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HomeMy WebLinkAboutBradley Lake PMC Meeting-Tues., May 20, 2003 2BRADLEY 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. Ts NEW BUSINESS Cc. 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. fe 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. ts 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: ee LZ —— Steve Haagenson, Chairman ATTEST: hi ly Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE ¥ 1. CALL TO ORDER & 813 W. Northern Lights Boulevard Tuesday, May 20, 2003 — 10:00 a.m. MEETING MINUTES Anchorage, Alaska 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. is NEW BUSINESS B. Presentation from governor Subcommittee Stead Mr. Stead stated that the Subcommittee had reviewed the proposal by VA Tech Hydro who was the only proposer on the project and had met with them and recommend to continue with contract negotiation along with pursing a contract with them to procure the new governor pilot valves and position sensors. Chair Haagenson read the Resolution for the record (attached). Chair Haagenson commented that he felt the committee was giving them an unlimited checkbook. The number he had was $1.2 million and would like to incorporate that into the Resolution. Mr. Carmony asked that HEA bring the negotiated agreement back to the committee for a vote. HEA stated that would be fine, and they would be going back to them for a ‘best and final’ but believe it will be at $1.2 million. HEA will call and ask for a special meeting once that is completed. Mr. Calvert asked why there was only one bidder. Mr. Stead responded that most of the people declined to bid. Some of them had problems with the Bradley Lake Hydro project itself; some were involved earlier in the late ‘80s in the construction. VA Tech Hydro was the only one wanting to step up and do something. HEA received two letters declining to bid, which were rather explicit. Mr. Griffith asked if that was based upon construction problems they perceived or just general bad feelings about the late ‘80s. Mr. Stead responded that one believed they would not be able to solve all the problems because the turbine pit was too small and there was one that said that based upon their previous history on the project the didn’t think they would be able to solve all the problems. They felt the utilities’ group expectations on responsibility were above what they believe could be implemented. They felt that we were asking for too much. Mr. Carmony asked that a copy of the letters declining to bid be faxed for review to see the concerns and discuss. 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 Cc. HEA Bradley Lake Transmission Losses at Bradley Lake Story Mr. Story expanded on the letter dated April 29, 2003, from HEA to Chair Haagenson. HEA had a Black and Veatch study performed, which revealed certain things. HEA had hired EPS to look at system losses and their conclusion was that HEA’s transmission losses were above what was being calculated and credited back. HEA is currently in discussion with CEA and are investigating findings in that study and will come out with an opinion together in the future. There is some belief that possibly the losses aren't as far off as being indicated. HEA will keep the group informed as well as through the technical committee. HEA is also continuing with the installation of a check meter. HEA has seen a steady growth of losses over time since Bradley came on line, and suspected there was something going on there, but this is the first time HEA has really looked at it to this degree, which is subject to interpretation and also criticism. However, HEA is making an attempt to identify because their losses at times swing heavy. The SVC losses have been known since the beginning and that is something that Black and Veatch’s study discovered and HEA will be working on that as well. HEA will work through it with CEA. 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. Griffith asked what was concluded with the Martin River report. Mr. Copoulos said that at this point, the plan is to complete minimal maintenance to make the road serviceable and to blade the runway this summer. We will continue with an air transport study to make a determination of how best to handle the air transportation question in the long-term, and whether that will or will not include the Martin River. An air transport study will be done to clarify the access procedures and also to clarify what is the best use of the Martin River airstrip and if there is a need to continue to spend money maintaining it. Mr. Story stated that HEA is not having issues getting people in and out. The issues and decision making relative to transportation and possibly people’s willingness and desire to exit the project because of shift changes, etc. The runway was slated to be wrecked out when this project was complete. Someone at the time felt the alternate