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HomeMy WebLinkAboutAEA Board Meeting Jan 2022Alaska Energy Authority BOARD MEETING MINUTES Thursday, January 27, 2022 Anchorage, Alaska 1. CALL TO ORDER ALAS KA ENERGY AUTHORITY Vice -Chair Sande called the meeting of the Alaska Energy Authority to order on January 27, 2022, at 9:04 am. She apologized for the delay of the meeting start time. A quorum was established. 2. ROLL CALL BOARD MEMBERS Members present: Chair Dana Pruhs (Public Member) (arrived late); Vice -Chair Julie Sande (Commissioner DCCED); Anna MacKinnon (SOA-DOR) (arrived late); Albert Fogle (Public Member); Bill Kendig (Public Member); and Bill Vivlamore (Public Member). 3. AGENDA APPROVAL MOTION: A motion was made by Mr. Kendig to approve the agenda. Motion seconded by Mr. Fogle. Curtis Thayer, Executive Director, informed that Chair Pruhs is on his way to the meeting from the airport. Mr. Thayer suggested to move Item 6. Executive Session after Item 9. Director Comments so that Chair Pruhs is present. There was no objection to the friendly amendment to the agenda. A roll call was taken, and the motion to approve the agenda, moving Item 6. after Item 9., passed without objection, with Chair Pruhs absent and Ms. MacKinnon absent. 4. PRIOR MINUTES - December 1, 2021 MOTION: A motion was made by Mr. Kendig to approve the prior minutes of December 1, 2021, as presented. Motion seconded by Mr. Fogle. The motion to approve the minutes of the December 1, 2021, minutes passed without objection. 5. PUBLIC COMMENTS (2 minutes per person) Vice -Chair Sande informed that each person is allowed two minutes to comment. She requested that the comments relate to the agenda items. Ken Castner stated that he is unaffiliated. He commented that he is also sorry that AEA is still confused about how to indicate the correct meeting time and begin at the published start time. NERGYAUTHORITY.ORG 813 W Northern Lights Blvd, Anchorage, AK 99503 - Phone: (907) 771-3000 • Fax: (907) 771-3044 - Email: info@akenergyauthority.org Mr. Castner noted that this is the second meeting in a row that he has had to use his cell phone and telephone to make communication after the published start time. He highlighted the executive session and noted that AEA does not enjoy the same sort of confidentiality protections that AIDEA maintains. Mr. Castner indicated that even at AIDEA's standards, CEA and MEA would have to be the initiators in order to have an executive session. He stated that if he were a member of the either of the co-ops, he would be questioning why co-op business needed to be conducted in a session that is forever sealed from public scrutiny. These are member -owned cooperatives. Mr. Castner expressed his curiosity as to why and under what agreement the decision was made to give presentations only in executive session. He believes the deliberative process is a public process by law and that notion should be followed. There being no other members of the public online or in -person wishing to make a public comment, Vice -Chair Sande closed the public comment period. 7. NEW BUSINESS A. Resolution No. 2022-01 FY23 Operating and Capital Budget Submissions Ratification MOTION: A motion was made by Mr. Kendig to approve Resolution 2022-01 FY23 Operating and Capital Budget Submissions Ratification. Motion seconded by Mr. Fogle. Mr. Thayer advised that the Governor submitted his budget on December 151". The purpose of the resolution is to ratify the budget that was proposed for AEA. There are no changes to the Operating Budget from last year. There is a significant change in the Capital Budget. The Governor approved the standard ask of $200,000 for electrical emergencies. The budgeted amount for bulk fuel upgrades is $5.5 million, with a Federal match of $2 million for a total of $7.5 million. The budgeted amount for powerhouses is $10 million, with an expected Federal match of $18.5 million for a total of $28.5 million. This is a significant increase over previous years. Mr. Thayer discussed that the Renewable Energy Fund program budget has $15 million. This is the single largest increase since 2014. Round 14 currently has 39 applicants. The budget includes $1.5 million in the supplemental for the electric vehicle (EV) infrastructure. There are Federal funds of approximately $51 million that could be made available to AEA working with State DOT to develop a plan to apply to the Federal program funds. The budget contains $2.5 million for Railbelt planning to continue AEA's efforts in working closely with the utilities regarding the Dixon diversion and transmission upgrade opportunities. There were no questions or comments. Mr. Thayer reported the reason for Ms. MacKinnon's delay and noted that she will arrive later in the meeting. A roll call was taken, and the motion to approve Resolution 2022-01 FY23 Operating and Capital Budget Submissions Ratification passed, with Chair Pruhs absent and Ms. MacKinnon absent. 