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Bradley Lake PMC Meeting-Tues., Oct. 21, 2003 2
BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, October 21, 2003 — 9:00 a.m. 1. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:00 a.m. on Tuesday, October 21, 2003, 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 Howell. The following members were present: Steve Haagenson Golden Valley Electric Association Lee Thibert Chugach Electric Association Rick Eckert Homer Electric Association Jim Posey Anchorage Municipal Light & Power Dave Calvert (teleconference) City of Seward Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Howell, Alaska Energy Authority Don Stead, Homer Electric Association Doug Hall, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Rick Miller, Anchorage Municipal Light & Power Ed Reubling, Anchorage Municipal Light & Power Ron Saxton, AterWynne Michelle Detweiler, AterWynne Dave Carlson, Southeast Conference Mike Cunningham, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association Jim Walker, Matanuska Electric Association (teleconference — observer) Brian Hickey, Chugach Electric Association (teleconference) Page 1 of 3 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS The FERC issue was added as Item 8C. 6. APPROVAL OF MEETING MINUTES - May 20, 2003 and September 24, 2003 Mr. Posey moved to approve the meeting minutes of May 20, 2003, and September 24, 2003. Seconded by Mr. Eckert. A voice vote was taken, and the minutes were unanimously approved. 7A. Election of Officers (Resolve Vice Chair Issue) At the previous meeting, the election of officers was held. The committee voted to accept the slated officers currently standing. There was a mis-noted person stated as Vice Chair at the last meeting, which needed to be changed to reflect the true Vice Chair. Dave Calvert was on the slate as the official Vice Chair. Dave Calvert and Jim Posey were nominated. The committee voted Jim Posey as the new Vice Chair. 7B. Briefing on Bradley Lake Responsibilities Ron Saxton Ron Saxton gave an overhead presentation of the responsibilities (see attached handouts). 7C. Response Regarding Inquiries on Bradley Transfer Art Copoulos Mr. Copoulos stated “AIDEA/AEA’s comment on that was that it would be inappropriate at this time to discuss a disposition of assets at least until the Statewide Energy Plan is completed and the utility IRP study that is currently underway.” 8A. Next Meeting Date The next meeting will be at the call of the Chair. 8B. Insurance/Risk Assessment Scope of Work/Signed Copoulos Mr. Copoulos gave a brief overview of the letter from Warren, McVeigh & Griffin dated September 19, 2003, regarding the proposal to perform risk and insurance review for Bradley Lake. Mr. Copoulos will meet with Mike Cunningham to discuss and go over questions. 8C. FERC Issue Copoulos FERC had been contacted and there are plans to visit them on November 3, 2003, to lay out the maps and give an overview and get their input on how we can work best with the Washington, D.C. office. This meeting is timed with other PMC members already being in that area so that if need be to contact them and coordinate a group gathering, location will allow it. A report will be brought to the PMC after the November 3” meeting. Page 2 of 3 Update on Runner Cracks Don Stead Three new cracks have been found in one runner. Those cracks have been excavated and have had Bacon Donaldson come in to provide support on the excavation and weld repairs. A boat sample was done. A section was cut out and sent with Bacon Donaldson to be analyzed. That analysis showed that the crack is a fatigue crack, more than likely caused by significant oscillation events. These cracks are being caused by the power oscillations that the runner is seeing. Fuji has been notified and they are awaiting a report from Bacon Donaldson talking about the cracks. One runner crack repair has been done and was tested to see if it passed. Believe that the repair method is effective and have started repairs on the other cracks in runner. The O&D committee has added the additional response that every six months they will shut down and do a check of the runner. 9. ADJOURNMENT The meeting was adjourned at 11:00 a.m. BY: pee \ asi genson, | Chairman ATTEST: ! AX WY Alaska Energy Authority, Secretary Page 3 of 3 Bradley Lake Project Management Committee An Introduction to the BPMC’s Functions and Responsibilities Presentation Compiled by Ater Wynne, LLP October 2003 Bradley Lake PMC * Membership + Alaska Energy Authority (AEA) * Chugach Electric Association (Chugach) * Golden Valley Electric Association (GVEA) + Anchorage Municipal Light & Power (ML&P) * Homer Electric Association (HEA) * Matanuska Electric Association (MEA) * Seward Electric System (Seward) + Alaska Electric Generation & Transmission Co-op (AEG&T) BPMC Powers & Authority * Key documents that set forth the BPMC’s powers and authorities: — 1987 Power Sales Agreement — Bradley PMC Bylaws — 1989 AEA Power Revenue Bond Resolution Power Sales Agreement ¢ Termination (PSA s.2): — 50 years after date of Commercial Operation, or — no Bonds outstanding under the Bond Resolution, whichever occurs later. * Renewal (PSA s.2): — Any purchaser may renew for additional successive terms up to the useful life of the project. — Ifnot all parties renew, percentage shares will be reallocated accordingly. + Agreement is a Take or Pay obligation (PSA s.7): — Each Purchaser will make payments as required under the PSA notwithstanding a suspension or reduction in the amount of power supplied by the Project. Objectives of the BPMC Article | of the Bylaws sets forth the objective of the PMC as follows: * Responsibility for the management, operation, maintenance, and improvement of the Bradley Lake Project, subject to the non-delegable duties of the AEA. Representative Appointment and Voting * Each utility member of the BPMC designates one voting representative and one alternate representative to the BPMC. * Each utility member must notify, in writing, all other members of the names, addresses and telephone numbers of the designated and alternate representatives. * No Committee member shall obtain an additional vote through merger with, acquisition of , or assignment from any other Committee member, and AEG&T shall not have a direct vote, but is represented by and through HEA and MEA each of which is entitled to vote as a Purchaser member. * Quorum = 5 members Purchaser’s Percentage Shares of Project Capacity and Annual Project Costs AEG&T 25.8% (MEA = 13.8%; HEA = 12.0%) Chugach 30.4% GVEA 16.9% ML&P 25.9% Seward 1.0% BPMC Responsibilities — Project management, operation, maintenance and improvement — Budgets and audits — Procedural: adopt rules of procedure, hold meetings, elect officers, establish subcommittees (as needed), dispute resolution, hire consultants, etc. * Operation and Maintenance (PSA s.13). — Operate and maintain the Project. — Adopt maintenance schedules for the Project. * Scheduling, Production, and Dispatch of Project Power (PSA s.13). — Adopt procedures for scheduling, production, and dispatch of Project power. * Water Allocation (PSA s.13). — Establish procedures for the use of each Purchaser’s Water Allocation. 10 * Required Project Work (PSA s.13). — Work required to keep project in good and efficient operating condition. — Evaluate and select among alternative methods (if any) of carrying out and funding Required Project Work. * Optional Project Work (PSA s.13). — Adopt provisions to evaluate and approve Optional Project work and to determine the compensation (if any) to be provided if the Committee approves such Optional Project Work. — Only if approved by utilities (AEA cannot force) — BPMC must determine which utilities are benefited and which, if any, are adversely impacted, and allocate expense and compensation accordingly. 12 * Insurance Determination (PSA s.13). — Make an initial determination of customary insurance (within the meaning of Section 714 of the Bond Resolution), and determine the appropriate amount of insurance for the Project and obtain same (in addition to other insurance that may be required by the Bond Resolution). * Electric Power Reserves (PSA s.13). — Adopt and implement procedures relating to electric power reserves for the Project. 13 * Renewal and Continuity Reserve Fund. — Consider the need for and approve an additional amount to be added to the Renewal and Continuity Reserve Fund above the Renewal and Continuity Reserve Requirement provided in the Bond Resolution. 14 * Limitation on Certain Contracts: — Section 10(d) of the PSA lays out the conditions under which other take or pay contracts for power can be entered into by the Purchasers, e.g., No Purchaser can enter into a take or pay contract for power outside of the PSA if payments for that power are equal to or greater than the Purchaser’s obligations under the PSA, unless: — the contract is for two years or less and payment obligations under the contract are on parity with the Purchaser’s payment obligations under the PSA — a formal opinion has been obtained from a Consultant that the contract will contribute to the business of the Purchaser’s System in accordance with Prudent Utility Practice and contract will not impair the ability of the Purchaser to raise revenues sufficient to meet its obligations under the PSA. 15 * Sales, mergers and assignments (PSA S.17(c)) — No Purchaser shall abandon, sell, mortgage, lease or otherwise dispose of the Purchaser’s system or any assets of that system or assign the PSA or any interest thereunder to any assignee or successor in interest. unless: consented to by majority of utilities and AEA, or made to other BPMC utility, or limited to surplus assets, or consultant certifies such action will not adversely impact utilities ability to perform 16 * Special Provisions — Establish Accounts if No Bonds Outstanding — Excess Payments 17 Budget Process * Fiscal Year (PSA s.1(r)): July 1 - June 30 * Committee’s Duties in the Budget Process (Bylaws Art.9). — The Committee is responsible for adopting a detailed budget process. The annual budget must include: amounts required for debt service on any outstanding bonds; * amounts required for reserved funds created by bond resolution; and costs of producing and delivering power. The budget may include amounts for non-bond funding of additional Project work. 18 + Budget “Default’(PSA s.13(e)). Each fiscal year, adopt and revise (as necessary) a budget of Annual Project Costs. + Ifthe Committee fails to adopt a budget by the ninetieth (90") day prior to the beginning of a fiscal year (April 2), then AEA may adopt the budget. 19 * Types of Annual Project Costs (PSA s.8) Debt Service on Construction and Acquisition Bonds Debt Service on other Bonds Amounts required for restoration of funds established under the Bond Resolution to appropriate levels Payment for required project work Payments into Funds established under the Bond Resolution Operation and Maintenance costs Insurance costs AEA Administrative costs Committee costs Other Project costs as deemed necessary by the Committee 20 10 ¢ Estimated Annual Payment Obligation (PSA s.13(c)). — Each fiscal year, establish each Purchaser’s estimated Annual Payment Obligation, including a schedule of equal monthly payments that each Purchaser must make during that fiscal year. + Ifthe Committee fails to establish each Purchaser’s Annual Payment Obligation in a timely fashion, then AEA may do so. 21 + Actual Annual Project Costs and Actual Annual Payment Obligation (PSA s.13(c)). — Determine the actual Annual Project Costs after the conclusion of each fiscal year, the actual Annual Payment Obligation for each Purchaser, and the amount of any additional payment required from (or refund to be given to) each Purchaser. + Ifthe Committee fails to determine the actual Project Costs in a timely fashion, then the Authority may do so. 22 11 * Audit (Bylaws Art. 9.3) An annual audit shall be performed by qualified independent auditors selected by the Committee, to be completed on or before the first day of December of each year. * Capital Asset Acquisition and Accounting (Bylaws Art. 9.4) AEA owns and controls all assets that are part of the Project Asset = value of $500 or more, a useful life of at least one year, and substantially comprises a Retirement Unit as listed in the Federal Energy Regulatory Commission List of Retirement Units, as amended from time to time Committee control and management of capital assets AEA as “Purchasing Agent” on behalf of PMC 23 + Funds Required to be Established by Bond Resolution (Bylaws Art. 10) Construction Fund Debt Service Fund Capital Reserve Fund Renewal and Contingency Reserve Fund Revenue Fund Operating Fund Revolving Construction Fund . 24 12) Procedural Duties Article 5 of the Bylaws sets forth the following: Rules of Procedure. Adopted for the selection of Committee officers, conduct of Committee meetings, dispute resolution, approval of Consultants, modification of procedural rules and applicable voting requirements (the Bylaws). Annual Meeting. First regular meeting of the Fiscal Year (July 1 through June 30), to elect officers and transact such other business as may come before the meeting. Regular Meetings. Held at least quarterly. Special Meetings. Called by the Chairman or by three members of the Committee at any time and advising the Secretary of the Committee. Business at a special meeting is limited to the purpose stated in the notice of special meeting. Reasonable written notice needs to be given prior to the meeting. 25 Notice of Meetings. Public notice is given by the Secretary of the Committee for all meetings of the Committee. Notice required at least five (5) days before date of meeting by mail. + Notice published once in the designated newspaper of the Committee (Anchorage Daily News) + A notice of a meeting includes date, time and place of the meeting, and if the meeting is by teleconferencing, the location of a teleconferencing facility equipped with a speaker-telephone or similar listening device. + Itis the intent of the Committee to give the best notice possible to the public of all its transactions, but the inadvertent failure to accomplish any one of the notice requirements shall not invalidate any action of the Committee. 26 13 Waiver of Notice. Whenever any notice is required to be given to any member a waiver of the notice in writing, signed by the person or persons entitled to such notice, whether before or after the time stated in the notice, is deemed equivalent to giving notice. Place of Meetings. The Chairman of the Committee may designate any place for any annual, regular or special meeting. Teleconferencing. Meetings may be held by teleconference. Minutes of Meetings. Written minutes shall be kept for all regular and special meetings of the Committee. Minutes of Committee meetings shall be mailed to each member following each meeting. The official copy of each minutes shall be signed by the Chairman and the Secretary. 27 Manner of Acting. + Committee actions may be taken by any reasonable voting method, provided that any member may request a public roll call vote. All actions taken via teleconferencing shall be by roll call vote. + Except for those matters which expressly require alternative voting procedures, the act of a majority of votes taken during a meeting at any time when a quorum is present, shall be an act of the Committee, and binding on the members. + A representative who is present at a meeting of the Committee at which action on a Committee matter is taken shall be presumed to have assented to such action unless the representative's dissent is both indicated and recorded at the time of the action. 28 14 ¢ Voting Arrangements and Requirements (Bylaws Art.5.10): — Actions that require the affirmative vote of at least four representatives of the Purchasers whose percentage shares of Project capacity are greater than 51%, but no action by the Authority: + Adopting procedures for scheduling, production and dispatch of Project power. * Selecting alternative methods not involving AEA for funding Required Project Work. + Establishment of procedures for the use of each Purchaser's Water Allocation, except that the Authority's affirmative vote shall be required for any water allocation decision which affects performance of the Authority's obligation under its FERC license. = — Actions requiring the affirmative vote of at least four representatives of the Purchasers, whose percentage shares of Project capacity are greater than 51 % plus the affirmative vote of AEA: + Arrange for the operation and maintenance of the Project. + Adopt budget of Annual Project Costs. + Establish the estimated Annual Payment Obligation of each Purchaser, together with a schedule for each Purchaser of equal monthly payments that such Purchaser is required to make during that year. + After the end of the FY, determine the actual Annual Project Costs. 30 15 Evaluate necessity for and scheduling of Required Project Work. Determine appropriate amount of and obtain insurance for or related to the Project. Adopt additional minimum funding amounts for the Renewal and Contingency Reserve Fund above that required by the Bond Resolution. Select among alternative methods that involve AEA for funding Required Project Work. Adopt or amend procedural rules of the Committee except for procedures for dispute resolution which shall be adopted or amended by unanimous agreement. 