Loading...
HomeMy WebLinkAboutBradley Lake PMC Meeting-Tues., March 28, 2006 2BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, March 28, 2006 — 10:30 a.m. 45 CALL TO ORDER Chair Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:30 a.m. on Tuesday, March 28, 2006, 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 Mike Cunningham Chugach Electric Association Bradley Janorschke Homer Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Jim Posey Anchorage Municipal Light & Power (teleconference) Tim Barnum City of Seward Karl Reiche Alaska Energy Authority 3. PUBLIC ROLL CALL Brian Bjorkquist, Department of Law Mike Cunningham, Chugach Electric Association Bob Price, Anchorage Municipal Light & Power Doug Hall, Anchorage Municipal Light & Power Henri Dale, Golden Valley Electric Association Charles O’Hare, Homer Electric Association Rick Eckert, Homer Electric Association Brian Hickey, Chugach Electric Association Mark Foster, Consultant Linda MacMillan, Alaska Energy Authority Gary Stromberg, Parisena, Stromberg & Co. Jenny True, AterWynne (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Bradley Lake PMC Meeting March 28, 2006 Page 2 of 5 4. PUBLIC COMMENT There were no public comments. 5; AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES — June 21, 2005 The meeting minutes of June 21, 2005, were unanimously approved as presented, with the comment from Chair Haagenson to delete the memorandum attachment. te NEW BUSINESS 7A. _FY’06 Budget Revision Mike Cunningham and Linda MacMillan gave an overview of the 2006 Operating and Capital budget revision. MOTION #06-1: Mr. Janorschke moved that the Bradley Lake Project Management Committee approve the fiscal year 2006 Operating and Capital budget revision as presented. Seconded by Mr. Miller. A voice vote was taken and the motion was unanimously approved. 7B. FY’07 Budget MOTION #06-2: Mr. Janorschke moved that the Bradley Lake Project Management Committee approve the fiscal year 2007 Operating and Capital budget as presented. Seconded by Mr. Miller. Mike Cunningham and Linda MacMillan gave an overview of the FY’07 Operating and Capital budget. Wayne Carmony commented on the topic of $40,000 budgeted for Bradley Lake PMC Legal. MEA’s position is that the firm of AterWynne has an inherent conflict of interest in representing the BPMC. They believe that the inclusion of $40,000 in the budget is inappropriate and requested that the membership would consider deleting it — either to delete it or to take steps to locate and identify a new legal firm to represent this organization. Chair Haagenson noted that they were talking about the budget items and wasn’t sure if they could dive into the philosophy of the budget. MOTION #06-3: Mr. Carmony moved to make an Amendment to delete the $40,000 from the 2007 budget that is identified as Bradley Lake PMC Legal and to take that up after taking a look at the potential for identifying and employing a new attorney. Chair Haagenson restated the motion to read: Motion to amend the Bradley Lake PMC Meeting March 28, 2006 Page 3 of 5 budget to remove the $40,000 on page 5 of 9 called Bradley Lake PMC Legal. Seconded by Brad Janorschke. Mr. Carmony stated that there are three months before the fiscal year 2007 budget begins. He believes that in that timeframe we can take up the question of a conflict and add funds back into the budget prior to the commencement of the fiscal year 2007 once this issue of a potential conflict of interest is resolved. Mr. Cunningham added that the FY’07 budget needs to be approved and in place by April 1°' according to bond covenants, and that doesn’t preclude a future amendment to it. Mr. Posey stated that this issue was brought up last year and nothing was brought up by anybody in that interim period of time to look for new counsel and with the pending date ‘of April right upon us, he didn’t think they should change the budget now, but if someone wanted to do the research and look for other counsel that would meet all of their requirements during this interim period — either for one year or three months — that’s fine but we have to approve the budget and he intended to vote against this motion. Mr. Carmony also stated that over the course of the last year there had been changes that he wanted to point out to the group. The AREA has been formalized and that organization has named AterWynne as their attorney and as everyone was aware, the intense lobbying efforts are taking place to have various State-owned assets placed with that organization (JAA). Chair Haagenson added that the question now was do we take the money out of the budget now or not, and it doesn’t specify who our legal counsel is. As the Amendment stands now — do we remove the $40,000 from the budget or not? Mr. Janorschke commented that regardless of what is done with the current legal, the funds are needed and we can certainly add the Amendment back in, but just to keep from intermingling the two issues, he would support leaving it as-is, but not ruling out if someone wanted to do the research bringing it up at the next BPMC meeting to discuss. Chair Haagenson called the question — All in favor of removing Bradley Lake PMC legal counsel fees of $40,000 from the FY’07 budget say aye (MEA — Wayne Carmony responded and asked for a roll call vote). City of Seward No Matanuska Electric Association Yes Chugach Electric Association - Homer Electric Association No Golden Valley Electric Association No Anchorage Municipal Light & Power No Alaska Energy Authority Abstain Chair Haagenson stated that the motion failed. Bradley Lake PMC Meeting March 28, 2006 Page 4 of 5 Motion of Approving the FY’07 budget as presented. A voice vote for the Approval of the FY’07 budget was taken and the only nay vote was from MEA. The motion passed with one nay vote from MEA. 7C. FY’05 Audit Report from Parisena, Stromberg & Company MOTION 06-4: Mr. Janorschke moved that the Bradley Lake Project Management Committee accept the results of the Bradley Lake Project Management Committee Operating and Revenue Funds as of June 30, 2005, as presented by Parisena, Stromberg & Co., APC. Seconded by Mr. Posey. Gary Stromberg presented the audit report. A voice vote was taken and the motion passed by unanimous approval. 7D. Direction from Chair Haagenson . Direct the O&D Committee to review the Homer Operation and Maintenance Agreement. 7 Consider the Homer Electric request to sign a 10-year term Agreement. 7 Identify necessary modifications to the contract, such as BPMC attorney review of construction contracts, as approved by the BPMC - timeframe to be by the next meeting in July. 8. COMMITTEE REPORTS / COMMENTS 8A. Operators Report Charlie O’Hare stated that the governor project started a couple of weeks ago. There are no major issues as of this time. Brian Hickey added that from a technical perspective they have worked with VA Tech to develop a governor control algorithm to eliminate the instability problem in conjunction with the new deflectors. By August they will know the results. Completion date is set for the end of August. 8B. Next Meeting Date The next meeting date is at the call of the Chair, and will be held at the Bradley Lake Project site. Bradley Lake PMC Meeting March 28, 2006 Page 5 of 5 9. ADJOURNMENT The meeting was adjourned at 11:20 a.m. BY: LEP Jat | Steve Maagenson, Chairman ATTEST: Alaska Energy Authority, Secretary AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT AMENDMENT NO. 3 THIS AGREEMENT entered into this day of , 2006, between the Homer Electric Association, Inc. (the “Operator”) and the Alaska Energy Authority (the “Authority’). Recital Effective February 11, 1994, the parties entered into an agreement titled Operation and Maintenance Agreement for Bradley Lake Project (the “Agreement’). The term of the Agreement was for an initial period of five years, automatically renewable annually thereafter. The parties extended the Agreement through an Amendment dated June 22, 1999. The Amendment extended the Agreement until June 30, 2004, and provided that the term shall continue from year to year thereafter. The parties have determined that instead of the annual renewal, the Agreement shall be renewed for an additional period of ten years and automatically renewed annually thereafter; and that the Agreement be further amended as hereafter set forth. Amendments NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: 1. Section 2 of the Agreement as amended by the June 22, 1999 Amendment is hereby amended as follows: Effective July 1, 2006, the term of the Agreement shall be ten years and the term shall automatically be renewed for successive one-year periods, until terminated as provided in the Agreement. 2. Paragraph 13(a)(1) of the Agreement is amended to read as follows: Each Party shall be liable for the negligent, willful and grossly negligent acts of its officers, employees, agents and contractors with respect to the ownership, construction operation, maintenance or repair of the Project. It is recognized that the project insurance does not cover the willful and grossly negligent acts of a party. Each Party shall be solely liable for the willful and grossly negligent acts of its officers, employees, agents and contractors to the extent not covered by insurance. A party’s maximum cumulative liability relative to all other claims and liabilities, including that with respect to direct damages and obligations under any indemnity, will not exceed the limits of any insurance policies insuring against such claims or liabilities. In no event will a Party be liable for incidental, indirect or consequential damages of any kind. Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project (AEA 2006-01) 3. Paragraph 13(a)(8) of the Agreement is amended to read as follows: (8) | Acopy of the insurance policies required of the Operator by this Section will be furnished to the Authority prior to beginning work under this Agreement. Prior to February 1 of each year thereafter, evidence of insurance shall be provided by the Operator. 4. Paragraph 13(a)(9) of the Agreement is amended to read as follows: (9) | The Operator’s obligation to obtain and maintain insurance coverage pursuant to this Section shall be subject to the general availability of such coverage under reasonable terms and conditions. If one or more of the required insurance coverages is not available to the Operator under reasonable terms and conditions, the Operator shall, under the guidance and direction of the BPMC and Division of Risk Management, use its best efforts to obtain substantively equivalent insurance coverage acceptable to the BPMC, the Authority, and the Division of Risk Management. 5. A new subsection 13(f) is added to the Agreement to read as follows: (f) The Authority shall maintain a policy or policies of property damage insurance fully insuring the Project against lost resulting from fire, explosion, accident, or equipment breakdown for the full insurable value of the Project. The policy shall contain a waiver of subrogation with respect to the Operator and the BPMC and list the Operator as an additional named insured. IN WITNESS WHEREOF, the parties have caused this agreement to be executed as of the date first written above. HOMER ELECTRIC ASSOCIATION, INC. Date By General Manager ALASKA ENERGY AUTHORITY Date By Executive Director Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project (AEA 2006-01) Agenda Item: 7A MOTION: Move the Bradley Lake Project Management Committee approve the fiscal year 2006 Operating and Capital budget revision as presented. Y?) — Move: Dyad Ja ie hes Second: Vek / lle Aggro by Uoice- vole. I seimagt ‘ \ \ . 7A) FY Ob Bed “Bus- ae U vest, DO? inentent t, epee port bw Aves te a i te Prd AS‘ © a tie = bivgst clave - POWER PURCHASER UTILITIES UTILITIES TO NET TO RECEIVE CASH POWER PURCHASER % SHARE PAY FY05 REFUND TO PROJ APRIL 2006 CHUGACH ELECTRIC 30.4% 408,504.00 (214,259.58) 194,244.42 MUNICIPALITY OF ANCHORAGE 25.9% 348,035.00 (182,543.52) 165,491.48 AEG&T-HEA 12.0% 161,251.63 (84,576.10) 76,675.53 AEG&T-MEA 13.8% 185,439.37 (97,262.62) 88,176.75 GOLDEN VALLEY ELECTRIC 16.9% 227,096.00 (119,111.41) 107,984.59 CITY OF SEWARD 1.0% 13,438.00 (7,048.01) 6,389.99 100.0% 1,343,764.00 (704,801.22) 638,962.76 AMENDED UTILITIES MAY 2006 ORIGINAL _ DECREASE TO PAY CHUGACH ELECTRIC. 30.4% 408,504.00 (265,542.21) 142,961.78 MUNICIPALITY OF ANCHORAGE 25.9% 348,034.62 (226,234.98) 121,799.64 AEG&T-HEA 12.0% 161,251.32 (104,819.23) 56,432.09 AEG&T-MEA 13.8% 185,439.27 (120,542.25) 64,897.02 GOLDEN VALLEY ELECTRIC 16.9% 227,095.86 (147,620.51) 79,475.35 CITY OF SEWARD 1.0% 13,437.38 (8,734.94) 4,702.44 100.0% 1,343,762.44 (873,494.13) 470,268.32 JUNE 2006 CHUGACH ELECTRIC 30.4% 408,504.00 (265,542.21) 142,961.78 MUNICIPALITY OF ANCHORAGE 25.9% 348,034.62 (226,234.98) 121,799.64 AEG&T-HEA 12.0% 161,251.32 (104,819.23) 56,432.09 AEG&T-MEA 13.8% 185,439.27 (120,542.25) 64,897.02 GOLDEN VALLEY ELECTRIC . 16.9% 227,095.86 (147,620.51) 79,475.35 CITY OF SEWARD 1.0% 13,437.38 (8,734.94) 4,702.44 100.0% 1,343,762.44 (873,494.13) 470,268.32 MONTHLY TRANSFERS BEGINNING JULY 2007 CHUGACH ELECTRIC. 