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HomeMy WebLinkAboutAEA Board Meeting April 2021Alaska Energy Authority BOARD MEETING MINUTES Wednesday, April 14, 2021 Anchorage, Alaska 1. CALL TO ORDER A LAS KA ENERGY AUTHORITY Chair Pruhs called the meeting of the Alaska Energy Authority to order on April 14, 2021 at 8:31 am. A quorum was established. 2. ROLL CALL BOARD MEMBERS Members present: Chair Dana Pruhs (Public Member); Vice -Chair Bernie Karl (Public Member); Julie Anderson (Commissioner DCCED); Anna MacKinnon (SOA-DOR); Albert Fogle (Public Member); Bill Kendig (Public Member); and Julie Sande (Public Member). 3. AGENDA APPROVAL Curtis Thayer, AEA Executive Director, requested that the Board utilize Item 6. Executive Session to discuss confidential legal matters. There was no objection to the amendment. There was no objection to the adoption of the agenda as presented and modified with the inclusion of the Executive Session. 4. PUBLIC COMMENTS (3 minutes per person) Chair Pruhs requested each person to please state their name and association, if any. Chair Pruhs announced that public comments are limited to two minutes per person. Jennifer Bertolini, AEA, gave instructions to members of the public who are accessing telephonically to press star -nine to raise their hand. A notification will then indicate when it is that person's turn to speak. Seth Kantner, Kotzebue, commented that star -nine is not working. He stated that he is a person that would be affected by the plan for the road and mine. Chair Pruhs asked if Mr. Kantner was referring to the Ambler Road. Mr. Kantner responded that he believed he was addressing AIDEA. Chair Pruhs conveyed that this meeting is the Alaska Energy Authority (AEA) meeting and the AIDEA meeting will be later in the day. Chair Pruhs stated that since Mr. Kantner is on the line, AEA will listen to his comments. Mr. Kantner indicated that he was told to call in at 8:30 am, and if it were a minute later, then he would not be able to comment. Mr. Kantner stated he is against AIDEA handing over any deal to Ambler Metals with State money. Mr. Kantner is against the whole project. He stated the sneakiness has left the local people hopeless about dealing with any of the entities, and especially AIDEA. He feels all the REDUCING THE COST OF .. O. 813 W Northern Lights Blvd, Anchorage, AK 99503 • Phone: (907) 771-3000 • Fax: (907) 771-3044 • Email: info@akenergyauthority.org public comments just disappear. Mr. Kantner noticed that field work is occurring this year, including assessments of drainage in areas that have not been previously addressed. He stated that this feels backward to begin the work at the same time as checking to see what effects will happen from the work. Mr. Kantner believes this same process is occurring with cultural resources, that they are still reviewing information, even though the decision has been made to move forward. Mr. Kantner expressed he has been put in a position of feeling like a pest and he is trying to protect the affected homes and lands. He does not believe AIDEA is playing by the rules. Mr. Kantner apologized for stepping in on AEA's meeting. Chair Pruhs expressed appreciation for Mr. Kantner's comments. He suggested that Mr. Kantner email AIDEA his comments in order to receive a response providing clarifications. Ms. Bertolini noted that the system does not indicate any additional public comments at this time. Chair Pruhs noted that there are no public comment requests in the conference room. Chair Pruhs closed public comments. Ms. MacKinnon commented that she is unaware how Mr. Kantner identified that star -nine was not working. She suggested asking for a verbal confirmation to ensure that star -nine is functioning properly. Ms. Bertolini reported that staff is verifying the functionality of star - nine. Chair Pruhs noted that the meeting will continue and if it is determined that there was an issue with accessing star -nine, he will then return to public comments. 5. PRIOR MINUTES - March 3, 2021 MOTION: A motion was made by Mr. Fogle to approve the prior minutes of March 3, 2021, as presented. Motion seconded by Mr. Kendig. The motion to approve the minutes of the March 3, 2021 minutes passed without objection. Ms. Bertolini indicated that there was technical difficulty with the star -nine function and that the line now shows several people indicating a request to make public comment. She asked Chair Pruhs if he would like to return to Item 4. Public Comments. There was no objection from the Board to reopen public comments. Robert Hawkins, AEA IT Department, made a comment to verify that star -nine was functioning properly. Devon Kibby stated that he knows there are other