31 Adopt maintenance schedules for the Project. If and when no Bonds are outstanding, determination of rules, procedures and accounts necessary to manage the Project. Evaluation and approval of Optional Project Work and the compensation for such work. Application of insurance claims proceeds not governed by the bond resolution. Approval of procedures and any individual utility agreements relating to electric power reserves for the Project in accordance with Section 5 of the Power Sales Agreement. The approval (including possible pre-approval) of consultants. a2 16 — The unanimous concurrence of all Committee members is necessary for: + Adoption of procedures for dispute resolution. — A majority of Committee votes, with each Member receiving an equal vote (including AEA) is required for: + Election of officers. 33 * Conduct of Meetings (Bylaws Art. 5.11): — Robert’s Rules of Order — Open Meetings Policy + Although not required to do so, the BPMC has determined that Alaska public policy favors openness and public access and the Committee desires to conduct its business in public in accordance with certain policies outlined in the Bylaws. 34 17 — The Conduct of Executive Sessions and Topics to be Discussed in Executive Session Matters the immediate knowledge of which would clearly have an adverse effect upon the finances of the Authority or the Project. Subjects that tend to prejudice the reputation and character of any person; provided, however, the person may request a public discussion; Matters which by law, municipal charter or ordinance are required to be confidential. Matters discussed with an attorney for the Committee or a member of the Committee, the immediate knowledge of which could have an adverse effect on the legal position of the Committee or the Authority. 52 — The Open Meetings Policy does not apply to: Meetings at which a quorum is not present; Informal discussions, by telephone or otherwise, among members of the Committee, at which votes are not taken and official business is not conducted; or Meetings and discussions, formal or informal, of Committee members in which all participants indicate they are acting individually as representatives of the Parties to the Agreement and not as the assembled Committee, and at which no Committee business is conducted and no votes are taken. 18 * Special Purpose Committees (Bylaws Art. 6) — The BPMC may appoint special purpose committees, however, these committees may only act upon PMC matters when given prior authorization by the PMC to do so. — The PMC grants authorization by adopting a resolution detailing in writing the purpose and scope of the committee. * Election of Officers (Bylaws Art.7). — Elect a Chairman, Vice Chairman, Secretary/Treasurer, and other officers and agents as necessary,. The Committee is responsible for determining the officers’ term and duties. * The Committee may remove any officer upon the vote of five Committee members. 37 * Dispute Resolution (Bylaws Art.12). — Adopt procedures for the resolution of disputes that may arise between the parties to the Power Sales Agreement regarding the meaning of its terms. + Expense Reimbursement (Bylaws Art.13) — Each Member will be reimbursed for the cost of travel and per diem necessary for its representative and alternate to attend meetings of the Committee in the amount of $150.00 per day. "I 19 * Authority May Take Required Actions if Committee Fails to Do So (PSA s.13(e). — AEA has been granted the default authority to take any action it deems necessary to manage and maintain the Project according to Prudent Utility Practice if the PMC fails to carry out its duties. — AEA may take any other action which it believes to be required in order for it to comply with federal or state law, the orders of licensing and regulatory agencies, the Bond Resolution, or the PSA. 39 20 BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS ARTICLE 1 ARTICLE 2 ARTICLE 3 ARTICLE 4 ARTICLE 5 ARTICLE 6 ARTICLE 7 ARTICLE 8 TABLE OF CONTENTS Statement of' Objectives sie scciacr ls cies elslac oe 1 Authority of Bradley Project Management Committee) |) oot ee ele kl See labe see Fae See ass z Q©PPCES) | ic Ys lal se) oh ol fesse lafie bel oe fotos fa 21 lee ed Sy tw fo te | B Representatives) (4 s\q 5) a> | eds ees eile [eto toi ele fet res |= 4 Committee Meetings ..............----..-20-- 5 5.1 |-Annuall Meetings | 2 5) 5) slices tert leech oe) lore a els 5 5-2) Regular Meetings: | .)- |) 5 ela ole da © sonia os 5 5.3: Special Meetings o\c \2 6) 5 em leto es ole 1) lense | els 5 5:4) Notice:of Meetings | 2). 1.) 2. oe kee tj eee aes > 5.5! Waiver of Notices. a). Sela sb ia ole aoe) siseis ae 6 5.6) Placejof Meetings . sick) secis ae 4 oie os ©) aie ae 6 5.7 | Teleconferencing |i jos sian lsc ole a) see els 6 5:8) Minutesiof' Meetings! <5 6/5 -¢\go6 a5 556 aoe 6 5.9) Quorum) bse, sia wie Bis el Bele we ale es BS bolas by ote pe 6 5.10 Manner of Acting )e.6|5 5c |s ele a i ot chal ee 6 5.11 |@pen Meetings) | )2 321.2 elses oe ae tise sel 9 @onnmittees: 6) aie eis ie ale el sy ae | fie foe sim on) folie fev ei se 11 6218 Designationi ay arid ie ie eet eine) eel aie 11 (6:2;) POwets) | oo Jamie fais era ela eite|a al] 6) st Ble lefske ole 11 23+) WEI & bel Sw bol etd im fal) Sa ede bel sell Jo ot lit: for cote! ed 11 Officers) Praeeree lola cia eee oe ye Piette 12 Dade | Number) bla fo}! it astm flit ays fod bel sly tel op etregist en fe lot 12 7.2. Election and Term of Office. .............-.. 12 7S (Removal): |s se) <) she lacie sere sow sees se lak 34 2 Msi) NACATICIES) |. 1) E/-) bie tele fale ate ee fe aie | lie Fe ieabel no 12 7.5 Separation of the Office of Treasurer from that of Permanent Secretary 7.6 Chairman dai) Nice Chairman (0) ) sats ic) ) tiekel aie sla el 13 7.8 Secretary/Treasurer Indemnification) Sialeiai cia sie cla ae ele ale aie ale 14 i - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 9 ARTICLE 10 ARTICLE 11 ARTICLE 12 ARTICLE 13 ARTICLE 14 TABLE OF CONTENTS (cont.) Annual Budgets and Determination of Rates ......... 15 9.1 Budget Process Prior to Project @ontpletion Geir 45e, 292 ase ee ose he ses 15) 9.2 Budget Process Following Project Completion .. 63.2.2 3. Petes tege tetsestes dotcas 15 9.3 Auditing Standards and Procedures............ 16 9.4 Standards for Capital Asset Acquisition and Accounting: 5 = <8 <-em 3 s1< 6 se Stat g 3 16 Committee Funds and Assets .............--0-- 18 10:1, Required Fonds:<:.:5 3.050 45.8. 5) sowie hs 18 Project Insurance =. .ir.t, 007. siyes aeeitd. 2 ahd 19 iil Coverage Leimitts a = ost sto 2 cs ct 19 isd: Self-Insurance. 3.5 si 5. cs ee id ws 19 11.3 Insurance Claim Proceeds. «2... 5 0 Swedes. 19 11-4 Annual Review... = 22 t5.0203.0-6 3 fh hare 19 Procedures for Dispute Resolution ............... 20 D2 ProceduraluRules .a.00 5904 ier 9 nese cette asin 20 122 AURORA tc owe = ter 20 1203 Vudiciall Reviews a- 2-3 s se 20 1204 Arbitration ee stestet 5109 st 20 1225 @osts! of Arbiter atin: sera oc ss ae 20 Reimbursement of Travel and Per: Diem) Expenses = 3.—1 =. 1. Bocce 21 1351 Committee Meetings! ==. ~ 15-2 ae oe 21 13.2 Special Purpose Committee Meetings ......... 21 Other: Policies so--c sores cts ee et 22 14.1 Numbering of Resolutions ................ 22 14.2) Definitioniof Terms 454. - 54: 9. 22 14.3 Amendment of Bylaws ..........-........ 22, ii - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) BYLAWS OF BRADLEY PROJECT MANAGEMENT COMMITTEE ARTICLE 1 STATEMENT OF OBJECTIVES The Project Management Committee (the "Committee") shall be responsible for the management, operation, maintenance, and improvement of the Bradley Lake Project (the "Project"), subject to the non-delegable duties of the Alaska Energy Authority (the "Authority"). All Committee members have a substantial long-term interest in the Project. The responsibilities of the Committee evolve in accordance with the Authority’s ownership of the Project, and the Purchaser’s obligations to pay the Project’s annual costs and right to use the Project’s power production. These Bylaws set forth the procedural rules of the Bradley Project Management Committee established pursuant to the Bradley Lake Power Sales Agreement and policies adopted by the Committee. 1 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 2 AUTHORITY OF BRADLEY PROJECT MANAGEMENT COMMITTEE The Bradley Project Management Committee exists and operates pursuant to the terms of the Bradley Lake Hydroelectric Project Agreement for the Sale and Purchase of Electric Power ("Power Sales Agreement" or "Agreement"). 2 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 3 OFFICES The Committee shall have no physical office but shall have a mailing address at the Alaska Energy Authority whose representative is the permanent Secretary of the Committee. 3 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 4 REPRESENTATIVES The Committee shall consist of the Authority and the Purchasers, including as Purchasers for this purpose both Homer Electric Association, Inc. and Matanuska Electric Association, Inc., for themselves and for AEG&T as a Purchaser represented by and through these utilities. No Committee member shall obtain an additional vote through merger with, acquisition of, or assignment from any other Committee member, and AEG&T shall have no direct vote, but shall be represented by and through Homer Electric Association, Inc., and Matanuska Electric Association, Inc., each of which shall be entitled to vote as a Purchaser member for purposes of Committee procedure. Each Committee member entitled to vote shall designate one representative and one alternate representative to the Committee. Each member shall notify all other members in writing of the names, addresses and telephone numbers of its representative and designated alternate. Any member may change its designated representative or alternate representative at any time and shall promptly provide written notice of such change to the members. The alternate representative shall serve as the designated representative in the absence of the designated representative. 4 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 5 COMMITTEE MEETINGS 5.1 Annual Meeting. The annual meeting of the Bradley Project Management Committee shall be the first regular meeting of the Fiscal Year (July 1 through June 30), for the purpose of electing officers and transacting such other business as may come before the meeting. 5.2 Regular Meetings. Regular meetings shall be held at least quarterly, with the specific date and time to be determined by the Committee. 5.3 Special Meetings. Special meetings of the Bradley Project Management Committee may be called by the Chairman or by three members of the Committee at any time by so advising the Secretary of the Committee. Business at a special meeting of the Committee shall be limited to the purpose stated in the notice of such special meeting. 5.4 Notice of Meetings. Public notice shall be given by the Secretary of the Committee for all meetings of the Committee. 5.4.1 Notice of regular meetings shall be given at least five (5) days before the date of the meeting by: (a) mailing notice to all Committee members, alternates, and persons or organizations who have filed with the Committee a written request to receive notice, and (b) publishing notice once in the designated newspaper of the Committee. 5.4.2 A notice of a meeting shall include the date, time and place of the meeting, and if the meeting is by teleconferencing, the Jocation of a teleconferencing facility that is equipped with a speaker-telephone or similar listening device. 5.4.3. Written notice of special meetings shall be given, as reasonable, before the time specified for such meeting. Such notice of special meetings shall state the purpose or purposes for which the meeting is called. Business at a special meeting shall be limited to the purposes stated in the notice of such special meeting. 5.4.4 It is the intent of the Committee to give the best notice possible to the public of all its transactions, but the inadvertent failure to accomplish any one of the notice requirements shall not invalidate any action of the Committee. 5 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 5.4.5 The designated newspaper of the Committee is the Anchorage Daily News. 5.5 Waiver of Notice. Whenever any notice is required to be given to any member a waiver of the notice in writing, signed by the person or persons entitled to such notice, whether before or after the time stated in the notice, shall be deemed equivalent to the giving of such notice. 5.6 Place of Meetings. The Chairman of the Committee may designate any place as the place of meeting for any annual, regular or special meeting of the Committee. 5.7 Teleconferencing. Attendance and participation by any or all representatives of the members at any meeting of the Committee may be by teleconference. The votes at a meeting held by teleconference shall be taken by roll call. Materials that are to be considered at a meeting that is by teleconference shall be made available at the teleconference locations. Participation by such means shall constitute presence in person at a meeting. 5.8 Minutes of Meetings. Written minutes shall be kept for all regular and special meetings of the Committee. Minutes of Committee meetings shall be mailed to each member following each meeting. The official copy of each minutes shall be signed by the Chairman and the Secretary. 5.9 Quorum. At all meetings of the Committee, the presence of the representatives of any five members shall constitute a quorum for the transaction of business, except as otherwise provided in the Power Sales Agreement. 5.10 Manner of Acting. 5.10.1 Committee actions may be taken by any reasonable voting method, provided that any member may request a public roll calf vote. All actions taken via teleconferencing shall be by roll call vote. 5.10.2 Except for those matters which expressly require alternative voting procedures, the act of a majority of votes taken during-a meeting at any time when a quorum is present, shall be an act of the Committee, and binding on the members. 5.10.3 A representative who is present at a meeting of the Committee at which action on a Committee matter is taken shall be presumed to have assented to such 6 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) action unless the representative’s dissent is both indicated and recorded at the time of the action. 5.10.4 The following matters shall require the affirmative vote of at least four representatives of the Purchasers whose percentage shares of Project capacity are greater than 51%. Such matters do not require action by the Authority. 1. Adopting of procedures for scheduling, production and dispatch of Project power. 2. Selection among alternative methods that do not involve the Authority for funding Required Project Work. 3. Establishment of procedures for the use of each Purchaser’s Water Allocation, except that the Authority’s affirmative vote shall be required for any water allocation decision which affects performance of the Authority’s obligation under its FERC license. 5.10.5 The following matters shall require the affirmative vote of at least four representatives of the Purchasers, whose percentage shares of Project capacity are greater than 51% plus the affirmative vote of the representative of the Authority. 1. Arrange for the operation and maintenance of the Project. 2. Adoption of budget of Annual Project Costs. 3. Establish for each Fiscal Year the estimated Annual Payment Obligation of each Purchaser, together with a schedule for each Purchaser of equal monthly payments that such Purchaser shall be required to make during that year. : 4. Determine after the conclusion of each fiscal year the actual Annual Project Costs. 5. Evaluation of necessity for and scheduling of Required Project Work. 6. Determine the appropriate amount of and obtain insurance for or related to the Project. 7 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 5210.9 7. Adoption of additional minimum funding amounts for the Renewal and Contingency Reserve Fund above that required by the Bond Resolution. 8. Selection among alternative methods that involve the Authority for funding Required Project Work. 9. Adoption or amendment of procedural rules of the Committee except for procedures for dispute resolution which shall be adopted or amended by unanimous agreement. 10. Adoption of maintenance schedules for the Project. 11. If and when no Bonds are outstanding, determination of rules, procedures and accounts necessary to manage the Project. 12. Evaluation and approval of Optional Project Work and the compensation for such work. 13. Application of insurance claims proceeds not governed by the bond resolution. 14. Approval of procedures and any individual utility agreements relating to electric power reserves for the Project in accordance with Section 5 of the Power Sales Agreement. 15. The approval (including possible pre-approval) of consultants. In the following matters, the unanimous concurrence of all Committee members shall be necessary for an action to Be taken: (a) Adoption of procedures for dispute resolution. 5.10.10 Certain matters shall require a majority of Committee votes, with each Member receiving an equal vote (including the Authority): (a) Election of officers. 5.10.11 Conduct of Meetings. Robert Rules of Order shall govern the conduct of Committee meetings except where in conflict with specific procedural rules adopted by the Committee. 8 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 5.11 Open Meetings. The Committee has determined that Alaska public policy favors openness and public access and the Committee desires to conduct its business in public in accordance with the following policies: 5.11.1 The Committee recognizes that meetings between the Authority and public utilities concerning a wholesale agreement for the sale of power or other matter exempted from review under AS 42.05.431(c) (which are contracts for wheeling, storage, regeneration or wholesale repurchase of power between the Authority and public utilities entered into between October 31, 1987 and January 1, 1988), are required to be open to the public under AS 42.05.431(d) and 44.62.310. 