30.4% 415,360.67 MUNICIPALITY OF ANCHORAGE 25.9% 353,876.36 AEG&T-HEA 12.0% 163,958.06 AEG&T-MEA 13.8% 188,551.98 GOLDEN VALLEY ELECTRIC 16.9% 230,907.74 CITY OF SEWARD 1.0% 13,663.18 100.0% 1,366,318.00 H:\all\imacmillan\BradleyLake\F YO6BRADLEY\2006BradleyBdgt-amend3revised3-send.xIsPAYMENT SCH 535 535 539 543 545 545 556 556 556 571 Based on implemented April 1, 2006 Original Budgeted Utility Contributions Schedule I-Net change to revised interest income projection Schedule B Operating Original FYO6 O&M Budget. Net Changes HEA O&M Contract-two operators on site HEA O&M Contract-reduce amount for apprentice not hired CEA Circuits -Bernice Lake to Anchorage Kachemak Creek Gauging Station-work completed HEA O&M Contract-Culvert repair under runway Martin River Road Study-Amendment & Removal-work completed SCS Snow Measurement USGS Stream Gauging State of Alaska Permits-adjust to actual HEA Overhead Line Maintenance FERC 924 - Property Insurance-Adjust to actual FERC Inspections- 5 Year & Begin PMA Contractual Engineer-FERC License Issues Total Net Changes Amended FY06 Budget Schedule D R&C Fund Assuming Repay at Year End Original FY06 Budget Net Changes Additional funds in unallocated construction to apply to governor pj Runner repair costs moved to FY06 from FY07 Additional costs to replace cable from dam to power house Move power system stabilizer replacement to FY07 Move RTU replacement to FY07 Repay costs over 4 years Total Net Changes Amended FY06 Budget Arbitrage Transfer-Adjust to actual Operating Reserve Transfer to equal 20% of amended operating budget Amended Budgeted Utility Contributions Net Monthly Decrease-April 2006 through June 2006 Original Utility Contribuitons Amended Utility Contributions Net Decrease Divided by 2 months Net monthly decrease for last 2 months in utility contributions Net FY06 Decrease to Utilities Plus FY05 Surplus Refund to Utilities Net Decreased Cash from Utilities (1,580,592) 16,125,172 (267,732) 3,010,926 91,614 (90,500) 28,740 (26,000) 10,000 engineering only (30,000) (21,000) (37,125) 100 36,000 (27,707) 75,000 75,500 84,622 2,130,888 (590,000) 496,112 288,000 (200,000) (75,000) (1,499,704) (1,580,592) 550,296 16,714 0 8,184 (16,125,172) 14,378,184 (1,746,988) X0.5 (873,494) (1,746,988) (704,801) (2,451,789) BRADLEY LAKE HYDROELECTRIC PROJECT Schedule A REVENUES, EXPENSES & CHANGES IN SURPLUS REVENUES UTILITY CONTRIBUTIONS INTEREST INCOME FEMA GRANT RECEIPTS MISCELLANEOUS INCOME EXPENSES . OPERATIONS RENEWALS/REPLACEMENTS (R&C FUND REPAYMENTS R&C INTEREST APPLIED AS REPAYMENT REPLACE TRANSMISSION RELAYS PURCHASE NEW VEHICLE TRANSFER TO OPERATING RESERVE DEBT SERVICE (net of Capital Reserve Reductions) ARBITRAGE TRANSFER REFUND OF PRIOR YEARS SURPLUS. CURRENT YEAR SURPLUS (DEFICIT) BEGINNING SURPLUS ENDING SURPLUS (DEFICIT) BALANCE SHEET ASSETS REVENUE FUND OPERATING FUND RECEIVABLES LIABILITIES & SURPLUS LIABILITIES SURPLUS OTHER INFORMATION OPERATING RESERVE * MONTHLY CONTRIBUTIONS * Required to be 20% of budgeted operating expense 3/20/20062:53 PMH:\all\imacmillan\BradleyLake\F YO6BRADLEY\2006BradleyBdgt-amend3revised3-send.xisSchedule A-Budget Summary FY03 FY04 FY2005 FY2006 INC(DEC) ACTUALS ACTUALS ACTUALS BUDGET FROM PY 14,409,226 14,759,083 16,030,046 14,378,183 | (1,651,863) 1,840,740 1,850,365 1,770,989 1,785,699 14,711 0 0 293,170 O] (293,170) 2,680 0 0 0 0 16,252,646 16,609,448 18,094,205 16,163,882 | (1,930,322) 2,316,682 3,299,790 2,977,028 3,095,548} 118,520 321,021 784,571 1,581,725 550,296 | (1,031,429) 314,818 (314,818) 0 0 29,130 11,067 0 0 0 111,400 15,000 (15,000) 12,268,075 12,273,400 12,273,050 12,276,325 3,275 163,420 202,711 227,782 241,714 13,932 2,013,381 (73,492) 704,801] 778,293 15,098,329 18,696,321 17,315,911 (447,227) 1,154,317 (2,086,873) 778,293 859,063 2,013,380 (73,492) 2,013,380 (73,492) 704,801 1,759,535 (0) 0 684,300 294,998 q) 2,689 - 2,446,524 294,997 a 433,143 368,489 0 2,013,381 (73,492) ) 2,446,524 294,997 (1) 535,000 646,400 661,402 661,402 1,200,768 1,594,243 1,335,837 1,198,182 BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B FY05 31-Dec-05 AMENDED FY2004 FY2004 FY2006 FY2006 BUDGET ACTUAL VARIANCE ACTUAL YTD ACTUAL BUDGET SUMMARY (A) HEA Annual Operations & Maintenance 1,216,500 1,198,460 18,040 1,383,486 746,058 1,278,795 (B) CEA Dispatch and Substation/SVC Maintenance 73,000 57,090 15,910 120,570 65,372 105,200 (C) Other O&M and Maintenance Projects 812,276 880,567 (68,291) 478,911 193,881 437,131 (D) Insurance Costs 610,000 677,601 (67,601) 654,490 556,293 588,503 (E) Regulatory Costs 245,630 196,835 48,795 75,141 46,813 316,500 (H) Contingencies 0 0 0 0 0 94,919 2,957,406 3,010,553 (53,147) 2,712,598 1,608,417 2,821,048 (F) Administrative Costs 274,500 289,237 (14,737) 264,431 223,530 274,500 3,231,906 3,299,790 (67,884) 2,977,029 1,831,947 3,095,548 (G) Bond Refunding Costs 0 0 0 0 0 0 3,231,906 3,299,790 (67,884) 2,977,029 1,831,947 3,095,548 Page 1 of 4 3/20/2006 2:53 PM H:\all\imacmillan\BradleyLake\F YO6BRADLEY\2006BradleyBdgt-amend3revised3-send.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B FERC 535 - Operation Supervision & Engineering (A) HEA O&M Contract (C) HEA On-Site Civil Project Manager (C) HEA Digitize & Control Project Drawings FERC 537 - Hydraulic Expenses (A) HEA O&M Contract FERC 538 - Electric Expenses (A) HEA O&M Contract (C) SOA BOILIER INSPECTION FERC 539 - Misc. Hydraulic Power Generation Expenses (A) HEA O&M Contract (C) Replace Two Way Radios (C) DIS Voice/Data Circuits (inc. space & power) (C) DIS 2-way Radio Circuits & radio maint. (C) HEA Circuits and Radio - To Bernice Lake (C) CEA Circuits -Bernice Lake to Anchorage FERC 540 - Rents FERC 542 - Maintenance of Structures (A) HEA O&M Contract (C) Other (A) HEA O&M Contract (C) Bradley Lake Dam Repair (C) Nuka Diversion (C) Middle Fork Diversion (C) Bradley Lake FERC land use fees (5% increase bu' FERC 543 - Maintenance of Reservoirs, Dams & Waterways FY05 31-Dec-05 AMENDED FY2004 FY2004 FY2006 FY2006 BUDGET ACTUAL VARIANCE ACTUAL YTD ACTUAL BUDGET 192,800 130,716 62,084 147,460 105,248 185,214 23,732 (23,732) 0 45,840 (45,840 0 192,800 200,289 (7,489) 147,460 105,248 185,214 39,900 3,900 36,000 3,950 4,415 58,300 39,900 3,900 36,000 3,950 4,415 58,300 | 63,800 197,032 (133,232) 206,246 124,093 94,200 0 1,710 (1,710 0 0 0 63,800 198,742 (134,942) 206,246 | 94,200 210,900 210,566 334 165,027 103,177 253,100 0 0 5,761 10,000 10,000 0 10,000 0 0 0 7,000 0 7,000 0 0 0 90,000 90,000 0 90,000 45,000 90,000 28,746 28,746 0 28,746 14,373 28,740 L 346,646 329,312 17,334 283,773 168,311 381,840 108,000 100,220 7,780 66,115 64,587 74,000 108,000 100,220 7,780 66,115 64,587 74,000 35,300 10,453 24,847 50,231 64,189 53,500 0 0 0 0 0 0 35,300 10,453 24,847 50,231 64,189 53,500 _— 62,000 2,235 59,765 0 0 15,400 160,000 152,640 7,360 0 0 0 125,134 (125,134) 0 0 20,000 20,245 (245) 11,145 0 0 3/20/2006 2:53 PM Page 2 of 4 H:\all\imacmillan\BradleyLake\F YO6BRADLEY\2006BradleyBdgt-amend3revised3-send.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B (C) Kachemak Creek Gauging Station (C) Other O&M FERC 544 - Maintenance of Electric Plant (A) HEA O&M Contract (A) HEA O&M Contract-Runner Repairs FERC 545 - Maintenance of Misc. Hydraulic Plant (A) HEA O&M Contract FERC 556 - System Control & Load Dispatching (A) HEA O&M Contract (A) HEA O&M Contract-Contingency (C) NOAA Weather Service (C) SCS Snow Measurement (C) UAA Seismic monitoring and reporting (C) USGS Streamguaging (C) State of Alaska Permits FERC 562 - Station Expenses (B) CEA SVC/Substation Maintenance Contract (C) SVC Condition Assessment/Staff Training FERC 571 - Maintenance of Overhead Lines (A) HEA Overhead Line Maintenance (H) Contingencies FERC 920 - Administrative Expense (F) AEA Admin Fee FY05 31-Dec-05 ] [ AMENDED FY2004 FY2004 FY2006 FY2006 BUDGET ACTUAL VARIANCE ACTUAL YTD ACTUAL BUDGET 26,000 0 26,000 0 0 0 0 0 0 268,000 300,253 (32,253)} |_ 11,145 0 15,400 368,400 342,669 25,731 540,304 212,861 295,000 0 41,080 (41,080) 0 0 0 368,400 383,748 (15,348) 540,304 212,861 295,000 210,600 153,066 57,534 158,048 95,137 274,000 (C) Martin River Road Study-Amendment & Removal 110,000 51,382 58,618 15,923 0 0 320,600 204,447 116,153 173,971 95,137 274,000 12,200 74,428 (62,228) 16,651 11,646 9,000 0 0 0 0 5,081 5,081 7,040 0 7,040 0 0 0 41,990 38,278 3,712 (8,482) 6,966 9,000 56,500 56,500 0 56,500 14,522 56,500 147,000 146,040 960 174,017 42,672 168,791 0 100 (100) 100 0 100 264,730 315,346 (50,616) 238,786 80,887 248,472 73,000 57,090 15,910 120,570 65,372 105,200 0 44,847 0 0 73,000 57,090 15,910 165,417 65,372 105,200 =| j 20,600 32,316 (11,716) 95,569 20,211 36,000 20,600 32,316 (11,716) 95,569 20,211 | 36,000 0 0 0 0 0 94,919 200,000 200,000 0 200,000 200,000 200,000 3/20/2006 2:53 PM Page 3 of 4 H:\all\lmacmillan\BradleyLake\FYO6BRADLEY\2006BradleyBdgt-amend3revised3-send.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B AEA Administrative Costs PMC Costs (F) Bradley Lake Audit fees (F) Bradley Lake PMC Legal (F) Bradley Lake Arbitrage Report (F) Bradley Lake Trustee fees (F) PMC Costs Bond Refunding Costs Reimburseable costs Refunding Costs TOTAL FERC 920 (D) FERC 924 - Property Insurance (D) Homer Electric Insurance (D) Risk Assessment FERC FERC administrative fees (E) FERC 5 Year Inspection (E) FERC Instrumentation Data Collection (E) Seismic Survey Spillway (E) Contractual Engineer - FERC license issues (E) Spillway Seepage Water and Pressure Study TOTAL BRADLEY LAKE BUDGET FY05 31-Dec-05 AMENDED FY2004 FY2004 FY2006 FY2006 BUDGET ACTUAL VARIANCE ACTUAL YTD ACTUAL BUDGET 200,000 200,000 0 200,000 200,000 200,000 8,500 7,898 602 8,100 8,100 8,500 40,000 57,945 (17,945) 33,511 1,758 40,000 6,000 5,800 200 5,225 4,875 6,000 20,000 17,595 2,406 17,595 8,797 20,000 74,500 89,237 (14,737) 64,431 23,530 74,500 0 0 0 0 0 0 274,500 289,237 (14,737) 264,431 223,530 274,500 555,000 547,895 7,105 513,754 528,503 528,503 30,000 57,972 (27,972) 56,141 27,790 60,000 25,000 71,734 (46,734)| 84,595 0 0 610,000 677,601 (67,601) 654,490 556,293 588,503 150,000 44,424 105,576 15,233 0 126,000 0 0 0 0 75,000 57,687 (57,687) 0 0 18,771 (18,771) 0 0 31,500 3,816 27,684 52,362 24,728 115,500 64,130 72,137 (8,007) 7,546 22,085 0 245,630 196,835 48,795 75,141 46,813 316,500 3,231,906 3,299,790 (67,884) 2,977,029 1,831,947 3,095,548 3/20/2006 2:53 PM Page 4 of 4 H:\all\imacmillan\BradleyLake\F YO6BRADLEY\2006BradleyBdgt-amend3revised3-send.xlsSchedule B-Budget Detail BRADLEY LAKE MONTHLY UTILITY CONTRIBUTION AMENDED BUDGET FY2006 FY2006 TOTAL DECREASE 4,370,966 (502,164) 3,723,948 (427,838) 3,709,572 (426,182) 2,429,916 (279,158) 143,784 (16,514) 14,378,186 | _ (1,651,856) AMENDED SCHEDULE C ACTUAL ACTUAL PERCENT FY2004 FY2005 POWER PURCHASER SHARE TOTAL TOTAL CHUGACH ELECTRIC 30.4% 4,509,110 4,873,130 MUNICIPALITY OF ANCHORAGE 25.9% 3,841,634 4,151,786 AEG&T 25.8% 3,826,802 4,135,754 GOLDEN VALLEY ELECTRIC 16.9% 2,506,706 2,709,074 CITY OF SEWARD 1.0% 148,322 160,298 100.0% 14,832,574 16,030,042 FY2004 FY2005 PERCENT MONTHLY MONTHLY POWER PURCHASER SHARE AVERAGE AVERAGE CHUGACH ELECTRIC 30.4% 375,759 406,094 MUNICIPALITY OF ANCHORAGE 25.9% 320,136 345,982 AEG&T 25.8% 318,900 344,646 GOLDEN VALLEY ELECTRIC 16.9% 208,892 225,756 CITY OF SEWARD 1.0% 12,360 13,358 FY2006 FY2006 MONTHLY | DECREASE 364,247 (41,847) 310,329 (35,653) 309,134 (35,515) 202,493 (23,263) 11,982 (1,376) 100.0% 1,236,047 1,335,836 COMPONENTS OF CHANGE IN CONTRIBUTION FY2005 ANNUAL CONTRIBUTION Revenue Changes (INCREASE) DECREASE IN INTEREST EARNINGS (INCREASE) DECREASE IN FEMA GRANT RECEIPT Expenditure Changes INCREASE (DECREASE) IN BUDGETED O&M COSTS INCREASE (DECREASE) IN PAYBACK TO R&C FUND INCREASE (DECREASE) R&C APPLIED INTEREST EARNINGS INCREASE (DECREASE) TRANSMISSION RELAYS REPLACEMENTS INCREASE (DECREASE) VEHICLE PURCHASE INCREASE (DECREASE) IN DEBT SERVICE INCREASE (DECREASE) IN ARBITRAGE TRANSFER INCREASE (DECREASE) IN OPERATING RESERVE TRANSFER OPERATING BUDGET SURPLUS (DEFICIT) TRUE-UP. Other OPERATING BUDGET (SURPLUS) DEFICIT IMMATERIAL ROUNDING DIFFERENCES NET INCREASE(DECREASE) FY2006 ANNUAL CONTRIBUTION 1,198,182 137,654 16,030,046 (14,711) 293,170 118,520 (1,031,429) (314,818) 3,275 13,932 (15,000) (704,801) 3/20/20062:53 PM H:\all\imacmillan\BradleyLake\F YO6BRADLEY\2006BradleyBdgt-amend3revised3-send.xlsSchedule C Utility Contrib BRADLEY LAKE R&C FUND DISBURSEMENTS AND REPAYMENTS SCHEDULE D ACTUAL TO REPAY at 06/30/03 668,000.32 20,789.79 196,689.93 77,583.24 Description Needle repairs Runner repairs SCADA Governor Replace RFLS Replace Runners Replace cable from dam to power house Replace power system stabilizer Replace two RTUs UNDER REIMB Ending Balance ACTUAL Disburse 587,046.30 78.76 367.10 132,182.58 ACTUAL R&C Interest (291,047.00) ACTUAL Ropay (369,428.35) (6,949.62) (65,655.09) (58,906.73) 7,414.39 $ 963,063.28 | $ 719,674.74 1$ (291,047.00) $ (493,525.39) $ Balance in R&C Fund at June 30 ACTUAL TO REPAY at 06/30/04 594,571.27 13,918.93 131,401.95 150,859.10 7,414.39 898,165.63 $_4,101,834.37 $_5,000,000.00 ACTUAL Disburse 3,559.79 $ 3,559.79 $ ACTUAL Repay (594,571.27) (13,918.93) (131,401.95) (1,149,235.73) (7,414.15) ACTUAL TO CARRY at 06/30/05 PROJECTED Disburse (994,816.84) - 592,000.00 688,000.00 1,916,000.00 PROJECTED Repay (230,295.75) (148,000.00) (172,000.00) PROJECTED TO REPAY at 06/30/06 690,887.41 444,000.00 516,000.00 (0.00) 1,896,542.02) $ (994,816.60)] $ 3,195,999.76 $ (550,295.75) $ 1,650,887.41 $_5,994,816.60 $ _5,000,000.00 S$ 3,349,112.59 $__5,000,000.00 PROJECTED Disburse 868,000.00 85,000.00 1,098,754.00 1,396,000.00 200,000.00 80,000.00 $_3,727,754.00 PROJECTED Repay (447,295.75) (21,250.00) (422,688.50) (521,000.00) (50,000.00) (20,000.00) $_(1,482,234.25) § PROJECTED TO REPAY at 06/30/07 1,111,591.66 63,750.00 1,120,065.50 1,391,000.00 150,000.00 60,000.00 (0.00)| 3,896,407.16 