence listing certain obligations arising under the PSA and ending with the sentence stating, "The current disputes between the designated utilities and HEA concern each of these areas of the BPMC's authority," which is saying these disputes arise out of the specific details dealing with the Project. Mr. Bjorkquist disagrees and noted these disputes arise out primarily of the transmission of power between Soldotna Substation and Quartz Creek and is not part of the Project. Mr. Griffith commented the fact that the PSA creates the BPMC seems the PSA is inextricable from the process that is underway. Mr. Bjorkquistexplained these disputes are arising out of the Services Agreement and that needs to be clearly stated in the resolution. The Services Agreement brings the BPMC into these disputes because the Services Agreement states the BPMC can adopt dispute resolution procedures that would be used to resolve a dispute under the Services Agreement and that is the connection to the BPMC. The PSA is not needed for the BPMC to have the authority to act and operate. This is not a dispute arising out of the Project. The dispute is effecting, connected to, and could have a practical impact on the Project, but that is different than this being a dispute that arises out of the Project. Mr. Griffith requested counsel respond to Mr. Bjorkquist. Mr. Gibson asked if it would satisfy AEA's concern if the sentence on page 11 was changed to read, "The current disputes between the designated utilities and HEA generally concern each of these areas of the BPMC's authority and specifically arise out of the Services Agreement." Mr. Bjorkquist believes that is a step in the right direction. The concern is this resolution will be used later and to whatever extent it is vague or ambiguous as to what is being done, problems are created and those are problems that should be avoided. Mr. Bjorkquist recommended another further step toward clarification is to delete the specific references in the sentence in Section 13.C. Chair Evans does not see the difficulty that Mr. Bjorkquist is articulating, but understands that is AEA's position. Chair Evans believes the resolution has been out long enough for those sort of nuances to be worked into the resolution and this is the wrong place and time to be addressing those. There are always unintended consequences of making changes at the last minute. A roll call vote was taken and the motion passed, with HEA and AEA voting against. DRAFT BPMC Minutes 5/8/14 Page 3 of 5 8. OPERATORS REPORT Mr. Owens gave a brief update on the Governor Project. The factory acceptance testing was successful and any tuning will have to be done during the installation of the project. The project is on schedule. Chair Evans asked if the commissioning plan and testing plan have been established. Mr. Owens noted those plans will be discussed tomorrow at the O&D Committee meeting. Mr. Day informed the O&D meeting tomorrow is intended to be an open forum and if there are any special plans or any tests that the utilities want to include as part of the plan, please bring them forward and they will be incorporated into the test plan. Mr. Griffith asked who is in charge of the commissioning process of the test. Mr. Owens stated that will be resolved at tomorrow's O&D meeting, but he believes the decision will be made to bring in an outside oversight commissioning agent. Mr. Griffith requested the BPMC be briefed in depth on the commissioning plan when it is complete. Mr. Day agreed. Mr. Borgeson asked if the project and commissioning is on budget. Mr. Owens stated the HEA budget is on schedule, but he does not know about AEA's budget for the consultants. Chair Evans commented AEA has the authority with the budget to protect the owner's interest in the project. Mr. Borgeson does not believe that is accurate and stated the approval of the consultants takes a majority vote. Mr. Borgeson believes the budget requires a majority vote and for AEA to take control of the spending would mean that proper due diligence is not occurring. Mr. Borgeson requested a comprehensive budget from AEA and if they have the authority to spend that amount. Ms. Fisher-Goad believes this is covered under the R&R fund and will get back with the members regarding a comprehensive budget. Mr. Day noted discussions have occurred regarding the advisory testing help requiring postponement of the installation. That may have a cost that will affect the budget, but the estimate is unknown at this point. Mr. Borgeson commented he is not necessarily opposed to the cost, getting assistance, or spending, but believes the approval needs to be by the BPMC and not by AEA. Mr. Owens gave a brief update on replacing a failed nozzle in June or July. This will be discussed in the O&D Committee meeting tomorrow. HEA has installed additional monitoring for generator connections and any static discharge. Unit 2, Phase A, shows a possibility there might be some insulation breakdown. Mr. Owens will update the BPMC at the next meeting. 