airstrip should be available since it was already built. Now the issue to bring it up to grade is roughly $300,000 or to wreck it out and restore. HEA was leaning more toward managing the way air travel was scheduled to eliminate the need for a second field, and also do a minimal amount of demo on that strip in the event it is ever brought back for use. Extracting people that are injured or down would be done with a chopper. If there is a concern of flying or not flying due to weather — that is done all the time. The issue for HEA as far as managing the project on site is not that much of a concern. Mr. Story asked what the results of the study would include. Mr. Copoulos explained that the study is to help with the decision on what to do with the Martin River over the long-term. Although HEA’s approach is to do minimal maintenance, what the O&D committee had discussed was that because of where the airstrip is located, in the floodplain of the Martin River, eventually the airstrip would be washed away resulting in a significant cost to replace. It’s an economic decision whether to spend the money to maintain it, which is an obligation under the FERC license, or make a one time effort to go in and get rid of it. Those are the items the air transport study will review. Mr. Copoulos also noted that as a condition of the FERC license, it’s required that the airstrip be available and maintained. Mr. Saxton asked if the removal for FERC is not complicated and expensive and is in fact reasonably simple? Mr. Copoulos believes he could get FERC approval to remove it, but any amendment in the FERC license isn’t going to be complicated or simple due to the amendment process. Mr. Story stated that if it can be maintained on a short run for a minimum amount of money and when it becomes damaged by the river that it is no longer useful, then request an amendment to the FERC license with a recommendation to remove it and do the work for minimum cost. Mr. Story’s suggestion is to leave the strip there and do minimal maintenance to get by with, or ask for an amendment to remove it and discuss with FERC to do so. Mr. Copoulos agreed that the approach of doing minimal maintenance makes the most sense economically. The only concern is complying with FERC obligation with maintaining the road and continue to use the access and then eventually when it completely fails, look at removing it. Mr. Carmony’s suggestion was to remove the strip now and eliminate the maintenance costs. Mr. Story agreed and suggested putting the $10,000 away and use that money for demote when approval is received from FERC. Mr. Copoulos noted that when they originally came up with the idea of the study, a recommendation was made to remove the road and the thinking was to do a study to show that we can get by without the airstrip there — showing what the other transport options are — what the FERC issues are — and possibly get into the cost issues as well. 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 =< \ > € \ —+s Election ot OFF | ar Alaska Industrial Development and Export Authority AIDE Ayla Nate Alaska Energy Authority BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Tuesday, May 20, 2003 — 10:00 a.m. (Via electronic media at AIDEA/AEA - 813 W. Northern Lights Boulevard) (Corner of Arctic and Northern Lights Boulevard) CALL TO ORDER \~ Haagenson ROLL CALL (for Committee members) va PUBLIC ROLL CALL (for all others present) mT PUBLIC COMMENT et | AGENDA COMMENTS “~ Motion aa APPROVAL OF MEETING MINUTES€é——_ March 24, 203 Ser Now So / NEW BUSINESS + _#© Risk Assessment Scope of Work Proposal ft Saxton \ ; Presentation from Governor Subcommittee ——~ Stead * 5 Ve HEA Bradley Lake Transmission Losses at Bradley Lake -~ Story = _7® 0&D Committee Martin River Report ~ Copoulos ji _= Incident Investigation )~~ Copoulos COMMITTEE COMMENTS A. 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Shauna Dean From: Art Copoulos Sent: Tuesday, May 13, 2003 4:00 PM To: Shauna Dean Subject: FW: Bradley Lake Flight Operations WF] BRADLEY LAKE FLIGHT OPERATIONS... Shauna, Here it is - please include the email and the attachment in the packet. Thanks, Art o---- Original Message----- From: Zacharski, Bob [mailto:BZacharski@HomerElectric.com] Sent: Tuesday, May 13, 2003 3:43 PM To: acopoulos@aidea.org Subject: FW: Bradley Lake Flight Operations > anne Original Message----- > From: Zacharski, Bob > Sent: Tuesday, May 13, 2003 10:25 AM >To: Cooley, John (E-mail); Dale, Henri (E-mail); Stead, Donald (Don) (E-mail) >Cc: Stead, Donald (Don) > Subject: Bradley Lake Flight Operations > > Gentlemen, > A meeting to discuss the recent airplane incident at Bradley Lake was held on April 24, 2003. The attendees were the chief pilot of the Bradley Lake flight services contractor (Homer Air), the HEA safety director, an HEA employee who has his commercial license and is a flight instructor and myself. > > The accident investigation