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HomeMy WebLinkAboutBradly Lake PMC Rep. List 02-27-2002RECOMMENDATION The Bradley Lake Operations and Dispatch Subcommittee recommends to the Bradley Lake Project Management Committee (BPMC) that it authorize Chugach Electric Association Inc. (Chugach) to provide the functional specification for the Unit Governor Digital Control System to GE Global Services and to VA TECH VOEST MCE Corp. Additionally, authorize Chugach to request that both vendors complete the table of compliance for the specification. Furthermore, authorize Chugach to pursue the possibility of ABB Hydro, now Alsthom Power, also completing the table of Compliance. Finally, authorize Chugach to make a recommendation to the O&D based on its review of the tables of compliance regarding the most qualified vendor. DATE: BRADLEY PMC VOTING Agenda Item No. #2 A ol i Gul YES NO ABS YES NO ABS YES NO ABS CITY OF SEWARD 01% [ZT =] Le] MATANUSKA ELEC Assoc 14% ‘(OZ CHUGACH ELEC ASSOC 30% [AL J HOMER ELEC ASSOC mm (Eo | Sc] GOLDEN VALELEC ASSOC. 17% [Z[_ [|_| MUNI LIGHT & POWER 26% ree | ALASKA ENERGY AUTHORITY era A=4+ OVER 51% B= AEA CONCUR With A 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) 12) 13) 14) 15) Determination of rules, procedures and accounts necessary to manage project when no bonds outstanding. Evaluation and approval of optional project work and compensation for such work. Application of insurance claims proceeds not governed by bond resolution. Approval of procedures and any individual utility agreements relating to electric power reserves for project. Approval of consultants. VOTING METHOD C: Unanimous vote by all (including AEA) VOTING METHOD D: Majority vote (including AEA) Election of Officers Bradley Lake PROJECT MANAGEMENT COMMITTEE MEETING Y-2 ¥-02 (Date) “Pe hcontrere ALDEA (Location) PLEASE SIGN IN No. NAME REPRESENTING ard a ; CfA, Yi AL AEA 10 ll 12 13 14 15 st 16 17 18 19 20 21 2a 92Q2\IT9884 amy = bese bar"Cigpsins owed Ly © bas lh the fF + ogiille Gileguite, te Corte yor dike en Fincvee | premitter ty look. inche +tlod New-— yes - lwK @Q_ reco mane hotno ee i Motiv Finowee Come ieduonad feteved yaruye Policies... 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Ove sil , Aptian Fillo Prearvene “pre ee [bye = would 4 ke pusible ge the te ctw wy? | Netm— Corer b ter Cnctach 2 Wack = de ne bee te ener - ts puaci fet, ae Dee Steel — The Or talks abwh "HEA wok. fells pede b+ M Caehendh. AEA eadroctirg Party — Fyal erAity wf ite ss He. aa Ferns + Corbina . il fone- li ot budyeA 8 Me Peconmerbh- User AEA 00 Lely fe OL Stout [0:00 Gum. ed [0$ 50 On 04/22/02 18:12 FAX 503 226 0079 ATER WYNNE {010/010 ATERWYNNE ur CONFIDENTIAL — ATTORNE Y/CLIENT PRIVILEGE additional coverage that may apply to HEA acts. We will update this memo afler a review of the policy is completed. 6. CEA-AEA Operation and Maintenance Agreement-Static VAR Compensation System (dated 8/20/96). Section 3 incorporates Exhibit A of the Master Operating Agreement into the O&M Agreement. Exhibit A (described above) provides that CEA will maintain “adequate” insurance in amounts acceptable to AEA, but nothing in the Agreement specifically describes the insurance to be maintained by CEA. There is no discussion of any AEA insurance coverage as excess to the amounts covered by CEA’s insurance. Exhibit A (Subsection (a) and Subsection (b)) state that CEA is an “independent contractor” and that CEA indemmifies AEA from any CEA negligence. Bradley Lake Project Management Committee Dave Calvert, Seward Wayne Carmony, MEA Gene Bjornstad, CEA Norm Story, HEA _ Steve Haagenson, GVEA Michael Scott, ML&P Cc: Brian Bjorkquist, Assistant Attomey General Art Copoulos, AEA Page 4 173725/2/LG11/053844-0000 . 04/22/02% 18:12 FAX 503 226 0079 ATER WYNNE 009/010 . ATERWYNNEu CONFIDENTIAL — ATTORNEY/CLIENT PRIVILEGE comparable to amounts for comparable facilities. Comprehensive auto liability and workers’ compensation are also required. 35 Bradley Lake BPMC Bylaws Article 11 (Project Insurance) parallels the Bond Resolution provisions. 