PROJECTED Disburse $ PROJECTED PROJECTED TO REPAY Repay at 06/30/07 (447,295.75) (21,250.00) (422,688.50) (521,000.00) (50,000.00) (20,000.00) 664,295.91 42,500.00 697,377 870,00( 100,000.00 40,000.00 (0.00) $_(1,482,234.25) $ 2,414,172.91 3/20/20062:53 PM H:\all\imacmillan\BradleyLake\F Y O6BRADLEY\2006BradleyBdgt-amend3revised3-send.xlsSchedule D R&C Disb & Repay BRADLEY LAKE BUDGET ACTIVITY BY ACCOUNT SCHEDULE G Rev Fund O&M Fund Debt Fund Op Reserve R&C Cap Reserve Total 6/30/2004 Actual Balance (0) 294,998 : 646,400 4,101,835 12,834,000 17,877,232 A 20.001% of Annual O&M Budget FY2005-Actual - Revenues 16,030,048 - 16,030,048 Interest 1,455,695 472 2 314,817 1,770,986 Transfers to O&M (3,284,811) 3,284,811 - - Transfers to Debt Service (12,273,050) 12,273,050 - Payback of R&C Fund (1,581,725) 1,581,725 - Requisitions (2,929,415) (2,929;415) 2005 Capital Requistions - - - - Renewals/Replacements - - (3,560) - (3,560) To Excess Earnings fund (227,782) (227,782) Prepaid Revenue 348,035 348,035 Payment of Prior Year Defici 73,492 - 73,492 Debt Payments (12,273,050) (12,273,050) Increase Op Reserve (15,000) 15,000 - 6/30/2005 Actual Balance 524,901 650,866 : 661,402 5,994,817 12,834,000 20,665,986 A FY2006 Budget - Revenues 14,378,183 - 14,378,183 Deferred Revenue-06/30/05 (348,035) (348,035) Interest 1,785,699 1,785,699 Transfer back interest - - Transfers to O&M (3,095,548) 3,095,548 - - Transfers to Debt Service (12,276,325) 12,276,325 - Payback of R&C Fund (550,296) 550,296 - FEMA Grant 293,170 293,170 O&M Requisitions (3,511,649) (3,511,649) 2006 Capital Requistions - - - - Renewals/Replacements - - (3,196,000) - (3,196,000) To Excess Earnings fund (241,713.90) (241,714) Pay Prior Year Surplus (176,866) (527,935) (704,801) Debt Payments (12,276,325) (12,276,325) Increase Op Reserve - : - 6/30/2006 Projected Balance (0) 0 - 661,402 3,349,113 12,834,000 16,844,514 Assumption: should be 20.00% For purpose of budget cash flows, July 01 debt service projected 21.37% is assumed to be disbursed on June 30 3/20/20062:53 PM H:\all\imacmillan\BradleyLake\F YO6BRADLEY\2006BradleyBdgt-amend3revised3-send.xlsSchedule G-Cash balances BRADLEY LAKE BUDGET PROJECTED INTEREST INCOME SCHEDULE | Beginning Balance Receipts Utility Contributions Interest Income Received FEMA Grant Receipts Repay Prior Year Deficit Disbursements Repay Prior Year Deficit O &M Expenses R&C Fund Disbursement Debt Service Payment Capital Requisitions Excess Earnings Transfer Other Adjustment-Equal Sch G Adjust to Actual Ending Balance Interest Income Projection Estimated Accrued Interest Adjust to Actual Received Actual Actual Actual Actual Actual Actual Actual TOTAL Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 OTHER ADJ 20,665,985.95 20,665,985.95 22,378,230.76 22,640,490.75 23,751,748.87 24,886,340.63 26,001,503.84 26,337,660.31 25,621,109.58 25,824,766.13 26,457,139.36 26,240,746.26 26,112,486.17 25,991,070.53 14,030,148.00 995,729.00 1,343,764.00 1,343,764.00 1,343,764.00 1,343,764.00 1,343,764.00 1,343,764.00 1,343,764.00 1,343,764.00 761,435.67 761,435.67 761,435.67 1,785,699.17 958,229.71 395.34 310.85 426.33 210.90 368.55 934,151.28 0.00 0.00 0.00 0.00 0.00 (108,393.79) IntACCRUAL BASIS 293,170.00 293,170.00 0.00 0.00 16,109,017.17 2,247,128.71 1,344, 159.34 1,344,074.85 1,344,190.33 1,343,974.90 1,344,132.55 2,277,915.28 1,343,764.00 1,343,764.00 761,435.67 761,435.67 761,435.67 (108,393.79) (704,801.22) 0.00 0.00 0.00 0.00 0.00 0.00 (704,801.22) 0.00 0.00 0.00 0.00 (3,511,649.00) (293,170.00) (825,116.29) (211,419.91) (191,301.74) (158,929.52) (131,728.48) (211,144.24) (297,767.76) (297,767.76) (297,767.76) (297,767.76) (297,767.76) (3,195,999.76) 0.00 (256,783.06) (21,396.82) (18,296.83) (69,882.17) (876,247.60) 454,840.73 (137,538.47) (413,623.00) (680,061.00) (591,928.00) (585,083.54) (12,276,325.00) (3,238, 162.50) (9,038,162.50) ASSUME DEBT 0.00 SERVICE PD 06/30/ (241,713.90) (241,713.90) 0.00 (19,930,488.88) (534,883.90) _(1,081,899.35) (232,816.73) (209,598.57) (228,811.69) (1,007,976.08) (2,994,466.01) (1,140,107.45) (711,390.76) (977,828.76) (889,695.76) (882,851.30) _ (9,038,162.50) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 16,844,514.24 — 22,378,230.76 22,640,490.75 —_—-23,751,748.87 _24,886,340.63 —26,001,503.84 —26,337,660.31 25,621,109.58 —-25,824,766.13 —26,457,139.36 — 26,240,746.26 —-26,112,486.17 ——-25,991,070.53 — 16,844,514.24 1,647,225.95 121,961.36 123,390.67 129,447.03 135,630.56 141,708.20 143,540.25 139,635.05 140,744.98 144,191.41 143,012.07 142,313.05 141,651.33 138,473.22 138,473.22 1,785,699.17 121,961.36 123,390.67 129,447.03 135,630.56 141,708.20 282,013.47 139,635.05 140,744.98 144,191.41 143,012.07 142,313.05 141,651.33 0.00 Actual Payment of Interest 934,151.28 3/20/20062:54 PM H:\all\Imacmillan\BradleyLake\F YO6BRADLEY\2006BradleyBdgt-amend3revised3-send.xlsSchedule I-Interest Inc Agenda Item: 7B MOTION: Move the Bradley Lake Project Management Committee approve the fiscal year 2007 Operating and Capital budget as presented. Move: bet a Le Second: Ric dk Pt te BRADLEY LAKE HYDROELECTRIC PROJECT Schedule A AMENDED FY04 FYOS FY2006 FY2007 INC(DEC) ACTUALS ACTUALS BUDGET BUDGET FROM PY REVENUES, EXPENSES & CHANGES IN SURPLUS REVENUES UTILITY CONTRIBUTIONS 14,759,083 16,030,048 14,378,183 16,395,817 | 2,017,634 INTEREST INCOME 1,850,365 1,770,986 1,785,699 1,313,711] (471,988) SALE OF VEHICLE 0 0 0 0 0 FEMA GRANT REVENUE 0 293,170 0 0 o 16,609,448 18,094,204 16,163,882 17,709,528 | 1,545,646 EXPENSES OPERATIONS . 3,299,790 2,977,028 3,095,548 3,428,343] 332,795 RENEWALS/REPLACEMENTS (R&C FUND REPAYMENTS 784,571 1,896,543 550,296 1,482,234] 931,938 CULVERT REPAIRS 0 0 0 50,000 50,000 HELICOPTER PAD REPAIRS 0 0 0 200,000 | — 200,000 PURCHASE NEW VEHICLE 11,067 0 0 0 0 TRANSFER TO OPERATING RESERVE 111,400 15,000 0 25,000 25,000 DEBT SERVICE (net of Capital Reserve Reductions) 12,273,400 12,273,050 12,276,325 12,273,950 (2,375) ARBITRAGE TRANSFER 202,711 227,782 241,714 250,000 8,286 PRIOR YEARS SURPLUS (DEFICIT) 2,013,381 (73,492) 704,801 Oo} (704,801) 18,696,321 17,315,911 16,868,684 17,709,527 | 840,843 CURRENT YEAR SURPLUS (DEFICIT) (2,086,873) 778,293 (704,802) BEGINNING SURPLUS (DEFICIT) 2,013,380 (73,492) 704,801 ENDING SURPLUS (DEFICIT) (73,493) 704,801 (ay PL Se eee Re ds ee BALANCE SHEET ASSETS REVENUE FUND - 524,902 0 OPERATING FUND 294,998 650,866 (1) RECEIVABLE-FEMA GRANT : 293,170 294,998 1,468,938 @ LIABILITIES & SURPLUS LIABILITIES 368,489 764,137 0 SURPLUS (DEFICIT) (73,492) 704,801 (a) 294,997 1,468,938 (1) ES OTHER INFORMATION OPERATING RESERVE * 646,400 661,402 661,402 MONTHLY CONTRIBUTIONS 1,594,243 1,335,836 1,198,182 * Required to be 20% of budgeted operating expense 3/20/20062:54 PMH:\all\imacmillan\BradleyLake\F Y07 BRADLEY\2007BradleyBdgt-1.xisSchedule A-Budget Summary BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B FY06 31-Dec-05 FY2005 FY2005 AMENDED FY2006 FY2007 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET SUMMARY (A) HEA Annual Operations & Maintenance 1,166,649 1,383,486 (216,837) 1,273,714 740,977 1,494,965 (B). CEA Dispatch and Substation/SVC Maintenance 70,000 120,570 (50,570) 105,200 65,372 130,000 (C) Other O&M and Maintenance Projects 766,162 478,911 287,251 437,131 193,881 444,521 (D) Insurance Costs 725,000 654,490 . 70,510 588,503 556,293 653,357 (E) Regulatory Costs 182,500 75,141 107,359 316,500 46,813 331,000 (H) Contingencies 100,000 ) 100,000 100,000 5,081 100,000 3,010,311 2,712,598 297,713 2,821,048 1,608,417 3,153,843 (F) Administrative Costs 274,500 264,431 10,069 274,500 223,530 274,500 3,284,811 2,977,029 307,782 3,095,548 1,831,947 3,428,343 (G) Bond Refunding Costs 0 0 0 0 0 0 3,284,811 2,977,029 307,782 3,095,548 1,831,947 3,428,343 3/20/2006 2:54 PM Page 2 of 9 H:\all\lmacmillan\BradleyLake\FY07BRADLEY\2007BradleyBdgt-1.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B FY06 31-Dec-05 FY2005 FY2005 AMENDED FY2006 FY2007 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET FERC 535 - Operation Supervision & Engineering (A) HEA O&M Contract 122,828 147,460 (24,632) 185,214 105,248 125,569 (C) HEA On-Site Civil Project Manager 0 0 0 (C) HEA Digitize & Control Project Drawings 0 0 0 122,828 147,460 (24,632) 185,214 105,248 125,569 FERC 537 - Hydraulic Expenses (A) HEA O&M Contract : 35,730 3,950 31,780 58,300 : 4,415 49,200 35,730 3,950 31,780 58,300 4,415 49,200 FERC 538 - Electric Expenses (A) HEA O&M Contract 99,365 206,246 (106,881) 94,200 124,093 222,000 (C) SOA BOILIER INSPECTION 0 0 0 0 0 0 99,365 206,246 (106,881) 94,200 124,093 222,000 FERC 539 - Misc. Hydraulic Power Generation Expenses (A) HEA O&M Contract 234,321 165,027 69,294 253,100 103,177 331,625 (C) Replace Two Way Radios 10,000 0 10,000 10,000 5,761 3,000 (C) HEA Circuits and Radio - To Bernice Lake 90,000 90,000 0 90,000 45,000 90,000 (C) CEA Circuits -Bernice Lake to Anchorage 28,746 28,746 0 28,740 14,373 28,740 363,067 283,773 79,294 381,840 168,311 453,365 | FERC 540 - Rents (C) Bradley Lake FERC land use fees (5% increase bu 74,000 66,115 7,885 74,000 64,587 74,000 74,000 66,115 7,885 74,000 64,587 74,000 FERC 541 - Maintenance Supervision & Engineering (A) HEA O&M Contract 0 0 0 0 0 82,451 0 0 0 0 0 82,451 FERC 542 - Maintenance of Structures (A) HEA O&M Contract 19,278 50,231 (30,953) 53,500 64,189 90,400 (C) Other 0 0 0 0 0 0 19,278 50,231 (30,953) 53,500 64,189 90,400 FERC 543 - Maintenance of Reservoirs, Dams & Waterways (A) HEA O&M Contract 10,278 0 10,278 15,400 0 10,440 (C) Bradley Lake Dam Repair 0 0 0 0 0 3/20/2006 2:54 PM Page 3 of 9 H:\all\imacmillan\BradleyLake\F Y07 BRADLEY\2007BradleyBdgt-1.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B FY06 31-Dec-05 FY2005 FY2005 AMENDED FY2006 FY2007 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET (C) Nuka Diversion 0 0 0 0 (C) Middle Fork Diversion 15,000 11,145 3,855 0 0 (C) Kachemak Creek Gauging Station 26,000 0 26,000 0 0 (C) Other O&M 0 0 0 0 51,278 11,145 40,133 15,400 0 10,440 FERC 544 - Maintenance of Electric Plant (A) HEA O&M Contract 276,741 540,304 (263,563) 295,000 212,861 280,200 (A) HEA O&M Contract-Runner Repairs 0 0 0 0 : 0 0 276,741 540,304 (263,563) 295,000 212,861 280,200 FERC 545 - Maintenance of Misc. Hydraulic Plant (A) HEA O&M Contract 282,169 158,048 124,121 274,000 95,137 213,000 (C) Penstock Drain Clean-out 30,000 15,923 14,077 0 0 0 312,169 173,971 138,198 274,000 95,137 213,000 FERC 556 - System Control & Load Dispatching (A) HEA O&M Contract 23,315 16,651 6,664 9,000 11,646 20,080 (C) NOAA Weather Service 0 0 0 0 0 (C) SCS Snow Measurement 30,000 (8,482) 38,482 9,000 6,966 9,000 (C) UAA Seismic monitoring and reporting 56,500 56,500 0 56,500 14,522 56,500 (C) USGS Streamguaging 205,916 174,017 31,899 168,791 42,672 183,281 (C) State of Alaska Permits 0 100 (100) 100 0 0 315,731 238,786 76,945 243,391 75,806 268,861 FERC 562 - Station Expenses (B) CEA SVC/Substation Maintenance Contract 70,000 120,570 (50,570) 105,200 65,372 130,000 (C) SVC Condition Assessment/Staff Training 200,000 44,847 155,153 0 0 0 270,000 165,417 104,583 105,200 65,372 130,000 FERC 571 - Maintenance of Overhead Lines (A) HEA Overhead Line Maintenance 62,624 95,569 (32,945) 36,000 20,211 70,000 62,624 95,569 (32,945) 36,000 20,21 1) 70,000 (H) Contingencies 100,000 0 100,000 100,000 5,081 | 100,000 FERC 920 - Administrative Expense 3/20/2006 2:54 PM Page 4 of 9 H:\all\imacmillan\BradleyLake\F Y07 BRADLEY\2007BradleyBdgt-1.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B FY06 31-Dec-05 FY2005 FY2005 AMENDED FY2006 FY2007 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET (F) AEA Admin Fee 200,000 200,000 0 200,000 200,000 200,000 AEA Administrative Costs 200,000 200,000 0 200,000 200,000 200,000 PMC Costs (F) Bradley Lake Audit fees 8,500 8,100 400 8,500 8,100 8,500 (F) Bradley Lake PMC Legal 40,000 33,511 6,489 40,000 1,758 40,000 (F) Bradley Lake Arbitrage Report 6,000 5,225 775 6,000 4,875 6,000 (F) Bradley Lake Trustee fees 20,000 17,595 2,405 20,000 8,797 20,000 (F) PMC Costs 74,500 64,431 10,069 74,500 23,530 » 74,500 Bond Refunding Costs Reimburseable costs Refunding Costs 0 0 0 0 0 0 TOTAL FERC 920 274,500 264,431 10,069 274,500 223,530 274,500 FERC Insurance Premiums 590,000 513,754 76,246 528,503 528,503 581,357 (D) Homer Electric Insurance 60,000 56,141 3,859 60,000 27,790 57,000 (D) Risk Assessment 75,000 84,595 (9,595) 0 0 15,000 (D) 725,000 654,490 70,510 588,503 556,293 | 653,357 FERC FERC administrative fees 126,000 15,233 110,767 126,000 0 126,000 (E) FERC 5 Year Inspection 0 0 75,000 0 90,000 (E) Seismic Survey Spillway 0 0 0 (E) Contractual Engineer - FERC license issues 56,500 59,908 (3,408) 115,500 46,813 115,000 182,500 75,141 107,359 316,500 46,813 331,000 3,284,811 2,977,029 307,782 3,095,548 1,831 sar 3,428,343 TOTAL BRADLEY LAKE BUDGET 3/20/2006 2:54 PM Page 5 of 9 H:\all\imacmillan\BradleyLake\F YO07 BRADLEY\2007 BradleyBdgt-1.xIsSchedule B-Budget Detail BRADLEY LAKE MONTHLY UTILITY CONTRIBUTION SCHEDULE C AMENDED ACTUAL BUDGET BUDGET PERCENT FY2005 FY2006 FY2007 FY2007 POWER PURCHASER SHARE TOTAL TOTAL TOTAL DECREASE CHUGACH ELECTRIC 30.4% 4,873,130 4,370,966 4,984,334 613,368 MUNICIPALITY OF ANCHORAGE 25.9% 4,151,786 3,723,950 4,246,512 522,562 AEG&T 25.8% 4,135,754 3,709,574 4,230,120 520,546 GOLDEN VALLEY ELECTRIC 16.9% 2,709,074 2,429,918 2,770,896 340,978 CITY OF SEWARD 1.0% 160,298 143,786 163,956 20,170 Rounding , (5) ‘ 100.0% _ 16,030,042 14,378,189 16,395,818 2,017,624 AMENDED FY2005 FY2006 PERCENT