HomeMy WebLinkAboutAEA Board Meeting June 2015
BOARD MEETING MINUTES
Thursday, June 25, 2015
Fairbanks, Alaska
1. CALL TO ORDER
Chair Dick called the meeting of the Alaska Energy Authority (AEA) to order on June 25, 2015
at 10:04 am. A quorum was established.
2. ROLL CALL: BOARD MEMBERS
Members present: Chair Russel Dick (Public Member); Vice-Chair Dana Pruhs (Public
Member); Jerry Burnett (Deputy Commissioner, Department of Revenue); Fred Parady (Deputy
Commissioner, Department of Commerce, Community and Economic Development (DCCED));
Crystal Nygard (Public Member); and Gary Wilken (Public Member).
3. ROLL CALL: STAFF, PUBLIC
AEA & AIDEA Staff present: Sara Fisher-Goad (AEA Executive Director); Gene Therriault (AEA
Director-Energy Policy & Outreach (EPO)); Emily Ford (AEA EPO Manager); Kirk Warren (AEA
Project Manager); Teri Webster (AEA Executive Assistant); John Springsteen (AIDEA Executive
Director); Ted Leonard (AIDEA Director Emeritus); Jim Hemsath (AIDEA Director-Project
Development & Asset Management (PDAM)); Michael Lamb (Chief Financia l Officer); Karsten
Rodvik (AIDEA External Affairs Officer); Nick Szymoniak, (AIDEA Energy Infrastructure
Development Officer); Sherrie Siverson (AIDEA Executive Assistant); and Brian Bjorkquist
(Department of Law).
AEA Staff participating via teleconference: Jennifer Haldane (Human Resources Director); Sandra
Moller (AEA Director/COO-Project Implementation); Sean Skaling (Director-Program
Development & Project Evaluation); Tom Erickson (Chief Procurement Officer); Catherine Bliss
(AIDEA Administrative Assistant); and Krin Kemppainen (AIDEA Administrative Assistant).
Public present: Elwood Brehmer (AK Journal of Commerce); Dan Britton (Fairbanks Natural Gas
(FNG)); Tim Gallagher (HDR); Mark Gardiner (Western Financial Group); Doug Issacson (Former
SOA Representative); Linda Leary (Alaska Railroad); Bob Shefchik (Interior Energy Project (IEP)
Team Leader); and Jamie Schwartzwald (Channel 13 Fairbanks).
Public participating via teleconference: Bernie Smith (Regulatory Commission of Alaska (RCA));
Mark Fineman and Robert Scanlon (Blood Bank of Alaska (BBA)); Jerry Juday (Department of
Law); Ladonna Lindley (Accu-Type Depositions).
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June 25, 2015
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4. AGENDA APPROVAL
The agenda was approved as presented.
5. PRIOR MINUTES - May 27, 2015
MOTION: A motion was made by Vice-Chair Pruhs to adopt the minutes of May 27, 2015.
Motion seconded. Motion passed.
6. PUBLIC COMMENTS
None.
7. NEW BUSINESS
7A. Railbelt Transmission Issues Update
Ms. Fisher-Goad introduced Mr. Therriault and Mr. Warren, who gave a PowerPoint
presentation regarding the Alaska Railbelt Transmission System. The current AEA
Transmission Study was reviewed. Mr. Therriault explained the AEA Transmission Plan is a 10-
year planning proposal for the Railbelt. He noted FERC does not have jurisdiction in the state of
Alaska because there is no transmittal of power across state lines. AEA does provide FERC's
level of forward-looking planning. AEA plans to provide one-year status updates to the study to
address technology changes or load increases.
Mr. Therriault described the project upgrades and benefits to the Railbelt and stated the total
estimated cost for all of the proposed projects is $900 million. He reported the estimated
benefits per year would range from $146 million to $241 million, if all of the proposed projects
were currently online. Mr. Warren explained this would provide a savings of .03 cents to .06
cents per kilowatt hour to approximately 500,000 ratepayers over what they would pay if
economic dispatch were not allowed in the Railbelt. He clarified the savings would not provide
a reduction in the rate payers current bill.
Deputy Commissioner Burnett requested the cost per kilowatt hour to pay for the $900 million.
Mr. Warren noted he will determine an estimate and report that information to the Board. Mr.
Therriault stated the completed projects would provide a net savings.
Mr. Therriault presented the primary concepts for a future Railbelt transmission system. He
discussed the structure of responsibilities for a transmission company (TransCo) and for an
independent system operator (ISO).
Vice-Chair Pruhs asked if a study has been completed identifying the amount of debt on the 500
miles of existing transmission infrastructure. Mr. Therriault stated the debt components are
substantial. He does not have a specific numerical figure. The existing bond holders have to be
satisfied they will continue to see a return, before the asset can be pledged to an aggregated
system. Assurances have been given in similar structures in the Lower 48.
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June 25, 2015
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Mr. Wilken asked if there is a model used in the Lower 48 that Alaska could replicate. Mr.
Warren noted Alaska is unique because there is no possibility for an energy market. He advised
much of the modeling that has been completed has been premised on the independent Electric
Reliability Council of Texas (ERCOT) model. Mr. Wilken asked if there needs to be money in
the budget to engage in an advisory capacity on a formal basis. Mr. Therriault believes the
utilities understand money is tight and private capital would be considered for investment. Mr.
Warren informed a number of equity investing firms have expressed interest in the next phase of
the study.
Mr. Warren gave an update on the work completed by Dr. Antony Scott of Alaska Center for
Energy and Power (ACEP). The final report is due to the Legislature on June 30, 2015, and will
address whether creating an independent system operator or similar structure for electric utilities
in the Railbelt area is the best option for effective and efficient electrical transmission. Five
public meetings have been held and an open informational docket was created. Mr. Warren
discussed Dr. Scott's general findings, as presented to the RCA on May 13, 2015.
Mr. Therriault explained the issues surrounding the proposed EPA 111(d) Rule of the Clean Air
Act entitled, "The Clean Power Plan." A 26 percent reduction of CO2 from five generating
sources in the Railbelt is proposed for Alaska. The difficulty is this reduction relies heavily on
transmission. Mr. Therriault informed an EPA exemption from this rule for the state of Alaska
has been requested, because Alaska does not have a transmission system like those in the Lower
48.
Ms. Nygard asked how increased energy efficiency is expected to be measured under the
proposed EPA 111(d) Rule. Mr. Therriault noted energy efficiency is measured from the total
emissions from the five targeted plants compared to the power that is produced.
Mr. Wilken commented he expects Senator Murkowski to be engaged with these issues.
Mr. Bjorkquist provided an overview of the Railbelt transmission litigation issues, particularly
the disputes relating to the transmission line between Soldotna and Quartz Creek, and whether or
not this line remains under the Bradley agreements. There are currently two different court cases
and a proceeding before the RCA dealing with all the issues and disputes, including Homer
Electric Associations (HEA) request for a tariff of $2.7 million to $3.4 million. The questions of
jurisdiction before the Alaska Supreme Court are: Does RCA have jurisdiction over these
matters, and does the Superior Court have jurisdiction to hear the question?
The RCA has a statutory deadline for answering and entering a final order on rate cases like this.
If RCA does not issue an order by August 31, 2015, there is an argument that HEA's original
tariff filing will become effective by operation of law. Mr. Bjorkquist informed the Supreme
Court was requested to take the cases on an expedited basis because of the potential harm that
could come from the statutory deadline.
Mr. Bjorkquist noted AEA has been involved with all of the proceedings with the primary
interest in protecting the priority right for Bradley Lake power to be wheeled over the Soldotna