people on the line who are waiting to make public comments. He does not know why they are unable to make the public comments. Alaska Energy Authority Page 2 of 10 Craig Dobbins, Alaska, expressed that he is strongly opposed to the Ambler Road project. He commented that the State's last budget cut. money from every department and every program. Mr. Dobbins questioned why $35 billion is being spent on a road that Alaskans are not going to be able to drive on. He stated the road is benefitting only foreign corporations, Board members, and Board members' friends. Mr. Dobbins believes this is a terrible investment, a terrible idea, and is ruining the environment. Chair Pruhs reminded the public that this is the Alaska Energy Authority Board meeting and not the AIDEA Board meeting, which has purview over the Ambler Road. He stated that the AIDEA Board meeting should begin around 10:30 am or 11:00 am. Ms. Bertolini informed that no additional hands are raised. Ms. MacKinnon responded to Mr. Dobbins' testimony regarding his reference to $35 billion. She reiterated that this is the AEA Board meeting and wanted to correct the record that she believes Mr. Dobbins was referring to $35 million that was transferred by AIDEA into the Arctic Infrastructure Fund for the Ambler Road Project. Ms. MacKinnon believes $35 billion is an inappropriate quote for the road, but she does not have the technical details and wanted to clarify the record. MOTION: A motion was made by Mr. Kendig to enter into Executive Session to discuss confidential legal matters. This is supported by the Open Meetings Act, which allows a board to consider confidential legal matters in executive session. Motion seconded by Mr. Fogle. The motion was approved without objection. 6. EXECUTIVE SESSION 8:45 pm Discuss confidential legal matters The Board reconvened its regular meeting at 9:32 am. Chair Pruhs advised that the Board did not take any formal action on matters discussed while in executive session. He stated that Mr. Thayer was absent during the executive session meeting. Chair Pruhs remarked that he was made aware that there is a member of the public who is in -person wishing to provide a public comment. Chair Pruhs noted that he is willing to return to Item 4. Public Comment, if a motion is made and approved. MOTION: A motion was made by Mr. Kendig to return to Item 4. Public Comment. Motion seconded by Mr. Fogle. The motion was approved without objection. Chair Pruhs welcomed the member of the public and noted that public comments are limited to a couple of minutes. Alaska Energy Authority Page 3 of 10 Dimitri Shein, Executive Director of the Alaska Electric Vehicle Association (AKEVA), informed that he was not planning to attend personally, but the telephonic hand -raising function was not working properly. The alert indicated that he was recognized, but then the Board went into executive session and he could still hear what was being discussed in executive session. Mr. Shein noted that he tried calling AEA to inform them that the executive session could be heard by the public and that he was trying to make a public comment, but nobody answered the phone. Mr. Shein explained that he then drove to AEA's offices and argued with someone who told him the technology is working fine. Mr. Shein commented that his plan was to be very positive today because he believes AEA is doing great work in rolling out the EV charging program. He noted that Zoom is $20 per month and everyone is using it. Mr. Shein thanked the Board for rolling out the funding for EV fast charging in Alaska. He shared excitement in seeing the level of enthusiasm from Alaska businesses that want to participate in the fast charger installation. Mr. Shein informed that AKEVA has been doing its part in assisting entities with the AEA application process for selection of the electric vehicle, EV, fast charging sites. Mr. Shein expressed a concern that the application packet utilizes a Californian format and is not Alaska friendly. He informed that it took approximately 100 hours to complete the application for one site. He noted the application for the installation of a charger took 40 hours. Mr. Shein informed that AKEVA would have liked to have reviewed the process, but they have never had the chance to provide any feedback. Mr. Shein noted that the EV Working Group had not seen any of the information either before it was distributed by AEA. Mr. Shein informed that he would like to provide feedback to staff to reduce the hours it takes to complete the RFQ from 100 hours to 10 hours, because 100 hours is an undue burden to business locations. He noted that the application is also burdensome to businesses that may have to get a grant writer, an