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HomeMy WebLinkAboutAEA Board Meeting March 2021Alaska Energy Authority BOARD MEETING MINUTES Wednesday, March 3, 2021 Anchorage, Alaska 1. CALL TO ORDER ALASKA ENERGY AUTHORITY Chair Pruhs called the meeting of the Alaska Energy Authority to order on March 3, 2021 at 2:28 pm. A quorum was established. 2. ROLL CALL BOARD MEMBERS Members present: Chair Dana Pruhs (Public Member); Vice -Chair Bernie Karl (Public Member); Anna MacKinnon (SOA-DOR); Albert Fogle (Public Member); Bill Kendig (Public Member); and Julie Sande (Public Member). 3. AGENDA APPROVAL MOTION: A motion was made by Mr. Kendig to approve the agenda, as presented. Motion seconded by Mr. Fogle. The motion to approve the agenda passed without objection. 4. PRIOR MINUTES - January 13, 2021 MOTION: A motion was made by Mr. Fogle to approve the prior minutes of January 13, 2021, as presented. Motion seconded by Mr. Kendig. The motion to approve the minutes of the January 13, 2021 minutes passed without objection. 5. PUBLIC COMMENTS (2 minutes per person) Chair Pruhs requested each person to please state their name and affiliation for the record. Public comments are limited to two minutes per person. Ken Castner, resident of Homer, stated for the record his objection that the beginning time of this meeting was not posted. Mr. Castner informed that he waited six hours to discover the time the meeting was to begin. He listened to the training presentation given this morning and slide number six delineated that the meeting time needs to be given to the public. Mr. Castner stated that he requests again for the record that any future AEA Board meeting or any meeting that follows another Board meeting specifically designates a start time so that the public knows when to pick up the phone and call in. REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG 813 West Northern Lights Boulevard, Anchorage, Alaska 99503 T 907.771.3000 Toll Free 888.300.8534 F 907.771.3044 6. NEW BUSINESS - NONE 7. OLD BUSINESS A. Audit Update Chair Pruhs requested Curtis Thayer, AEA Executive Director, to present. Mr. Thayer reminded the Board that discussion occurred at the previous meeting regarding a conflict with Legislative Audit and the presentation of the financials. The issue was taken before the Governmental Accounting Standards Board (GASB) for an opinion. GASB sided with the BDO auditors and with AEA in the presentation of the financials. The Comprehensive Annual Financial Report (CAFR) process continued. GASB identified other clarifying language that staff will identify for future audits. The issue was resolved and Legislative Audit agrees the classification of the audit was appropriate. Ms. MacKinnon expressed appreciation to Mr. Thayer and his team for their additional efforts to work with Legislative Audit to obtain the needed clarification. Ms. MacKinnon also expressed appreciation to Legislative Audit for working the compromise to seek the needed determination. MOTION: A motion was made by Mr. Kendig to enter into Executive Session to discuss confidential information related to Bradley Lake and confidential personnel matters. Motion seconded by Mr. Fogle. The motion was approved without objection. 8. EXECUTIVE SESSION 2:37 pm Discuss confidential matters related to Bradley Lake and confidential personnel matters The Board reconvened its regular meeting at 3:31 pm. Chair Pruhs advised that the Board did not take any formal action on matters discussed while in executive session. 9. DIRECTOR COMMENT A. Response to Board Questions Mr. Thayer gave an overview of the six Board questions asked previously. The link in the electronic agenda has the final 80-page response document attached. 1. Provide update on Bradley Lake Hydroelectric facility inventory and spare parts. See response document. 2. Provide Renewable Energy Fund Advisory Committee Meeting materials to demonstrate whether there are commonalities with successful applicants and consultants and reasons for denied applications. See response document. Alaska Energy Authority Page 2 of 8 Ms. Sande requested Mr. Thayer provide a verbal overview of the response. Mr. Thayer discussed the Renewable Energy Fund (REF) was initiated about 12 years ago and $268 million has gone through the program. Southeast Alaska has received the largest amount of funding for any region in the state for Rounds I through IX at 22%. The funding was primarily for hydroelectric projects. 3. Add a column to Denali Commission Awards spreadsheet to include Estimated Construction Jobs Created and Estimated Permanent Jobs Created. See 9D. Denali Commission Update. 