MONTHLY MONTHLY FY2007 FY2007 POWER PURCHASER SHARE AVERAGE AVERAGE MONTHLY DECREASE CHUGACH ELECTRIC 30.4% 406,094 364,247 415,361 51,114 MUNICIPALITY OF ANCHORAGE 25.9% 345,982 310,329 353,876 43,547 AEG&T 25.8% 344,646 309,131 352,510 43,379 GOLDEN VALLEY ELECTRIC 16.9% 225,756 202,493 230,908 28,415 CITY OF SEWARD 1.0% 13,358 11,982 13,663 1,681 100.0% 1,335,836 1,198,182 1,366,318 168,136 COMPONENTS OF CHANGE IN CONTRIBUTION FY2006 ANNUAL CONTRIBUTION 14,378,183 Revenue Changes (INCREASE) DECREASE IN BUDGETED INTEREST EARNINGS 471,988 Expenditure Changes INCREASE (DECREASE) IN BUDGETED O&M COSTS 332,795 INCREASE (DECREASE) IN PAYBACK TO R&C FUND 931,938 INCREASE (DECREASE) CULVERT REPAIRS 50,000 INCREASE (DECREASE) HELICOPTER PAD REPAIRS 200,000 INCREASE (DECREASE) IN DEBT SERVICE (2,375) INCREASE (DECREASE) IN EXCESS EARNINGS TRANSFER 8,286 INCREASE (DECREASE) IN OPERATING RESERVE TRANSFER 25,000 Other IMMATERIAL ROUNDING DIFFERENCES 2 NET INCREASE(DECREASE) 2,017,634 FY2007 ANNUAL CONTRIBUTION 16,395,817 (0) 3/21/20067:32 AM H:\all\imacmillan\BradleyLake\F YO7 BRADLEY\2007BradleyBdgt-1.xlsSchedule C Utility Contrib BRADLEY LAKE R&C FUND DISBURSEMENTS AND REPAYMENTS SCHEDULE D ACTUAL TO REPAY at 06/30/03 668,000.32 20,789.79 196,689.93 77,583.24 ACTUAL ACTUAL Disburse 587,046.30 78.76 367.10 132,182.58 R&C Interest (291,047.00) Replace cable from dam to power house Replace power system stabilizer Replace two RTUs UNDER REIMB ACTUAL Repay (369,428.35) (6,949.62) (65,655.09) (58,906.73) 7,414.39 ACTUAL TO REPAY at 06/30/04 594,571.27 13,918.93 131,401.95 150,859.09 7,414.39 ACTUAL ACTUAL Disburse Repay (594,571.27) (13,918.93) (131,401.95) 3,559.79 (1,149,235.72) (7,414.15) ACTUAL TO REPAY at 06/30/05 0.00 (994,816.84) PROJECTED 1,916,000.00 592,000.00 688,000.00 (0.24) PROJECTED PROJECTED TO REPAY at 06/30/06 0.00 Repay (230,295.75) 690,887.41 (148,000.00) 444,000.00 (172,000.00) (0.00) PROJECTED Disburse 868,000.00 85,000.00 1,098,754.00 1,396,000.00 200,000.00 80,000.00 PROJECTED Repay (447,295.75) (21,250.00) (422,688.50) (521,000.00) (50,000.00) (20,000.00) PROJECTED TO REPAY at 06/30/07 0.00 1,111,591.66 63,750.00 1,120,065.50 1,391,000.00 150,000.00 60,000.00 (0.00) PROJECTED Disburse PROJECTED PROJECTED TO REPAY at 06/30/07 0.00 Ropay 664,295.91 42,500.00 697,377.00 870,000.00 100,000.00 40,000.00 (0.00) (447,295.75) (21,250.00) (422,688.50) (521,000.00) (50,000.00) (20,000.00) Ending Balance $ 963,063.28 | $ 719,674.74 I $ (291,047.00) $_ (493,525.39) Balance in R&C Fund at June 30 $ 898,165.63 $_4,101,834.37 3,559.79 $ 1,896,542.02) $ (994,816.60)] $ 3,195,999.76 $ $_5,994,816.60 550,295.75) $ 1,650,887.41 $_3,349,112.59 $_3,727,754.00 1,482,234.25) $ 3,896,407.16 $ $ 1,103,592.84 1,482,234.25) $ 2,414,172.91 3/20/20062:54 PM H:\all\imacmillan\BradleyLake\FY07 BRADLEY\2007BradleyBagt-1.xisSchedule D R&C Disb & Repay BRADLEY LAKE BUDGET ACTIVITY BY ACCOUNT SCHEDULE G Rev Fund O&M Fund Debt Fund Op Reserve R&C Cap Reserve Total FY2006 Budget-Amended Revenues 14,378,183 - 14,378,183 Deferred Revenue-06/30/05 (348,035) (348,035) Interest 1,785,699 1,785,699 Transfers to O&M (3,095,548) 3,095,548 - = Transfers to Debt Service (12,276,325) 12,276,325 - Payback of R&C Fund (550,296) 550,296 - FEMA Grant 293,170 293,170 O&M Reauisitions (3,511,649) (3,511,649) Capital Requistions - ‘- - * (3,196,000) (3,196,000) Renewals/Replacements - - - - To Excess Earnings fund (241,714) (241,714) Repay pPrio Year Surplus (176,866) (527,935) (704,801) Debt Payments (12,276,325) (12,276,325) Increase Op Reserve : - = 6/30/2006 Projected Balance (1) (0) : 661,402 3,349,113 12,834,000 16,844,514 A FY2007 Budget - Revenues 16,395,817 - 16,395,817 Interest 1,313,711 1,313,711 Transfer back interest - - Transfers to O&M (3,428,343) 3,428,343 - S Transfers to Debt Service (12,273,950) 12,273,950 2 Payback of R&C Fund (1,482,234) 1,482,234 - 2006 O&M Requisitions - - 2007 O&M Reauisitions (3,428,343) (3,428,343) 2007 Capital Requistions (250,000) 250,000 - - Renewals/Replacements (250,000) - (3,727,754) - (3,977,754) To Excess Earnings fund (250,000) (250,000) Payment of Prior Year Deficit - - Debt Payments (12,273,950) (12,273,950) Increase Op Reserve (25,000) 25,000 = 6/30/2007 Projected Balance (0) (0) : 686,402 1,103,593 12,834,000 14,623,995 Assumption: should be 20.00% For purpose of budget cash flows, July 01 debt service projected 20.02% is assumed to be disbursed on June 30 3/20/20062:54 PM H:\all\imacmillan\BradleyLake\F Y07 BRADLEY\2007BradleyBdgt-1.xlsSchedule G-Cash balances BRADLEY LAKE BUDGET PROJECTED INTEREST INCOME SCHEDULE | TOTAL Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 OTHER ADJ Beginning Balance 16,844,514.26 16,844,514.26 17,284,043.88 17,754,114.49 18,225,593.11 18,889,921.73 19,915,712.34 20,854,984.96 18,902,633.40 19,998,327.01 20,680,077.63 21,794,426.25 22,928,774.86 23,819,247.48 Receipts Utility Contributions 16,395,817.00 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 ADJ INTEREST Interest Income Received 1,313,710.82 851,550.00 615,437.82 0.00 0.00 0.00 0.00 0.00 (153,277.00) TO ACCRUAL BASIS Repay Prior Year Deficit 0.00 0.00 17,709,527.82 2,217,868.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,981,755.90 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 1,366,318.08 (153,277.00) Disbursements Prior year accrued expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 O &M Expenses (3,428,342.60) (978,178.47) (221,969.47) (221,969.47) (221,969.47) (221,969.47) (230,469.47) (221,969.47) (221,969.47) (221,969.47) (221,969.47) (221,969.47) (221,969.47) R&C Fund Disbursement-Sch D (3,727,754.00) (425,160.00) (549,278.00) (672,870.00) (480,020.00) (118,558.00) (196,576.00) (480,163.00) (48,655.00) (462,598.00) (30,000.00) (10,000.00) (253,876.00) Debt Service Payment (12,273,950.00) (3,231,975.00) (9,041,975.00) ASSUME DEBT Culvert Repair-SCH A (250,000.00) (125,000.00) (125,000.00) SERVICE PD 06/30/06 Excess Earnings Transfer (250,000.00) (250,000.00) 1 Other Adjustment-Equal Sch G 0.00 (19,930,046.60) (1,778,338.47) (896,247.47) (894,839.47) (701,989.47) (340,527.47) (427,045.47) (3,934,107.47) (270,624.47) (684,567.47) (251,969.47) (231,969.47) (475,845.47) _(9,041,975.00) Adjust to Actual 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Ending Balance 14,623,995.48 17,284,043.88 —17,754,114.49 —_18,225,593.11 18,889,921.73 _19,915,712.34 _20,854,984.96 18,902,633.40 19,998,327.01 _20,680,077.63 —-21,794,426.25 = 22,928,774.86 —23,819,247.48 — 14,623,995.48 Interest Income Projection Estimated Accrued Interest 1,313,710.82 94,198.04 96,759.92 99,329.48 102,950.07 108,540.63 113,659.67 103,019.35 108,990.88 112,706.42 118,779.62 124,961.82 129,814.90 Adjust to Actual Received 1,313,710.82 94,198.04 96,759.92 99,329.48 102,950.07 108,540.63 113,659.67 103,019.35 108,990.88 112,706.42 118,779.62 124,961.82 129,814.90 0.00 Payment of Accrued Interest 615,437.82 Actual Balance per Statements 14,623,995.40 Difference (17,284,043.88) (17,754,114.49) (18,225,593.11) (18,889,921.73) (19,915,712.34) (20,854,984.96) (18,902,633.40) (19,998,327.01) (20,680,077.63) (21,794,426.25) (22,928,774.86) (23,819,247.48) (0.08) 3/20/20062:54 PM H:\all\imacmillan\BradleyLake\FY07BRADLEY\2007BradleyBdgt-1.xlsSchedule I-Interest Inc ATTACHMENT A SCOPE OF WORK i” The scope of this project is to rework the supports for 17 Bradley transmission line tower helicopter landing pads and reclear the areas around them to allow safe use by helicopters. These are located along the Bradley Lake transmission line right of way starting from the Bradley Lake powerhouse at Kachemak Bay, and are typically accessible only by air. The platforms themselves are not expected to require rework. The platforms are founded on slash and stumps from previous work which have now decayed to the extent that the platforms are becoming unsafe for helicopter use. Existing platform supports are neither robust enough nor numerous enough to safely support helicopter use. See below photographs for typical examples of existing conditions. ce r (ARTHAS | A ARM Ca EBB? _ In addition, the areas around the platforms have growth that interferes with safe helicopter use. Reclear the growth around the platforms to a radius of 75’ from the center of each platform per the Reclearing Specification outlined below. Zs Platform Support Rework: New supports shall be built using materials rated for ground contact. Supports shall be of sufficient strength to provide a stable platform for helicopter use. The supports shall be carefully bedded or A : founded on the earth, and shall be distributed to prevent platform tipping if weight is applied to the edges of the platform (eg; helicopter is not centered on platform during takeoff/landing). The ground shall be leveled and the supports “stepped” as needed to provide a level platform; this shall include the removal of all material beneath the supports that may degrade over time such as slash, stumps, etc. The platforms shall be solidly attached to the supports using fasteners suitable for outdoor use. Proposals shall outline a general support layout plan and spacing, the materials to be used, and the materials and methods proposed for attaching supports to the platforms. Bradley Lake Transmission Line Helo Pads Repairs/Reclearing — Scope Page | of 2 3. Reclearing Specification: All trees, brush and other growth within seventy five feet (75’) radius of the platform center (including under the platform), shall be felled/cleared within 6” of ground level. Felled trees greater than 5” diameter shall be not be left either “jackstrawed” or blocking natural drainage routes, and boles shall be cut to lie essentially parallel with the natural contour of the ground. The area within the 75’ radius from the platform shall be cleared of all slash. Felled trees, slash, brush, etc. less than 5” in diameter shall be chipped and scattered evenly outside the 75’ radius. Stumps shall not exceed 6” in height measured from the high side to ground level and shall be trimmed for personnel safety. Final determination of acceptability shall be made by Mark Peery, HEA’s Supervisor of Transmission or his designated alternate. 4. Contractor shall not be responsible for the disposal of any portion of trees/brush felled under this agreement, these shall be left as described above. 5. If damaged or severely degraded platforms are found, contractor shall immediately contact HEA’s Supervisor of Transmission or his designated representative. Repairs to the platforms shall be addressed via a field work order approved by HEA and the contractor. 6. Contractor shall be responsible for any damages to property caused by operations. Contractor should not attempt to fell any tree that Contractor deems a safety risk. Trees Contractor deems unsafe for felling shall be brought to the attention of HEA’s Supervisor of Transmission or his designated alternate. 7. HEA shall provide permits, as required. 8. The Contractor shall abide by all applicable Federal, State, and Kenai Peninsula Borough rules and regulations regarding EINE work safety. All personnel shall have and wear the appropriate safety equipment. All personnel shall wear appropriate safety equipment as defined by OSHA regulations. Contractor shall submit a copy of his safety program to HEA prior to commencing any work under this contract, and shall actively ensure program observance at all times. 9. Contractor shall ensure that work within the vicinity of the power lines is performed by qualified personnel, in accordance with NESC section 42. Any work performed within dangerous proximity to energized electrical circuits shall be performed by journeymen linemen or journeymen tree trimmers employed by a (sub)contractor signatory with IBEW Local Union 1547. NESC section 441 provides definition of approach distances used to determine dangerous proximity guidelines. HEA power lines within the right of way to be cleared are rated at 115kV phase to phase. 