4. Master Maintenance and Operating Agreement (dated 5/24/94). Section 3 obligates AEA to “enter into Contracts necessary to perform services for, or operation and maintenance of the Project or Project Related Facilities (i-c., Project transmission and substation facilities). All Contracts shall be subject to the Master Contract Provisions set forth hercin.” The Contracts are subject to the procedures detailed in the PSA (BPMC review and approval and inclusion in an Annual Project Budget). Exhibit A to the Master Agreement is a required attachment to any AEA- contractor contract. Subsection (a) of Exhibit A provides that “Unless otherwise agreed to by the Parties, each Contractor entering into a Contract shall perform solely as an independent contractor. Subsection (g) requires the contractor to maintain “adequate” insurance in amounts acceptable to AEA and consistent with the PSA. Subscction (h) provides that each Party to the contract (i.e, AEA and contracting Party) indemnifies the other for its negligence. Concurrent negligence responsibility is to be determined “by the trier of fact.” 5. HEA-AEA Operation and Maintenance Agreement (dated 2/11/94). Section 13 (Insurance) provides that “(a)(1) Each Party shall be liable for the negligent, willful and grossly negligent acts of its officers, employees, agents and contractors with respect to the ownership, construction, operation, maintenance or repair of the Project. It is recognized that the project insurance does not cover the willful and grossly negligent acts of a party. Each Party shall be solely liable for the willful and grossly negligent acts of its officers, employees, agents and contractors.” Subsection (a)(2) requires HEA to maintain insurance satisfactory to AEA and the BPMC unless the BPMC or the AEA elects to obtain such coverage. Subsection (a)(3) provides that insurance obtained under Subsection (a)(2) is the “primary coverage” for exposures of the AEA and any insurance obtained by AEA or the BPMC “shall be in excess” of that insurance. We have requested that the Alaska Department of Risk Management forward copies of their policies with ARECA and Willis (Seattle) to determine the level of Page 3 os 173725/2/LGH/053844-0000 04/22/02° 18:11 FAX 503 226 n79 ATER WYNNE 008/010 ATERWYNNEu? CONFIDENTIAL — ATTORNE Y/CLIENT PRIVILEGE any AEA exposure. However, the same agreement states that each party is liable for its own negligence, and the project insurance will not cover gross negligence. ANALYSIS The Bradley Lake Power Sales Agreement (dated 12/8/87), the Bond Resolutions supporting the Bonds sold to finance the Project, and the Mastcr Maintenance and Operating Agreement between AEA and the BPMC (dated 3/24/94) each contain provisions that provide the overall] insurance and liability obligations of AEA, the BPMC, and AEA contractors. In addition, the existing O&M agreements between AEA and HEA and between AEA and CEA, and the insurance policies and self-insurance obligations of AEA, each provide insight regarding the risks assumed by AEA, thc BPMC and AEA’s contractors. i Bradley Lake Power Sales Agreement (“PSA”) Insurance and BPMC Contract Obligations. Section 7 of the PSA obligates each Purchaser to pay its Participants Share of Annual Project Costs for each Fiscal Year. Section 8 defines Annual Project Costs as “all of the costs resulting from the ownership, operation, maintenance of and renewals and replacements to the Project, properly incurred or paid during each Fiscal Year... .” Those costs include “Costs of Project-related insurance, . . -” (Section 8(a)(vii)(A).) As a result, the Purchasers, operating under an approved Annual Budget, are responsible to pay for Project insurance and all Project Costs that are not insured by AEA or are not the responsibility of another party under a contract with AEA. AEA’s obligations to provide insurance are provided in the Bradley Lake Project Bond Resolution. N Bradley Lake Power Revenue and Bond Resolution. Section 714 requires AEA to “keep and maintain the Project insured against such risks and in such amounts, with such deductible provision, as are customary in connection with the operation of facilities of a type and size comparable to the Project. The determination of what is customary within the meaning of the prior sentence shall be made by an independent insurance consultant employed by the Authority.” There is a specific requirement that AEA carry insurance to cover “buildings, works, plants and facilities comprising the Project for all risks of direct physical loss, at all times in an amount not less than the amount necessary giving regard to co-insurance provisions to pay and retire and redeem all the Outstanding Bonds.” In addition, the section requires AEA to