5.11.2 All formal meetings of the Committee and its special purpose committees shall be open to the public except as otherwise provided in these Bylaws. 5.11.3 Executive Sessions. If any subjects to be discussed at a meeting are subjects that may potentially be discussed in an executive session, the meeting shall first be convened as a regular or special meeting and the question of holding an executive session to discuss matters that come within the exceptions contained in Section 5.11.4 of this rule shall be determined by a majority vote of the Committee. No subjects may be considered at the executive session except those mentioned in the motion calling for the executive session unless auxiliary to the main question. Formal action may not be taken during the executive session. Only members of the Committee, designated alternates, and attorneys for members of the Committee may attend an executive session, unless the motion calling for the executive session specifies other persons whom the Committee wishes to attend. 5.11.4 The following excepted subjects may be discussed in an executive session: 1. Matters the immediate knowledge of which would clearly have an adverse effect upon the finances Of the Authority or the Project. 2. Subjects that tend to prejudice the reputation and character of any person; provided, however, the person may request a public discussion; 3. Matters which by law, municipal charter or ordinance are required to be confidential. 4. Matters discussed with an attorney for the Committee or a member of the Committee, the immediate knowledge of which 9 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) could have an adverse effect on the legal position of the Committee or the Authority. 5.11.5 Sections 5.11.2, 5.11.3, 5.11.4 and 5.11.5 shall not apply to: 1. Meetings at which a quorum is not present; 2. Informal discussions, by telephone or otherwise, among members of the Committee, at which votes are not taken and official business is not conducted; or 3. Meetings and discussions, formal or informal, of Committee members in which all participants indicate they are acting individually as representatives of the Parties to the Agreement and not as the assembled Committee, and at which no Committee business is conducted and no votes are taken. 10 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 6 COMMITTEES 6.1 Designation. The Committee may appoint special purpose committees from time to time, subject to such conditions as may be prescribed by the Committee. The designation of any such committee shall not relieve the Committee or any member of the Committee of any responsibility imposed by law or the Agreement. 6.2 Powers. Special purpose committees may only act upon Committee matters when given prior authorization by the Committee. The Committee will formalize the authorization by adopting a resolution which details the scope of the special purpose committee’s authority to act. Decisions made by a special purpose committee shall be by affirmative vote of a majority of the members of a special purpose committee, unless otherwise directed by the Committee. 6.3 Term. The members of each special purpose committee shall serve from the date of appointment until the date of the next annual meeting of the Committee. 11 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (2-1-94) ARTICLE 7 OFFICERS 7.1 Number. The officers of the Committee shall initially consist of a Chairman, a Vice Chairman, and a Secretary/Treasurer. Under subsection 7.5., below, the Committee may later decide to separate the offices of Secretary and Treasurer. The offices of Chairman and Secretary shall not be held by the same person. The Committee may elect such other officers and agents as it shall deem necessary, who shall hold office for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Committee. The Committee may, by separate resolution, provide for the indemnification of its officers, members and the members of any special purpose committees appointed by the Committee. 7.2 Election and Term of Office. Initially only the Chairman and Vice Chairman shall be elected by the Committee at its annual meeting. The Authority representative shall be the permanent Secretary/Treasurer. In the event that the office of Treasurer is separated from that of Secretary under the provisions of 7.5., below, the Treasurer will become an annually elected officer, while the Authority representative will retain the position of permanent Secretary. Only Committee members or alternates shall be eligible to serve as officers. Each officer shall hold office until a successor is elected and accepts office unless the officer resigns or is removed by the Committee. 7.3 Removal. Any officer elected by the Committee may be removed upon the vote of five members of the Committee. 7.4 Vacancies. In the event any vacancy occurs in any elected office of the Committee, the remaining members of the Committee shall elect a successor to the office at the next regular meeting of the Committee. 7.5 Separation of the Office of Treasurer from that of Permanent Secretary. Upon the vote of a majority of the Committee member’ (unweighted for percentage share), the offices of Secretary and Treasurer shall be separated, and an election held to fill the Treasurer’s office until the next regular election of officers. Upon separation of those offices, the Treasurer shall become an annually elected office, retaining only the "Treasurer duties" of 7.8.2. Upon separation of these officers, the representative of the Authority will remain the permanent Secretary, retaining only the "Secretary duties" of G:8ei0 7.6 Chairman. The Chairman shall preside at all meetings of the Committee and shall perform such other duties and have such other powers as the Committee may pre- scribe, subject to the limitations set forth in the Power Sales Agreement. 12 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 7.7 Nice Chairman. The Vice Chairman shall act under the direction of the Chairman, and in the absence or disability of the Chairman or if the office of the Chairman is vacant, shall perform the duties of the Chairman, and from time to time shall perform such other duties and have such other powers as the Chairman or Committee may prescribe, subject to the limitations set forth in the Agreement. 7.8 Secretary/Treasurer. The following duties will be assigned to the Secretary/Treasurer until such time that the Committee determines they should be separated under the provisions of 7.5., at which time the Secretary will retain only the Secretary Duties and the Treasurer shall retain only the Treasurer Duties. 7.8.1 Secretary Duties The Secretary/Treasurer shall act under the direction of the Chairman in regards to secretarial duties. Subject to the direction of the Chairman or the Committee, the Secretary/Treasurer shall attend all meetings of the Committee and keep a record of the proceedings. In the Secretary/Treasurer’s absence, the Chairman shall designate another member of the Committee to keep a record of the proceedings. The Secretary/Treasurer shall perform like duties for committees when required. The Secretary/Treasurer shall give or cause to be given notice of all meetings of the Committee and special meetings of the Committee and shall perform such other duties as may be prescribed by the Chairman or the Committee. The Secretary/Treasurer may incur reasonable expenses associated with keeping a record of the proceedings, including the compensation and travel costs incurred to retain a person to keep such records. 7.8.2 Treasurer Duties. The Secretary/Treasurer shall act under the direction of the Committee in regards to Treasurer duties. Subject to the direction of the Committee, the Secretary/Treasurer shall have control of the Committee funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Committee, and shall immediately deposit all monies and other valuable effects in the name and to the credit of the Committee in such depositories as may be designated by the Committee. The Secretary/Tredsurer shall disburse the funds of the Committee as may be ordered by the Committee, taking proper vouchers for such disbursements, and shall render to the Chairman and the Committee at its regular meetings or when the Committee so requires, an account of all the Secretary/Treasurer’s transactions as Secretary/Treasurer and of the financial condition of the Committee. The Committee shall secure a bond in an adequate amount to cover the actions of the Secretary/Treasurer. 13 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 8 INDEMNIFICATION To the extent legally permitted and financially able to do so from Committee- controlled assets, the Committee shall indemnify 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 purposes of this provision, "Committee member" means a Committee representative, an alternate Committee representative, an authorized agent of the Committee who is otherwise employed by the Committee, the Purchasers or any authorized employee of the Committee. 14 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 9 ANNUAL BUDGETS AND DETERMINATION OF RATES 9.1 Budget Process Prior to Project Completion. 9.1.1 Prior to Project completion, the Power Sales Agreement does not require any "budget process." The Purchasers determine what expenses to incur and how to fund them (the Authority is not a party to these decisions. or payment obligations). The only Committee expenses during this period will be those related to Committee activity or costs incurred by individual Purchasers and agreed to be shared by other Committee members. No Authority costs will be eligible for utility payment during this period, nor will the Authority have any obligation to share in the payment of Committee expenses. 9.2 Budget Process Following Project Completion. The Agreement and Bond Resolution provides for a formal budget process following completion of the Project. Prior to Project completion and the sale of Project bonds, the Committee shall adopt a detailed budget process. 9.2.1 The annual budget shall include: 1. Amounts required for debt service on any outstanding bonds; 2. Amounts required for reserve funds created by bond resolution; 3. Costs of producing and delivering power including: (a) O&M; (b) Insurance; (c) Authority’s Project specific administrative and general costs; ° (d) Costs of Committee; (e) Any individual utility cost to be reimbursed by the Committee; and (f) Any other cost approved by the Committee. 4. The budget may, in the future, include amounts for non-bond funding of additional Project work, as well as Excess Payments following final payment of all bonds. 15 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 5. The annual budget shall be based on a 12-month period starting July 1st of a calendar year through and including June 30 of the succeeding calendar year. 9.2.2 For purposes of 9.2.1(3): 1. The Authority shall provide annual budget detail listing personnel requirements by work function, their gross payroll, payroll burdens and the estimated percentage of each work function to be required for operation and maintenance. The estimated costs for materials, supplies, engineering and other costs shall be provided in sufficient detail to allow the Committee a reasonable basis to analyze the budget in the approval process and to provide a basis for the annual audit of actual costs. 2. The Authority shall provide annual budgets detailing the estimated costs relating to FERC license requirements and property insurance and the Project specific administrative and general costs and to be paid to the AEA. 9.3 Auditing Standards and Procedures. 9.3.1 An annual audit shall be performed by qualified independent auditors selected by the Committee, to be completed on or before the first day of December of each year. 9.3.2 The primary purpose of the audit is to verify expenses. The scope of the audit shall include the operating and maintenance costs relating to the Facilities, the annual Project-specific costs of the AEA, and the AEA and Committee assets, liabilities and costs including all funds administered by the AEA and the Committee, necessary to establish a true-up of the annual Project cost" 9.3.3 The annual financial statements shall disclose the comparison of actual operating results to the annual budget. 9.3.4 The members shall make available to the auditors such records and schedules required in their examination of the financial statements in a timely manner. 9.4 Standards for Capital Asset Acquisition and Accounting. To provide for a comprehensive, consistent policy of ownership and control, the Committee has designated the AEA as owner of all capital assets which benefit the Project while retaining the right to control all capital assets associated with the Project. 16 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 9.4.1 Capital assets include an asset acquired for the benefit of the Project that has a value of $500 or more, a useful life of at least one year, and substantially comprises a Retirement Unit as listed in the Federal Energy Regulatory Commission List of Retirement Units, as amended from time to time. 9.4.2 The Committee shall transfer ownership of any assets held in trust for the Project to the AEA. 9.4.3. The Committee will have control and management of all capital assets purchased with the state or utility funds, and the Committee shall manage all proceeds derived from sales upon retirement of these capital assets and to purchase additional capital assets for the benefit of the Project. 9.4.4 To the extent that purchase costs can be minimized through the State of Alaska’s purchasing power, the AEA may make purchases on behalf of the Committee as the "Purchasing Agent". To the extent other purchasing alternatives are preferable, the Committee may use those procedures. The Committee is under no obligation to follow the State Procurement Code for acquisitions with any of the funds. 17 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 10 COMMITTEE FUNDS AND ASSETS 10.1 Required Funds. The following funds are required to be established by the Bond Resolution: Construction Fund Debt Service Fund, consisting of an Interest Account and a Principal Account Capital Reserve Fund Renewal and Contingency Reserve Fund Excess Investment Earnings Fund Revenue Fund Operating Fund Revolving Construction Fund 18 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 11 PROJECT INSURANCE 11.1 Coverage Limits. Insurance shall be secured and maintained in types and amounts as are "customary" for facilities of similar types and sizes as the Project. The initial determination of "customary insurance" shall be made by the Committee in concert with the insurance consultant employed by the Authority. 11.2 Self-Insurance. The amounts and types of insurance determined "customary," including the minimum amounts required in the Bond Resolution, may be maintained through self-funded insurance methods. 11.3. Insurance Claim Proceeds. Disposition of insurance claim proceeds for damage or destruction of the physical facilities is governed by Section 715 of the Bond Resolution. Application of any other insurance proceeds accruing to the Project shall be determined by the Committee. 11.4 Annual Review. The Authority and the Committee together shall review annually the insurance types and amounts carried with respect to the Project. 19 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 12 PROCEDURES FOR DISPUTE RESOLUTION 12.1 Procedural Rules. The Project Management Committee shall perform its decision-making responsibilities consistent with the Power Sales Agreement and any duly adopted procedural rules. 12.2 Authority. In the event the authority of the Committee to act is at issue, the Committee shall first make a finding as to its authority. If the Committee determines that it has authority to consider the matter, it shall decide the issue on its merits. If the Committee determines that it does not have authority to consider the matter, the matter will be subject to immediate judicial resolution. If the court determines that the Committee in fact had authority to consider the matter, the matter shall be remanded for Committee action. 12.3 Judicial Review. Any action, or failure to act, of the Committee shall be subject to judicial review. The reviewing court shall (a) set aside any Committee action found to be arbitrary, capricious or otherwise not in accordance with law or with the terms of the Agreement, and (b) order the Committee to take action if such action has’ been unreasonably withheld or delayed. Failure of any party to appeal any Committee decision shall not constitute a waiver of the right to appeal any future decision. Judicial review shall be governed by the laws of the State of Alaska and shall be filed in the Alaska Court System. 12.4 Arbitration. Upon agreement of the Committee representatives of the Authority and any three utilities, the Committee may refer any matter within the Committee’s authority to arbitration. Unless otherwise unanimously agreed to by the members of the Committee, arbitration shall be conducted before an arbitrator selected under the guidelines of the American Arbitration Association and the arbitration shall be conducted in accordance with the commercial arbitration rules of the American Arbitration Association then in effect. In addition, the arbitrator must have education and experience in the particular matter being arbitrated. The arbitrator shall have no authority, power or jurisdiction to alter, amend, change, modify, add to or delete any of the provisions of the Agreement and the decision of the arbitrator shall be subject to judicial review as a Committee decision, in accordance with Section 12.3, above. 