10. All work under this contract shall proceed in a continuous and orderly progression, may not begin before | July 2005, and shall be completed by December 1, 2006. Work schedules shall be coordinated with Mark Peery, HEA’s Supervisor of Transmission or his designated representative. HEA may inspect the work activities at any time. Contractor shall provide a minimum 3 working day notice for each platform to allow for HEA substantial completion inspection. HEA shall promptly inspect the platform (or waive its right to do so, in writing) and provide Contractor with a ‘punch list’ of items requiring completion before final acceptance. HEA’s Supervisor of Transmission determinations of completeness of work and acceptability of each platform will be final and binding. Bradley Lake Transmission Line Helo Pads Repairs/Reclearing — Scope Page 2 of 2 Itemized increase in HEA Annual O&M From AIDEA Bradley Lake Budget Sch. B Summary (A) - $221,251 Labor - Union Labor - Management & Support Labor Total Travel - Personnel and shipping Materials and supplies including equipment and machinery Fuel MISC. OTHER ITEMS Training Overhead line maintenance Misc. Total TOTAL OF ABOVE ITEMS FY06 BUDGET (July/05-June/06) $627,400 $286,700 $914,100 $172,000 $66,500 $9,000 $17,000 $36,000 $300,500 $1,214,600 ACTUAL YTD (Dec. 31, 2005) $344,543 $132,548 $477,091 $64,205 $71,586 $14,301 $194 $20,624 $170,911 $648,001 Page 2 PROJECTION (FY-06 actual) $689,086 $304,123 $993,209 $128,411 $110,037 $28,603 $17,000 $40,000 $324,051 $1,317,260 FY07 BUDGET (July/06-June/07) $743,999 $299,765 $1,043,764 $158,000 $95,200 $30,000 $30,000 $70,000 $383,200 $1,426,964 INCREASE (DECREASE) $116,599 18.58% $13,065 4.56% $129,664 14.18% -$14,000 -8.14% $28,700 43.16% $21,000 233.33% $13,000 76.47% $34,000 94.44% $82,700 27.52% $212,364 17.48% COMMENTS Cost of living increase (4%) - 2 persons required on site at all times Cost of living increase Helicopter use lower than budgeted for in 2006 New man-lift needed Fuel prices going up Training required for new Operators and has been lacking in the past. ROW clearing will be required in FY2007 A few odd items were ommited. Agenda Item: 7¢ MOTION: Move the Bradley Lake Project Management Committee accept the results of the Bradley Lake Project Management Committee Operating and Revenue Funds as of June 30, 2005, as presented by Parisena, Stromberg & Company, APC. AUDITED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS JUNE 30, 2005 AND 2004 Parisena, Stromberg & Company A Professional Corporation AUDITED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS JUNE 30, 2005 AND 2004 Parisena, Stromberg & Company A Professional Corporation Audited Financial Statements and Other Financial Information BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS Independent Auditor's Report Balance Sheets Statements of Revenues, Expenses and Changes in Surplus Statements of Cash Flows Notes to Financial Statements Independent Auditor's Report on Additional Information Statements of Expenses 5-9 10 11 DPrusena, Stmbeg & Company A Professional Corporation Certified Public Accountants 3201 C Street, Suite 405 Anchorage, Alaska 99503 Tel. (907) 563-4547 FAX (907) 561-7683 Independent Auditor's Report Bradley Lake Project Management Committee Anchorage, Alaska We have audited the accompanying special-purpose balance sheets of the Bradley Lake Project Management Committee Operating and Revenue Funds (a project management committee) as of June 30, 2005 and 2004, and the related special-purpose statements of revenues, expenses and changes in surplus, and of cash flows for the years then ended. These financial statements are the responsibility of the Bradley Lake Project Management Committee. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether'the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. The accompanying special-purpose financial statements were prepared for the purpose of complying with, and in conformity with the accounting requirements specified in Note A, and are not intended to be a presentation in conformity with generally accepted accounting principles. In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects, the assets, liabilities and surplus of the Bradley Lake Project Management Committee Operating and Revenue Funds as of June 30, 2005 and 2004, and its revenue, expenses and changes in surplus and its cash flows for the years then ended, on the basis of accounting described in Note A. This report is intended solely for the information and use of the Bradley Lake Project Management Committee and is not intended to be and should not be used by anyone other than this specified party. Foeinaua). Muomcng + Corpor, APL Parisena, Stromberg & Company, APC Anchorage, Alaska November 10, 2005 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS BALANCE SHEETS June 30, 2005 and 2004 2005 2004 ASSETS Current assets: Investments (Note B) S 1el 755767 $ 294,998 Accounts receivable 293,170 - Utility contributions receivable (Note E) - 73,492 Total assets $_ 1,468,937 $ 368.490 LIABILITIES AND SURPLUS Current liabilities: Due to other funds $ 8,761 $ 97 Accounts payable 407,340 368,393 Utility contributions paid in advance 348,035 - Payable to utilities 704,801 - Total liabilities 1.468.937 368.490 Surplus (Note E) = S Total liabilities and surplus $_ 1,468,937 $368,490 See accompanying notes to the financial statements. 2 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN SURPLUS Years ended June 30, 2005 and 2004 2005 Variance Favorable 2004 Budget Actual (Unfavorable) Actual Revenues: Utility contributions, net of surplus refund $ 16,030,046 $15,325,245 $ (704,801) $12,819,194 Interest receipts 1,552,323 1,770,987 218,664 1,850,365 Other miscellaneous - 293.170 293,170 - Total revenue 17,582,369 17,389,402 (192,967) 14,669,559 Expenses, fixed asset replacements, refunds and debt service: Operations and maintenance 4,866,537 4,873,570 (7,033) 4,084,362 Debt service 12,273,050 12,273,050 - 12,273,400 Arbitrage transfer 227,782 227,782 - 202,711 Fixed asset replacements 200,000 - 200,000 11,067 Interfund transfer 15,000 15,000 - 111,400 Total expenses, fixed asset replacements and debt service 17,582,369 17,389,402 192,967 16,682,940 Excess (deficiency) of revenues over expenses, fixed asset replacements, refunds and debt service - - - (2,013,381) Surplus, beginning of year - - 2.013.381 Surplus, end of year $ _- g$ - $ See accompanying notes to the financial statements. ni oy! BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS STATEMENTS OF CASH FLOWS Years ended June 30, 2005 and 2004 Cash flows from operating activities: Excess (deficiency) of revenues over expenses, fixed asset replacements, refunds and debt service Adjustments to reconcile excess (deficiency) of revenues over expenses, fixed asset replacements, refunds and debt service to net cash provided by (used in) operating activities: Decrease (increase) in accounts receivable Decrease (increase) in utility contributions receivable Increase (decrease) in accounts payable Increase (decrease) in amounts due to other funds Increase in utility contributions paid in advance Increase in payable to utilities Net cash provided by (used in) operating activities Available cash and cash equivalents, beginning of year Available cash and cash equivalents, end of year Supplemental disclosure of cash flows information: Interest paid See accompanying notes to the financial statements. 4 (293,170) 73,492 38,947 8,664 348,035 704.801 880,769 294,998 $_1,175,767 $6,608,050 2004 $ (2,013,381) 2,689 (73,492) (25,294) (39,359) (2,148,837) 2.443.835 $294,998 Po TO BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS NOTES TO FINANCIAL STATEMENTS June 30, 2005 and 2004 NOTE A: SIGNIFICANT ACCOUNTING POLICIES Description of Business: The Bradley Lake Project Management Committee (the Committee) was established pursuant to Section 13 of the Agreement for the Sale and Purchase of Electric Power (Power Sales Agreement) dated December 8, 1987. The purpose of the Committee is to arrange for the operation and maintenance of the Bradley Lake Hydroelectric Project (the Project), which became operational in September 1991, and the scheduling, production and dispatch of power. The members of the Committee include the Alaska Energy Authority (AEA) and the five purchasers under the Power Sales Agreement - Chugach Electric Association, Inc.; Golden Valley Electric Association, Inc.; the Municipality of Anchorage (Municipal Light & Power); the City of Seward (Seward Electric System); and the Alaska Electric Generation & Transmission Cooperative, Inc. (AEG&T). The Homer Electric Association, Inc. (HEA) and the Matanuska Electric Association, Inc. (MEA) are additional parties to the Power Sales Agreement but are included as power purchasers for purposes of representation while AEG&T has no direct vote as a consequence of the individual representation of HEA and MEA. Section 13 of the Power Sales Agreement delineates other Committee responsibilities, including: establishing procedures for each party's water allocation, budgeting for annual Project costs and calculating each party's required contribution to fund annual Project costs. Committee approval of operations and maintenance arrangements for the Project, sufficiency of the annual budgets and wholesale power rates and the undertaking of optional Project work requires a majority affirmative vote and the affirmative vote of AEA. The Power Sales Agreement extends until the later of: 1) 50 years after commencement of commercial operation or 2) the complete retirement of bonds outstanding under the AEA Power Revenue Bond Resolution along with the satisfaction of all other payment obligations under the Power Sales Agreement. Renewal options for additional terms exist. Establishment of Trust Funds: Article V, Section 502 of the Alaska Energy Authority's Power Revenue Bond Resolution established a Revenue Fund and an Operating Fund, including an Operating Reserve account, to be held by AEA. In actuality these funds, along with the Debt Service, Excess Investment Earnings (arbitrage), and various construction funds related to the Bradley Lake Hydroelectric Project are all held by the Corporate Trust Department of US Bank in Seattle, Washington. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 2005 and 2004 NOTE A: SIGNIFICANT ACCOUNTING POLICIES (Continued) All deposits, including utility contributions and interest transferred from other funds, are made into the Revenue Fund, which transfers amounts approximately equal to one-twelfth of the annual operating and maintenance budget into the Operating Fund on a monthly basis. Additional transfers are made from the Revenue Fund to the Debt Service Fund in order to satisfy semiannual interest payments and annual principal payments on the Project's outstanding bonds payable. Interest earnings available for operations and maintenance are derived from the following funds: Debt Service Fund; Operating Reserve Fund; Operating Fund; Revenue Fund; Capital Reserve Fund; and the Renewal & Contingency Fund when the fund balance is $5,000,000 or greater. Revenue and Expense Recognition: Utility contributions are recognized as revenue when due to be received under the terms of the Power Sales Agreement. Transfers from other funds are recognized when the transfer is made and interest earnings are recognized when received. Operating and maintenance expenses are recognized when incurred, while interest and principal transfers to Debt Service Fund are recognized when the transfer is made. Purchases of fixed asset replacements are expensed when purchased. Estimates: The preparation of the special-purpose financial statements of the Operating and Revenue Funds requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Income Taxes: The Bradley Lake Project Management Committee is exempt from income taxation under Section 501 (a) of the Internal Revenue Code. Reclassifications: Certain reclassifications have been made to the 2004 financial statements to conform to the 2005 presentation. NOTE B: INVESTMENTS Substantially all of the balances in the following funds are invested in collateralized investment agreements through the trust department of US Bank. The specified interest rate for monies from the Operating and Revenue Funds invested in the agreements is 7.38% per annum. Balances at June 30, 2005 and 2004 are as follows: BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 2005 and 2004 NOTE B: INVESTMENTS (Continued) 2005 2004 Operating Fund $ 650,865 $ 294,998 Revenue Fund 524,902 - Total investments $_ 1,175,767 $294,998 Investments are sold as needed to cover operating requisitions submitted to the trustee and are therefore considered to be short-term and available for sale. Investments are presented at aggregate cost, which approximates market value. For purposes of the cash flow statements, management considers the full amount of the investment balance to be cash available for operations. NOTE C: MAJOR CONTRACTS AND AGREEMENTS During May 1994, the Alaska Energy Authority entered into the Master Maintenance and Operating agreement with the Committee. The purpose of the agreement is to establish contract administration and budgeting procedures for maintenance and operation contracts of the Bradley Lake Hydroelectric Project and to provide for the lease or other use of facilities and equipment in a manner consistent with the requirements of the Power Sales Agreement. The term of the Master Agreement is indefinite, remaining in effect until termination of the Power Sales Agreement or until AEA no longer legally exists. This agreement authorizes AEA to enter into any contracts necessary to perform operating or maintenance-type services to the Project, subject to the approval of the Committee. On behalf of the Committee, the AEA entered into an agreement with Chugach Electric Association, Inc. (CEA) in August, 1996, for the provision of all services necessary to dispatch the Bradley Project's electric power output. The dispatch agreement runs concurrently with the wheeling and related services contract entered into by and among the parties to the Power Sales Agreement in December 1987 and remains in effect for the term of the wheeling agreement unless CEA ceases to be the output dispatcher. In August 1996, the Alaska Energy Authority entered into an agreement with CEA on behalf of the Committee for the provision of maintenance services for the Daves Creek and Soldotna SVC Substations. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 2005 and 2004 NOTE C: MAJOR CONTRACTS AND AGREEMENTS (Continued) An operation and maintenance agreement dated February 11, 1994, was executed between Homer Electric Association, Inc. and the Alaska Energy Authority. This agreement provides for the operation and maintenance of the Bradley Lake Hydroelectric Project by Homer Electric Association, Inc. The agreement is through June 30, 2004 and continues from year to year thereafter, except upon written notice to terminate by either party. Notice of termination must be given one year in advance of the termination date. HEA is to be reimbursed for costs associated with the operation, maintenance and repair of the Project as determined in advance through the submission of an annual budget based upon prudent estimates and anticipated operation and maintenance costs. In August, 1996, the agreement was amended to separate the maintenance of the transmission facilities from the hydroelectric project. The transmission agreement continues from year to year, except upon written notice to terminate by either party. Notice of termination must be given six months in advance of termination dates. In June, 1999 the agreement was again amended to require HEA to provide communication services in addition to the other services. NOTE D: RELATED PARTY TRANSACTIONS During the years ended June 30, 2005 and 2004, costs incurred under the various contracts with related parties described in Note C were as follows: 2005 2004 Homer Electric Association, Inc. — operation, maintenance and communications $ 1,574,296 $ 1,759,890 Chugach Electric Association, Inc. — substation service maintenance $ 162,448 $ 57,090 Alaska Energy Authority — administrative fees $ 200,000 $ 200,000 For the years ended June 30, 2005 and 2004, Chugach Electric Association, Inc. provided dispatch services to the Committee at the agreed upon amount which is zero. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 2005 and 2004 NOTE D: RELATED PARTY TRANSACTIONS (Continued) Amounts payable to related parties at June 30, 2005 and 2004 were as follows: 2005 2004 Homer Electric Association, Inc. $ 286,086 $ 160,672 Chugach Electric Association, Inc. $ 25,497 $ 10,627 Alaska Energy Authority $ 8,761 $ 97 NOTE E: SURPLUS REFUND AND UTILITY CONTRIBUTIONS RECEIVABLE The $73,492 utility contribution receivable at June 30, 2004 was the cash deficit for fiscal year 2004 which was repaid by the utilities in fiscal year 2005 pursuant to the Power Sales Agreement (PSA) and direction of the Bradley Lake Project Management Committee (BPMC). The $704,801 surplus at June 30, 2005 will be refunded to member utilities in fiscal year 2006 pursuant to the PSA and direction of the BPMC. NOTE F: CONTINGENCY Federal Energy Regulatory Commission’s (FERC) administrative fees for fiscal years 2004 and 2005 are under review by FERC to add assessments for costs incurred by other federal agencies in administering licensing of hydropower projects. Only FERC administrative fees before the additional assessments have been recorded for these years. A reasonable estimate of the additional assessments cannot be made until FERC has made a final determination. In addition, a time estimate of when FERC will make a final determination cannot be made. Brrisena, Sinbery & Company A Professional Corporation Certified Public Accountants 3201 C Street, Suite 405 Anchorage, Alaska 99503 Tel. (907) 563-4547 FAX (907) 561-7683 Independent Auditor’s Report on Additional Information Bradley Lake Project Management Committee Anchorage, Alaska Our report on our audits of the special-purpose financial statements of the Bradley Lake Project Management Committee Operating and Revenue Funds for the years ended June 30, 2005 and 2004 appears on the page preceding the balance sheets. Those audits were conducted for the purpose of forming an opinion on the special-purpose financial statements taken as a whole. The supplemental special-purpose Statements of Expenses are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the special-purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the special- purpose financial statements taken as a whole. Fee halen cod i ZN \hew Parisena, Stromberg & Company, APC Anchorage, Alaska November 10, 2005 10 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE OPERATING AND REVENUE FUNDS STATEMENTS OF EXPENSES Years ended June 30, 2005 and 2004 Expenses: Generation expense: Operation supervision and engineering Hydraulic operation Electric plant operation Hydraulic power generation operation FERC land use fees Structure maintenance Reservoir, dam, and waterway maintenance Electric plant maintenance Hydraulic plant maintenance System control and load dispatching Substation operation and maintenance Overhead line maintenance Total generation expense Administrative, general and regulatory expense: Insurance AEA administrative fee PMC costs Regulatory commission: FERC administrative fees FERC licensing FERC study Total administrative, general and regulatory expense Total operations and maintenance expenses, before capital project reimbursement Capital project reimbursement Total operations and maintenance expenses 2005 Variance Favorable 2004 Budget Actual (Unfavorable) Actual $ 122,829 $ 147,460 $ (24,631) $ 200,289 35,730 3,950 31,780 3,900 99,365 206,246 (106,881) 198,742 363,067 283,773 79,294 329,312 74,000 66,115 7,885 100,220 19,278 50,231 (30,953) 10,453 51,278 11,145 40,133 300,253 276,741 540,304 (263,563) 383,748 312,169 173,971 138,198 204,447 315,731 238,786 76,945 315,346 270,000 165,417 104,583 57,090 162.624 95,569 67,055 32,316 2,102,812 1,982,967 119,845 2,136,116 725,000 654,490 70,510 677,601 200,000 200,000 - 200,000 74,500 64,431 10,069 89,237 126,000 15233 110,767 44,424 31,500 52,362 (20,862) 61,503 25.000 7,546 17.454 90.909 1,182,000 994.062 187,938 1,163,674 3,284,812 2,977,029 307,783 3,299,790 1,581,725 1,896,541 (314,816) 784,572 $4,866,537 $4,873,570 $ (7,033) $ 4,084,362 yl If you are unable to attend the meeting in person, please use the following phone instructions: TELECONFERENCE INSTRUCTIONS Tuesday, March 28, 2006 — 10:30 a.m. To join the meeting, please do the following: Dial 1-800-315-6338 Enter 813# K Wx AIDEN. = ALASKA ok @@@__ ENERGY AUTHORITY Alaska Industrial Development and Export Authority BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING } iy : be wry ly : yee AGENDA p || lee ae av 5 Pal pen (Ue (Via electronic media at AIDEA and AEA — 813 W. Northern Lights ee (Corner of Arctic and Northern Lights Boulevard) Tuesday, March 28, 2006 — 10:30 a.m. f CALL TO ORDER ~~ Haagenson Z. ROLL CALL (for Committee members) wv 3: PUBLIC ROLL CALL (for all others present) 4 An ; V v ' ( a 4. PUBLIC COMMENT a % E ‘u - F ye At ter 5. AGENDA COMMENTS rail ™ { et | Poe Wi y qe fe, 7. NEW BUSINESS A. FY ’06 Budget ae rai Cunningham B. FY ’07 Budget J Cunningham C. FY ’05 Audit Report Stromberg D. . Direct the O&D Committee to review the Haagenson Homer Operation and Management Agreement . Consider the Homer Electric request to sign a 10-year term Agreement . Identify necessary modifications to the contract ~ such as BPMC Attorney review of construction contracts, as approved by the BPMC 8. COMMITTEE REPORTS / COMMENTS A. Operators Report » Update on Governor Modification Project rail Governor Committee B. Next Meeting Date Haagenson 9. ADJOURNMENT 813 West Northern Lights Boulevard * Anchorage, Alaska 99503-2495 www.aidea.org * 907/269-3000 * FAX 907/269-3044 ® Toll Free (Alaska Only) 888/300-8534 * www.akenergyauthority.org (6.30 Stat a0 End TA. nui tyre we del Pac [lle Bil gh Marine Newer tow is budgh deve? bi wdas— inte past CEA +4ulls Camurcther verte ow forma + ‘Ppe.. HEA feedlige is ved BD deevennes overtine, Ter : Mv. Fer (viene a ee Opeweteis “thet mainte og uedl. 2 a he tel = Atel ise lie shh. A aN RO moa | delete a locate tidy new counsel: tien KH See And dlor Ho, sv0 ee hegad yp ™ | denchid ag + Sfp iath ge! URL ma ot, Aetoed b (c, BJD Bid ete # / $52, 60 “3 L730 FEMA Refund. _ 4 £66, eve {573 208 (es ars, ore Tivetir Forad- surgistion oe acy. Teper in GO day” er rie Hickey — Worle wf VA ee cobrel ee pawn: 157 Ce fain iveR > WAIL Hew by Avpost- incl Cuewl OfFico Electinns @ yoxt yaks (| brie Pec. Caused mobi BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE ‘i MEETING MINUTES l ra i Vat ih} 0 813 W. Northern Lights Boulevard AV! @ aye Anchorage, Alaska ie AA4 : iF ae Tuesday, June 21, 2005 — 10:00 a.m. ly lel le Ca av 1. CALL TO ORDER ee etay tate Chair Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, June 21, 2005, 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 Brenda Fuglestad. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association Bradley Janorschke Homer Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Jim Posey Anchorage Municipal Light & Power Dave Calvert City of Seward Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Mike Cunningham, Chugach Electric Association Linda MacMillan, AEA and AIDEA Ron Saxton, AterWynne John Cooley, Chugach Electric Association Bob Price, Anchorage Municipal Light & Power Ed Ruebling, Anchorage Municipal Light & Power Brian Hickey, Chugach Electric Association Lee Thibert, Chugach Electric Association Henri Dale, Golden Valley Electric Association Bob Day, Anchorage Municipal Light & Power Gerald Winkler, Homer Electric Association David Burlingame, Electric Power Systems Jim Walker, Matanuska Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Maynard Smith, Homer Electric Association (teleconference) Bradley Lake PMC Meeting June 21, 2005 Page 2 of 4 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES — March 31, 2005 The meeting minutes of March 31, 2005, were approved as presented with the addition of Art Copoulos making a change to include the addition of the statement “Costs associated with JAA formation (of Four Dam Pool) did not run through the AEA accounting records.” 6A. OLD BUSINESS Motion: To bring back table Item 7E from the March 31, 2005 Committee Meeting; HEA O&M Contract extension pending legal review of the Contracts of VA Tech and FUJI. A discussion ensued and the Motion was moved to table and seconded by Mr. Griffith allowing for an evergreen roll-over of the existing contract. Motion: Mr. Copoulos moved to have the PMC do a review of the five year O&M Contract and convene to discuss recommendations contingent to its approval and renewal. There being no further discussion, the question was called. Seconded by Mr. Brad Janorschke. A raised hands vote was taken and the Motion was unanimously approved. ‘A. NEW BUSINESS 7A. | Replacement for Don Stead’s Position Mr. Brad Janorschke explained the Transition Plan in effect is for HEA to continue managing the Project involved hiring EPS as the Project Manager for the duration of the transition or until HEA is in a position to relieve them of that responsibility. Mr. David Burlingame is EPS’ designated Project Manager and will remain in charge of the project for the interim. The governor project is currently being run as follows: Maynard Smith is Contract Administrator monitoring any contract appliance issues with VA Tech and with EPS; Gerry Winkler is Power Production Manager and is currently working closely with Don Stead via email. Gerry will be filling this position until the new Generation Manager is positioned in mid-July. Mr. Copoulos informed this committee that the transition process is running smoothly. The weekly meeting of the O&D Committee and the Bradley Lake Governor Subcommittee is keeping communication open and the governor project progressing Bradley Lake PMC Meeting June 21, 2005 Page 3 of 4 well. The Bradley Lake Governor Subcommittee was set up strictly as advisory to the BPMC to help guide Homer's efforts. 7B. Detuning the Rotor Chair Haagenson asked to attach this memo to the minutes to discuss the VA Tech serviceman not grinding the bucket on the runners as commissioned. Mr. Winkler explained that the first serviceman sent by VA Tech was not experienced in the grinding process but a second person sent over was in fact a grinding supervisor with prior grinding experience. He provided the correct grinding depth profiles and templates were made to allow for quality grinding. Mr. Winkler gave an update on the detuning process. Currently runner AO is detuned and signed off of decoupling. It is currently on Unit 1 and back in service. Currently runner SO is in LA for crack repair and stress relief. Runner BO, which is currently on Unit #2, is being removed during this two week outage and due to be detuned towards the end of this week. Mr. Winkler described the detuning process to the committee and added that welding is now being done on-site with stress relief being done in LA. Both runners will have been detuned after this week and a third runner weld and stress repaired but not detuned. This third runner is a back-up spare in case of another event. Chair Haagenson asked about the micro-goose runners and Mr. Day informed that they are about eighteen months away. He went on to say that they have started the 45-day review for the governor project. Governor replacement is scheduled to start November 18‘ depending on water level and other factors involved. There will be a 55-day outage for the first unit and a 45-day outage for the second unit. It will take from six to eight months to have the governors in place with the detuned runners operating until that time. 7C. Bradley Lake Project Transition Plan This topic was covered under section 7A above so Mr. Janorschke reiterated that the Transition Plan currently in place is going well. The O&D Committee and the Bradley Lake Governor Subcommittee are working well together to ensure the project continues to run smoothly during this time. 7D. Revised R&C Transfer Motion: Approve June 2005 transfer from the Revenue Fund to the R&C Fund in the amount equal to the amount budgeted in the FY2005 Project Budget of $1,581,725.00 and for the R&C Fund balance to be greater than $5,000,000 after the transfer estimated to be $5,994,000.00. This is allowed for in sections 506.1 (4) and 509.3 of the “Bond Resolution.” This Motion supersedes the Motion made at Bradley Lake PMC Meeting June 21, 2005 Page 4 of 4 the March 31, 2005 meeting under Item C. Seconded by Mr. Jim Posey. A raised hands vote was taken and the Motion was unanimously approved. Mr. Cunningham reiterated how the BPMC authorized the transfer of the necessary amount to bring the R&C Fund back up to five million dollars, but built into the Budget were some governor project payments that have not occurred and rather than return them in the form of a Fiscal Year Surplus, transfer those excess funds to the R&C Fund and hold them pending payment for the milestone payments on the governor project. He went on to say that the Budget Subcommittee had discussed this issue and recommended approval of the Motion. 