electrical engineer, and a surveyor. He believes the process could be more business friendly and Alaska friendly. Mr. Shein expressed understanding that the Board oversees many important projects and AKEVA would gladly provide feedback directly to staff. He thanked AEA for moving this project forward and looks forward to driving electric from Homer to Fairbanks. Chair Pruhs requested the Board's concurrence to ask Mr. Shein for clarifications. Vice -Chair Karl agreed, and there were no objections. Chair Pruhs thanked Mr. Shein for his comments and apologized for the inconvenience of the phone system not working correctly. Vice -Chair Karl thanked Mr. Shein for his passion regarding electric vehicles. He asked Mr. Shein if he owns an electric vehicle. Mr. Shein responded that he owns a Tesla. Vice -Chair Karl informed that he, within the private sector at Chena Hot Springs, installed two charging stations long ago and it took only a few hours to install. He expressed understanding of Mr. Shein's frustration in the amount of time the application may take to complete. Vice -Chair Karl noted that he has not yet seen the application and will request an application today to review. Vice - Chair Karl does not agree that it should take 100 hours to complete an application. He asked Mr. Shein if the application is to bid on the installation work. Alaska Energy Authority Page 4 of 10 Mr. Shein explained that AEA staff has delineated the applications into a cumbersome three- part process, including solicitation and qualification of vendors, submittal of interest from the site hosts, and submittal of the site host grant application, which is the portion that has taken 100 hours to complete. Mr. Shein described the grant application requesting detailed information, including a security plan, the location of the first transformer, the location of the second transformer, and letters of support. Vice -Chair Karl asked Mr. Shein to elaborate on his interests in the fast charging project and if he is a contractor who intends to submit a bid. Mr. Shein explained that AKEVA is a nonprofit organization, whose interests focus on allowing EV drivers to gain additional driving miles by increasing the number of charging stations. Mr. Shein discussed that AKEVA is helping potential site hosts fill out the applications. He contacted the Loussac Library in Anchorage and a bookstore in Soldotna to inquire if they were interested in becoming a host site and offered to assist in the application process. Vice -Chair Karl asked Mr. Shein if he has requested AEA to help him fill out the application. Vice -Chair Karl believes AEA has some of the best engineers and staff in the state and could complete the application in five hours that it took Mr. Shein to complete in 100 hours. Mr. Shein agreed that if AEA was completing all of the application work, that would be fine, and the host sites would no longer be expected to obtain the expertise of an electrical engineer and a grant writer to complete the application. Vice -Chair Karl asked if Mr. Shein has asked AEA staff to help with the applications. Mr. Shein stated that the process is not set up that way. Mr. Shein commented that he asked AEA staff to call AKEVA to gather their feedback and AKEVA has not yet been contacted to provide feedback. Vice -Chair Karl expressed appreciation to Mr. Shein for his testimony. Ms. MacKinnon noted that she has a question for the Executive Director Mr. Thayer. Ms. MacKinnon explained that she understands the public's passion in wanting to move forward with the charging stations, which is the reason the Board requested Mr. Thayer to move in this direction with the VW funds. Ms. MacKinnon advised that from her work history, there is an incredible amount of liability associated with anything that corporations do, especially when it is affiliated with the State. She requested Mr. Thayer provide a brief discussion regarding the reasons this process was chosen and if modifications can be made to provide a friendlier process to smaller organizations. Ms. MacKinnon understands the complexity of these issues. Mr. Thayer discussed that there is a State procurement process that has to be followed. Additionally, there is a federal process that has to be followed because these monies are tied to the Volkswagen Settlement and approval of spending has to be endorsed by the Trustee. Mr. Thayer commented that he can look into simplifying the process. He noted that this is the first time it has been raised that the process is burdensome. Mr. Thayer highlighted that staff conducted several webinars, including the one provided in the Board packet from March 30th. The webinars reviewed the process to all interested EV parties. Mr. Thayer stated that he will provide an application to each Board member. Alaska Energy Authority Page 5 of 10 Chair Pruhs believes that that there will be problems if the process follows a Californian model. He does not support modeling after California. 