obtain coverage for “general public liability in minimum amounts per occurrence,” in amounts Page 2 173725/2/LGH/053844-0000 04/22/02 18:11 FAX 503 226 0079 ATER WYNNE (007/010 ATERWYNNE ur CONFIDENTIAL — ATTORNE Y/CLIENT PRIVILEGE ATTORNEYS AT LAW Suite 1800 222 S.W. Columbia Portland, OR 97201-6618 503-226-1191 Fax 503-226-0079 MEMORANDUM VIA FACSIMILE TO: Bradley Lake Project Management Committee FROM: Larry G. Hittle and Inara Scott DATE: April 22, 2002 RE: Insurance Obligations Related to Bradley Lake Project Contracts, AEA, PMC, and Contractors OVERVIEW The Bradley Lake Project Management Committee (“BPMC”) asked that we provide the BPMC with a summary of the insurance obligations of the Alaska Energy Authority (AEA), the BPMC, and the contractors providing services for the Bradley Lake Project (“Project”). SUMMARY 1) Insurance Requirements p Pt LAND SEATTLE Each Purchaser must pay its Participant’s share of insurance costs and any other Project-related expenses that are not the responsibility of any other party. Any losses that are not covered by existing parties will ultimately be the responsibility of the Purchasers. AEA must maintain adequate insurance for Project facilities, general public liability, auto liability and worker’s compensation. In Project-related contracts, independent contractors must maintain adequate Insurance in amounts acceptable to AEA, and each party must indemnify the other for its negligence. Under the HEA-AEA O&M Agreement, HEA is required to provide insurance satisfactory to AEA and BPMC, and this insurance is primary coverage for 173725/2/1.GH/053844-0000 04/22/02" 18:11 FAX 503 226 1079 ATER WYNNE 006/010 ATERWYNNEur CONFIDENTIAL ~ ATTORNEY/CLIENT PRIVILEGE RECOMMENDATIONS A. Continue the practice of using AEA as the primary contracting agency for the Project. If it is more convenient, use the existing AEA contractors to sub-contract for Project related services. Avoid BPMC acting as the primary contractor for Project-related services. B. Investigate the possibility of re-creating BPMC as a limited liability company to avoid limitless liability for individual Committee members if the BPMC determines that the BPMC should become the contractor for Bradley Lake issues. C. Amend the existing AEA contracts with HEA and CEA to provide consistent insurance and liability terms as suggested by Warren, McVeigh & Griffin. Clarify the relationship of AEA and its contractors with respect to primary and secondary liability insurance. D. Proceed with the overall review of Project insurance (AEA and contractor) for adequacy and consistency of teums. Bradley Lake Project Management Committee Dave Calvert, Seward Wayne Carmony, MEA Gene Bjornstad, CEA Norm Story, HEA Steve Haagenson, GVEA Michael Scott, ML&P Cc: Brian Bjorkquist, Assistant Attorney General Art Copoulos, AEA Page 5 173992/1/1.GH/053844-0000 04/22/02" 18:10 FAX 503 226 9979 ATER WYNNE 005/010 ATERWYNNE ur CONFIDENTIAL — ATTORNE ¥Y/CLIENT PRIVILEGE members hold the BPMC out to have authority to enter into contracts on their behalf, or by express agreement.® If the BPMC is the agent of the Committee members, the Committee members are joint and severally liable for BPMC obligations just as they would be in the partnership context.’ Whether by intent or default, it is most likely that the BPMC will be considcred an agent of the Commitiee members. Thus it is probable that Committee members are jointly and severally liable for all obligations of the BPMC. 2 Should the BPMC enter into contracts with an individual Purchasing Utility for services related to the Project? Section 13(c) of the PSA establishes the BPMC’s responsibilities for management of the Project. That section requires the BPMC to: “Arrange for the operation and maintenance of the Project, and the scheduling, production, and dispatch of Project power . . . subject to the provisions of the Bond Resolution, federal and state law, the requirements of licensing and regulatory agencies, and the rights of the Authority and the Purchasers under other provisions of this Agreement.” The AEA as owner of the Project is the FERC Project licensee and therefore the party ultimately responsible for the operation of the Project. As a result, the Bylaws of the BPMC and the Master Operation and Maintenance Agreement between the BPMC and AEA reflect the assumption that AEA is the contracting party for most Project work. Hence, AEA