8. COMMITTEE REPORTS 8A. Operators Report Mr. Day reiterated that Homer’s crew is doing a great job and expects that dates concerning the governor project will be met. 8B. Next Meeting Date The next meeting date is at the call of the Chair. The next meeting will be to discuss the Operation Agreement. All comments pertaining to the Operation Agreement and Performance Measures are to be emailed to the Chairman. 9. ADJOURNMENT The meeting was adjourned at 11:12 a.m. BY: Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary Way-17-" 08:55am = From-GVEA Administration 9074585951 “S 1-933 P.002/007 F-490 . (Attachment te b [ai (2008 print ) GOLDEN VALLEY ELECTRIC ASSOCIATION, INC. Interoffice Memorandum May 9, 2005 TO: Steve Haagenson, Ron Saxton FROM: Henri Dale RE: — Highlights of last months BLH O&D mtg. A meeting of the BLH O&D Committee was held on May 5". 1) The tuning for the old runner.hit a small snag. The “tuner” told us how much weight needed to be removed from each bucket, but then told us that the metal removal was something we had to do. How do you remove 3 kg of metal? Weigh the floor sweepings?. Apparently they estimate removal by measuring the reduction in diameter of the grinding wheel. After some discussion with VA Teck, they well send another person with experience and some profile drawings to supervise the grinding. 2) Unit one will be down for about 3 weeks to repair a low voltage buss that was damaged during a fault due to water leakage near a penetration. The other penetrations will be checked, 3) EPS finally got the governor model from VA Teck to run simulations against the rail belt system. They noted that the model did not have a divider mode, documentation, synchronous condenser mode and needle scheduling. They say initial runs show the governor responding poorly in the system. They will need a week to verify the base case and do tuning. EPS says it’s possible to be ready in time for the governor change out, but it’s not likely due to the incompleteness of the package. Originally we were to have this model last August so that we could do testing before they built the governor. The committee does not want to accept the hardware until we have success with the simulations. May-1 7-05 a 08:56am = From-GVEA Administration 9074585951 WW ST-833-P.003/007 4) Discussed postponing the governor change out until Nov 1. We don’t want to take a chance installing (and accepting) new govermors until they can show that the model works in the interconnected system. Another month delay up front will cause the tail of the project to encroach into our “spill” season when we need both units to control the rising water. Spill after Nov 1 isn’t likely (storms more likely to dump snow which is held in the mountains than rain which runs into the pond). 5) Don Stead relayed to us that his last day is May 13" (next week) when he will take a position in Minnesota. This was the first any of us heard about this. HEA is apparently recruiting for his position. In the mean time, he had Jerry Winkler who will be doing Don’s job on an interim bases on the teleconference. Jerry has been the Nikiski (Soldotna) operator for 15 years. In his job duties as a bargaining operator, he has been involved the governor upgrade for that combustion turbine. He has operated a few times at Bradley but claims about a 50% knowledge level of the plant (whatever that means, and why was he allowed to operate it). He has no project management experience. The committee expressed reservations on getting a new person up to speed if VA Tech insists on changing govemors this month. It is likely that VA Tech won't be ready if the modeling issue is any indication. We also discussed an interim project manager. Brian Hickey says he’s just started his busy season and would not have time. Don says he would not be able to continue to do this on the side at his new jab. A consultant (like Dave Burlingame of EPS) who has been following this project and has much of the historical back ground) is a possibility. The committee asked Don to have HEA formally respond with a transition plan. We also asked Don to put into writing as much as possible on the status of the project for the new person when he comes on board. Don was informed that the utilities are watching HEA's performance on this project as a reflection of their ability to perform under their Operations and Maintenance Agreement. 6) There will be another meeting Tuesday to get an update on the model, the transition plan, and whether or not to postpone to Nov 1. F480 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, June 21, 2005 — 10:00 a.m. 1. CALL TO ORDER Chair Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, June 21, 2005, 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 Brenda Fuglestad. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association Bradley Janorschke Homer Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Jim Posey Anchorage Municipal Light & Power Dave Calvert City of Seward Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Mike Cunningham, Chugach Electric Association Linda MacMillan, AEA and AIDEA Ron Saxton, AterWynne John Cooley, Chugach Electric Association Bob Price, Anchorage Municipal Light & Power Ed Ruebling, Anchorage Municipal Light & Power Brian Hickey, Chugach Electric Association Lee Thibert, Chugach Electric Association Henri Dale, Golden Valley Electric Association Bob Day, Anchorage Municipal Light & Power Gerald Winkler, Homer Electric Association David Burlingame, Electric Power Systems Jim Walker, Matanuska Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Maynard Smith, Homer Electric Association (teleconference) Bradley Lake PMC Meeting June 21, 2005 Page 2 of 4 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES — March 31, 2005 The meeting minutes of March 31, 2005, were approved as presented with the addition of Art Copoulos making a change to include the addition of the statement “Costs associated with JAA formation (of Four Dam Pool) did not run through the AEA accounting records.” 6A. OLD BUSINESS Motion: To bring back table Item 7E from the March 31, 2005 Committee Meeting; HEA O&M Contract extension pending legal review of the Contracts of VA Tech and FUJI. A discussion ensued and the Motion was moved to table and seconded by Mr. Griffith allowing for an evergreen roll-over of the existing contract. Motion: Mr. Copoulos moved to have the PMC do a review of the five year O&M Contract and convene to discuss recommendations contingent to its approval and renewal. There being no further discussion, the question was called. Seconded by Mr. Brad Janorschke. A raised hands vote was taken and the Motion was unanimously approved. 7. NEW BUSINESS 7A. Replacement for Don Stead’s Position Mr. Brad Janorschke explained the Transition Plan in effect is for HEA to continue managing the Project involved hiring EPS as the Project Manager for the duration of the transition or until HEA is in a position to relieve them of that responsibility. Mr. David Burlingame is EPS’ designated Project Manager and will remain in charge of the project for the interim. The governor project is currently being run as follows: Maynard Smith is Contract Administrator monitoring any contract appliance issues with VA Tech and with EPS; Gerry Winkler is Power Production Manager and is currently working closely with Don Stead via email. Gerry will be filling this position until the new Generation Manager is positioned in mid-July. Mr. Copoulos informed this committee that the transition process is running smoothly. The weekly meeting of the O&D Committee and the Bradley Lake Governor Subcommittee is keeping communication open and the governor project progressing Bradley Lake PMC Meeting June 21, 2005 Page 3 of 4 well. The Bradley Lake Governor Subcommittee was set up strictly as advisory to the BPMC to help guide Homer’s efforts. 7B. Detuning the Rotor Chair Haagenson asked to attach this memo to the minutes to discuss the VA Tech serviceman not grinding the bucket on the runners as commissioned. Mr. Winkler explained that the first serviceman sent by VA Tech was not experienced in the grinding process but a second person sent over was in fact a grinding supervisor with prior grinding experience. He provided the correct grinding depth profiles and templates were made to allow for quality grinding. Mr. Winkler gave an update on the detuning process. Currently runner AO is detuned and signed off of decoupling. It is currently on Unit 1 and back in service. Currently runner SO is in LA for crack repair and stress relief. Runner BO, which is currently on Unit #2, is being removed during this two week outage and due to be detuned towards the end of this week. Mr. Winkler described the detuning process to the committee and added that welding is now being done on-site with stress relief being done in LA. Both runners will have been detuned after this week and a third runner weld and stress repaired but not detuned. This third runner is a back-up spare in case of another event. Chair Haagenson asked about the micro-goose runners and Mr. Day informed that they are about eighteen months away. He went on to say that they have started the 45-day review for the governor project. Governor replacement is scheduled to start November 1® depending on water level and other factors involved. There will be a 55-day outage for the first unit and a 45-day outage for the second unit. It will take from six to eight months to have the governors in place with the detuned runners operating until that time. 7C. Bradley Lake Project Transition Plan This topic was covered under section 7A above so Mr. Janorschke reiterated that the Transition Plan currently in place is going well. The O&D Committee and the Bradley Lake Governor Subcommittee are working well together to ensure the project continues to run smoothly during this time. 7D. Revised R&C Transfer Motion: Approve June 2005 transfer from the Revenue Fund to the R&C Fund in the amount equal to the amount budgeted in the FY2005 Project Budget of $1,581,725.00 and for the R&C Fund balance to be greater than $5,000,000 after the transfer estimated to be $5,994,000.00. This is allowed for in sections 506.1 (4) and 509.3 of the “Bond Resolution.” This Motion supersedes the Motion made at Bradley Lake PMC Meeting June 21, 2005 Page 4 of 4 the March 31, 2005 meeting under Item C. Seconded by Mr. Jim Posey. A raised hands vote was taken and the Motion was unanimously approved. Mr. Cunningham reiterated how the BPMC authorized the transfer of the necessary amount to bring the R&C Fund back up to five million dollars, but built into the Budget were some governor project payments that have not occurred and rather than return them in the form of a Fiscal Year Surplus, transfer those excess funds to the R&C Fund and hold them pending payment for the milestone payments on the governor project. He went on to say that the Budget Subcommittee had discussed this issue and recommended approval of the Motion. 8. COMMITTEE REPORTS 8A. Operators Report Mr. Day reiterated that Homer’s crew is doing a great job and expects that dates concerning the governor project will be met. 8B. Next Meeting Date The next meeting date is at the call of the Chair. The next meeting will be to discuss the Operation Agreement. All comments pertaining to the Operation Agreement and Performance Measures are to be emailed to the Chairman. 