7. NEW BUSINESS - NONE 8. OLD BUSINESS - NONE 9. DIRECTOR COMMENTS Mr. Thayer reported that staff has testified and answered questions to Senate Finance Committee, Senate Resources Committee, House Energy Committee, and House Subcommittee on the DCCED Budget, including AEA's budget. Additionally, staff has been working on the shovel -ready project list. Mr. Thayer remarked that staff has been working closely with Congressman Young's office to submit for possible federal funding through the House Committee on Appropriation. Mr. Thayer noted that Alaska's share of the available funding is projected at approximately $65 million. However, the guidelines and processes are not yet completed. Staff has forwarded the possible shovel -ready projects in ranked order, including a FERC license for Susitna-Watana, renewable projects, transmission projects, the spillway at Bradley Lake, and the Renewable Energy Fund. Mr. Thayer informed that in two weeks, staff will conduct the same process to recommend projects for funding through the Transportation and Infrastructure Committee in the House. Staff has also been in contact with the Offices of Senator Murkowski and Senator Sullivan. A. Response to Board Questions Mr. Thayer reviewed the included responses to Board questions from the March 3, 2021 meeting. The first question regarded the most commonly installed genset. The second question regarded AEA's review of the Energy Act of 2021 to determine any funding opportunities. The remaining questions regarded EV batteries. All responses are provided in the Board packet. B. Denali Commission Update Mr. Thayer discussed that the Denali Commission funding has remained primarily unchanged with approximately $33 million in projects. The Acting Federal Co -Chair is retiring and the delegation has put forward two names for the role. During this interim period, the funding is paused until an appointment is finalized. Previous grants have been accelerated in anticipation of this transition. C. EV Update (Fast Charging Station "corridor") Mr. Thayer advised that the member packets include a webinar slide presentation given by AEA staff. He informed that staff is receiving a robust interest in the program to choose 10 to 14 site hosts between Homer to Fairbanks. The potential grant amount is approximately $80,000 per fast -charging station. The average cost of a fast -charging station is approximately $100,000. Mr. Thayer explained that the intent is to find qualified people who Alaska Energy Authority Page 6 of 10 can provide the equipment and then work with the site host for determination. He gave the example that there are only two companies in Fairbanks that make the equipment suitable for weather that reaches temperatures of 40-below zero. He highlighted the importance of the site host choosing the appropriate model for the location's weather. Mr. Thayer discussed that the process is ongoing and it will close in early May. Commissioner Anderson clarified that the site hosts will receive a grant for a partial amount of the cost of installation and then the site host will charge the public for the electricity. Mr. Thayer agreed, and noted the cost would be less than the cost of a tank of fuel. Commissioner Anderson inquired if the charge of the electricity is part of the grant review process. Mr. Thayer stated that the charge of electricity is not part of the review process because each utility and utility location has its own rates. Commissioner Anderson asked if the charging station is free to set their own rate and if they are under the Regulatory Commission of Alaska (RCA). Mr. Thayer did not answer verbally. He stated the Level Three chargers will provide a full charge within approximately a half an hour. Chair Pruhs requested additional information on the logistics of cars lined up waiting half an hour each in order to charge their car. Mr. Thayer expressed understanding for the concerns regarding possible wait times. The primary goal now is to install these first charging stations. Mr. Fogle commented that he is perplexed as to why AKEVA and others look to government agencies to fund the installation of charging stations, especially since government has a more cumbersome process compared to the private sector. He inquired as to the reasons there is not more private interest regarding installation of charging stations without utilization of government funding. Mr. Fogle additionally asked if there are more businesses