contracted with HEA to operate and maintain the Project and CEA contracted with AEA for O&M of the Soldotna Static VAR Compensation System. All AEA O&M contracts for the Project must be approved by the BPMC under the Master Maintenance and Operation Agreement (see Item 3 below). We recommend that the BPMC continue to use the ABA as the contracting entity for Project-related services. Given that the BPMC members may be jointly and severally liable for BPMC actions, BPMC’s participation in Project contracting raises insurance and liability questions for both the BPMC and each of its members. While the existing AEA contracts need some revision, the AEA, as Project owner, is the logical contractor for Project services. The BPMC can contract for services related to its functions under the Power Sales Agreement (audit, budget, legal, financial, engineering review), however Committee members should be aware that they may be liable for these obligations. °City of Delta Junction v, Mack Trucks, Inc,, 670 P.2a 1128 (Alaska 1983). The Master Maintenance & Operating Agreement § 5 gives the clearest evidence of this, where it states, “The Parties intend that the BPMC is the representative of the Purchasers . . . .” Td. Page 4 173992/1/LGH/053844-0000 04/22/02" 18:10 FAX 503 226 N79 ATER WYNNE 004/010 ATERWYNNE ur CONFIDENTIAL — ATTORNEY/CLIENT PRIVILEGE The analysis of the Committee must be drawn primarily from the agreements that created and formed it. The PSA states, “The Committee shall consist of the Authority and the Purchasers . . . . Each Committee member entitled to vote shall designate one representative and one alternative representative to the Committee.” PSA § 13 (a). The PSA does not designate the contractual authority of the BPMC or make any statements with regard to liability of the BPMC. The Committee Bylaws, drawn directly from the PSA, use this same language. BPMC Bylaws provide for indemmification of Committee representatives or agents.” Several agreements also refer to the BPMC as a third-party beneficiary. See Operation & Maintenance Agreement for Bradley Lake Project, § 20 (signed February 11, 1994, between HEA and AEA); Master Maintenance & Operating Agreement § 5 (signed May 24, 1994 between BPMC and AEA). These contractual provisions, taken together, imply that the Committee is an independent entity, and that the member representatives make up a decision-making body of that entity. The limited language in the PSA suggests that the Committee is not simply a represeutative body, but is independently organized and made up of the state and the Purchasers, The BPMC can only be a third-party beneficiary and indemnify Committee representatives if it is an independent organization. If indeed the BPMC is determined to be an independent organization, a partnership is the only entity the Committce members could have formed by implication or default.’ All members of a partnership are jointly and severally liable for partnership obligations.* If the BPMC cannot be considered a partnership,” it will most likely be determined to be an affiliation of organizations without entity status. In this case, the BPMC would be designated the agent of the Committee members, with the authority to bind Committee members to contractual obligations. An agency rclationship can be formed by implication, as where the Committee ? article 8 (Indemnification) provides: To the extent legally permitted and financially able to do so from Committec controlled assets, the Comnmittee shall indemnity 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 the purposes of this provision, “Committee member” means a Committee representative, au alternate Committee representative, an authorized agent of the Committee who is otherwise employed by the Committce, the Purchasers or any authorized employee of the Committee, 3 Innes v. Beauchene, 370 P.2d 174 (Alaska 1962) (partnership may be determined by conduct, transactions and declarations). * Alaska Stal. § 32.06.306 (2001). * A partucrship is an association of persons “to carry on as co-owners a business for profit.” Alaska Stat, § 32.05.010 (2001), The BPMC may not qualify under this definition because of the non-profit and cooperative status of its membcrs. Page 3 173992/1/LGH/053844-0000 04/22/02* 18:09 FAX 503 226 n79 ATER WYNNE {003/010 ATERWYNNE ur CONFIDENTIAL — ATTORNEY/CLIENT PRIVILEGE Compensation System. Both the HEA and