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HomeMy WebLinkAboutBradley Lake PMC Meeting-Friday, Feb. 23, 2007 4If you are unable to attend the meeting in person, please use the following phone instructions: TELECONFERENCE INSTRUCTIONS Friday, February 23, 2007 — 10:00 a.m. To join the meeting, please do the following: Dial 1-800-315-6338 Enter 0223# Eytan Cop (2s we xt mat a YIDEX /= ALASKA @™®_) ENERGY AUTHORITY Ho oy Alaska industrial Development and Export Authority BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Friday, February 23, 2007 — 10:00 a.m. (via electronic media at CEA’s Board Room - 5601 Minnesota Drive) 1. CALL TO ORDER Stewart 2. ROLL CALL (for Committee members) 3. PUBLIC ROLL CALL (for all others present) 4. PUBLIC COMMENT 5: AGENDA COMMENTS 6. APPROVAL OF MEETING MINUTES December 15, 2006 te NEW BUSINESS A. FY 08 Operating and Capital Budget MacMillan B. FY 07 Interim Budget Report MacMillan C. Homer O&M Agreement Janorschke 8. COMMITTEE REPORTS / COMMENTS A. Operators Report >» Update on Governor Modification Project Governor Committee B. Next Meeting Date , Stewart 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 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES (held @ CEA’s Board Room) Anchorage, Alaska ; Friday, December 15, 2006 — 10:00 a.m. i: CALL TO ORDER Chair Stewart called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Friday, December 15, 2006, from Chugach Electric Association’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: Bill Stewart Chugach Electric Association Steve Haagenson Golden Valley Electric Association Bradley Janorschke Homer Electric Association Wayne Carmony Matanuska Electric Association Jim Posey Anchorage Municipal Light & Power Tim Barnum City of Seward Bryan Carey Alaska Energy Authority 3. PUBLIC ROLL CALL Tuckerman Babcock, Matanuska Electric Association Elvi Gray Jackson, Anchorage Municipal Light & Power John Cooley, Chugach Electric Association Bob Price, Anchorage Municipal Light & Power Rick Miller, Anchorage Municipal Light & Power Mike Cunningham, Chugach Electric Association Linda MacMillan, Alaska Energy Authority Brian Hickey, Chugach Electric Association Henri Dale, Golden Valley Electric Association Charles O’Hare, Homer Electric Association Jenny Trieu, AterWynne Suzanne Gibson, Chugach Electric Association Gary Stromberg, Parisena, Stromberg & Company (teleconference) Bradley Lake Project Management Committee Meeting December 15, 2006 Page 2 of 3 4. PUBLIC COMMENT There were no public comments. 5: AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES — July 26, 2006 Mr. Haagenson moved to approve the minutes of the July 26, 2006 meeting, seconded by Mr. » Janorschke. The meeting minutes were unanimously approved as presented. Te NEW BUSINESS 7A. Bradley Lake Audit Status Report — Gary Stromberg Mr. Stromberg presented the final draft of the audited financial statements and other financial information for Bradley Lake Project Management Committee Operating and Revenue Funds for the period ending June 30, 2006 and 2005. The group would like to receive an interim or budget variance report throughout the year. MOTION #06-10: Mr. Haagenson moved the Bradley Lake Project Management Committee accept the results of the Bradley Lake Project Management Committee Operating and Revenue Funds as of June 30 2006, as presented by Parasena, Stromberg & Company, APC. Seconded by Mr. Posey. A voice vote was taken and the motion passed by unanimous approval. MOTION #06-11: Mr. Posey moved the Bradley Lake Project Management Committee instruct the utilities to pay their proportionate share of the FY06 short fall ($70,648.40) to the bond trustee, U.S. Bank, on or before February 1, 2007. Seconded by Mr. Janorschke. A voice vote was taken and the motion passed by unanimous approval. 7B. Insurance Coverage — Mike Cunningham Mr. Cunningham gave an overview of a 2-page handout on commercial property and boiler and machinery. The group discussed comfort levels with amount of insurance coverage as well as premium prices. 