in the Lower 48 that are installing charging stations to attract electric vehicle (EV) users. Mr. Thayer discussed there are many businesses primarily in Anchorage that have installed charging stations because it is good for business. The site hosts that are lacking remain along the highway corridor. Mr. Thayer understands that there are only two community charging stations in Fairbanks. The goal is to provide sites approximately 50 to 100 miles apart on the highway road system. Mr. Fogle asked Mr. Thayer if he has worked with Mr. Shein to potentially have him connect with these different communities to locate private entities that would want to install a charging station. Mr. Thayer answered that because of the procurement process, Mr. Thayer has not worked with Mr. Shein, but staff has encouraged people to go out to communities and find site hosts to present proposals. Mr. Thayer explained that this is Phase I of a multi- phase plan for charging corridors. Commissioner Anderson commented that Wi-Fi cell service is necessary to compete and is a limiting factor for electric vehicles. Chair Pruhs agreed that there is a technology limitation to get power and information to certain places due to the remoteness of some portions of the corridor. Mr. Thayer noted the challenges include Girdwood and Cooper Landing. Alaska Energy Authority Page 7 of 10 Ms. MacKinnon inquired about the public comments made regarding Alaska modeling the California process during the implementation of the first stage of the corridor, and asked Mr. Thayer if staff has reviewed other models that could be utilized within the particular set of restrictions and if it is accurate that Alaska is modeling the California process. Mr. Thayer explained that staff researched other'states for best practices during the development of the program. The states reviewed were primarily from the west coast, including California, and the Midwest. Ms. MacKinnon expressed her concern that the program needs to be Alaska applicable, including temperature, remoteness, Wi-Fi access, and other Alaskan variables. D. Legislative Update Mr. Thayer informed that the legislative update includes the different presentations and the responses to the committees provided in the member packet. It consists of approximately 180 pages. Mr. Thayer noted that the Governor had proposed a funding source change to use PCE, instead of UGF, for $847,000 of AEA's budget. However, the House Subcommittee rejected that proposal and the Senate Finance Committee has mirrored the denial. E. Power Project Fund Dashboard and Loan Report Mr. Thayer informed that there is one new loan reflected in the report. There were no delinquencies at the time of the report. There are three pending applications, which could be funding with the present balance. Mr. Thayer anticipates a discussion will occur at this time next year regarding the current commitments and outstanding balance. F. Rural Update Mr. Thayer discussed the Rural Update included in the packet reviews the current full replacement projects for the powerhouses and for bulk fuel. He noted that the inventory and assessment is approximately 80% complete. G. Community Outreach - Calendar included in packet and continues to be remote. H. Articles of Interest - Included in packet. I. Next Regularly Scheduled AEA Board Meeting Wed. May 19, 2021 J. BOARD COMMENTS Vice -Chair Karl requested that Mr. Thayer give him a copy of the RFP application for the charging stations today. He does not believe it is reasonable if the application actually takes 100 hours to complete. Vice -Chair Karl commented that perhaps additional assistance from the highly capable staff can be given to applicants to streamline the process. Vice -Chair Karl noted that he will review the application and provide his feedback. Alaska Energy Authority Page 8 of 10 Mr. Thayer commended staff for their diligence and team effort in releasing the RFP while working through the process of identifying projects within the congressional format in order to receive funding. Chair Pruhs requested the Board's indulgence to discuss a recent topic. There was no objection. Chair Pruhs noted that he recently asked Mr. Thayer to provide the amount of the debt for the Railbelt energy corridor of the six utilities. Chair Pruhs explained that the debt is $2.5 billion, and the total is closer to $3 billion when the debts of Ketchikan, Juneau, and AVEC are included. He further examined the discussions regarding stimulus and shovel - ready projects. Chair Pruhs believes the reduction of the cost of energy would provide the fastest immediate relief to the public, to businesses, and to the military. The quickest way to reduce the cost of energy is