12.5 Costs of Arbitration. The costs incurred in connection with the arbitration shall be apportioned by the arbitrator as she or he deems appropriate. 20 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 13 REIMBURSEMENT OF TRAVEL AND PER DIEM EXPENSES 13.1 Committee Meetings. The Committee has established a policy for reim- bursing the cost of travel and per diem expenses with respect to attendance at meetings of the Committee as follows: 13.1.1 Each party shall be reimbursed for the cost of travel and per diem necessary for its representative and alternate to attend meetings of the Committee, subject to the following policy: (a) Travel must be by the most direct route and will be reimbursed based on actual ground transportation, agreed upon mileage, or standard airfare. Total travel costs shall not exceed a maximum amount determined by airline coach fare. (b) Reimbursement of actual costs exclusive of transportation costs will not exceed $150.00 per day for a maximum of two days’ travel and actual meeting days for each duly convened meeting of the Committee. 13.1.2 Application must be made to the Secretary of the Committee for reimbursement. 13.2 Special Purpose Committee Meetings. The Committee has established a policy for reimbursing the cost of travel and per diem expenses with respect to attendance at meetings of the special purpose committees as follows: 13.2.1 Each Special Purpose Committee Member shall be reimbursed for the cost of travel and per diem necessary to attend special purpose committees created by the Project Management Committee, subject to the following policy: (a) Travel must be by the most direct route and will be reimbursed based on actual ground transportation, agreed upon mileage, or standard airfare. Travel costs shall not exceed a maximum amount determined by airline coach fare. (b) Reimbursement of actual costs exclusive of transportation costs will not exceed $150.00 per day for a maximum of two days’ travel and actual meeting days of the special purpose committee. 13.2.2 Application must be made to the Secretary of the Committee for reimbursement. 21 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) ARTICLE 14 OTHER POLICIES 14.1 Numbering of Resolutions. The Committee has established that all resolutions and actions adopted by the Committee shall be assigned a number. The first part of the number shall be the last two digits of the year in which the resolution or action is adopted (e.g., Resolution No. 88-___). The second part shall be a sequential number reflecting the order in which the resolution or action was adopted, beginning with the number "1," and increasing by one with the adoption of each subsequent resolution or action. The Secretary of the Committee shall establish and maintain an official journal for recording resolutions [and actions] of the Committee. 14.2 Definition of Terms. Except as otherwise provided, terms included in these Bylaws shall take the meaning specified in the Power Sales Agreement. 14.3 Amendment of Bylaws. These Bylaws may be altered, amended, or repealed and new Bylaws may be adopted by the Bradley Project Management Committee at any regular or special meeting, subject to the voting requirements set out in Article 5.10 of these Bylaws. 22 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (12-1-93) 10/At/03 BPC | 4-0 Ap | / to [0:20AM IM Seve. Heoginst ~ i gim welle.~- MEA ee, A Kon Sartor Mon voting weambees LM Anche heli Riek Mille ne? Darg Holl dob Teite ~ Dove Canlso~ Ae Wie CAs, Ve. = ee Rewb ling? Pike Cunningham — “Pips, Ae ea Hicled oer Coolew Aik Copnlas Vick Eclert Dow Stead fi Aaa a Approved ere ti XK Gl liste 4 otlindtia ne KA chal vs. bdr, Cat 7 Sa, ies? ea fe. too. 3& 2%\ Signd. + set te cay lier She" Arh- po perdn @ fernk AeDonk Ad reckon A, ; “ve _ harpete Ae. compl ie, pestion Sap ee Leelee ot Stese = Ox+D te 2 Cyaclts tronyoe on Stead z Lond 3 pew epodkG jwrarner. Eycaohh cyaclls. Ket pes: Boat Sang be Coen Dine dian Fatigue Crack. Careek ae sci llcbir ced. Comsed es Poon sCiLloAims the. yuna, Nos Looe, Startins rep ef. Sareds. [SoA ‘to _yrete 4 optrte ¥ tra br embe Bradley Lake PROJECT MANAGEMENT COMMITTEE MEETING -o{ - Aor (Date) AZDEA Dial Magece (Location) PLEASE SIGN IN No. NAME REPRESENTING 1 Sreuna Howell! AEA 2 STORM AAIGENS oot GUEA 3 Hichclle Whuile. Hey (uyre CcP 4 LEE FAI BELT CH UGCA CH s | Deve Hac! PALE 6| os fice LIC 5? 7 Kier N35) bew— hy) @P s| Jthy Cote, Chua ¢ A 9 | Dw Sig HA 10 “Kick cokes Hs f. Kd esc AMLer 2] Ayt (Coposlee AE 4 13 Dare Caartsy, LE . Guictnence u| Ed Kueplin’ Ami bP 15 16 7 | 18 |_19 20 21 22 92Q2\IT9884 DATE BRADLEY PMC VOTING Agenda Item No. 4 0 | | (ad / YES YO ABS YES NO ABS YES NO ABS CITY OF SEWARD 01% He q MATANUSKA ELEC ASSOC —-:14% ~[ [| CHUGACH ELEC ASSOC 30% fied er HOMER ELEC ASSOC 12% DEL GOLDEN VAL ELEC ASSOC 17% Zi [ MUNI LIGHT & POWER 26% zee | ALASKA ENERGY AUTHORITY CoE cc 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 PMC VOTING DATE: Agenda Item No. YES NO ABS YES NO ABS YES NO ABS CITY OF SEWARD 01% MATANUSKA ELEC ASSOC 14% CHUGACH ELEC ASSOC 30% HOMER ELEC ASSOC 12% GOLDEN VAL ELEC ASSOC 17% MUNI LIGHT & POWER 26% ALASKA ENERGY AUTHORITY A=4+ OVER 51% B= AEA CONCUR With A C = UNANIMOUS D= MAJORITY VOTING METHOD A: 3) Establishment of FY estimated annual 11) Determination of rules, procedures and payment obligation and schedule of each accounts necessary to manage project when Requiring four yeas with 51% of utilities, with no purchaser. no bonds outstanding. AEA vote: 4) Determination of annual project costs after 12) Evaluation and approval of optional project 1) Procedures for scheduling, production and each FY. work and compensation for such work. dispatch of project power. 5) Evaluation of necessity for and scheduling of 13) Application of insurance claims proceeds not 2) Establishment of procedures for use of each required project work. governed by bond resolution. purchaser's water allocation (AEA assent required for license requirements). 6) Determination of appropriate amount of 14) Approval of procedures and any individual insurance. utility agreements relating to electric power 3) Selection among alternative methods that do reserves for project. not involve AEA for funding required project 7) Adoption of additional minimum funding work. amounts for renewal and contingency reserve 15) Approval of consultants. fund above that required by bond resolution. VOTING METHOD C: 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) 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. Unanimous vote by all (including AEA) VOTING METHOD D: Majority vote (including AEA) Election of Officers BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE | MEETING MINUTES CO \ A 813 W. Northern Lights Boulevard ( \ / Anchorage, Alaska \ Tuesday, October 21, 2003 — 9:00 a.m. 1. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:00 a.m. on Tuesday, October 21, 2003, 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 Howell. The following members were present: Steve Haagenson Golden Valley Electric Association Lee Thibert Chugach Electric Association Rick Eckert Homer Electric Association Jim Posey Anchorage Municipal Light & Power Dave Calvert (teleconference) City of Seward Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Howell, Alaska Energy Authority Don Stead, Homer Electric Association Doug Hall, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Rick Miller, Anchorage Municipal Light & Power Ed Reubling, Anchorage Municipal Light & Power Ron Saxton, AterWynne Michelle Detweiler, AterWynne Dave Carlson, Southeast Conference Mike Cunningham, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association Jim Walker, Matanuska Electric Association (teleconference — observer) Brian Hickey, Chugach Electric Association (teleconference) 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS The FERC issue was added as Item 8C. 6. APPROVAL OF MEETING MINUTES - May 20, 2003 and September 24, 2003 Mr. Posey moved to approve the meeting minutes of May 20, 2003, and September 24, 2003. Seconded by Mr. Eckert. A voice vote was taken, and the minutes were unanimously approved. 7A. Election of Officers (Resolve Vice Chair Issue) At the previous meeting, the election of officers was held. The committee voted to accept the slated officers currently standing. There was a mis-noted person stated as Vice Chair at the last meeting, which needed to be changed to reflect the true Vice Chair. Dave Calvert was on the slate as the official Vice Chair. Dave Calvert and Jim Posey were nominated. The committee voted Jim Posey as the new Vice Chair. 7B. Briefing on Bradley Lake Responsibilities Ron Saxton Ron Saxton gave an overhead presentation of the responsibilities (see attached handouts). 7C. Response Regarding Inquiries on Bradley Transfer Art Copoulos Mr. Copoulos stated “AIDEA/AEA’s comment on that was that it would be inappropriate at this time to discuss a disposition of assets at least until the Statewide Energy Plan is completed and the utility IRP study that is currently underway.” 8A. Next Meeting Date The next meeting will be at the call of the Chair. 8B. Insurance/Risk Assessment Scope of Work/Signed Copoulos Mr. Copoulos gave a brief overview of the letter from Warren, McVeigh & Griffin dated September 19, 2003, regarding the proposal to perform risk and insurance review for Bradley Lake. Mr. Copoulos will meet with Mike Cunningham to discuss and go over questions. 8C. FERC Issue Copoulos Contacted FERC and plan to visit them on November 3, 2003, to lay out the maps and give an overview and get their input on how we can work best with the Washington, D.C. office. This meeting is timed with other PMC members already being in that area so that if need be to contact them and coordinate a group gathering, location will allow it. A report will be brought to the PMC after the November 3 meeting. Update on Runner Cracks Don Stead Three new cracks have been found in one runner. Those cracks have been excavated and have had Bacon Donaldson come in to provide support on the excavation and weld repairs. A boat sample was done. A section was cut out and sent with Bacon Donaldson to be analyzed. That analysis showed that the crack is a fatigue crack, more than likely caused by significant oscillation events. These cracks are being caused by the power oscillations that the runner is seeing. Fuji has been notified and they are awaiting a report from Bacon Donaldson talking about the cracks. One runner crack repair has been done and was tested to see if it passed. Believe that the repair method is effective and have started repairs on the other cracks in runner. The O&D committee has added the additional response that every six months they will shut down and do a check of the runner. . 9. ADJOURNMENT The meeting was adjourned at 11:00 a.m. BY: Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary Alaska Industrial Development and Export A . AID. ~AWAE acral Alaska Energy Authority BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Tuesday, October 21, 2003 - 9:00 a.m. (Via electronic media at AIDEA/AEA — 813 W. Northern Lights Boulevard) (Corner of Arctic and Northern Lights Boulevard) 4 CALLTO ORDER Haagenson x ROLL CALL (for Committee members) PUBLIC ROLL CALL (for all others present) _A® PUBLIC COMMENT _4< AGENDA COMMENTS at APPROVAL OF MEETING MINUTES May 20, 2003 September 24, 2003 ff NEW BUSINESS _-A® Election of Officers (Resolve Vice Chair Issue) Haagenson _B- Briefing on Bradley Lake Responsibilities Saxton _S&~ Response Regarding Inquiries on Bradley Transfer Copoulos CE FERO Tssu 8. COMMITTEE REPORTS / COMMENTS _K. Next Meeting Date Haagenson UB. Insurance/Risk Assessment Scope of Work/Signed Haagenson 9. ADJOURNMENT 813 West Northern Lights Boulevard * Anchorage, Alaska 99503 907 / 269-3000 * FAX 907 / 269-3044 ° Toll Free (ALASKA ONLY) 888 / 300-8534 * www.aidea.org Warren, IVicVeigh & Griffin, Inc. RISK MANAGEMENT CONSULTANTS September 19, 2003 Bradley Lake Project Management Committee 813 West Northern Lights Blvd. Anchorage, AK 99503 PROPOSAL TO PERFORM RISK AND INSURANCE REVIEW FOR BRADLEY LAKE HYDROELECTRIC PROJECT As requested, Warren, McVeigh & Griffin, Inc. (WMG) proposes to perform a risk analysis and review of insurance existing and applicable to the Bradley Lake Hydroelectric Project. OUR UNDERSTANDING OF THE SITUATION The Bradley Lake Project Management Committee (BPMC) is responsible for the operation and management of the Bradley Lake Hydroelectric Project, which is owned by the Alaska Energy Authority (AEA), a public corporation of the state of Alaska. The BPMC is composed of representatives of the AEA and each of the utility participants that purchase the power output of this project. The participants are Chugach Electric Association, Inc. (Chugach), Alaska Electric Generation and Transmission Cooperative (AEG&T) — consisting of Matanuska Electric Association, Inc. (Matanuska) and Homer Electric Association, Inc. (Homer), Golden Valley Electric Association, Inc. (GVEA), and Anchorage Municipal Light and Power (AML&P). The BPMC, as a group, and the individual utility participants desire an insurance evaluation and an assessment of various types of risks to which they may be exposed through their participation as (1) power purchasers, (2) BPMC members, and (3) AEA project service providers. The Bradley Lake Project Power Sales Agreement (PSA) as amended obligates the AEA to sell and the utilities to purchase the project’s output, creates certain financial obligations (e.g., “take or pay” for certain project costs, all annual project operating and maintenance costs), and creates and empowers the BPMC as the principal decision maker for project operations and maintenance. Under the PSA, the Power Purchasers are obligated to make payments to the AEA in an aggregate amount sufficient to pay all Annual Project Costs, including costs resulting from the ownership, operation and maintenance of the Project, debt service on all Bonds, and any amount required to maintain the reserves established under the Bond Resolution. Each Power Purchaser is unconditionally obligated to pay its respective Percentage Share of the Annual Project Costs notwithstanding any suspension or reduction in the amount of power supplied by the Project. 1420 Bristol Set North, Suite 220, Newport Beach, CA 92660 Telephone 949/752-1058 Facsimile 949/955-1929 ‘wwwgriffincom.com Bradley Lake Project Manages win Committee Page 2 September 19, 2003 SCOPE OF WORK The scope of our work and our work product shall address: ie Maximum Loss Assessment — Physical Risks and PSA Obligations The estimated maximum loss the Purchasers should insure (if appropriate insurance is available at reasonable cost) through the BPMC for physical damage risks, the Purchasers’ obligations under the PSA, debt service obligations, and estimated value of replacement power in event of loss causing power interruption. Our risk analysis will be based on information gained from interviews, data obtained from the BMPC and its members, and review of the Bradley Lake Hydroelectric Risk Assessment Evaluation performed by Stone & Webster Engineering Corporation in March 1990. The Stone & Webster risk assessment will be updated for inflation and any major additions since completion of the Project in order to arrive at current property loss estimates. Insurance Coverage Review All property, liability and workers’ compensation/employer’s liability insurance coverages for the Project currently in place on behalf of the AEA and the BPMC shall be identified and explained in the following manner: specific risk, liability of specific parties, and recommended coverage. Sufficiency of coverage will be addressed. Purchasing Utility Contractor Risk Recommendations on risk management for services provided by purchasing utilities (such as current arrangements with Chugach and Homer) to minimize risk to the utility providing services while providing adequate protection to BPMC. We also shall review and make recommendations regarding possible BPMC-secured risk protection for noninsured risk levels of the contracting utilities. Engineering and Contractor Risk Adequacy of insurance coverage for Non-Purchasing Utility Contractors and engineering done for the project for the utility contractors or the AEA. Liability Risk Recommend coverage levels for personnel, contractors, invited visitors, uninvited visitors (hunters, campers, etc.), the emergency airstrip, use of non-owned aircraft or watercraft, and other third-party liability loss exposures. Additional Insurance Requirements Research and recommend the need for builders risk insurance (particularly with respect to the “governor replacement project”), supplemental contractor general liability insurance, business interruption coverage, and adequacy of existing property coverage (including appropriateness of deductibles). Miscellaneous Issues To Be Evaluated Additional items to be evaluated in the assessment: Warren, McVeigh & Griffin, Inc. Bradley Lake Project Managemen Committee Page 3 September 19, 2003 = Collective and individual liability of the Purchaser = Insurance market response (in light of a major repair/overhaul project about to be undertaken) m= Other risk and insurance recommendations DURATION OF ENGAGEMENT WMG shall endeavor to complete the study and issue a report in time for recommendations to be reviewed and decisions made on which recommendations will be implemented. WMG is prepared to begin the engagement no later than September 30, 2003, and complete the field work and make our final report available to the Purchasers by mid-month or sooner in December 2003. As requested, WMG will plan on making a presentation to the Bradley Lake Project Management Committee on a mutually agreed date in December 2003. Our target dates are contingent upon = No force majeure events (including bad weather) = Nounreasonable delays by BPMC in providing requested materials and scheduling interviews PLAN OF ACTION We plan the following activities: 1. One site visit to the Project in order to survey facilities and potential exposures. This one-day visit is scheduled for September 30, 2003. 