4. Identify Rural Communities with only one generator. See response attached. Chair Pruhs asked if the rural communities identified are taking steps to cure the issue. Mr. Thayer informed that staff is actively engaged with the communities and he noted that not all of the communities listed are down to one generator, but preparations are being made in anticipation of that possibility. The incentives for communities to make their own repairs are dependent on the State and community assistance. Mr. Thayer noted that even though this specific list has not been provided to the Governor and to the Legislature, $225,000 of supplemental budgetary funds have been budgeted to help pay for electrical emergencies. There were no electrical emergencies in 2020. In 2019, there were five community electrical emergencies. Chair Pruhs inquired as to why AEA is the entity that has to repair or replace these generators. Mr. Thayer reminded members of previous discussions highlighting the assistance as a moral obligation that AEA may assist with funding, and not a statutory obligation that AEA shall assist. Vice -Chair Karl asked for information regarding ongoing maintenance like changing oil when a community is working with only one generator. Mr. Thayer explained the communities on the list are very small and are not affiliated with a utility. Chair Pruhs requested additional information regarding staffs specific communications to the Legislature and Governor on the budget and the status of deferred power maintenance in rural Alaska. Mr. Thayer explained staff has a presentation with the Senate Finance Committee that identifies which communities will be assisted with this year's budget, and lists the next set of 10 communities that are in line if additional funding is received. Staff has informed Office of Management and Budget (OMB) that in rural Alaska, the deferred maintenance for powerhouses is $327 million, and the deferred maintenance for bulk fuel is $800 million. Last year, the Legislature gave $5 million to powerhouse, but the Legislature did not give funds to bulk fuel. The impact resulted in the additional loss to bulk fuel communities of one -and -a -half times matching funds through the Denali Commission and other federal priorities. Staff specifically raised the concern with Senator Natasha Ann von Imhof. Chair Pruhs reiterated the importance of communicating to the Legislature and to the Governor the financial risks that emergency repairs may present so that they can make the best decisions and perhaps preempt the emergencies. Alaska Energy Authority Page 3 of 8 Vice -Chair Karl asked for the average size of the generator in the listed communities. Mr. Thayer noted that he does not have that information available at the meeting and will follow- up with the average size. Vice -Chair Karl asked if staff has reviewed the American Rescue Plan Act of 2021, which passed in the Unites States House of Representatives and is expected to pass in the Senate, to identify funding that can be utilized. Mr. Thayer indicated that he has not reviewed the bill, but staff will review any opportunities available, once the bill is finalized. 5. Analyze efficiency of AEA Staff working at home versus the potential savings for overhead. This item is still under review. Employees will continue working from home through March. 6. Analyze Energy provisions in COVID-19 relief package. Provide update at next Board meeting including opportunities and funding available. See 9B. Energy Act Update. B. Energy Act of 2020 - Update Mr. Thayer complimented Conner Erickson, AEA Economist, for his outstanding job on providing the section -by -section analysis of the Energy Act of 2020 passed in November; including hyperlinks to AEA related sections and comments. Mr. Thayer noted that the Board can expect a similar analysis with the latest American Rescue Plan Act. C. AEA Annual Report Mr. Thayer informed that Brandy Dixon, AEA Communications Director, produced the Annual Report in-house with staff. He believes it captures the efforts of AEA, while highlighting the bulk fuel and powerhouses deferred maintenance cost estimated at approximately $800 million. The Annual Report has been shared electronically with the Legislature and they will receive a hard copy this week. D. Denali Commission Update Mr. Thayer reviewed the Denali Commission Update provided in member packets. AEA will be receiving a matching funds award from Denali Commission of $6 million within the next month. E. Rural Update Mr. Thayer requested Tim Sandstrom, AEA Director of Rural Programs, provide the rural