9. COMMITTEE REPORTS A. O&D - Evaluation of operator report of compliance to reliability standards No update given. 10. COMMITTEE ASSIGNMENTS DRAFT BPMC Minutes 5/8/14 Page 4 of 5 Chair Evans stated there are task assignments, including the request for AEA's comprehensive budget and a report on the testing plan. 11. MEMBERS COMMENTS Mr. Griffith commented it has been nearly five months groveling in this dispute issue and is chagrinned it is still ongoing to these depths. Mr. Janorschke requested a copy of the recording of this meeting to understand the comments from the attorneys and others. Mr. Borgeson recognized Mr. Griffith for all of his leadership efforts. Mr. Borgeson expressed his disappointment regarding the ongoing dispute and looks forward to finding a resolution. Mr. Griffith expressed his appreciation for Mr. Borgeson's comments and Chair Evans was the one in charge. 12. NEXT MEETING DATE The next meeting date was not discussed. 13. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 11:19 a.m. BY: Bradley Evans, Chair Attest: Sara Fisher-Goad Alaska Energy Authority, Secretary DRAFT BPMC Minutes 5/8/14 Page 5 of 5 DISPUTED ISSUES The Designated Parties assert and HEA denies the truth or accuracy of the following propositions: i HEA does not have the legal right to recover transmission-related costs for wheeling Bradley Lake energy though a tariffed rate filed with the Regulatory Commission of Alaska (RCA). The RCA does not have jurisdiction to approve a tariffed rate which allows HEA to recover its costs of wheeling Bradley Lake energy. HEA did not have the legal right to remove from the Soldotna Substation the CEA meter used to measure the Bradley Lake power flow to that substation. The term "Soldotna Substation" as used in the Services Agreement, means the physical facility by that name located in Soldotna, Alaska unless and until changed by an amendment to the Services Agreement. HEA has a legal and/or contractual duty to permit CEA physical access to certain areas within its Soldotna Substation to enable Chugach to maintain a metering point for and to receive delivery of Bradley Lake power. HEA has a legal and/or contractual duty to permit CEA physical access to its Soldotna Substation and the transmission lines between the Soldotna and Quartz Creek Substations to enable Chugach to transmit Bradley Lake power from HEA’s Soldotna Substation to CEA’s Quartz Creek Substation. HEA has a legal and/or contractual duty to permit CEA physical access to its Soldotna Substation and the transmission lines between the Soldotna and Quartz Creek Substations to enable Chugach operate, maintain and repair the facilities. The legal and contractual rights and duties referred to in the above list arise under and by virtue of one or more of the Bradley Lake Agreements and AS 42.05.431(c). Unit Statistics: Bradley Lake BPMC September 18, 2014 Operators Report Generation Unit 1 (MWhrs) Unit 2 (MWhrs) Total (MWhrs) June 2014 17,578 6,163 23,741 July 2014 4,334 24,678 29,012 August 2014 22,713 14,219 36,932 Hydraulics Avg. Lake Level (ft) Usage (ac ft) Fishwater (ac ft) June 2014 1,134 24,054 4,346 July 2014 1,146 28,804 5,613 August 2014 1,165 36,587 6,371 Lake Level — September 16 - 1,180’ Incidents and CEA callout: June 1* — Fishwater flow at Lower Bradley River. The radio transmission signal from the LBR USGS gaging station failed in May when the station thawed. The DCS indication was not available so we were operating using the USGS website. During the morning hours of June 1* the fishwater flow dropped to 91 CFS for 3 fifteen minute updates. The operators made a flow correction when they came on duty. Replacement parts for the LBR radio system were located and the system was restored on June 10". AEA was notified on June 2". August 6", @14:22 - Unit #1 trip, low hydraulic pressure. This was caused by oscillations in the divider that caused an unusually high duty cycle on the hydraulic system. The lead pump was operating and the lag pump failed to start on low pressure. It was determined the lag pump breaker mechanism was out of adjustment and the breaker did not fully close when racked in. The breaker was repaired. August 14", @ 13:21- Unit #1 trip, low penstock pressure. Wiring technicians from Kachemak Electric were conducting installation loop I/O checks on the Unit #2 