2. Interview (personally or by telephone) appropriate financial, legal, administrative, and operational personnel of various BPMC members to gain a thorough understanding of the current program and to discuss: a. Short- and long-term operating objectives b. Types and extent of major loss exposures c. BPMC attitudes toward risk retention d. — Fiscal aspects of loss assumption, accounting, and methods of funding losses and expenses e. Operational procedures relating to risk management, including communications, risk-cost allocations, claim control, and general administration 3. Interview insurance brokerage personnel to a. Determine type and extent of services provided b. Obtain data pertinent to risk analysis and insurance 4. Review the methods used to arrive at and update insured values for buildings, equipment, extra expenses, business interruptions, debt service, earthquake, and flood. 5. Review and analyze Bradley's major contracts to evaluate assumptions and transfers of risks, including: Warren, McVeigh & Griffin, Inc. Bradley Lake Project Managermer Committee Page 4 September 19, 2003 a. The manner in which risk costs, both insured and uninsured, are allocated among the parties to the contracts b. Indemnity and hold-harmless provisions c. Responsibility for and details of insurance arrangements in contracted operations 6. Review procedures to require and monitor insurance of contractors and suppliers. 7. Review historical loss and exposure data. 8. Analyze current insurance policies in the following manner: a. Carefully read each insurance policy to understand its terms and limitations, deficiencies, or other important features. This step is closely related to our understanding of Bradley's risks of loss. b. | Compare related policies, particularly for coverages requiring layers of primary and excess insurance, to identify inconsistencies or gaps in coverage. c. Compare policies providing different types of coverage, to identify gaps or overlaps in coverage. d. Develop recommendations for improvements, with practical suggestions on their implementation. e. Promptly communicate any serious coverage deficiencies to BPMC, if improvements are needed or possible during the study. 9. Prepare a written report containing major findings, conclusions and recommendations in a brief summary, plus detailed backup data to support all conclusions and recommendations. This will be presented first in draft form for review by the BPMC. After receiving BPMC’s response, a final written report will be submitted. DOCUMENTATION AND MATERIAL NEEDED BY CONSULTANT The Purchasers will promptly provide complete copies of all current insurance coverages and agreements for contractual services that may be in force (including Homer). In addition, consultant requires complete copies of or information about: = Master M&O Agreement (already received) m O&M Agreement — Homer and AEA (already received) = Transmission Facilities Maintenance Agreement — AEA/Homer (already received) = Bradley Lake Dispatch Agreement — Chugach /AEA (already received) = Static Var Compensation Agreement — Chugach/AEA (already received) = Information and data on debt service obligations and cost of replacement power in event of loss causing significant power interruption at Bradley Lake = Schedule of insurable values for buildings, equipment, personal property and time-element risks = Details on the “governor replacement project” = Brochures, maps, drawings, and any other information describing Bradley operations As the study progresses, WMG may request additional information or documentation. Warren, McVeigh & Griffin, Inc. Bradley Lake Project Management Committee Page 5 September 19, 2003 GENERAL INFORMATION ABOUT THE FIRM Our Organization Warren, McVeigh & Griffin, Inc. is a leading management consulting firm specializing in risk and insurance. Founded in 1968, we are one of the oldest and most respected risk management consulting firms in the United States. Our principal office is in Newport Beach, California. Our Staff Our consulting organization includes: 1. An insurance and risk management consulting section. 2. Acasualty and workers’ compensation claims consulting and auditing unit. These resources permit us to undertake complex, multifaceted assignments on a coordinated basis with a single philosophy, and still maintain strict control of time, expenses and results. Our Philosophy We respect the confidentiality of client information. While our wide experience with many organizations helps us to render competent service to every client, we will not divulge any specific client information without that client’s consent. No information or reports are released to others without the express written consent of the client. To maintain complete independence: 1. Warren, McVeigh & Griffin, Inc. is compensated by and has direct responsibility only to the clients for whom work is performed. No assignments are undertaken which would impair our independence and objectivity. We neither sell insurance nor participate in commissions. 2. Warren, McVeigh & Griffin, Inc. is not owned by, nor does it own an interest in, any insurance, agent, broker, claim administrator or other entity whose services may be the subject of our analysis. 3. Warren, McVeigh & Griffin, Inc.’s revenues are derived solely from its consulting activities, and the publication of: = The Umbrella Book = The Risk Management Letter = The D&O Book COST We charge for professional services on an hourly fee basis as time is expended on the project. In addition, out-of- pocket expenses for travel, telephone, report production, etc. are billed at our cost. During the engagement, invoices will be presented to you monthly, payable within 20 days. We require a retainer deposit of $5,000 at the outset of the engagement. Refer to the appended Standard Conditions and Rate Schedule for Professional Services, which is incorporated into and made a part of this proposal. Warren, McVeigh & Griffin, Inc. Bradley Lake Project Managem... Committee Page 6 September 19, 2003 For the scope of work proposed and based on our understanding of the situation, we estimate that professional fees will be $34,500 to $39,500, which will include a site inspection, the detailed risk and insurance analysis, a written report, and personal presentation to the BPMC. CONSULTANT'S EXPERIENCE Personnel C. C. (Bud) Griffin, CPCU, President of WMG, is a nationally recognized risk management consultant. His insurance and risk management experience includes 25 years as a consultant to major corporations and public entities throughout the world, 12 years in corporate risk management with a Fortune 200 manufacturer, and five years in underwriting management with major insurance companies. Bud has served as expert witness in numerous high-profile litigations. Some of the clients Bud has served include the State of California, the State of Montana, the State of Alaska, Caltrans, California Real Estate Services Division, the California Public Employees Retirement System, the California Department of Veterans Affairs, the City of Los Angeles, the County of Los Angeles, the City of San Jose, the Port of Los Angeles, the Port of Long Beach, the California State University system, Public Agency Risk Sharing Authority of California, Arctic Slope Regional Corporation, Chugach Electric Association, Alaska Electric Light & Power, The Walt Disney Company, McDonnell Douglas Corporation, Newhall Land & Farming Company, The Penn Central Corporation, Time Incorporated, and Veco Corporation. In addition to his consulting activities, Bud is Editor of The Umbrella Book and The Risk Management Letter. Over the course of his risk management career, he has published many articles on risk management and insurance subjects. Bud and Gary Griffin both will work on this project. Assistance will be available from other members of our professional staff. Resumes are appended to this proposal. Gary Griffin, ARM, Executive Vice President of WMG, has 21 years’ experience in broker operations, risk management consulting, and publishing of risk and insurance references. His expertise includes construction risks and insurance, workers’ compensation, employment practices insurance issues, directors/officers liability, professional liability, pollution liability, and umbrella liability insurance. In a consulting capacity, Gary has served public entities, corporations, and non-profit-entity clients, including Caltrans, California Office of Risk & Insurance Management, Los Angeles County Civil Grand Jury, Port of Los Angeles, Port of Long Beach, Four Dam Pool Power Agency, County of Los Angeles, California Real Estate Services Division, Chugach Electric Association, Donahue Schriber, AARP, Golden Gate Bridge Highway and Transportation District, and others. Gary also has served as expert witness and provided technical support in several insurance-related litigations. Since 1992, in addition to his consulting activities, Gary has managed the firm’s highly technical and complex publishing operations, serving as Senior Editor for The Umbrella Book, The D&O Book, The EPL Book and The Risk Management Letter. Gary also developed, designed, and manages the firm’s Employment Practices Liability and Insurance National Forum, a two-day seminar covering a broad range of employment practices liability and insurance issues. Gary has been a frequent lecturer on employment practices and was EPL session leader for RIMS national convention. Gary has written articles for national periodicals, including The Compleate Lawyer and Fleet Financial Magazine. References Specific client references are given below. Warren, McVeigh & Griffin, Inc. Bradley Lake Project Managemen. Committee Page 7 September 19, 2003 Alaska Electric Light & Power 5601 Tonsgard Court Juneau, AK 97801-7201 Connie Hulbert, Secretary/Treasurer 907/463-6313 In 2003 we performed a detailed risk and insurance review of AELP’s generation and transmission operations. We performed a separate review for the large Snettisham hydroelectric facility. Arctic Slope Regional Corporation ASRC Service Center Inc. 3900 C Street, Suite 202 Anchorage, AK 99503 Sherry Jones, Risk Manager 907/339-6818 We have completed many studies for this large regional corporation. Our most recent assignment was to review their insurance and assist in a broker-selection process. State of California Department of Veterans Affairs (CDVA) 1227 O Street Sacramento, CA 95814 Glen Rimbey, Insurance Manager 916/503-8032 We have a retainer arrangement with the State to provide ongoing professional services. A recent project was to direct a competitive bidding process for CDVA’s $10 million premium life and disability program for veterans with home mortgages arranged through CDVA. The Four Dam Pool Power Agency (FDPPA) 703 West Tudor Road, Suite 102 Anchorage, AK 99503-6650 Tom Lovas, CEO 907/258-2281 We assisted FDPPA in arranging a comprehensive insurance program after the four hydroelectric projects were spun off by the State and FDPPA became independently responsible for all risks and insurance. WMG continues to provide risk management consulting services to FDPPA on a retainer basis. Many more references can be provided, if desired. Vilar eM (e\( ole aR CIN AME lem Bradley Lake Project Managem... ‘ommittee Page 8 September 19, 2003 We appreciate this opportunity to prepare this proposal and look forward to working with you. If this proposal as outlined is acceptable, please acknowledge by signing below and returning a copy to us along with a retainer deposit of $5,000. WARREN, McVEIGH & GRIFFIN, INC. C. C. Griffin, CPC President Accepted by Bradley Lake Project Management Committee Warren, McVeigh & Griffin, Inc. Professional Experience Education Professional Affiliations Papers and Publications Warren, McVeigh & Griffin, Inc. RISK MANAGEMENT CONSULTANTS C. C. (Bud) Griffin, CPCU President Warren, McVeigh & Griffin, Inc. 1971-present. President of Warren, McVeigh & Griffin, Inc., Bud is responsible for major risk management studies with particular emphasis on captive insurer, pooling and other risk funding techniques for corporate and governmental clients. Serves as expert witness in a variety of insurance litigation cases. Carnation Company. 1958-1971. Responsible for all domestic and foreign property and casualty programs, including worldwide marine risks. Handled major loss adjustments and negotiations on employee benefits programs. Continental Casualty Company. 1955-1958. Held several senior underwriting positions with responsibility for major corporate casualty accounts. Developed CNA’ first California workers’ compensation dividend plans and designed new policies for special marketing approaches. Argonaut Insurance Company. 1953-1955. Assistant Los Angeles Division Manager. Assignments included work in casualty underwriting, claims, auditing and safety. Rollins College. Chemical Engineering (Scholastic Scholarship). University of California. Insurance and Finance. American Institute for Property and Liability Underwriters. CPCU designation (Chartered Property Casualty Underwriter). Risk and Insurance Management Society (RIMS). Past President, Southem California Chapter, 1965. Past National Director, 1968-70. Recipient of Past President's Award for Outstanding Service to Southern California Chapter. Member, Society of Chartered Property and Casualty Underwriters. Past Director, Secretary and Treasurer, Los Angeles Chapter. Member, Society of Risk Management Consultants. Member, State of California Risk Management Advisory Committee. “Self-Insuring Workmen's Compensation.” Risk Management “Municipal Liability Insurance: The Availability Dilemma.” Governmental Finance. “How to Approach the Insurance Market.” Public Risk and Insurance Management Association (PRIMA). “Excess Liability: Are Your Catastrophe Exposures Really Insured?” RIMS National Conference. “Avoiding The Risk Of Fiduciary Diversion By Agents And Brokers.” The Risk Management Letter. “Exceptions To The Umbrella Pollution Liability Exclusion.” The Risk Management Letter. “What Is Risk Management.” 1998 Risk Management Conference, State of Califomia. “California Earthquake Risks.” The Risk Management Letter. One of the original creators and authors of The Umbrella Book, Practical Risk Management, The Risk Management Letter, The D&O Book and The EPL Book. Professional Experience Education Professional Affiliations Warren, McVeigh & Griffin, Inc. RISK MANAGEMENT CONSULTANTS Gary W. Griffin, ARM Principal, Griffin Communications, Inc. Senior Consultant, Warren, McVeigh & Griffin, Inc. Griffin Communications, Inc. 1991-present. Publisher and Senior Editor of firm’s insurance and risk management related publishing operations. Responsible for managing all aspects of production, publication and distribution, including direct and trade marketing. He also is a special project consultant to Warren, McVeigh & Griffin, Inc. Warren, McVeigh & Griffin, Inc. 1991-present. Senior Risk Management Consultant. Andreini & Company. 1990-1992. Responsible for new business production and servicing of major accounts, including large agri-business, lawyers professional liability and public entity insurance programs. Assisted in the development and implementation of the Georgia Oilmans Association insurance program and other specialized oil and gas lease operator programs. Lockton Insurance Brokers, Inc. 1988-1990. Vice President. Formed company's oil and gas department. Responsible for all aspects of account production, management and marketing. Performed risk management audits and claims resolution for firm's largest accounts. Carson, Luebbehusen & Burke. 