8. OLD BUSINESS — None. Alaska Energy Authority Page 2 of 8 9. DIRECTOR COMMENTS A. Response to Board Questions Mr. Thayer informed that the responses to Board questions are included the packet. The cost per kilowatt by community is presented annually and are pulled from RCA filings. B. Bradley Lake Required Project Work Mr. Thayer discussed the memo included in the packet regarding the Bradley Lake Required Project Work. Staff has been collaborating with the utilities to identify upgrading projects related to Bradley Lake. The Department of Law (DOL) determined that the SSQ Line purchased in December 2020 qualifies as required project work. The DOL has a D. Hittle report that refers to the condition and capital improvements needed for Bradley Lake which have been approved for required project work. Mr. Thayer informed that outstanding issues awaiting required project work determination include the Battery Energy Storage System (BESS) within the Homer service territory and reviewing the lines that come from Bradley Lake into Soldotna and Sterling where it connects to the SSQ Line. Those lines are owned by Homer. Staff is working with the Bradley Lake Management Council (BPMC) and the Board regarding the capacity agreement on that line. Mr. Thayer reported that the total upgrade package is approximately $300 million. There is approximately $225 million that is available through excess payments. Staff will continue working with the utilities and hopes to come before the Board with a proposal for AEA bonding for the package of projects. The Governor's Office has been briefed on this proposal package and is supportive of the direction. Mr. Thayer believes the key component is to ensure that the transmission lines are upgraded and capable for increased transmission before additional renewable energy is introduced onto the system. C. Dixon Diversion Project Mr. Thayer explained that the Dixon Diversion Project is similar to the Battle Creek Diversion Project and work with the utilities through the BPMC is ongoing. Stream gauges have been installed at a potential site to divert water and to collect information. Mr. Thayer discussed that Bradley Lake electrifies approximately 54,000 homes. The addition of Battle Creek added approximately 5,000 more homes, which is about a 10% increase. The early -stage investigations for the Dixon project estimates the potential to add electricity for 24,000 to 30,000 homes. This is a significant increase, but it is not possible unless there are transmission upgrades out of Bradley Lake. D. Hydro Update Mr. Thayer informed that the quarterly Hydroelectric Program update is included in the Board packet. The funding for these smaller projects is provided by either REF grants or AEA funds. Mr. Alaska Energy Authority Page 3 of 8 Thayer gave a brief review of REF projects Fivemile Creek Hydroelectric, Thayer Lake, Nuyakuk River Hydroelectric, Final Design of Water Supply Creek Hydroelectric, and Cordova Hydro Storage Assessment Project. Mr. Thayer informed that there are over 100 hydro projects in Alaska. He noted that AEA is involved in a majority of those projects. E. Renewables Update Mr. Thayer reviewed the Bi-Annual Alternative Energy and Energy Efficiency (AEEE) Program update included in the Board packet. The update includes the Wind Program and its current projects, the Biomass Program and its current projects, and the Energy Efficiency Program. Mr. Thayer discussed the expansion of the organizational chart to include a Director of the AEEE/Renewables Program. He noted that Audrey Alstrom will join the team as the Director in this fast-growing area. She is a former Project Manager and a professional engineer. She will oversee the $250 million worth of upgrades on the transmission lines, the Dixon Diversion, and other projects including renewable projects. F. VW Settlement Mr. Thayer stated that the update on the VW Settlement in included in the Board packet. He highlighted that the $8.1 million from the VW Settlement has been used to replace diesel engines in rural Alaska, school bus replacements, public transit bus replacements, garbage and box trucks replacements, and the electric charging corridor. There are approximately $400,000 unused excess funds from interest earnings that is anticipated to be deployed for school bus replacement or public transit bus replacements. G. Power Project Loan and Dashboard Mr. Thayer discussed the Power Project Loan and Dashboard Report is included in the Board packet. There are 20 outstanding loans for a total of approximately $27 million. The uncommitted cash balance is approximately $11 million. The one delinquent loan is in the amount of $3,000. This is the last payment for the community. Contact has been made and the loan is anticipated to be paid off. H. EV