the CEA contracts anticipate the possibility of sub- contracts and provide for mandatory insurance to be obtained by the utilities. The BPMC, as required undcr the terms of the Bradley Lake Power Sales Agreement, has approved the HEA and CEA contracts. B. Questions Regarding BPMC Authority and Member Liability Several basic questions have been raised in BPMC discussions of related issues: What authority does the BPMC have to enter into contracts, either on its own or on behalf of Committee members? What is the potential liability of the BPMC and its members under existing contracts or under future BPMC and AEA contracts for the Project? Should the BPMC enter into contracts with an individual Purchasing Utility for services related to the Project? ip What authority does the Bradley Project Management Committee (“Committee”) have to enter into contracts and bind Committee members to performance and liability under those contracts? a. Summary The precise nature and role of the Committee is treated ambiguously in the relevant agreements implementing and addressing the Committee. It is possible to interpret the various agreements iu such a manner that the Committee can be seen as an independent entity that enters into contracts on its own behalf. The Committee may also be seen as an agent of Committee members that has the authority to enter into contracts on behalf of Committee members. Under either scenario, however, individual Committee members will mostly likely be jointly and severally liable for any contracts signed by the Committee. b. Analysis The first document to discuss the Committee is the Agreement for the Sale and Purchase of Electric Power (“PSA”), the comprehensive sales agreement for power generated by the Bradley Lake Hydroelectric Project. The Parties to this Agreement are Chugach Electric Association (“Chugach”), Golden Valley Electric Association (“GVEA”), Municipality of Anchorage d/b/a Municipal Light and Power (“ML&P”), the City of Seward d/b/a Seward Electric System (“SES”), and the Alaska Electric Generation & Transmission Cooperative, Inc. (*AEG&T”), collectively “Purchasers.”! ‘The Homer Electric Association (“HEA”) and the Matanuska Electric Association (“MEA”) are additional parties to the Power Sales Agrcement. Page 2 173992/1/LGH/053844-0000 04/22/02” 18:09 FAX 503 226 0079 ATER WYNNE 002/010 ATERWYN NEup CONFIDENTIAL ~ ATTORNEY/CLIENT PRIVILEGE ATTORNEYS AT LAW MEMORANDUM VIA FACSIMILE LO: Bradley Lake Project Management Committee FROM: Larry Hittle and Inara Scott DATE: April 22, 2002 RE: Overview of Bradley Lake Project Contracting Procedures OVERVIEW At the request of the Bradley Lake Project Management Committee (““BPMC”), we have reviewed the past contracting actions and policies of the BPMC and Alaska Energy Authority (AEA) with respect to the Bradley Lake Project (“Project”). We have provided an analysis of the scope of BPMC’s contractual authority, and the liability of individual Committee members for obligations incurred by the BPMC. Finally, we have provided recommendations for future BPMC activities. SUMMARY BPMC generally has the authority to bind the Committee members. The Committee members are likely to be jointly and severally liable for all obligations of the BPMC incurred with respect to operation and maintenance of the Project. ANALYSIS A. Background Project contracting procedures have generally relied upon AEA as the primary contracting entity. Three primary contracts are in place relating to the Operation and Maintenance of Project facilities. First, in 1994 Homer Electric Association (HEA) and AEA signed the Operation and Maintenance Agreement that detailed each party’s responsibilities. Later that year the BPMC and AEA entered into a Master Maintenance and Operating Agreement that set up contract standards for AEA Project contracting. Finally, AEA entered into an Operation and Maintenance Agreement with Chugach Electric Association (CEA) conforming to the terms of the Master M&O Agreement for the Soldotna Static VAR 173992/1/.GIV0S3844-0000 rd#tiranon i 2 BA, oD ae Suite 1800 222 $.W. Columbia Ponland, OR 97201-6618 503-226-119] Fax 503-226-0079 04/22/02 18:09 FAX 503 226 0079 ATER WYNNE ATERWYNNEur ATTORNEYS AT LAW FACSIMILE TRANSMITTAL 001/010 Suite 1800 222 $.W. Columbia Portland, OR 97201-6618 503-226-3191 Trax 503-226-0079 NOTICE: This facsimile contains confidential information that is being