conducted by Homer Air concluded that the landing was not hard enough to damage the wheel strut. The airplane manufacturer ageed with that conclusion and is currently testing the failed strut to determine the failure mode. > > Homer Air's chief pilot was questioned on the usefulness of the alternative airstrip. He was of the opinion that the alternative strip offered little, if any, advantage over the main strip during periods of high wind gusts. Homer Air will continue to return to Homer if a Bradley landing has been aborted. > > The attendees jointly developed a new policy restricting flight operations during certain weather conditions. The policy was reviewed both by Homer Air and within HEA and approved. It is attached for your review. > > Sincerely, > Robert Zacharski> > <<BRADLEY LAKE FLIGHT OPERATIONS.doc>> > > BRADLEY LAKE FLIGHT OPERATIONS The following restrictions supplement existing flight operational guidelines 1. No flight shall be permitted to land or depart the Bradley Lake airstrip if a 25 mph wind gust with a direction between 090 and 180 has been observed within forty- five (45) minutes of the scheduled operation. 2. No flight shall be permitted to land or depart the Bradley Lake airstrip if a 35 mph wind gust from any direction has been observed within forty-five (45) minutes of the scheduled operation. “Special VFR Departures” are not allowed. 4. A weather report including sustained wind speed, gusts, direction and visibility estimated shall be faxed from Bradley prior to each flight departing Homer Airport. Bradley Lake SCADA will be programmed to provide the 45 minute wind gust data. These restrictions shall be effective upon completion of that work. Bradley Lake PROJECT MANAGEMENT COMMITTEE MEETING May Ao 2003 U (Date) ALD=ZA Doard ff (Location) PLEASE SIGN IN No. NAME REPRESENTING 1 Rion Jaxb Bir nryane Srald, Vale mrmler mS — 2 | Maun Lear Hee ee 3 Ed able MLAP 4 | Aut tne AEA S| Sree HANGS SA GvlA Chagqa oh. l /¢ 10 1] 2 13 14 15 16 17 | 19 20 21 22 92Q2\IT9884 BRADLEY PMC VOTING DATE: —//0/ Agenda Item No. 4 all Cm l/ ves aps YES NO ABS YES NO ABS CITY OF SEWARD 01% [| we MATANUSKA ELEC ASSOC 14% mae f CHUGACH ELEC ASSOC 30% [oe HOMER ELEC ASSOC 12%. Ee GOLDEN VAL ELEC ASSOC 17% TE MUNI LIGHT & POWER 26% Ze ALASKA ENERGY AUTHORITY ze 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) VO’ 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. TING METHOD C: Unanimous vote by all (including AEA) VOTING METHOD D: Majority vote (including AEA) Election of Officers DATE: BRADLEY PMC VOTING 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% L 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 B: VOTING METHOD C: 8) Selection among alternate methods that Requiring 4 yeas with 51% of utilities and AEA involve AEA for funding required project Unanimous vote by all (including AEA) concurrence: work. VOTING METHOD D: 1) Arranging operation and maintenance of 9) Adoption or amendment of procedural project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) committee rules (except dispute resolution). 10) Adoption of project maintenance schedules. Majority vote (including AEA) Election of Officers TELECONFERENCE INSTRUCTIONS Tuesday, May 20, 2003 — 10:00 a.m. To join the meeting, please do the following: Dial 1-800-315-6338 Enter 520# RESOLUTION TO ACCEPT VATECH HYDRO BID -AND AUTHORIZE CONTRACT Whereas the Bradley Lake Project Management Committee has directed the formulation of the Je Fraclly “Governors Sub-committee and Whereas the Governor Sub-committee has reviewed the Request for Proposal for digital control system at Bradley Lake and Whereas VATech Hydro was the only respondent to the request and desks te Z Whereas the \pvemnor ‘Sub-Committee has discussed the bid response with VATech Hydro and recommends that Homer Electric Association continues contract negotiation with VATech Hydro and authorize Homer Electric Association to contract with VATech ke Hydro to install new governor system at Bradley Lake Hydroelectric Facility aw Now Therefore, Be It Resolved: bodkey Jae 5 Accept recommendation of the Governor gub-committee and authorize Homer Electric Association to complete contract negotiations for new governor system installation at Bradley Lake Hydroelectric with continuing oversight from the Governor pubcommittee. [4 Broder babe VATECH.DPS/js RESOLUTION TO ACCEPT VATECH HYDRO BID AND AUTHORIZE CONTRACT Whereas the Bradley Lake Project Management Committee has directed the formulation of the Governor Sub-committee and Whereas the Governor Sub-committee has reviewed the Request for Proposal for digital control system at Bradley Lake and Whereas VATech Hydro was the only respondent to the request and Whereas the Governor Sub-Committee has discussed the bid response with VATech Hydro and recommends that Homer Electric Association continues contract negotiation with VATech Hydro and authorize Homer Electric Association to