governor control installation. August 20" and 21° — Both Bradley units experienced divider oscillations that caused the units to trip. Emerson identified an undesirable interaction between (1) the normal power PID control loops within the governor, and (2) a frequency PID loop that controls the divider position. Emerson believes, based on the signals they saw, that these two PID loops interacted improperly and caused the divider to start to oscillate with the grid frequency. The oscillations built quickly Bradley Lake Operator Report Page 1 and the unit governors tripped when the dividers went to zero position. August 21° at 9:30 pm Emerson installed logic to correct the divider error. e Sept 12" Unit #2 tripped at 12:16pm. Load was 22 MW. Preliminary investigation indicates a relay action by the Jaquet overspeed detector. This is a specialized relay that will initiate a trip as a backup to the overspeed control scheme. Due to dispatch needs the unit was placed back in service which limits the ability to troubleshoot the problem. Additional alarming will be added to help trouble shoot external device failures that input into the governor trip system. Maintenance and Operation Activities: e Penstock Dresser Coupling Inspection and Painting - Extreme Access Inc. was on site the week of June 9"". Inspection of the coupling bolts indicated no significant degradation. The couplings and structures were cleaned and repainted. Additional rust prevention and paint was applied to structural surfaces in the Fishwater Portal Diversion Tunnel pipe and the Spillway Gallery corrugated metal tunnel surfaces. ° Dam Survey, July 15'"-26th — Ability Survey conducted the annual Dam Safety Survey. The results will be submitted to AEA and Dow! HKM for review. ° Crane inspections, August 1 1'"-13th — Washington Crane and Hoist conducted annual crane inspections. One limit switch on the portable JLG was found to fail intermittently. It was replaced. No other conditions were noted on plant cranes and hoists. ° Vibration Analysis, Sept 3'¢ - Associated Services conducted annual vibration monitoring and predictive analysis on the plant rotating equipment. Domestic water pump P1B had elevated values in the axial measurement. This pump will be monitored and trended. All other equipment on site is operating within expected ranges. Projects: e Turbine Nozzle Valve Repair — (Nozzle Picture on page 5) June 16" through June 27" — Nozzle Swap - NAES power constructors were on site to perform the Unit #2 nozzle #1 swap with the spare. Three millwrights and a project manager were mobilized to perform this work. They were part of the crew that performed the nozzle work in 2003 and the divider work in 2006. HEA provided the replacement parts and material required to install the nozzle and NAES provided the labor. The swap was performed in a six day period working mostly 12 hour days. The unit was released to dispatch on the evening of the 6"” day. CEA dispatch placed the unit in condense mode and received an alarm that the nozzle would not equalize. The problem was traced to the restoring shaft that provides nozzle Position feedback to the control system. The bronze bushing was too tight which would cause the feedback arm to stick at 3% when it was closed. The unit was Bradley Lake Operator Report Page 2 taken out of service one more day and the bushing has honed 3/1000ths to achieve the proper fit. Following the nozzle swap the NAES crew stayed for an additional 4 days to tear down the failed nozzle. During this exercise we also identified and cataloged each nozzle part to prepare for parts ordering and future nozzle rebuild. Preliminary inspection indicates the nozzle hydraulic leak was due damaged O- ring. It appears at some point the O-ring rolled. The damaged area was then exposed to hydraulic pressure cutting that increased flow past the damaged seal. The future benchmarks are as follows: 1. Repair Technology Inc. in Seattle has provided a preliminary estimate of $1500.00 to repair and refurbish the nozzle shaft. It will be crated and sent to them in September. 2. Order replacement parts for two nozzles this year. Negotiation and parts verification is ongoing with Voith Hydro. 