1986-1988. Senior Vice President for regional brokerage specializing in energy/marine risks. Responsible for production, risk management assessment and overall marketing for a wide range of energy risks, including exploration, production, offshore installations, pipelines, refining, underground salt dome product storage and oil field servicing. Also assisted in developing asbestos abatement and insulation contractor liability programs. Frank B, Hall & Co. 1980-1986. Assistant Vice President, Oil & Gas Division. Responsible for account production and handling of large oil and gas lease operator/drilling contractor accounts. Managed underwriting, policy issuance and claims handling activities for in- house oil lease operator liability program. Managed claim adjustment and payment for over 100 blowout and pollution liability claims. Southern Illinois University. M.B.A. studies in finance. California Polytechnic University. B.S., Engineering. Insurance Institute of America. ARM designation (Associate in Risk Management). Aetna Home Office Agents Training School. Crawford & Company Home Office Claims Adjuster Training School. Professional Liability Underwriting Society. Friends of RIMS—Los Angeles Chapter. American Society for Scholarly Publishing. National Association of Corporate Directors. continued Fees Invoices Relationship Between Client and Warren, McVeigh & Griffin, Inc. Warren, McVeigh & Griffin, Inc. RISK MANAGEMENT CONSULTANTS Standard Conditions and Rate Schedule For Professional Services If Warren, McVeigh & Griffin, Inc. (WMG) performs services for a fixed fee, the Client agrees to pay fees as set forth in the proposal, letter of engagement or contract submitted by WMG. If services are performed on a time-and-expense basis, the Client agrees to pay WMG in accordance with the following schedule of charges: Professional Staff Rates Classification Hourly Rates Direct Expenses Principal/Officer $225-250 Expenses that are directly attributable to the performance Senior Consultant. $150-225 of the work, such as travel and subsistence, long-distance Consultant $125-150 communications, outside computer services, and Actuary.. $300-350 sub-contracts not included in professional staff rates Technical Staff. $60-100 or purchase orders covering special goods or services, Clerical Staff.. «60 shall be billed at actual cost. Photocopies will be billed at $0.10 per copy. The above hourly rates include salary cost, general and administrative expense, overhead, and profit. These rates shall be increased by 50% for time spent in court as an expert witness or in giving legal depositions, or responding to subpoenas. WMG may increase its hourly rates from time to time upon not less than 30 days’ written notice to the Client. Invoices for services and expenses will be submitted on a monthly basis or more frequent basis or when the work is completed, at our option. Invoices will be due immediately and are past due 30 days from date of invoice. A finance charge of 1.5% per month, or the maximum rate allowed by law, will be charged on past-due accounts. In addition, if accounts become past due, WMG shall have the right to suspend or discontinue its work or to terminate its engagement, all without any liability to Client. If suit is filed for non-payment, Client shall pay to WMG its reasonable attorneys’ fees, to be set by the court, and other costs incurred in collecting any delinquent account, whether in such suit, any appeals, any bankruptcy proceedings or any enforcement of judgment Proceedings, and such amount shall be added to and included in any judgment in favor of WMG. The laws of the State of California shall govern any contract between WMG and Client and the work to be performed by WMG thereunder. WMG is retained by the Client to investigate and to consult with the Client regarding the project described in the attached proposal, engagement letter or contract. WMG's services are for the benefit of the Client, but the extent of those services is limited by the funds made available for such purposes by the Client. The Client agrees that, due to the practical economic limitations Client may impose on the scope of the investigation, factors that might have affected some of WMG's decisions, conclusions and recommendations may remain undiscovered. Therefore, it is the Client that controls the degree of risk Client is willing to assume, by determining the scope of work and budget Client authorizes for this project. In performing the professional services as requested by Client, WMG is not providing legal advice or services. Legal advice regarding the professional assignment of WMG's work must be obtained through Client's attorney. WMG is an independent contractor and is not an agent of Client. continued BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, May 20, 2003 — 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 Tuesday, May 20, 2003, 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: Steve Haagenson Golden Valley Electric Association Dave Calvert City of Seward (teleconference) Joe Griffith Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Ed Ruebling Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Jim Walker, Matanuska Electric Association (teleconference) Don Stead, Homer Electric Association (teleconference) Ron Saxton, AterWynne Brian Hickey, Chugach Electric Association John Cooley, Chugach Electric Association 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES - March 24, 2003 MOTION: Mr. Griffith moved to approve the meeting minutes of March 24, 2003. Mr. Story seconded the motion. The minutes need to reflect a change on page 2, motion for item 7A, the second was Mr. Posey. A voice vote was taken, and the minutes were unanimously approved as amended. 7. NEW BUSINESS A. Risk Assessment Scope of Work Proposal Saxton Mr. Saxton stated that the risk assessment scope of work proposal includes both comments from himself and AIDEA/AEA and is ready to be acted on. MOTION: Mr. Griffith moved to approve the Risk Assessment Scope of Work for issuance, seconded by Mr. Story. Mr. Saxton noted that before it is approved, the dates on the last page need to be determined. Mr. Griffith stated that the changes looked appropriate but wondered if the changes hit the issues that the group is trying to reach on the insurance. Mr. Story felt that it did. Mr. Copoulos stated that the document has been reviewed, and was provided input on what the consultant should look at to get a comprehensive review and that has been incorporated in addition to the minor edits. Chair Haagenson wants this document to be sent back to the Finance Committee for issuance. A voice vote was taken and the motion passed unanimously. 7. NEW BUSINESS B. Presentation from governor Subcommittee Stead Mr. Griffith withdrew his original motion and Mr. Story recommended the following: MOTION: Authorize HEA to go forward and negotiate a final contract and price with VA Tech Hydro. Seconded by Mr. Carmony. Correspondence will be provided to the BPMC of the two non-bidders for their review. A voice vote was taken and the motion unanimously passed. 7. NEW BUSINESS C. HEA Bradley Lake Transmission Losses at Bradley Lake Story Mr. Story expanded on the letter dated April 29, 2003, from HEA to Chair Haagenson. Chair Haagenson will send the letter on to the O&D committee for further action. 7. NEW BUSINESS D. 0&D Committee Martin River Report Copoulos Mr. Copoulos stated that at the last meeting he was requested to provide some support information on the Martin River, including FERC license amendments. The plan is to do some minimal maintenance; the RFP has gone out. Mr. Saxton suggested that the fist step be a conversation with FERC. Another idea was to suggest to FERC to put up flags and abandon the strip and no longer maintain it. Mr. Saxton suggested that there needs to be a discussion with FERC stating the facts of costs to maintain, usefulness, safety issues and that we don’t want to open up the process that invites others in to discuss other unrelated items. MOTION: Mr. Griffith motioned to set up a dialogue with FERC about the Martin River airstrip and road before spending other monies on a study. Seconded by Mr. Carmony. A voice vote was taken and the motion passed unanimously. 7. NEW BUSINESS E. Incident Investigation Copoulos Mr. Copoulos noted that at the last meeting the O&D committee was asked to provide documentation on the incident that occurred at the Bradley project. Also provided is a restriction supplement to the flight operation guidelines (attachment). Mr. Copoulos noted that this information was provided at the PMC’s request from a prior meeting. Chair Haagenson asked that if other incidents happen, to promptly notify all members of the PMC. 8. COMMITTEE COMMENTS Chair Haagenson requested that the Finance committee look at the $1.2 million anticipated for the governor repair and figure where those monies will come from. Another request to the governor repair committee is to do a benefit analysis as to what the $5 million will be spent on. Mr. Stead also noted that when HEA talked to VA Tech Hydro they asked them for a proposal to fix some of the civil or mechanical problems inside the turbine pit. They will be giving HEA proposals at a later date to do some additional work inside the discharge chamber that will attempt to eliminate some of the splashing and some of the small signal instabilities that are seen on the unit. On their rough order of magnitude costs, it did not approach $1 million for that repair. A. Next Meeting Date Haagenson The next meeting of the Bradley Lake PMC will be at the call of the Chair after negotiations with VA Tech Hydro. 9. ADJOURNMENT The meeting was adjourned at 11:00 a.m. BY: Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Wednesday, September 24, 2003 — 9:30 a.m. 1. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:30 a.m. on Wednesday, September 24, 2003, 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 Howell. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Rick Eckert Homer Electric Association Jim Posey Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Howell, Alaska Energy Authority Don Stead, Homer Electric Association Matt Bucek, Homer Electric Association Bob Day, Anchorage Municipal Light & Power (teleconference) Doug Hall, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Ron Saxton, AterWynne Mike Cunningham, Chugach Electric Association (teleconference) Tuckerman Babcock, Matanuska Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Mike Pauley, Matanuska Electric Association (teleconference) Brenda Applegate, Alaska Energy Authority Valorie Walker, Alaska Energy Authority Brian Bjorkquist, Department of Law Bradley Lake PMC Meeting Minutes September 24, 2003 Page 2 of 4 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS The addition of utilities cost being reimbursed on the governor project was added as Item B1. Also, the Bradley Lake Agreement Briefing was added as Item H. 6. APPROVAL OF MEETING MINUTES - May 20, 2003 Minutes will be changed to action items and brought back at the next meeting for approval. 7. NEW BUSINESS A. Bil. Election of Officers MOTION: Mr. Griffith moved to keep the current slate of officers (Steve Haagenson - Chair, Jim Posey — Vice Chair, and Secretary/Treasurer — AEA), seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Presentation from governor Subcommittee Matt Bucek Matt Bucek of HEA gave a presentation on the DCS replacement on the overhead projector (copies attached). MOTION: Mr. Eckert moved for approval on the recommendation of governor, which authorizes HEA to enter into the contract with the VA Tech for the replacement of the governor at $1,529,692.00, and work with the budget subcommittee to budget for it in the FY05 budget, seconded by Joe Griffith. A voice vote was taken and the motion passed unanimously. Cost Reimbursement on the governor project Stead Discussion between HEA and CEA over an $8,000 invoice. CEA has been discussing this for quite some time. Mr. Griffith told Mr. Stead to send him the invoice and the group moved on. MOTION: Mr. Griffith motioned for the governor committee to optimize the RAS system in the interim to control system repair, seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Bradley Lake PMC Meeting Minutes September 24, 2003 Page 3 of 4 Martin River Road Recommendations Copoulos Mr. Copoulos gave a brief overview of a letter dated July 8, 2003, regarding this item. MOTION: Mr. Copoulos moved to begin discussions with FERC to remove the Martin River Road as described, which consists of stripping it to ground level, leaving dredges, bridge approaches, and dike in place, and closing the airstrip, seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Account 544 Budget Adjustment Copoulos O&D committee is recommending an $80,000 budget adjustment to account 544. $30,000 to repair a cracked runner, and $50,000 to replace failed transmission relays. The $30,000 for the cracked runner may end up being more than that, depending on what is found. A welding engineer will review and continue preliminary work that has been done to excavate the crack. It’s anticipated that the work can be done on-site, but won’t know until that work is completed and engineer has arrived. MOTION: Mr. Griffith to approve a budget adjustment of $80,000 for the runner repair, seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Water Use Permits Copoulos MOTION: Mr. Copoulos motioned to proceed in obtaining water rights permit, seconded by Mr. Griffith. A voice vote was taken and the motion passed unanimously. MOA Internal Audit Report 2003-6 dated June 17,2003 Copoulos No discussion of any of the findings in the letter from Ron Miller of AIDEA to Steve Haagenson of GVEA. Insurance Report Cunningham A site visit to Bradley Lake by a Warren-McVeigh-Griffith representative will take place next week. In terms of a report due date — December of this year to present their findings to the committee. MOTION: Mr. Griffith moved to proceed having Warren-McVeigh-Griffin deal with the risk management questions that have been before us, seconded by Wayne Carmony. Mr. Cunningham noted there is $25,000 in Bradley Lake PMC Meeting Minutes September 24, 2003 Page 4 of 4 budget for this. A voice vote was taken and the motion passed unanimously. H. Bradley Lake Agreement Briefing Saxton MOTION: Mr. Posey motioned to have Ron Saxton come to the next meeting to give a briefing on the rules of operation, who makes decisions, etc., and invite the subcommittees to attend as well, seconded by Mr. Griffith. Chair Haagenson requested that in future packets, if the subcommittees have a recommendation, present it as a draft motion for inclusion in the packets. 8. Committee Reports/Comments None to report at this time. A. Next Meeting Date Tuesday, October 21, 2003, from 9:00 a.m. to 12:00 p.m. 9. Adjournment The meeting was adjourned at 11:10 a.m. BY: Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary If you are unable to attend the meeting in person, please use the following phone instructions: TELECONFERENCE INSTRUCTIONS Tuesday, October 21, 2003 — 9:00 a.m. To join the meeting, please do the following: Dial 1-800-315-6338 Enter 1021# Alaska Industrial Development and Export A\ Alaska Energy Authority BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Tuesday, October 21, 2003 — 9:00 a.m. (Via electronic media at AIDEA/AEA — 813 W. Northern Lights Boulevard) (Corner of Arctic and Northern Lights Boulevard) ile CALL TO ORDER Haagenson 2s ROLL CALL (for Committee members) 35 PUBLIC ROLL CALL (for all others present) 4. PUBLIC COMMENT 5. AGENDA COMMENTS 6. APPROVAL OF MEETING MINUTES May 20, 2003 September 24, 2003 fs NEW BUSINESS A. Election of Officers (Resolve Vice Chair Issue) Haagenson B. Briefing on Bradley Lake Responsibilities Saxton C. Response Regarding Inquiries on Bradley Transfer Copoulos 8. COMMITTEE REPORTS / COMMENTS A. “Next Meeting Date Haagenson B. Insurance/Risk Assessment Scope of Work/Signed Haagenson 9. ADJOURNMENT 813 West Northern Lights Boulevard * Anchorage, Alaska 99503 907 / 269-3000 * FAX 907 / 269-3044 ¢ Toll Free (Al ASKA ONIY) 888 / 300-8534 ¢ www aidea aro BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, May 20, 2003 — 10:00 a.m. 5 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 Tuesday, May 20, 2003, 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. 7 ROLL CALL Roll was called by Shauna Dean. The following members were present: Steve Haagenson Golden Valley Electric Association Dave Calvert City of Seward (teleconference) Joe Griffith Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Ed Ruebling Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Jim Walker, Matanuska Electric Association (teleconference) Don Stead, Homer Electric Association (teleconference) Ron Saxton, AterWynne Brian Hickey, Chugach Electric Association John Cooley, Chugach Electric Association 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES — March 24, 2003 MOTION: Mr. Griffith moved to approve the meeting minutes of March 24, 2003. Mr. Story seconded the motion. The minutes need to reflect a change on page 2, motion for item 7A, the second was Mr. Posey. A voice vote was taken, and the minutes were unanimously approved as amended. Te NEW BUSINESS A. Risk Assessment Scope of Work Proposal Saxton Mr. Saxton stated that the risk assessment scope of work proposal includes both comments from himself and AIDEA/AEA and is ready to be acted on. MOTION: Mr. Griffith moved to approve the Risk Assessment Scope of Work for issuance, seconded by Mr. Story. Mr. Saxton noted that before it is approved, the dates on the last page need to be determined. Mr. Griffith stated that the changes looked appropriate but wondered if the changes hit the issues that the group is trying to reach on the insurance. Mr. Story felt that it did. Mr. Copoulos stated that the document has been reviewed, and was provided input on what the consultant should look at to get a comprehensive review and that has been incorporated in addition to the minor edits. Chair Haagenson wants this document to be sent back to the Finance Committee for issuance. A voice vote was taken and the motion passed unanimously. is NEW BUSINESS B. Presentation from governor Subcommittee Stead Mr. Griffith withdrew his original motion and Mr. Story recommended the following: MOTION: Authorize HEA to go forward and negotiate a final contract and price with VA Tech Hydro. Seconded by Mr. Carmony. Correspondence will be provided to the BPMC of the two non-bidders for their review. A voice vote was taken and the motion unanimously passed. te NEW BUSINESS C. HEA Bradley Lake Transmission Losses at Bradley Lake Story Mr. Story expanded on the letter dated April 29, 2003, from HEA to Chair Haagenson. Chair Haagenson will send the letter on to the O&D committee for further action. Ul NEW BUSINESS D. O&D Committee Martin River Report Copoulos Mr. Copoulos stated that at the last meeting he was requested to provide some support information on the Martin River, including FERC license amendments. The plan is to do some minimal maintenance; the RFP has gone out. Mr. Saxton suggested that the fist step be a conversation with FERC. Another idea was to suggest to FERC to put up flags and abandon the strip and no longer maintain it. Mr. Saxton suggested that there needs to be a discussion with FERC stating the facts of costs to maintain, usefulness, safety issues and that we don’t want to open up the process that invites others in to discuss other unrelated items. MOTION: Mr. Griffith motioned to set up a dialogue with FERC about the Martin River airstrip and road before spending other monies on a study. Seconded by Mr. Carmony. A voice vote was taken and the motion passed unanimously. ides NEW BUSINESS :. Incident Investigation Copoulos Mr. Copoulos noted that at the last meeting the O&D committee was asked to provide documentation on the incident that occurred at the Bradley project. Also provided is a restriction supplement to the flight operation guidelines (attachment). Mr. Copoulos noted that this information was provided at the PMC’s request from a prior meeting. Chair Haagenson asked that if other incidents happen, to promptly notify all members of the PMC. 8. COMMITTEE COMMENTS Chair Haagenson requested that the Finance committee look at the $1.2 million anticipated for the governor repair and figure where those monies will come from. Another request to the governor repair committee is to do a benefit analysis as to what the $5 million will be spent on. Mr. Stead also noted that when HEA talked to VA Tech Hydro they asked them for a proposal to fix some of the civil or mechanical problems inside the turbine pit. They will be giving HEA proposals at a later date to do some additional work inside the discharge chamber that will attempt to eliminate some of the splashing and some of the small signal instabilities that are seen on the unit. On their rough order of magnitude costs, it did not approach $1 million for that repair. A. Next Meeting Date Haagenson The next meeting of the Bradley Lake PMC will be at the call of the Chair after negotiations with VA Tech Hydro. 