transmitted to and is intended only for the use of the recipient named below. Reading, disclosure, discussion, dissemination, distribution, or copying of this information by anyone other than the named recipient or his or her cmployees or agents is strictly prohibited. If you have received this facsimile in error, please immediately destroy it and notify us by telephone, 503-226-1191. DATE: April 22, 2002 TO: Bradley Lake Project Management Committee FROM: Larry Hittle and Inara Scott DOCUMENT: Bradley Lake Project Management Committee Memos PAGES (INCL. COVER) 10 Gene Bjornstad, CEA, Anchorage, AK Dave Calvert, City of Seward, Seward, AK Wayne Carmony, MEA, Palmer, AK Norn Story, HEA, Homer, AK Steve Haagenson, GVEA, Fairbanks, AK Michael Scott, ML&P, Anchorage, AK Art Copoulos, AEA, Anchorage AK Brian Bjorkquist, AK Attomey General’s Office, Anchorage, AK. PORTLAND SEATTLE —Fax No. __ Office No._ 907/562-6994 907/224-4085 907/761-9368 907/235-3323 907/458-5951 907/263-5204 907/269-3044 907/269-5150 907/563-7494 907/224-4049 907/745-3231 907/235-8551 907/458-5866 907/279-7671 907/260-3000 907/258-4978 - @ ALASKA INDUSTRIAL DEVELOPMENT * AND EXPORT AUTHORITY {= ALASKA @@E™ ~=ENERGY AUTHORITY 813 WEST NORTHERN LIGHTS BLVD. © ANCHORAGE, ALASKA 99503 © 907/269-3000 © FAX 907 / 269-3044 TOLL FREE (ALASKA ONLY) 888 / 300-8534 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING VIA TELECONFERENCE eet AGENDA On |S Wednesday, April 24, 2002 — 10:00 a.m. (Via electronic media at AIDEA/AEA - 813 W. Northern Lights Boulevard) (Corner of Arctic and Northern Lights Boulevard) 1. CALLTO ORDER ~~ Haagenson 2. ROLL CALL (for Committee members) — 3. PUBLIC ROLL CALL (for all others present) ~ 4. PUBLIC COMMENT -— 5. AGENDA COMMENTS “ 6. APPROVAL OF MEETING MINUTES March 5, 2002 vo April 11, 2002 1 Avent t. NEW BUSINESS r Rw Hsia spa Relating to the ee Project |“ Hickey ( \ forv tle - Recomnerncat ions cs ( MMIT # COMMENTS \e€ \ by-Laws Alexi Meeting Date Haagenson ADJOURNMENT — ences ——> tittle 97 f{\ 4, mencdect ions Or NP” 7 *) N\ece 7 2 7 =o = } esg ‘) ww “Reloty i ty the oo (ia sl BY Kees Bradley Lake PMC Meeting Wednesday, April 24, 2002 Page 3 of 3 just confuse the issue and create an additional insurance wrinkle. His recommendation states that if you do contract, you contract in a way that would be binding on each of the utilities as PMC acting as agents for them. He suggested continuing the practice of using AEA as the primary contracting agency for the project and if you feel it might be more convenient to use HEA or CEA, take action to allow that to happen. After discussion, it was decided to table the item and give the utilities time to meet and come back to the PMC with their suggestion and move forward. MOTION: Charge the finance committee to look at the insurance coverage levels, both internal and external, and compare the various policies to see how well it fits together and see if it’s consistent. Mr. Laufer stated that AEA will undertake a similar review using the Division of Risk Management. The State has an independent interest in making sure there is adequate insurance and has a duty to do that, and under the FERC licenses as well. Mr. Laufer noted that Mr. Copoulos would coordinate with the finance committee so there wasn’t duplicate effort. MOTION to table action on this item by Mr. Bjornstad seconded by Mr. Story until the Tuesday, April 30, 2002 teleconference at 10:00 a.m. Cc. BY-LAWS Steve Haagenson Chair Haagenson restated that he wanted everyone to receive a copy of the updated by-laws. 8. COMMITTEE COMMENTS A. Next Meeting Date - Haagenson Chair Haagenson recommended that the next regularly scheduled meeting of the committee be held at 10:00 a.m. on Tuesday, April 30, 2002, via teleconference, at the Alaska Industrial Development and Export Authority's Board Room. 9. ADJOURNMENT There being no objection and no further business of the Committee, the meeting was recessed at 10:50 a.m. BY: Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary Bradley Lake PMC Meeting Wednesday, April 24, 2002 Page 2 of 3 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS Chair Haagenson added discussion of Larry Hittle’s contracting issues report, a second item of the recommendation relating to the governor repair project and third, Chair Haagenson requested that everyone receive a copy of the current by-laws. 6. APPROVAL OF MEETING MINUTES - March 5, 