3. Prepare a nozzle refurbishment plan for each unit and provide parts and labor estimates for the next budget cycle. * Governor PLC Replacement — This project is complete except for post outage monitoring and evaluation. It was completed within the scheduled time and testing proved that the governor functions properly. EPS and HEA are working with Emerson to verify one logic item that was installed after testing was complete. This was a logic adjustment to prevent the divider oscillations that occurred on August 20" and 21*. We are still gathering information to determine if additional fine tuning is required. Emerson prepared a preliminary “Operating Modes Description and Block Diagram” that will be reviewed and finalized by EPS as part of the testing contract. ° Fishwater Screen and Power Tunnel Sonar Inspection — 1. Global Diving and Salvage will mobilize on September 29th to complete a Sonar inspection of the Diversion Tunnel and Power Tunnel intake structures. We will also inspect the area below the dam to help plan for equipment access to the diversion tunnel for fishwater screen debris removal in the Spring of 2015. 2. HEA will contract with a local shop to construct a replacement fishwater screen in the event one is determined to be damaged. . Other Capital Projects that are in the works or pending — 1. Fire Protection - request for proposals to add a gaseous fire protection system to the engineering room at Bradley. This project will also seek proposals to replace the fire panels and alarm systems at the residences, crew quarters, shop, and powerhouse. 2. Purchase of replacement trucks 3. Replacement of loader, backhoe, and dump truck tires. Bradley Lake Operator Report Page 3 Inspections: Dam Inspections — June 20 -— Dam inspection completed, no notable items found July 20 - Repaired one heater in diversion tunnel gate house Replaced both batteries on diesel pumps and generator August 27-_ Minor seepage along spillway wall, right side September 15 — Bradley Lake reached spill level of 1180’ at 11:28 am. (Picture of spillway on page 5) Spillway Gallery Drains Measurement — August 9- Lake level at 1157’ D-18 pressure near threshold pressure August 14 — Lake level at 1165’ D-16 and D-18 readings meet published limits (AEA and Dow! HKM were notifed on August 14"") September 11 — Lake level at 1174.8" D-18 pressure reading is at the threshold value of 8.0 psi Bradley Lake Operator Report Page 4 Unit #2 nozzle #1 being removed from spiral cage wall Bradley Lake Operator Report Page 5 Bradley Lake Budget Subcommittee Expenditure Review and Budget Process Review July 14, 2014 Expenditure Review: Carrie Buckley, Deanna Hracha, Sherri L. McKay-Highers, Kelli Veech, Ron Woolf Budget Review and Budget Process Review: Bryan Carey, Rick Miller, Carrie Buckley, Deanna Hracha, Sherri L. McKay- Highers, Kelli Veech, Ron Woolf As a group we sampled vendor invoices from the Bradley Lake vendors and other expenditures charged by and paid by AEA. We noted that the labor burden seemed low on both HEA and CEA invoices. We would like to know if contracts define what is charged in the labor burden. We did a cursory review of the 2015 budget. It seemed reasonable in conjunction with the expenditures reviewed. We decided that revisiting the 2015 budget with the operators is not a good use of their time at this season when they are busy working on the Plant. We reviewed the budget process and where it went wrong this year. Rather than focus and report on what happened with the FY2015 budget, we would plan prospectively for future budgets. We noted that more communication needs to occur between the technical experts on the O&D Committee and the Budget Committee members to allow the Budget Committee to better understand the projects from a technical standpoint. Additionally, improved communications from the participants O&D and Budget subcommittees needs to occur with General Managers prior to the introduction of the proposed budget. Here is our prospective plan for the budget process: 1) The O&D Committee meets the 2nd Thursday of each month a. O&D Committee will provide agenda and call in number to the Budget Committee. b. Budget Committee will determine if they need a representative(s) to participate. 2) Have an 0&D Committee meeting quarterly agenda item to review the Quarterly Budget and potential budget revisions/changes. a. Budget Committee will participate b. Per Kelli, quarterly reporting comes out 2 months after the quarter end, so review Dec quarter end in Feb, or March depending on timing, so we propose meeting with the O&D Committee to review the budget at the January, April, July, and October meetings 3) Make January O&D Committee Meeting a Joint Meeting with Budget Committee and AEA a. Start reviewing the next Fiscal Year’s budget b. O&D Committee to pass a formal resolution approving the budget before it goes to the Budget Committee 4) AEA (Kelli) will put together draft budget for Budget Committee a. Must be ready in time for Budget Committee to meet before 2" Thursday in February. 5) Have Budget ready for the Bradley Project Managers Committee by March 1. 6) Refine the process as it develops.