contract with VATech Hydro to install new governor system at Bradley Lake Hydroelectric Facility Now Therefore, Be It Resolved: Accept recommendation of the Governor Sub-committee and authorize Homer Electric Association to complete contract negotiations for new governor system installation at Bradley Lake Hydroelectric with continuing oversight from the Governor Subcommittee. VATECH.DPS/js RESOLUTION TO ACCEPT VATECH HYDRO BID AND AUTHORIZE CONTRACT Whereas the Bradley Lake Project Management Committee has directed the formulation of the Governor Sub-committee and Whereas the Governor Sub-committee has reviewed the Request for Proposal for digital control system at Bradley Lake and Whereas VATech Hydro was the only respondent to the request and , Whereas the Governor Sub-Committee has discussed the bid response with VATech Hydro and recommends that Homer Electric Association continues contract negotiation with VATech Hydro and authorize Homer Electric Association to contract with VATech Hydro to install new governor system at Bradley Lake Hydroelectric Facility Now Therefore, Be It Resolved: Accept recommendation of the Governor Sub-committee and authorize Homer Electric Association to complete contract negotiations for new governor system installation at Bradley Lake Hydroelectric with continuing oversight from the Governor Subcommittee. VATECH.DPS/js RESOLUTION TO ACCEPT VATECH HYDRO BID AND AUTHORIZE CONTRACT Whereas the Bradley Lake Project Management Committee has directed the formulation of the Governor Sub-committee and Whereas the Governor Sub-committee has reviewed the Request for Proposal for digital control system at Bradley Lake and Whereas VATech Hydro was the only respondent to the request and Whereas the Governor Sub-Committee has discussed the bid response with VATech Hydro and recommends that Homer Electric Association continues contract negotiation with VATech Hydro and authorize Homer Electric Association to contract with VATech Hydro to install new governor system at Bradley Lake Hydroelectric Facility Now Therefore, Be It Resolved: Accept recommendation of the Governor Sub-committee and authorize Homer Electric Association to complete contract negotiations for new governor system installation at Bradley Lake Hydroelectric with continuing oversight from the Governor Subcommittee. VATECH.DPS/js Bradley Lake Hydroelectric Project 2 f — Risk Assessment Scope of Work Proposal 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), aa-ageney—_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 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 as amended (PSA) obligates the AEA | to sell and the utilities to purchase the projects 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 its : phat Gperatioris aad maintenance. et copy of ya is attached). s-ewnerof The ae et:_The project has some De insurance coverage, a copy fof wi which i is sated. Sy —___ In addition to the BPMC role, and their individual rights and obligations as power purchasers, some individual utilities have contracted to provide services to the project, including for dispatch, on-site operation and maintenance, or repair of project design, management and construction. (Agreements attached) VV The Project The Bradley Lake Hydroelectric Project (“the Project”) is located in south central Alaska at the southern end of the Kenai Peninsula. The Project includes a 610 foot long, 125 foot high concrete-faced and rock filled gravity dam, a 3.5 mile power tunnel and steel- lined penstock. The Project has 126 megawatts of installed capacity that is normally scheduled at 90 megawatts to minimize losses. The Project has an expected average annual output of 376 million-kilowatt hours. Two 20 mile, 115 kilovolt transmission lines connect the Project to a transmission system on the Kenai Peninsula. The Project provides electric power to the most populous areas of Alaska, including the Kenai Peninsula, the Municipality of Anchorage, the Matanuska-Susitna Borough and the Fairbanks Area. Construction of the Project was substantially complete in 1991. The AdaskaEnereyAuthority the Authority? AEA has sold 100% of the capacity of the | project to the utility purchasers pursuant to the PSA. Under thePewerSales Agreement PSA, the Power Purchasers are obligated to make payments to the AuthorityAEA 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. Issues The BPMC desires an assessment of the risks associated with the project and recommendations for addressing those risks specifically, the work product should address: 1. Maximum Loss Assessment The maximum loss the Purchasers should insure through the BPMC. This analysis should address both physical damage risks and the Purchasers obligations under the PSA. 2s Coverage Review The full spectrum of insurance coverage for the Project currently in place on behalf of the AEA and the BPMC should be identified and explained in the following manner: specific risk, liability of specific parties and recommended coverage. Sufficiency of coverage should be addressed. 