2002 and April 11, 2002 MOTION: Mr. Story moved to approve the meeting minutes of March 5, 2002, seconded by Mr. Bjornstad. A voice vote was taken, and the minutes were unanimously approved. MOTION: Mr. Story moved to approve the meeting minutes of April 11, 2002, seconded by Mr. Day. Mr. Bjornstad noted that on item 7A., the third sentence wasn’t clear regarding was there more than one response. Brian Hickey stated that the initial RFQ received one response from GE Global Services. He contacted all the vendors asking them why then hadn’t responded, and at that point VA Hydro responded noting that the Request had been sent to the wrong location. The corrected sentence will read: We have contacted a number of vendors and had one response from GE Global Services. Mr. Bjornstad also noted that the third sentence in the last paragraph ...they aren’t qualified... he thought that was just the opinion of Brian Hickey. Mr. Hickey noted that that was their opinion to him. Minutes would reflect that ‘they’ being L&S Electric, would be changed. This change would include a name insertion of L&S Electric. On page 3 of 3, item 7D, the last sentence didn’t read correctly. The corrected sentence would read: The Master Agreement and the O&M Agreement along with copies of insurance policies were sent to the consultants for review. A voice vote was taken, and the minutes were unanimously approved as amended. 7. RECOMMENDATION ON INSURANCE __Larry Hittle Mr. Hittle noted that he had sent out two memorandums - one that talked about contracting procedures, and the other which was an examination of various terms and conditions regarding insurance and liability that existed in the current contracts. Mr. Hittle discussed the memorandum relating to contracting procedures and the relationship of the PMC to contracting. Mr. Hittle noted that the Settlement Agreement lays out the financial responsibilities pretty clearly. Mr. Hittle recommends to continue to use AEA as the contracting body for project repairs or project O&M and not have the PMC get involved in the chain of command. In the end it would BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Via Electronic Media @ AIDEA 813 W. Northern Lights Boulevard Anchorage, Alaska Wednesday, April 24, 2002 — 10:00 a.m. 1. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Wednesday, April 24, 2002, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Dave Calvert City of Seward (teleconference) Wayne Carmony Matanuska Electric Association (teleconference) Gene Bjornstad Chugach Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Steve Haagenson Golden Valley Electric Association (teleconference) Bob Day Anchorage Municipal Light & Power (teleconference) Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Keith Laufer, Foster Pepper Rubini & Reeves, Counsel to AEA Bob Zaharsky, Bradley Lake (teleconference) Brian Hickey, Chugach Electric Association (teleconference) Lee Thibert, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association (teleconference) Mike Cunningham, Chugach Electric Association (teleconference) Don Stead, Homer Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Larry Hittle, AterWynne, LLP (teleconference) Bradley Lake PMC Meeting Wednesday, April 24, 2002 Page 3 of 3 just confuse the issue and create an additional insurance wrinkle. His recommendation states that if you do contract, you contract in a way that would be binding on each of the utilities as PMC acting as agents for them. He suggested continuing the practice of using AEA as the primary contracting agency for the project and if you feel it might be more convenient to use HEA or CEA, take action to allow that to happen. After discussion, it was decided to table the item and give the utilities time to meet and come back to the PMC with their suggestion and move forward. MOTION: Charge the finance committee to look at the insurance coverage levels, both internal and external, and compare the various policies to see how well it fits together and see if it’s consistent. Mr. Laufer stated that AEA will undertake a similar review using the Division of Risk Management. The State has an independent interest in making sure there is adequate insurance and has a duty to do that, and under the FERC licenses as well. Mr. Laufer noted that Mr. Copoulos would coordinate with the finance committee so there wasn’t duplicate effort. MOTION to table action on