9. ADJOURNMENT The meeting was adjourned at 11:12 a.m. BY: Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary I Page 1 of 2 Shauna Howell From: Mike Cunningham [Mike_Cunningham@chugachelectric.com] Sent: Tuesday, March 21, 2006 8:30 AM To: Shauna Howell Ce: Linda MacMillan Subject: RE: BPMC Meeting How about these: Motion 1. "Move the Bradley Lake Project Management Committee accept the results of the Bradley Lake Project Management Committee Operating and Revenue Funds as of June 30, 2005 as presented by Parisena, Stromberg & Company, APC." Motion 2. "Move the Bradley Lake Project Management Committee approve the fiscal year 2006 Operating and Capital budget revision as presented." Motion 3. "Move the Bradley Lake Project Management Committee approve the fiscal year 2007 Operating and Capital budget as presented." Don't hesitate to rewicker the wording if I have mis spoke on any of these. Mike Cunningham Senior Vice President, Chief Financial Officer Chugach Electric Association, Inc. 907-762-4778 (office) 907-762-4514 (fax) 907-230-9478 (cell) mike_cunningham@chugachelectric.com From: Shauna Howell [mailto: SHowell@aidea.org] Sent: Tuesday, March 21, 2006 7:39 AM To: Mike Cunningham Cc: Linda MacMillan Subject: BPMC Meeting Importance: High Good morning, Linda just brought down the budget items that will be included into the packets for the March 2th meeting. | asked her who would be providing me with the motions for these documents and she thought it would be you — unless you would like her to write them, then to please let her know. 3/21/2006 Megsage Page 2 of 2 I'd like to receive these today, as I’m working on getting the packets out tomorrow. Thank you. Shauna Howell (907) 269-3028 3/21/2006 Page | of 1 Shauna Howell From: Saxton, Susan [ssaxton@HomerElectric.com] Sent: — Friday, March 17, 2006 2:10 PM To: Shauna Howell Subject: Agenda Item Hi Shauna: Attached is the Bradley Lake Amendment which needs to be included on the agenda for the BPMC meeting on the 28", Thanks, Susan Saxton Homer Electric Association, Inc. 3/20/2006 AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT AMENDMENT NO. 3 THIS AGREEMENT entered into this day of , 2006, between the Homer Electric Association, Inc. (the “Operator’) and the Alaska Energy Authority (the “Authority”). — Recital Effective February 11, 1994, the parties entered into an agreement titled Operation and Maintenance Agreement for Bradley Lake Project (the “Agreement’). The term of the Agreement was for an initial period of five years, automatically renewable annually thereafter. The parties extended the Agreement through an Amendment dated June 22, 1999. The Amendment extended the Agreement until June 30, 2004, and provided that the term shall continue from year to year thereafter. The parties have determined that instead of the annual renewal, the Agreement shall be renewed for an additional period of ten years and automatically renewed annually thereafter; and that the Agreement be further amended as hereafter set forth. Amendments NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: 1. Section 2 of the Agreement as amended by the June 22, 1999 Amendment is hereby amended as follows: Effective July 1, 2006, the term of the Agreement shall be ten years and the term shall automatically be renewed for successive one-year periods, until terminated as provided in the Agreement. 25 Paragraph 13(a)(1) of the Agreement is amended to read as follows: Each Party shall be liable for the negligent, willful and grossly negligent acts of its officers, employees, agents and contractors with respect to the ownership, construction operation, maintenance or repair of the Project. It is recognized that the project insurance does not cover the willful and grossly negligent acts of a party. Each Party shall be solely liable for the willful and grossly negligent acts of its officers, employees, agents and contractors to the extent not covered by insurance. A party’s maximum cumulative liability relative to all other claims and liabilities, including that with respect to direct damages and obligations under any indemnity, will not exceed the limits of any insurance policies insuring against such claims or liabilities. In no event will a Party be liable for incidental, indirect or consequential damages of any kind. Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project (f) Paragraph 13(a)(8) of the Agreement is amended to read as follows: (8) | Acopy of the insurance policies required of the Operator by this Section will be furnished to the Authority prior to beginning work under this Agreement. Prior to February 1 of each year thereafter, evidence of insurance shall be provided by the Operator. Paragraph 13(a)(9) of the Agreement is amended to read as follows: (9) | The Operator's obligation to obtain and maintain insurance coverage pursuant to this Section shall be subject to the general availability of such coverage under reasonable terms and conditions. If one or more of the required insurance coverages is not available to the Operator under reasonable terms and conditions, the Operator shall, under the guidance and direction of the BPMC and Division of Risk Management, use its best efforts to obtain substantively equivalent insurance coverage acceptable to the BPMC, the Authority, and the Division of Risk Management. A new subsection 13(f) is added to the Agreement to read as follows: The Authority shall maintain a policy or policies of property damage insurance fully insuring the Project against lost resulting from fire, explosion, accident, or equipment breakdown for the full insurable value of the Project. The policy shall contain a waiver of subrogation with respect to the Operator and the BPMC and list the Operator as an additional named insured. IN WITNESS WHEREOF, the parties have caused this agreement to be executed as of the date first written above. Date Date HOMER ELECTRIC ASSOCIATION, INC. By General Manager ALASKA ENERGY AUTHORITY By Executive Director Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project Vd 7 \ |e, x 5 ( ( P € >7 ee 06 a | ——_—— — - wr ev J AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT AMENDMENT NO. 3 THIS AGREEMENT entered into this day of , 2006, between the Homer Electric Association, Inc. (the “Operator’) and the Alaska Energy Authority (the “Authority”). | h Ww 3] oN Recital & Effective February 11, 1994, the parties entered into an agreement titled Operation and Maintenance Agreement for Bradley Lake Project (the “Agreement’). The term of the Agreement was for an initial period of five years, automatically renewable annually thereafter. The parties extended the Agreement through an Amendment dated June 22, 1999. The Amendment extended the Agreement until June 30,1999, and provided that the term shall continue from year to year thereafter. The “parties have determined that instead of the annual renewal, the Agreement shall be renewed for an additional period of ten years and automatically renewed annually thereafter; and that the Agreement be further amended as hereafter set forth. Amendments NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: 1 Section 2 of the Agreement as amended by the June 22, 1999 Amendment is hereby amended as follows: Effective July 1, 2006, the term of the Agreement shall be ten years and the term shall automatically be renewed for successive one-year periods, until terminated as provided in the Agreement. 2. Paragraph 13(a)(1) of the Agreement is amended to read as follows: Each Party shall be liable for the negligent, willful and grossly negligent acts of its officers, employees, agents and contractors with respect to the ownership, construction operation, maintenance or repair of the Project. It is recognized that the project insurance does not cover the willful and grossly negligent acts of a party. Each Party shall be solely liable for the willful and grossly negligent acts of its officers, employees, agents and contractors to the extent not covered by insurance. A party’s maximum cumulative liability relative to all other claims and liabilities, including that with respect to direct damages and obligations under any indemnity, will not exceed the limits of any insurance policies insuring against such claims or liabilities. In no event will a Party be liable for incidental, indirect or consequential damages of any kind. Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project (f) Paragraph 13(a)(8) of the Agreement is amended to read as follows: (8) | Acopy of the insurance policies required of the Operator by this Section will be furnished to the Authority prior to beginning work under this Agreement. Prior to February 1 of each year thereafter, evidence of insurance shall be provided by the Operator. Paragraph 13(a)(9) of the Agreement is amended to read as follows: (9) | The Operator's obligation to obtain and maintain insurance coverage pursuant to this Section shall be subject to the general availability of such coverage under reasonable terms and conditions. If one or more of the required insurance coverages is not available to the Operator under reasonable terms and conditions, the Operator shall, under the guidance and direction of the BPMC and Division of Risk Management, use its best efforts to obtain substantively equivalent insurance coverage acceptable to the BPMC, the Authority, and the Division of Risk Management. A new subsection 13(f) is added to the Agreement to read as follows: The Authority shall maintain a policy or policies of property damage insurance fully insuring the Project against lost resulting from fire, explosion, accident, or equipment breakdown for the full insurable value of the Project. The policy shall contain a waiver of subrogation with respect to the Operator and the BPMC and list the Operator as an additional named insured. IN WITNESS WHEREOF, the parties have caused this agreement to be executed as of the date first written above. Date Date HOMER ELECTRIC ASSOCIATION, INC. By General Manager ALASKA ENERGY AUTHORITY By Executive Director Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project Page | of 1 Shauna Howell From: Steve H. Haagenson [SHHaagenson@gvea.COM] Sent: Thursday, March 16, 2006 8:23 AM To: Shauna Howell Subject: RE: BPMC Agenda Item D is one item where | will be directing the O&D Committee to review the Homer Operation and Management Agreement and return a recommendation to the BPMC. During this review | would like to have the O&D committee consider the Homer Electric request to sign € year term Agreement and identify necessary modifications to the contract such as BPMC Attorney review of construction contracts. Thanks. Steven Haagenson President & CEO Golden Valley Electric Association, Inc. (907) 458-5866 shh@gvea.com From: Shauna Howell [mailto:SHowell@aidea.org] Sent: Wednesday, March 15, 2006 8:04 AM To: Steve H. Haagenson Subject: Good morning, Please let me know if you have any changes or additions/deletions. Also, should item D be broken into three separate items? | will also need the names of whoever will be speaking on those items, too. Thank you. --Shauna 3/16/2006 P. | * * * Transmisoiun Result Report (MemoryTX) ( Mar-i4- 2006 11:14AM) * * * 1) AIDEA/ZAEA 2) Date/Time: Mar-14. 2006 11:13AM File Page No. Mode Destination Pg (s) Result Not Sent 6123 Memory TX 919074585951 Pa | 2 OK THT smaabas wea SITE IAILee E.1) Hang up or line fail —E.2) Busy E.3) No answer E—E.4) No facsimile connection Aa Waal Cevelopmert and Export Asterty ADR ‘Andes Energy Aorhy FACSIMILE TRANSMITTAL TO: Stet. Hemme som Gatch _* FAX #: (40%) 458 -545/ FROM: S hai, Howell DATE: Meawh ld, 2006 Number of pages including cover page:_o& COMMENTS: Dreft BPA. seceding onde. Loe yur Vevito, Ctmneds + i Taw. 1 = Shave NOTICE: This tacsimile may contain confidential information that is being transmitted to and is intended only for the use of the recipient named above. Reading, disclosure, discussion, dissernination, 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 destroy tt ‘urid'rwstfy Us by telephone at (907) 269-3000, 813 West Northern Lights Boulevard ~ Anchorage, Alaska 99503 907 / 269-3000 + FAX 907 / 269-3044 + Toll Free (ALASKA ONLY) B86 / 300-8534 + www.aidea.org Alaskg Industrial Development and Export At Alaska Energy Authority FACSIMILE TRANSMITTAL sf TO: c) CVE Pees A d __ ved FAX #: (90%) 458 -545/ FROM: Shaw Hovell DATE: iad. id, 2006 4 Number of pages including cover page:__% COMMENTS: 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 destroy it and notify us by telephone at (907) 269-3000. 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 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA March 28, 2006 — 10:30 a.m. (Via electronic media at AIDEA and 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 June 21, 2005 NEW BUSINESS A. FY ’06 Budget Revision Cunningham B. FY ’07 Budget Cunningham Cc. FY ’05 Audit Report ; Stromberg D. . Direct the O&D Committee to review the \ Homer Operation and Management Agreement yoy f . Consider the Homer Electric request to sign a \ (| ill de fread 10-year term Agreement \ ile ‘ses53 . Identify necessary modifications to the contract a such as BPMC Attorney review of construction contracts, as approved by the BPMC COMMITTEE REPORTS / COMMENTS A. Operators Report >» Update on Governor Modification Project Governor Committee B. Next Meeting Date Haagenson ADJOURNMENT . Le Shauna Howell From: Steve H. Haagenson [SHHaagenson@gvea.COM] Sent: Thursday, March 09, 2006 10:58 AM To: Shauna Howell Ce: Ron Saxton; Susan K. Redlin; Allyson J. Carnaroli; Mike Cunningham; Henri F. Dale Subject: FW: BPMC meeting | have been asked by the budget committee to schedule a BPMC meeting. | would prefer the meeting to be held 10:30 a.m. on March 27th , or possibly March 31st, if the AIDEA Board room is available. (| have a conflict on the March 30th date we just talked about) Proposed Agenda 1. F/Y '06 budget revision 2. F/Y '07 budget 3. F/Y '05 audit report - Gary Stromberg of Parisena and Stromberg will be invited to attend the meeting to give the PMC the audit report. 4. Direct the O0&D Committee to review the Homer Operation and Management Agreement. Consider the Homer Electric request to sign a 10 year term agreement. Identify necessary modifications to the contract such as BPMC Attorney review of construction contracts, as approved by the BPMC. 5. Project Update on the Governor Modification Project. (Scheduled to start next week) Thank you for scheduling this. Steven Haagenson President & CEO Golden Valley Electric Association, Inc. (907) 458-5866 shh@gvea.com