3. Purchasing Utility Contractor Risk Recommendations on risk management when services are provided by purchasing utilities (such as current arrangements with Chugach and Homer) to minimize risk to utility providing services and providing adequate protection to BPMC. Recommendations regarding possible BPMC secured risk protection for noninsured risk levels of the contracting utilities. 4. Engineering and Contractor Risk Review adequacy of insurance coverage for Non-Purchasing Utility Contractors, and engineering done for the project for the utility contractors or the AEA. Ds Risk to Physical Assets Review of appropriate levels of insurance to cover debt service, maximum probable loss, catastrophic loss and value of replacement power. 6. Liability Risk Review and recommend coverage levels for personnel, visitor/contractor’s, uninvited visitors (hunters, campers, etc.), the emergency airstrip. Tes Additional Insurance Requirements Research and recommend the need for Builders Risk (particularly with respect to the governor replacement project), supplemental contractor general liability insurance, business interruption coverage, and adequacy of existing property coverage (including deductible). 8. Miscellaneous Issues to be evaluated Additional items to be evaluated in the assessment: - Collective and individual liability of the Purchaser’s. - Market Response (in light of a major repair/overhaul project about to be undertaken) - Other risk mitigation recommendations. Duration of Engagement The Consultant’s engagement should be completed in time for recommendations to be reviewed and decisions made on which will be implemented. This time frame is the next Project insurance coverage renewal time, currently slated for The Consultant should be committed to begin the engagement no later than and complete field work and make their final report available to the Purchaser’s by . Consultant should plan on making a presentation to the Bradley Lake Project Management Committee by Site Visit It is contemplated that the retained consultant will make at least one site visit to the Project in order to survey facilities and potential new exposures. This visit should be scheduled during to insure Project personnel will be available to conduct tours and respond to consultant inquiries [and weather considerations]. Documentation to be provided The Purchaser’s will provide copies of current insurance coverage in place and other agreements for contractual services that may be in force. Homer Electric Association, Inc. Corporate Office Ceotrul Peninsula Service Center 3977 Like Street 280 Aiport Way Homer. Aliska 99603-7080 Kenai. Alaska 99611-5280 Phone (907) 235-8551 Phone (907) 283-5831 FAX (907) 235-3313 PAX (907) 283-7122 April 29, 2003 RECEIVED Mr. Steve Haagenson Chairman BPMC President & CEO VAY 02 2003 Golden Valley Electric Association, Inc. PO Box 71249 Fairbanks, Alaska 99707-1249 GVEA Holding Company Dear Steve: RE: Homer Electric Association Bradley Lake Transmission Losses It has come to our attention that losses associated with the Bradley Lake facilities are not being properly calculated or accounted for. For instance, The Black and Veatch study performed for Chugach Electric Association, Inc. (CEA), Homer Electric Association, Inc. (HEA) and Matanuska Electric Association, Inc. (MEA), pointed out that SVC losses were not appropriately included as a CEA G&T system loss. Another study performed by EPS for HEA found that losses on the HEA transmission system due to the transfer of Bradley Lake power are higher than currently calculated by CEA, and HEA is not being adequately credited with associated losses caused by the Bradley Lake energy flows over the HEA 115 kV transmission system. These items need to be resolved at the technical level. HEA is currently installing revenue class metering on the Soldotna SVS 115 kV system. Such losses and station service amounts are to be credited to HEA in the future, consistent with the B&V study approved by the RCA. Regarding the accuracy of the 115 kV losses calculated by CEA, HEA has retained EPS to review the current CEA loss calculation system and “look up chart” and when the results are available, HEA will present them to the Bradley Lake O&D committce with appropriate recommendation for change. In as much as this error may have or continue to incorrectly assign loss and related economic impacts on HEA, HEA must reserve the right to seek adjustments for these past or fulure errors when the extent and impact of these errors are quantified. We hope to have such a quantification completed within the next six months. If you have any questions, please fee] free to contact me at 907-235-3301. e |e Sincerely, ‘Lh ELEC SSOCIATION, INC. 7 / NLL. Story General Manager Co:-” Myles Yerkes Art Cupolas FAGM\NLSILETTERS'2003\BL