9. ADJOURNMENT The meeting was adjourned at 11:00 a.m. BY: Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Wednesday, September 24, 2003 — 9:30 a.m. Uc CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:30 a.m. on Wednesday, September 24, 2003, 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 Howell. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Rick Eckert Homer Electric Association Jim Posey Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Howell, Alaska Energy Authority Don Stead, Homer Electric Association Matt Bucek, Homer Electric Association Bob Day, Anchorage Municipal Light & Power (teleconference) Doug Hall, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Ron Saxton, AterWynne Mike Cunningham, Chugach Electric Association (teleconference) Tuckerman Babcock, Matanuska Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Mike Pauley, Matanuska Electric Association (teleconference) Brenda Applegate, Alaska Energy Authority Valorie Walker, Alaska Energy Authority Brian Bjorkquist, Department of Law Bradley Lake PMC Meeting Minutes September 24, 2003 Page 2 of 4 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS The addition of utilities cost being reimbursed on the governor project was added as Item B1. Also, the Bradley Lake Agreement Briefing was added as Item H. 6. APPROVAL OF MEETING MINUTES - May 20, 2003 Minutes will be changed to action items and brought back at the next meeting for approval. 7. NEW BUSINESS A. Election of Officers MOTION: Mr. Griffith moved to keep the current slate of officers (Steve Haagenson — Chair, Jim Posey — Vice Chair, and Secretary/Treasurer — AEA), seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. B. Presentation from governor Subcommittee Matt Bucek Matt Bucek of HEA gave a presentation on the DCS replacement on the overhead projector (copies attached). MOTION: Mr. Eckert moved for approval on the recommendation of governor, which authorizes HEA to enter into the contract with the VA Tech for the replacement of the governor at $1,529,692.00, and work with the budget subcommittee to budget for it in the FY05 budget, seconded by Joe Griffith. A voice vote was taken and the motion passed unanimously. B1. Cost Reimbursement on the governor project Stead Discussion between HEA and CEA over an $8,000 invoice. CEA has been discussing this for quite some time. Mr. Griffith told Mr. Stead to send him the invoice and the group moved on. MOTION: Mr. Griffith motioned for the governor committee to optimize the RAS system in the interim to control system repair, seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Bradley Lake PMC Meeting Minutes September 24, 2003 Page 3 of 4 Martin River Road Recommendations Copoulos Mr. Copoulos gave a brief overview of a letter dated July 8, 2003, regarding this item. MOTION: Mr. Copoulos moved to begin discussions with FERC to remove the Martin River Road as described, which consists of stripping it to ground level, leaving dredges, bridge approaches, and dike in place, and closing the airstrip, seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Account 544 Budget Adjustment Copoulos O&D committee is recommending an $80,000 budget adjustment to account 544. $30,000 to repair a cracked runner, and $50,000 to replace failed transmission relays. The $30,000 for the cracked runner may end up being more than that, depending on what is found. A welding engineer will review and continue preliminary work that has been done to excavate the crack. It’s anticipated that the work can be done on-site, but won’t know until that work is completed and engineer has arrived. MOTION: Mr. Griffith to approve a budget adjustment of $80,000 for the runner repair, seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Water Use Permits Copoulos MOTION: Mr. Copoulos motioned to proceed in obtaining water rights permit, seconded by Mr. Griffith. A voice vote was taken and the motion passed unanimously. MOA Internal Audit Report 2003-6 dated June 17, 2003 Copoulos No discussion of any of the findings in the letter from Ron Miller of AIDEA to Steve Haagenson of GVEA. Insurance Report Cunningham A site visit to Bradley Lake by a Warren-McVeigh-Griffith representative will take place next week. In terms of a report due date — December of this year to present their findings to the committee. MOTION: Mr. Griffith moved to proceed having Warren-McVeigh-Griffin deal with the risk management questions that have been before us, seconded by Wayne Carmony. Mr. Cunningham noted there is $25,000 in Bradley Lake PMC Meeting Minutes September 24, 2003 Page 4 of 4 budget for this. A voice vote was taken and the motion passed unanimously. A. Bradley Lake Agreement Briefing Saxton MOTION: Mr. Posey motioned to have Ron Saxton come to the next meeting to give a briefing on the rules of operation, who makes decisions, etc., and invite the subcommittees to. attend as well, seconded by Mr. Griffith. Chair Haagenson requested that in future packets, if the subcommittees have a recommendation, present it as a draft motion for inclusion in the packets. 8. Committee Reports/Comments None to report at this time. A. Next Meeting Date Tuesday, October 21, 2003, from 9:00 a.m. to 12:00 p.m. 9. Adjournment The meeting was adjourned at 11:10 a.m. BY: Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary Warren, IVicVeigh & Griffin, Inc. RISK MANAGEMENT CONSULTANTS September 19, 2003 Ocr On v Bradley Lake Project Management Committee Com 813 West Northern Lights Blvd. Pan, Anchorage, AK 99503 PROPOSAL TO PERFORM RISK AND INSURANCE REVIEW FOR BRADLEY LAKE HYDROELECTRIC PROJECT As requested, Warren, McVeigh & Griffin, Inc. (WMG) proposes to perform a risk analysis and review of insurance existing and applicable to the Bradley Lake Hydroelectric Project. OUR UNDERSTANDING OF THE SITUATION The Bradley Lake Project Management Committee (BPMC) is responsible for the operation and management of the Bradley Lake Hydroelectric Project, which is owned by the Alaska Energy Authority (AEA), a public corporation of the state of Alaska. The BPMC is composed of representatives of the AEA and each of the utility participants that purchase the power output of this project. The participants are Chugach Electric Association, Inc. (Chugach), Alaska Electric Generation and Transmission Cooperative (AEG&T) — consisting of Matanuska Electric Association, Inc. (Matanuska) and Homer Electric Association, Inc. (Homer), Golden Valley Electric Association, Inc. (GVEA), and Anchorage Municipal Light and Power (AML&P). The BPMC, as a group, and the individual utility participants desire an insurance evaluation and an assessment of various types of risks to which they may be exposed through their participation as (1) power purchasers, (2) BPMC members, and (3) AEA project service providers. The Bradley Lake Project Power Sales Agreement (PSA) as amended obligates the AEA to sell and the utilities to purchase the project’s output, creates certain financial obligations (e.g., “take or pay” for certain project costs, all annual project operating and maintenance costs), and creates and empowers the BPMC as the principal decision maker for project operations and maintenance. Under the PSA, the Power Purchasers are obligated to make payments to the AEA in an aggregate amount sufficient to pay all Annual Project Costs, including costs resulting from the ownership, operation and maintenance of the Project, debt service on all Bonds, and any amount required to maintain the reserves established under the Bond Resolution. Each Power Purchaser is unconditionally obligated to pay its respective Percentage Share of the Annual Project Costs notwithstanding any suspension or reduction in the amount of power supplied by the Project. 1420 Bristol Sveet North, Suite 220, Newport Beach, CA 92660 Telephone 949/752-1058 Facsimile 949/955-1929 ‘wwwgriffincom.com Bradley Lake Project Management Committee Page 2 September 19, 2003 SCOPE OF WORK The scope of our work and our work product shall address: l. Maximum Loss Assessment — Physical Risks and PSA Obligations The estimated maximum loss the Purchasers should insure (if appropriate insurance is available at reasonable cost) through the BPMC for physical damage risks, the Purchasers’ obligations under the PSA, debt service obligations, and estimated value of replacement power in event of loss causing power interruption. Our risk analysis will be based on information gained from interviews, data obtained from the BMPC and its members, and review of the Bradley Lake Hydroelectric Risk Assessment Evaluation performed by Stone & Webster Engineering Corporation in March 1990. The Stone & Webster risk assessment will be updated for inflation and any major additions since completion of the Project in order to arrive at current property loss estimates. Insurance Coverage Review All property, liability and workers’ compensation/employer’s liability insurance coverages for the Project currently in place on behalf of the AEA and the BPMC shall be identified and explained in the following manner: specific risk, liability of specific parties, and recommended coverage. Sufficiency of coverage will be addressed. Purchasing Utility Contractor Risk Recommendations on risk management for services provided by purchasing utilities (such as current arrangements with Chugach and Homer) to minimize risk to the utility providing services while providing adequate protection to BPMC. We also shall review and make recommendations regarding possible BPMC-secured risk protection for noninsured risk levels of the contracting utilities. Engineering and Contractor Risk Adequacy of insurance coverage for Non-Purchasing Utility Contractors and engineering done for the project for the utility contractors or the AEA. Liability Risk Recommend coverage levels for personnel, contractors, invited visitors, uninvited visitors (hunters, campers, etc.), the emergency airstrip, use of non-owned aircraft or watercraft, and other third-party liability loss exposures. Additional Insurance Requirements Research and recommend the need for builders risk insurance (particularly with respect to the “governor replacement project”), supplemental contractor general liability insurance, business interruption coverage, and adequacy of existing property coverage (including appropriateness of deductibles). Miscellaneous Issues To Be Evaluated Additional items to be evaluated in the assessment: Warren, McVeigh & Griffin, Inc. Bradley Lake Project Management Committee Page 3 September 19, 2003 m Collective and individual liability of the Purchaser = Insurance market response (in light of a major repair/overhaul project about to be undertaken) a Other risk and insurance recommendations DURATION OF ENGAGEMENT WMG shall endeavor to complete the study and issue a report in time for recommendations to be reviewed and decisions made on which recommendations will be implemented. WMG is prepared to begin the engagement no later than September 30, 2003, and complete the field work and make our final report available to the Purchasers by mid-month or sooner in December 2003. As requested, WMG will plan on making a presentation to the Bradley Lake Project Management Committee on a mutually agreed date in December 2003. Our target dates are contingent upon = No force majeure events (including bad weather) = Nounreasonable delays by BPMC in providing requested materials and scheduling interviews PLAN OF ACTION We plan the following activities: 1. One site visit to the Project in order to survey facilities and potential exposures. This one-day visit is scheduled for September 30, 2003. 2. Interview (personally or by telephone) appropriate financial, legal, administrative, and operational personnel of various BPMC members to gain a thorough understanding of the current program and to discuss: a. Short- and long-term operating objectives b. Types and extent of major loss exposures BPMC attitudes toward risk retention 9 a Fiscal aspects of loss assumption, accounting, and methods of funding losses and expenses e. Operational procedures relating to risk management, including communications, risk-cost allocations, claim control, and general administration 3. _ Interview insurance brokerage personnel to a. Determine type and extent of services provided b. Obtain data pertinent to risk analysis and insurance 4. Review the methods used to arrive at and update insured values for buildings, equipment, extra expenses, business interruptions, debt service, earthquake, and flood. 5. Review and analyze Bradley’s major contracts to evaluate assumptions and transfers of risks, including: Warren, McVeigh & Griffin, Inc. Bradley Lake Project Management Committee Page 4 September 19, 2003 a. The manner in which risk costs, both insured and uninsured, are allocated among the parties to the contracts b. Indemnity and hold-harmless provisions c. Responsibility for and details of insurance arrangements in contracted operations 6. Review procedures to require and monitor insurance of contractors and suppliers. 7. Review historical loss and exposure data. 8. Analyze current insurance policies in the following manner: a. Carefully read each insurance policy to understand its terms and limitations, deficiencies, or other important features. This step is closely related to our understanding of Bradley’s risks of loss. b. | Compare related policies, particularly for coverages requiring layers of primary and excess insurance, to identify inconsistencies or gaps in coverage. c. Compare policies providing different types of coverage, to identify gaps or overlaps in coverage. d. Develop recommendations for improvements, with practical suggestions on their implementation. e. Promptly communicate any serious coverage deficiencies to BPMC, if improvements are needed or possible during the study. 9. Prepare a written report containing major findings, conclusions and recommendations in a brief summary, plus detailed backup data to support all conclusions and recommendations. This will be presented first in draft form for review by the BPMC. After receiving BPMC’s response, a final written report will be submitted. DOCUMENTATION AND MATERIAL NEEDED BY CONSULTANT The Purchasers will promptly provide complete copies of all current insurance coverages and agreements for contractual services that may be in force (including Homer). In addition, consultant requires complete copies of or information about: = Master M&O Agreement (already received) m= O&M Agreement — Homer and AEA (already received) = Transmission Facilities Maintenance Agreement — AEA/Homer (already received) m Bradley Lake Dispatch Agreement — Chugach /AEA (already received) = Static Var Compensation Agreement — Chugach/AEA (already received) = Information and data on debt service obligations and cost of replacement power in event of loss causing significant power interruption at Bradley Lake = Schedule of insurable values for buildings, equipment, personal property and time-element risks = Details on the “governor replacement project” = Brochures, maps, drawings, and any other information describing Bradley operations As the study progresses, WMG may request additional information or documentation. Warren, McVeigh & Griffin, inc. Bradley Lake Project Management Committee Page 5 September 19, 2003 GENERAL INFORMATION ABOUT THE FIRM Our Organization Warren, McVeigh & Griffin, Inc. is a leading management consulting firm specializing in risk and insurance. Founded in 1968, we are one of the oldest and most respected risk management consulting firms in the United States. Our principal office is in Newport Beach, California. Our Staff Our consulting organization includes: 1. An insurance and risk management consulting section. 