this item by Mr. Bjornstad seconded by Mr. Story until the Tuesday, April 30, 2002 teleconference at 10:00 a.m. Cc. BY-LAWS Steve Haagenson Chair Haagenson restated that he wanted everyone to receive a copy of the updated by-laws. 8. COMMITTEE COMMENTS A. Next Meeting Date - Haagenson Chair Haagenson recommended that the next regularly scheduled meeting of the committee be held at 10:00 a.m. on Tuesday, April 30, 2002, via teleconference, at the Alaska Industrial Development and Export Authority's Board Room. 9. ADJOURNMENT There being no objection and no further business of the Committee, the meeting was recessed at 10:50 a.m. BY: son, Chairman SteveyHaa ATTEST: Ad eee Alaska Energy Authority, Secretary Bradley Lake PMC Meeting Wednesday, April 24, 2002 Page 2 of 3 4. PUBLIC COMMENT There were no public comments. 5: AGENDA COMMENTS Chair Haagenson added discussion of Larry Hittle’s contracting issues report, a second item of the recommendation relating to the governor repair project and third, Chair Haagenson requested that everyone receive a copy of the current by-laws. 6. APPROVAL OF MEETING MINUTES — March 5, 2002 and April 11, 2002 MOTION: Mr. Story moved to approve the meeting minutes of March 5, 2002, seconded by Mr. Bjornstad. A voice vote was taken, and the minutes were unanimously approved. MOTION: Mr. Story moved to approve the meeting minutes of April 11, 2002, seconded by Mr. Day. Mr. Bjornstad noted that on item 7A., the third sentence wasn’t clear regarding was there more than one response. Brian Hickey stated that the initial RFQ received one response from GE Global Services. He contacted all the vendors asking them why then hadn’t responded, and at that point VA Hydro responded noting that the Request had been sent to the wrong location. The corrected sentence will read: We have contacted a number of vendors and had one response from GE Global Services. Mr. Bjornstad also noted that the third sentence in the last paragraph ...they aren’t qualified... he thought that was just the opinion of Brian Hickey. Mr. Hickey noted that that was their opinion to him. Minutes would reflect that ‘they’ being L&S Electric, would be changed. This change would include a name insertion of L&S Electric. On page 3 of 3, item 7D, the last sentence didn’t read correctly. The corrected sentence would read: The Master Agreement and the O&M Agreement along with copies of insurance policies were sent to the consultants for review. A voice vote was taken, and the minutes were unanimously approved as amended. t RECOMMENDATION ON INSURANCE __Larry Hittle Mr. Hittle noted that he had sent out two memorandums — one that talked about contracting procedures, and the other which was an examination of various terms and conditions regarding insurance and liability that existed in the current contracts. Mr. Hittle discussed the memorandum relating to contracting procedures and the relationship of the PMC to contracting. Mr. Hittle noted that the Settlement Agreement lays out the financial responsibilities pretty clearly. Mr. Hittle recommends to continue to use AEA as the contracting body for project repairs or project O&M and not have the PMC get involved in the chain of command. In the end it would BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES ls \ Via Electronic Media @ AIDEA LJ 813 W. Northern Lights Boulevard Anchorage, Alaska Wednesday, April 24, 2002 — 10:00 a.m. i CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Wednesday, April 24, 2002, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2 ROLL CALL Roll was called by Shauna Dean. The following members were present: Dave Calvert City of Seward (teleconference) Wayne Carmony Matanuska Electric Association (teleconference) Gene Bjornstad Chugach Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Steve Haagenson Golden Valley Electric Association (teleconference) Bob Day Anchorage Municipal Light & Power (teleconference) Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Keith Laufer, Foster Pepper Rubini & Reeves, Counsel to AEA Bob Zaharsky, Bradley Lake (teleconference) Brian Hickey, Chugach Electric Association (teleconference) Lee Thibert, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association (teleconference) Mike Cunningham, Chugach Electric Association (teleconference) Don Stead, Homer Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Larry Hittle, AterWynne, LLP (teleconference)