tmnsinission losses,doc 180-4 200/200'd = 20-1 1$698¢p206 UOIJEAISIUIUPY Y3AH-WO1y —WEP_:gQ —-EQ=29-KEW Alaska Industrial Development and Export Au as AID = AWE Alaska Energy Authority April 28, 2003 Mr. Steve Haagenson Chairman, Bradley Lake Project Management Committee Golden Valley Electric Association P.O. Box 71249 Fairbanks, Alaska 99707-1249 Dear Steve: Per the request at the last BPMC meeting, the following documents and information are attached to fully explain the history of the Martin River Road airfield access road restoration: Preliminary communications with FERC. Letter from Stan Sieczkowski to Lois Cashell 4-14-95. Letter from Stan Sieczkowski to Arthur Martin 4-14-95. Subsequent communications with FERC. Letter from Stan Sieczkowski to Lois Cashell 10-31-95 that includes minutes of an inter-agency coordination meeting. Discussion item #5 references the work planned to restore the Martin River airstrip and includes a reference to an O&D committee review of the FERC license amendment application. FERC license amendment for reactivation of the Martin River airstrip dated November 1995. Letter from Dennis McCrohan, AEA, to Tom Stahr, BPMC Chairman, dated 3-28- 96. The letter describes items proposed for the final Bradley Lake Project construction list as proposed by the O&D Committee. Item #12 is to fund reactivation of the Martin River airstrip and the access road. BPMC meeting minutes from 4-12-96. A motion was passed approving the construction list that includes $95,000.00 for reactivation of the Martin River airstrip and the access road. 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 Mr. Steve Haagenson April 28, 2003 Page 2 of 2 o- Bradley Lake Hydro Project Work Order dated 6-13-96 for the airstrip access road and related work. ° Construction list report of final activity indicating airfield access road complete and final cost. The full size drawings were not included in the attachments. If any additional information or documentation is needed please call anytime. Sincerely, Ate Art Copoulos Project Manager Attachments om Joe Griffith, CEA Norm Story, HEA Dave Calvert, City of Seward Wayne Carmony, MEA Jim Posey, AML&P Karl Reiche, AEA BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Tuesday, May 20, 2003 — 10:00 a.m. (Via electronic media at AIDEA/AEA — 813 W. Northern Lights Boulevard) (Corner of Arctic and Northern Lights Boulevard) CALL TO ORDER Haagenson ROLL CALL (for Committee members) PUBLIC ROLL CALL (for all others present) PUBLIC COMMENT AGENDA COMMENTS APPROVAL OF MEETING MINUTES March 24, 2003 NEW BUSINESS A. Risk Assessment Scope of Work Proposal Saxton B. Presentation from Governor Subcommittee Stead C. HEA Bradley Lake Transmission Losses at Bradley Lake Story D. O&D Committee Martin River Report Copoulos E. Incident Investigation Copoulos COMMITTEE COMMENTS A. Next Meeting Date Haagenson ADJOURNMENT Alaska Industrial Development and Export Au” AlD. = Awl i Alaska Energy Authority Facsimile Transmittal TO: St CV E HAGENS 4w— COMPANY: AVEA Ca <P eoc Fax #: ( 40 () tod = Set 2 C FROM: Viarrve~ lo’ DATE: 5-13-03 A415 Dm Number of pages including cover page: ey Transmittal Contents: Comments: D aff A gerbe tr: A ppress Notice: This facsimile may contain confidential information that is being transmitted to and is intended only for the use of the recipient named above. Reading, disclosure, discussion, dissemination, distribution, or copying of this information by anyone other than the named recipient or his or her employees or agents is strictly prohibited. If you have received this facsimile in error, please immediately destroy it and notify us by telephone at (907) 269-3000. HSANMERYMEScsinilel Transmittal Cover Pageldee 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 3 P. ima * * * Transmis..cn Result Report (MemoryTX) (May... 2003 1:44PM) * * 3 i AIDEA/AEA Date/Time: May.13. 2003 1:43PM File No. Mode Destination Pg (s) Result Not Sent 2476 Memory TX 919074585951 P. 2 OK Reason for error E-1) Hang up or line fail E.2) Busy E.3) No answer E.4) No facsimile connection Alndca tncomial Development and port Autharty AID nel Facsimile Transmittal ro Store Hoagensm COMPANY: Ved Fax #: 600) ISP S957 FROM: Shaun Dee DATE: j= 3-03 a Number of pages including cover page: <2 ‘Transmittal Contents: wr Dread Agtede tee Aporead. Notice: This facsimile may contain confidential information that is belng transmitted to and is intended only for the use of the recipient named above, Reading, disclosure, discussion, dissemination, distribution, or copying of this information by anyone other than the named recipient or his or her employees or agents is strictly prohibited. If you have received this facsimile in error, please immediately destroy it and nolify us by telephone at (907) 269-3000. 813 West Northem Lights Boulevard Anchorage, Alaska 99503 907 / 269-3000 + FAX 907 / 269-3044 = Toil Froe (ALASKA ONLY) 888 / 300-8534 » wwwaidea.og