Update The EV Update is included in the Board packet. Mr. Thayer noted the involvement of the Alaska Electric Vehicle Working Group. He discussed the current status of funding and the Infrastructure Investment and Jobs Act that has the potential for funding of $50 million. Staff is working with DOT on the efforts for the highway corridor, from Homer to Fairbanks to Tok, and also the marine highway system, including Kodiak and Southeast Alaska. One concern staff raised with the Department of Energy and DOT during the public comment period is that there is not funding available for rural Alaska hub communities, such as Dillingham, Nome, or Kotzebue. Another concern is the distance restriction that highway corridors do not exceed 50 miles. This is unrealistic in some parts of the Western United States and particularly in Alaska, with Girdwood Alaska Energy Authority Page 4 of 8 to Cooper Landing as an example. Mr. Thayer believes that these issues were oversights during the initial passage of the bill Vice -Chair Sande noted that vehicles on ferries may need that ability to charge while on the ferry. She asked if this funding could be utilized for adding charging capability to the ferries. Mr. Thayer indicated that issue is outside the scope of this particular EV infrastructure funding. He noted there are other buckets of funding that do include ferries and fleets, which are within the purview of DOT and that DOT is taking the lead in those efforts. I. Denali Commission Update Mr. Thayer commented that the relationship with the Denali Commission has grown. He and Tim Sandstrom, Director Rural Programs, have met with new Federal Co -Chair on several occasions. The total funding for active Denali Commission awards is approximately $30 million, as shown in the provided report. The Denali Commission is AEA's funding partner on potential additional funds of $18.5 million for bulk fuel and $7.5 million for powerhouses. Mr. Thayer noted that the Denali Commission received funding from the Infrastructure Bill for water upgrades and sewer upgrades in rural Alaska and is utilizing AEA to deploy those funds. However, the funding did not consider the need for the power to operate those systems. The Denali Commission is working with AEA to upgrade the powerhouses in those communities. J. EURP Update Mr. Thayer reported on the Electric Utility Relief Program Update included in the Board packet. The program was discussed at the December Board meeting. The Department of Commerce requested AIDEA to design a program with the $7 million to reimburse the utilities for any Covid- 19-related residential debt that occurred during the Governor's proclamation. There are over 200 potential qualifying utilities, of which 35 applied to the program. Mr. Thayer noted that other Covid-19 relief funds, including from Alaska Housing, have been utilized to assist utilities paying their debt. He explained that approximately $4 million will be deployed through Round 1 of this program and that there will be a Round 2 offering the remaining funds. Utilities cannot receive funding twice. Vice -Chair Sande asked if there were many applicants who were denied funding. Mr. Thayer informed that AEA did not deny any applicants, but that there were instances in which the funding amount was less than requested. Reimbursement can only be provided for the electrical portion of residential utilities. There were also circumstances where the utility received other relief funds prior to this release and the debt can only be relieved once. Staff worked with the utilities closely to determine the approved amounts. Mr. Thayer believes the program was a success and shared a letter of appreciation from Chugach Electric regarding their grant and AEA's efforts. K. FY2022 AEA / AIDEA Or Chart as of 1/31/2022 Mr. Thayer discussed the provided 15Y Quarter Organizational Chart. He noted that Ms. Alstrom is the new Director of the AEEE Program and that Josephine Hartley and Taylor Asher report to her. Alaska Energy Authority Page 5 of 8 Interviews are currently being held for the vacant project manager position in Rural Programs, for the vacant program manager economist position in Planning, and for the vacancies in the Finance Department. He noted that Amy Adler has returned on a temporary basis as the Controller. Mr. Thayer informed that two Finance employees left recently for positions at utilities. The vacant administrative assistant position most likely will be converted to an assistant project manager to help provide support for Renewable Energy, Electric Vehicles, and Owned Assets. Vice -Chair Sande asked if there has been an uptick in staff turnover. Mr. Thayer responded that staff turnover is stable, but there are a few positions that have been difficult to fill. He noted that many agencies have experienced this. There have been no changes in AEA's senior management team