update. Mr. Sandstrom reviewed the highlights of the Rural Power System Upgrade (RPSU) and Bulk Fuel Upgrade (BFU) Maintenance and Improvement (M&I) Projects included in the Board packet. There are 127 completed power houses that have 3-1) imaging and power generation assessments. The Circuit Rider Program and M&I Programs are concentrated on communities that have only one generator or are anticipated to have only one generator. Alaska Energy Authority Page 4 of 8 The intent is to mitigate any emergencies. Mr. Thayer explained capital funds are identified by community, but a portion of the M&I funds can be moved, as necessary. F. Power Project Fund Dashboard and Loan Report Mr. Thayer informed that there has not been much activity involving the Power Project Fund Dashboard and Loan Report. He noted the four delinquencies listed on the report have since become current. Mr. Thayer discussed that there are six pending applications for PPF that will be considered, even though grant money is not available. G. 1st Quarter Org Chart Mr. Thayer advised the 1st Quarter Organizational Chart includes the addition of the two new employees within accounting. H. Shovel Ready Projects - Update Mr. Thayer discussed the provided update to the Shovel -Ready Energy Infrastructure Projects in Alaska. The utilities have identified projects that are ready for next steps. The update shows the order of priority by transmission and characterization by type of project. Mr. Thayer explained the Susitna-Watana Hydroelectric Project is listed because there are 23,000 direct and indirect jobs, and the State has spent approximately $193 million on licensing. I. EV Update (Fast Charging Station "corridor") Mr. Thayer advised that AEA is within the RFI solicitation schedule to identify potential charging corridor site hosts from Homer to Fairbanks, at every 50 to 100 miles. Approximately 10 to 14 charging stations should be installed for the 615 miles of corridor, beginning in June. AEA has allocated $1.25 million toward electric vehicle (EV) charging infrastructure for the next five years. The intent of this project is to establish a corridor, which will hopefully allow the private sector to provide additional stations. The grant offers $80,000 to $100,000 per installation of an electric vehicle fast -charging station. The site host will volunteer to provide the charging station facility. The charging time is approximately 30 minutes for the fast chargers, with the capability of two plug -ins. If more funds were available, staff would either increase the number of charging stations or increase the number or plug -ins at each station. Vice -Chair Karl informed that there are two charging stations in Galena that were installed at no cost to the State. Chair Pruhs requested additional information regarding the battery composition of an electric vehicle, the disposal cost of the battery, and the replacement cost of a new battery. T.W. Patch, AEA Director of Planning, noted that he will provide additional information Alaska Energy Authority Page 5 of 8 regarding electric vehicle lithium -ion batteries. A round -table discussion occurred describing the process of charging the user for the electricity. The user will pay via credit card to the utility provider in the station area. The price per kWh will differ throughout the state and is dependent upon the utility provider's rates. There are approximately 12 publically accessible charging stations in Alaska. The mobile phone app P1ugShare offers a map of current electric vehicle charging stations. Mr. Thayer continued the discussion explaining that staff is working with DOT to identify possible charging station locations at State buildings that are publically accessible, including the parking garage at the Atwood building after business hours or AEA's building. Mr. Thayer discussed staff has consulted with the interested parties and the EV Working Group to draft the proposal and communication has continued. J. Electric Reliability Organization (ERO) Update Mr. Thayer introduced Kirk Warren, AEA Director of Engineering and Energy Development, to provide the ERO update. Mr. Warren informed that the ERO was created by the passage of SB 123 last year requiring an organization to implement resource planning, develop reliability standards, work on Railbelt interconnection standards, and propose rules to appropriately address consequences for entities that do not abide by the RCA regulations. The organization members consist of one seat per Railbelt utilities, one seat for AEA, one consumer advocacy seat, two independent power producer seats, two independent