2. Accasualty and workers’ compensation claims consulting and auditing unit. These resources permit us to undertake complex, multifaceted assignments on a coordinated basis with a single philosophy, and still maintain strict control of time, expenses and results. Our Philosophy We respect the confidentiality of client information. While our wide experience with many organizations helps us to render competent service to every client, we will not divulge any specific client information without that client’s consent. No information or reports are released to others without the express written consent of the client. To maintain complete independence: 1. Warren, McVeigh & Griffin, Inc. is compensated by and has direct responsibility only to the clients for whom work is performed. No assignments are undertaken which would impair our independence and objectivity. We neither sell insurance nor participate in commissions. 2. Warren, McVeigh & Griffin, Inc. is not owned by, nor does it own an interest in, any insurance, agent, broker, claim administrator or other entity whose services may be the subject of our analysis. 3. Warren, McVeigh & Griffin, Inc.'s revenues are derived solely from its consulting activities, and the publication of: = The Umbrella Book = The Risk Management Letter = The D&O Book « The EPL Book CO: We charge for professional services on an hourly fee basis as time is expended on the project. In addition, out-of- pocket expenses for travel, telephone, report production, etc. are billed at our cost. During the engagement, invoices will be presented to you monthly, payable within 20 days. We require a retainer deposit of $5,000 at the outset of the engagement. Refer to the appended Standard Conditions and Rate Schedule for Professional Services, which is incorporated into and made a part of this proposal. Warren, McVeigh & Griffin, inc. Bradley Lake Project Managemen: Committee Page 6 September 19, 2003 For the scope of work proposed and based on our understanding of the situation, we estimate that professional fees will be $34,500 to $39,500, which will include a site inspection, the detailed risk and insurance analysis, a written report, and personal presentation to the BPMC. CONSULTANT'S EXPERIENCE Personnel C. C. (Bud) Griffin, CPCU, President of WMG, is a nationally recognized risk management consultant. His insurance and risk management experience includes 25 years as a consultant to major corporations and public entities throughout the world, 12 years in corporate risk management with a Fortune 200 manufacturer, and five years in underwriting management with major insurance companies. Bud has served as expert witness in numerous high-profile litigations. Some of the clients Bud has served include the State of California, the State of Montana, the State of Alaska, Caltrans, California Real Estate Services Division, the California Public Employees Retirement System, the California Department of Veterans Affairs, the City of Los Angeles, the County of Los Angeles, the City of San Jose, the Port of Los Angeles, the Port of Long Beach, the California State University system, Public Agency Risk Sharing Authority of California, Arctic Slope Regional Corporation, Chugach Electric Association, Alaska Electric Light & Power, The Walt Disney Company, McDonnell Douglas Corporation, Newhall Land & Farming Company, The Penn Central Corporation, Time Incorporated, and Veco Corporation. In addition to his consulting activities, Bud is Editor of The Umbrella Book and The Risk Management Letter. Over the course of his risk management career, he has published many articles on risk management and insurance subjects. Bud and Gary Griffin both will work on this project. Assistance will be available from other members of our professional staff. Resumes are appended to this proposal. Gary Griffin, ARM, Executive Vice President of WMG, has 21 years’ experience in broker operations, risk management consulting, and publishing of risk and insurance references. His expertise includes construction risks and insurance, workers’ compensation, employment practices insurance issues, directors/officers liability, professional liability, pollution liability, and umbrella liability insurance. In a consulting capacity, Gary has served public entities, corporations, and non-profit-entity clients, including Caltrans, California Office of Risk & Insurance Management, Los Angeles County Civil Grand Jury, Port of Los Angeles, Port of Long Beach, Four Dam Pool Power Agency, County of Los Angeles, California Real Estate Services Division, Chugach Electric Association, Donahue Schriber, AARP, Golden Gate Bridge Highway and Transportation District, and others. Gary also has served as expert witness and provided technical support in several insurance-related litigations. Since 1992, in addition to his consulting activities, Gary has managed the firm’s highly technical and complex publishing operations, serving as Senior Editor for The Umbrella Book, The D&O Book, The EPL Book and The Risk Management Letter. Gary also developed, designed, and manages the firm’s Employment Practices Liability and Insurance National Forum, a two-day seminar covering a broad range of employment practices liability and insurance issues. Gary has been a frequent lecturer on employment practices and was EPL session leader for RIMS national convention. Gary has written articles for national periodicals, including The Compleate Lawyer and Fleet Financial Magazine. References Specific client references are given below. Warren, McVeigh & Griffin, Inc. Bradley Lake Project Management Committee Page 7 September 19, 2003 Alaska Electric Light & Power 5601 Tonsgard Court Juneau, AK 97801-7201 Connie Hulbert, Secretary/Treasurer 907/463-6313 In 2003 we performed a detailed risk and insurance review of AELP’s generation and transmission operations. We performed a separate review for the large Snettisham hydroelectric facility. Arctic Slope Regional Corporation ASRC Service Center Inc. 3900 C Street, Suite 202 Anchorage, AK 99503 Sherry Jones, Risk Manager 907/339-6818 We have completed many studies for this large regional corporation. Our most recent assignment was to review their insurance and assist in a broker-selection process. State of California Department of Veterans Affairs (CDVA) 1227 O Street Sacramento, CA 95814 Glen Rimbey, Insurance Manager 916/503-8032 We have a retainer arrangement with the State to provide ongoing professional services. A recent project was to direct a competitive bidding process for CDVA’s $10 million premium life and disability program for veterans with home mortgages arranged through CDVA. The Four Dam Pool Power Agency (FDPPA) 703 West Tudor Road, Suite 102 Anchorage, AK 99503-6650 Tom Lovas, CEO 907/258-2281 We assisted FDPPA in arranging a comprehensive insurance program after the four hydroelectric projects were spun off by the State and FDPPA became independently responsible for all risks and insurance. WMG continues to provide risk management consulting services to FDPPA on a retainer basis. Many more references can be provided, if desired. Warren, McVeigh & Griffin, Inc. Bradley Lake Project Managemen. Committee Page 8 September 19, 2003 We appreciate this opportunity to prepare this proposal and look forward to working with you. If this proposal as outlined is acceptable, please acknowledge by signing below and returning a copy to us along with a retainer deposit of $5,000. WARREN, McVEIGH & GRIFFIN, INC. C. C. Griffin, CPC President Accepted by Bradley Lake Project Management Committee Warren, McVeigh & Griffin, Inc. Professional Experience Education Professional Affiliations Papers and Publications Warren, McVeigh & Griffin, Inc. RISK MANAGEMENT CONSULTANTS C. C. (Bud) Griffin, CPCU President Warren, McVeigh & Griffin, Inc. 1971-present. President of Warren, McVeigh & Griffin, Inc., Bud is responsible for major risk management studies with particular emphasis on captive insurer, pooling and other risk funding techniques for corporate and governmental clients. Serves as expert witness in a variety of insurance litigation cases. Carnation Company. 1958-1971. Responsible for all domestic and foreign property and casualty programs, including worldwide marine risks. Handled major loss adjustments and negotiations on employee benefits programs. Continental Casualty Company. 1955-1958. Held several senior underwriting positions with responsibility for major corporate casualty accounts. Developed CNA''s first California workers’ compensation dividend plans and designed new policies for special marketing approaches. Argonaut Insurance Company. 1953-1955. Assistant Los Angeles Division Manager. Assignments included work in casualty underwriting, claims, auditing and safety. Rollins College. Chemical Engineering (Scholastic Scholarship). University of California. Insurance and Finance. American Institute for Property and Liability Underwriters. CPCU designation (Chartered Property Casualty Underwriter). Risk and Insurance Management Society (RIMS). Past President, Southem California Chapter, 1965. Past National Director, 1968-70. Recipient of Past President's Award for Outstanding Service to Southern California Chapter. Member, Society of Chartered Property and Casualty Underwriters. Past Director, Secretary and Treasurer, Los Angeles Chapter. Member, Society of Risk Management Consultants. Member, State of California Risk Management Advisory Committee. “Self-Insuring Workmen's Compensation.” Risk Management “Municipal Liability Insurance: The Availability Dilemma.” Governmental Finance. “How to Approach the Insurance Market.” Public Risk and Insurance Management Association (PRIMA). “Excess Liability: Are Your Catastrophe Exposures Really Insured?” RIMS National Conference. “Avoiding The Risk Of Fiduciary Diversion By Agents And Brokers.” The Risk Management Letter. “Exceptions To The Umbrella Pollution Liability Exclusion.” The Risk Management Letter. “What Is Risk Management.” 1998 Risk Management Conference, State of California. “California Earthquake Risks.” The Risk Management Letter. One of the original creators and authors of The Umbrella Book, Practical Risk Management, The Risk Management Letter, The D&O Book and The EPL Book. Professional Experience Education Professional Affiliations Warren, MicVeigh & Griffin, Inc. RtskK MANAGEMENT CONSULTANTS Gary W. Griffin, ARM Principal, Griffin Communications, Inc. Senior Consultant, Warren, McVeigh & Griffin, Inc. Griffin Communications, Inc. 1991-present. Publisher and Senior Editor of firm's insurance and risk management related publishing operations. Responsible for managing all aspects of production, publication and distribution, including direct and trade marketing. He also is a special project consultant to Warren, McVeigh & Griffin, Inc. Warren, McVeigh & Griffin, Inc. 1991-present. Senior Risk Management Consultant. Andreini & Company. 1990-1992. Responsible for new business production and servicing of major accounts, including large agri-business, lawyers professional liability and public entity insurance programs. Assisted in the development and implementation of the Georgia Oilmans Association insurance program and other specialized oil and gas lease operator programs. Lockton Insurance Brokers, Inc. 1988-1990. Vice President. Formed company’s oil and gas department. Responsible for all aspects of account production, management and marketing, Performed risk management audits and claims resolution for firm’s largest accounts. Carson, Luebbehusen & Burke. 1986-1988. Senior Vice President for regional brokerage specializing in energy/marine risks. Responsible for production, risk management assessment and overall marketing for a wide range of energy risks, including exploration, production, offshore installations, pipelines, refining, underground salt dome product storage and oil field servicing. Also assisted in developing asbestos abatement and insulation contractor liability programs. Frank B. Hall & Co. 1980-1986. Assistant Vice President, Oil & Gas Division. Responsible for account production and handling of large oil and gas lease operator/drilling contractor accounts. Managed underwriting, policy issuance and claims handling activities for in- house oil lease operator liability program. Managed claim adjustment and payment for over 100 blowout and pollution liability claims. Souther Illinois University. M.B.A. studies in finance. California Polytechnic University. B.S., Engineering. Insurance Institute of America. ARM designation (Associate in Risk Management). Aetna Home Office Agents Training School. Crawford & Company Home Office Claims Adjuster Training School. Professional Liability Underwriting Society. Friends of RIMS—Los Angeles Chapter. American Society for Scholarly Publishing. National Association of Corporate Directors. continued Fees Invoices Relationship Between Client and Warren, McVeigh & Griffin, Inc. Warren, MVicVeigh & Griffin, Inc. RISK MANAGEMENT CONSULTANTS Standard Conditions and Rate Schedule For Professional Services If Warren, McVeigh & Griffin, Inc. (WMG) performs services for a fixed fee, the Client agrees to pay fees as set forth in the proposal, letter of engagement or contract submitted by WMG. If services are performed on a time-and-expense basis, the Client agrees to pay WMG in accordance with the following schedule of charges: Professional Staff Rates Classification Direct Expenses Principal/Officer-.. Expenses that are directly attributable to the performance Senior Consuttant.. of the work, such as travel and subsistence, long-distance Consultant...... $125-150 communications, outside computer services, and Actuaty....... $300-350 sub-contracts not included in professional staff rates Technical Stai ..§60-100 or purchase orders covering special goods or services, Clerical Staff... shall be billed at actual cost. Photocopies will be billed at $0.10 per copy. The above hourly rates include salary cost, general and administrative expense, overhead, and profit. These rates shall be increased by 50% for time spent in court as an expert witness or in giving legal depositions, or responding to subpoenas. WMG may increase its hourly rates from time to time upon not less than 30 days’ written notice to the Client. Invoices for services and expenses will be submitted on a monthly basis or more frequent basis or when the work is completed, at our option. Invoices will be due immediately and are past due 30 days from date of invoice. A finance charge of 1.5% per month, or the maximum rate allowed by law, will be charged on past-due accounts. In addition, if accounts become past due, WMG shall have the right to suspend or discontinue its work or to terminate its engagement, all without any liability to Client If suit is filed for non-payment, Client shall pay to WMG its reasonable attorneys’ fees, to be set by the court, and other costs incurred in collecting any delinquent account, whether in such suit, any appeals, any bankruptcy proceedings or any enforcement of judgment Proceedings, and such amount shall be added to and included in any judgment in favor of WMG. The laws of the State of California shall govern any contract between WMG and Client and the work to be performed by WMG thereunder. WMG is retained by the Client to investigate and to consult with the Client regarding the project described in the attached proposal, engagement letter or contract. WMG's services are for the benefit of the Client, but the extent of those services is limited by the funds made available for such purposes by the Client. The Client agrees that, due to the practical economic limitations Client may impose on the scope of the investigation, factors that might have affected some of WMG's decisions, conclusions and recommendations may remain undiscovered. Therefore, it is the Client that controls the degree of risk Client is willing to assume, by determining the scope of work and budget Client authorizes for this project. In performing the professional services as requested by Client, WMG is not providing legal advice or services. Legal advice regarding the professional assignment of WMG's work must be obtained through Client's attorney. WMG is an independent contractor and is not an agent of Client. continued __OCT-20-2003 MON 01:37 PM CFA EXECUTIVE FAX NO. 1 9N7 562 6994 P, 02/02 CHUGAS POWERING ALASKA’S FUTURE =F ° October 20, 2003 Mr. Steve Haagenson President & CEO Golden Valley Electric Association, Inc. P.O. Box 71249 Fairbanks, Alaska 99707 Dear Steve: Lee Thibert is designated as my alternate for the Bradley Lake Project Management Committee. If you have any questions, | can be reached at 762-4740. cc: Committee Members Chugach Electric Association, Inc. 5601 Minnesoto Prive, RO. Box 196300, Ancharage, Alaska 99519-6300 © (907) 563-7494 Fax |90/] 562-0027 © (800) 478-7494 www.chuyachelectric.com # info@chugochelectic.com ° _ OCT-20-2003 MON 01:36 PM CEA.EXECUTIVE 0-2 FAX NO. 1 907 562 6994 P, 01/02 ac CAUG ACP reece 5601 Minnesota Drive FACSIMILE TRANSMITTAL SHEET P.O, Box 196300 Anchorage, Alaska 99519-6300 Phone: 907-762-4522 ae 12/18/02 TO; Steve Haagenson (907) 458-5951 Dave Calvert (907) 224-4070 Norm Story (907) 235-3313 Wayne Carmony (907) 761-9368 Ed Ruebling 263-5204 un FROM: Joe Griffith SUBJECT: Alternate/Bradley Lake Project Management Committee COMMENTS/MESSAGE: See attached letter. TOTAL NUMBER OF PAGES TRANSMITTING: (Includes Cover Sheet) IF TRANSMISSION IS INCOMPLETE, PLEASE CALL: (907) 762-4747 TIME/DATE OF TRANSMISSION: By: Connie Owens CHUGACH FAX NO.: (907) 762-4514 MACHINE TYPE: DEX 740 OR CANON 850