in the last three years. The project managers who have left, did so for personal reasons. Mr. Thayer reiterated the importance of having the staffing in place for the increased workload of the Infrastructure Bill. He informed that there are a few project managers who are eligible for retirement and succession planning is necessary to backfill those positions. Mr. Thayer discussed that vacancies in the Finance Department have been challenging. Review of compensation and employee evaluations occurred. He noted the increase in salary range from Range 12 to Range 14 in order to compete and adapt in the current market conditions. Mr. Thayer stated that Dona Keppers, CFO, is very attentive with her staff and they are on the path to hiring additional key components. L. Community Outreach Mr. Thayer discussed the provided six-month look -back listing of AEA's community outreach engagements. Most recently, Mr. Thayer and Mr. Sandstrom presented to the Denali Commission Board. Mr. Thayer highlighted that the Governor is hosting an Alaska Sustainable Energy Conference May 24 — May 26 at the Dena'ina Center. The Governor's Office is the lead and AEA is providing support to identify speakers, moderators, and other aspects of the three-day conference. Additional information on those efforts and AEA's sponsorship role is forthcoming. M. Articles of Interest Mr. Thayer gave an overview of the articles of interest included in packet. He highlighted the article from Alaska Business Monthly regarding the reduction of emissions and the charging stations that have been implemented. N. Next Regularly Scheduled AEA Board Meeting Wednesday, March 2, 2022 Mr. Thayer advised that the next scheduled AEA Board meeting is Wednesday, March 2, 2022. Mr. Kendig requested a brief at -ease. There was no objection. Chair Pruhs returned the meeting to order and noted that both he and Ms. MacKinnon are now present. Alaska Energy Authority Page 6 of 8 MOTION: A motion was made by Mr. Kendig to enter into executive session to discuss confidential matters, the immediate knowledge of which would have an adverse effect upon Alaska Energy Authority, and discuss confidential matters pertaining to personnel. This is supported by the Open Meetings Act, AS 44.62.310, which allows a Board to consider confidential matters in executive session. In this case, the Board believes that these are subjects which would have an adverse effect upon the finances of AEA and are protected by law, due to the rules protecting personal privacy and certain business information. Motion seconded by Vice -Chair Sande. The motion to enter into executive session to discuss confidential matters, the immediate knowledge of which would have an adverse effect upon Alaska Energy Authority and discuss confidential matters pertaining to personnel passed without objection. 6. EXECUTIVE SESSION: 9:58 am Discuss confidential financial matters (CEA/MEA Presentation) and discuss confidential matters pertaining to personnel. The Board reconvened its regular meeting at 12:00 pm. Chair Pruhs advised that the Board did not take any formal actions on matters discussed while in executive session. 10. BOARD COMMENTS Mr. Kendig expressed that he is pleased with the collaboration and progress with Mr. Thayer and the utilities. Vice -Chair Sande noted that during the State of the State, she appreciated the Governor's remarks positively reflecting on AEA and the work of the team and the staff. She expressed appreciation to the staff for their efforts. Mr. Vivlamore thanked Mr. Thayer and asked for the potential percentage increase of the Bradley Lake expansion. Mr. Thayer explained that Bradley Lake provides approximately 10% of Railbelt power. He noted that the successful expansion of the Dixon diversion would potentially increase Bradley Lake's capability to provide approximately 16% to 17% of Railbelt power. Mr. Thayer highlighted the diligence of staff involving the Infrastructure Bill and collaborating with the Board and the Governor's Office. He received a letter of appreciation from the Governor's Office which also requested to circulate and use the spreadsheet as an example of the work product for other commissioners and for all departments. Mr. Thayer noted that the appreciation goes to staff and to Ms. Hartley. Chair Pruhs expressed appreciation to Board members for their indulgence since he was late to the meeting. He thanked staff for their efforts. He was pleased with the opportunity to visit with CEA and MEA, which increased his understanding. Chair Pruhs encouraged the continued collaboration with the utilities. Alaska Energy Authority Page 7 of 8 11. ADJOURNMENT There being no further business of the Board, the AEA meeting adjourned at 12:05 pm. al`ttltlrrr�� 4`,,� ....... �'q� Curtis W. Thayer, Executive Director / Secretary : : pRPOq�. _'�r� SEAS 7, Alaska Energy Authority Page 8 of 8