seats, two non -voting seats for RCA, and one non -voting seat for Regulatory Affairs and Public Advocacy (RAPA). Mr. Warren discussed the ERO has been meeting three hours per week for the past three months and the workload is anticipated to increase. The ERO's efforts undertake a complex task of developing a new paradigm for the Railbelt procedures and ensuring a successful application is filed with RCA by October 1st, 2021. Large projects must have preapproval through the RCA. Mr. Warren believes the ERO is functioning well. K. Legislative Update Mr. Thayer provided an overview of the series of reports and issues that have been forwarded to the Legislature. An electronic link on the agenda also contains the information. Subjects include the certification of capital reserve fund requirements, the annual update on Susitna-Watana Hydroelectric Project, Renewable Energy Fund request, the estimate and statement of withdrawals from the capital reserve accounts, and the annual capital projects status report. All of the legislative requirements for AEA have been met. Mr. Thayer is scheduled to appear at Senate Finance next week and at Senate Resources on March 15th. Chair Pruhs asked Mr. Thayer where he anticipates the excess annual Power Cost Equalization (PCE) funds will be directed. Mr. Thayer noted the statute allows for up to $30 million of excess PCE funds to be directed to community assistance, and subsequently, an Alaska Energy Authority Page 6 of 8 amount would be apportioned to the Renewable Energy Fund. Staff has recommended that the funding for the rural powerhouses and the bulk fuel is from the PCE endowment and earnings. Mr. Thayer explained the importance of the high investment return when the $10 million investment can receive an additional $17 million in funding. Mr. Thayer discussed that last year the PCE was fully funded. The Governor vetoed the community assistance of $30 million and used the funds for other projects, including $9 million for Department of Corrections, and funds for Department of Administration and Department of Law. That was the first time PCE earnings have been used to fund other parts of State government. The PCE is within this year's budget to be fully funded. Mr. Thayer does not know how the PCE earnings are anticipated to be utilized this year. The fund is sweepable each year, as determined by the opinion of the Attorney General. The financial issue has been resolved with Legislative Audit, as reviewed earlier. Mr. Thayer discussed that while PCE represents $30 million annually to rural Alaska, the ownership of the Intertie by AEA saves the Fairbanks community an average of $40 million per year. Vice -Chair Karl emphasized the importance of communicating those benefits to Golden Valley Electric Association's rate payers in the state. He does not believe that rate payers are aware of the benefits. L. Community Outreach - Continues to be web -based via Zoom. M. Articles of Interest - Included in packet and via the link to the agenda. N. Next Regularly Scheduled AEA Board Meeting Wednesday, April 14, 2 02 1, beginning at 8:30 am. 10. BOARD COMMENTS Vice -Chair Karl thanked Mr. Thayer and his team for their diligent efforts and excellent ability in implementing AEA's vision. Ms. Sande expressed appreciation and congratulations to Mr. Thayer and his team for their achievements this year. She enjoys working with Mr. Thayer and the team. Ms. MacKinnon thanked Mr. Thayer and his team for the accomplishments discussed today, specifically in bringing the utilities together to benefit Alaskans in the Railbelt. She highlighted the update of supporting rural communities in their efforts. She acknowledged that government cannot move as fast as the public would like, and the electric vehicle conversation exemplifies this challenge. Ms. MacKinnon thanked the EV community for their engagement thus far and encouraged continued involvement. She believes Mr. Thayer has fulfilled the Board's requests to deploy the resources in a thoughtful way and to understand the impacts and partnerships that might be available for advancement of the strategy. Ms. Alaska Energy Authority Page 7 of 8 MacKinnon expressed appreciation to Chair Pruhs and Board members for their assistance in helping Alaskans. Chair Pruhs thanked Mr. Thayer and staff. He looks forward to the legislative process and moving forward with their decisions. 11. ADJOURNMENT There being no further business of the Board, the AEA meeting adjourned at 4:17 pm. Curtis Thayer, Executive Director / Secretary Alaska Energy Authority r ��� .� Zl co•GpVAPOR4T •� SEAL Alaska Energy Authority Page 8 of 8