to reduce the energy debt. Chair Pruhs discussed that if the debt was eliminated, the benefits would be seen by the public the next month. Chair Pruhs further explained that if MEA's debt was removed, it would reduce the kilowatt cost per hour by three cents. Mr. Kendig affirmed the reduction of three cents per kilowatt hour. Chair Pruhs discussed that the RCA allows the utility to charge its rate payers an additional percentage of the debt in order to pay its overhead. He gave the example if the utility borrows money at 3%, the utility can charge the rate payers 8%. Chair Pruhs expressed a personal opinion that this is a backward and broken business model that disadvantages the members of the public and provides no incentive to reduce the cost of energy because the more debt a utility company has, the more money they can have for their operating expenses. Chair Pruhs commented that he does not have a solution and does not know if there is a solution. He wanted to convey his surprise to the Board that this business model is being used. Chair Pruhs believes that paying off the debt would immediately benefit all parties. It would give headroom to the utilities to become more efficient and possibly lead to cooperation and consolidation. Chair Pruhs commented that Chugach Electric Association (CEA) and Anchorage Municipal Light and Power (ML&P) merged, and a $300 million premium was paid to the city of Anchorage, which went into the city's permanent fund. CEA borrowed the money, charging back the rate payers at 8% for the $300 million. Chair Pruhs expressed his opinion and considers this an off -balance -sheet tax that the rate payers are paying without their understanding. Ms. MacKinnon asked Chair Pruhs if he would consider requesting that staff provide a short one or two -page white paper report on this issue and provide alternatives for the AEA Board to recommend to the Administration to improve the model. Ms. MacKinnon expressed agreement that incentivizing utilities to borrow money and having tax payers unknowingly pay the bill does not seem like a transparent process, nor a process that the general public should accept. Ms. MacKinnon expressed that she would be interested in exploring the reasons that the new borrowing requires new administrative costs. Alaska Energy Authority Page 9 of 10 Chair Pruhs agreed and requested staff prepare a white paper that clarifies the issue and corrects any mistakes he may have inadvertently made in his remarks today. Mr. Thayer informed that at the next meeting, he will provide the members with the debt and the asset value for all of the Railbelt utilities. He noted that Matanuska Electric Association (MEA), Homer Electric Association (HEA), and CEA have asked for an extension to the 2020 filings, which were due March 31. Staff will update and share the information at the May meeting. Mr. Thayer explained that the model is under the jurisdiction of RCA statutes and tariffs. Ms. MacKinnon expressed her belief that this issue directly aligns with AEA's mission. She asked Chair Pruhs to request staff provide the white paper and a presentation at the next Board meeting. Ms. MacKinnon requested Chair Pruhs and staff invite the Railbelt utilities to inform the Board of their perspective on this issue and to give the public an opportunity to review this particular practice. Chair Pruhs agreed. Mr. Thayer expressed the importance of inviting the RCA to explain their jurisdiction and State statutes and tariffs, which allow for this. Chair Pruhs noted that Mr. Thayer could provide the pertinent RCA information within the white paper. Chair Pruhs reiterated that AEA's mission is to reduce the cost of power to the citizens of the state and the current process seems to be counter to that mission. Chair Pruhs hopes he is wrong and that there is a logical explanation for the public. He understands and recognizes that some utilities are better at managing debt than others. Vice -Chair Karl commented his belief that TW Patch, AEA, could assist in providing additional understanding of the subject. Mr. Thayer conveyed that the utilities and the RCA are not doing anything wrong in implementing the current and past practices. He believes the AEA Board is looking for a change of practice that could benefit everyone. Chair Pruhs explained that it is important for the Board to understand the big picture in order to make decisions that support the utilities with the ultimate goal of reducing the cost to the rate payers. 10. ADJOURNMENT There being no further business of the Board, the AEA meeting adjourned at 10:15 am. -33 Curtis Thayer, Executive Director / Secreta G ' " Alaska Energy Authoirty SEAL, 197E Alaska Energy Authority Page 10 of 10