7C. Homer O&M Agreement — Brad Janorschke Mr. Janorschke presented the group with HEA’s request to have a 5-year renewable instead of a year-to-year Agreement. The 5-year Agreement would be easier for HEA in regards to planning and training. HEA is requesting a 5-year Agreement and change the year to 2007. After discussion, the Chairman said that the group who would be tasked with looking this Agreement over would bring back something to the BPMC in 60 days. Each utility will have one person designated to perform the review and report back. Chair Stewart will have someone Bradley Lake Project Management Committee Meeting December 15, 2006 Page 3 of 3 from his office schedule the meeting with an invitation for the utilities to send someone to participate. 8. COMMITTEE REPORTS 8A. Operators Report / Update on Governor’s Modification Project— Charlie O’Hare Mr. O’Hare gave an overview of an update handout, which included budget information, available spin limit, and power and fiber cable replacement — the report states that the Bradley governor project is 95% complete. There was some discussion as to the total expenditures and Mr. O'Hare said he will have the total expenditures to date at the next meeting. He also stated that the O&D recommends the BPMC rescind the present limits on Bradley Lake spinning reserve in favor of new limits and/or use requirements developed by the IOC Dispatch Subcommittee when they have been finalized. After some discussion, Mr. O’Hare said he would take this back to the O&D Committee and re-address it. The issue of the power and fiber cable replacement was discussed, with the emphasis being on the over projected project cost of $200,000. HEA will provide a budgetary update at the next BPMC meeting to include a budget amendment request, if required. HEA will have Rick Baldwin review and approve the construction contract bid selection. After approval, they will be forwarded to the BPMC Chair. 8B. NEXT MEETING DATE The next meeting date will be in February at the call of the Chair. 9. ADJOURNMENT The meeting was adjourned at 11:20 a.m. BY: Bill Stewart, Chairman ATTEST: Alaska Energy Authority, Secretary Agenda Item: 7A MOTION: Move the Bradley Lake Project Management Committee approve the fiscal year 2008 Operating and Capital budget as presented. Move: Second: © e OVERVIEW OF BUDGET CHANGES BETWEEN FY07 AND FY08 FY07 Utility Contributions DECREASES R&C Fund transfer.due to application of interest retained in fund offset by additional expenditures to repay Decrease in one time repairs on Schedule A Decrease in debt service TOTAL DECREASES INCREASES Operating budget increase mainly due to increased FERC Admin Fees and right of way clearing work Increase in transfer to operating reserve due to increased operating budget Reduced interest earnings due to projected less investment balances Increase in projected arbitrage transfer TOTAL INCREASES FY08 Utility Contributions 16,395,817 (238,851) (46,456) (4,100) (289,407) 242,443 23,000 9,184 8,555 283,182 16,389,592 BRADLEY LAKE HYDROELECTRIC PROJECT Schedule A FY05 FY06 FY2007 FY2008 INC(DEC) ACTUALS —ACTUALS BUDGET BupceT | FROM PY REVENUES, EXPENSES & CHANGES IN SURPLUS REVENUES UTILITY CONTRIBUTIONS 15,325,245 14,448,825 16,395,817 16,389,592 (6,225) INTEREST INCOME 1,770,987 1,896,353 1,313,711 1,304,527 (9,184) SALE OF VEHICLE 0 0 0 0 0 FEMA GRANT REVENUE 293,170 0 0 oO o 17,389,402 16,345,178 17,709,528 17,694,119 (15,409) EXPENSES OPERATIONS 2,977,028 3,212,203 3,428,343 3,670,786 242,443 RENEWALS/REPLACEMENTS (R&C FUND REPAYMENTS 1,896,543 614,936 1,482,234 1,243,383 (238,851) CULVERT REPAIRS 0 oO 50,000 81,546 31,546 HELICOPTER PAD REPAIRS. 0 0 200,000 0 (200,000) PURCHASE MAN-LIFT, TRUCK & PLOW ATTACHMENT 0 0 0 122,000 122,000 TRANSFER TO OPERATING RESERVE 15,000 0 25,000 48,000 23,000 DEBT SERVICE (net of Capital Reserve Reductions) 12,273,050 12,276,325 12,273,950 12,269,850 (4,100) ARBITRAGE TRANSFER 227,782 241,714 250,000 258,555 8,555 PRIOR YEARS SURPLUS (DEFICIT) 0 a ) o oO 0 17,389,403 16,345,178 17,709,527 17,694,120 (15,407) CURRENT YEAR SURPLUS (DEFICIT) (1) 0 1 BEGINNING SURPLUS (DEFICIT) 0 0 0 ENDING SURPLUS (DEFICIT) 1 eee BALANCE SHEET ASSETS REVENUE FUND 524,901 457,899 0 OPERATING FUND 650,866 534,187 (1) RECEIVABLE FROM UTILITIES - 70,648 PREPAID EXPENSES - 20,525 RECEIVABLE-FEMA GRANT . 293,170 : 1,468,937 1,083,259 LIABILITIES & SURPLUS LIABILITIES 416,101 670,840 o PREPAID UTILITY CONTRIBUTION 348,035 - PAYABLE TO UTILITIES 704,801 - R&C REPAYMENT - 412,419 1,468,937 1,083,259 ERS eae me OTHER INFORMATION OPERATING RESERVE * 661,402 661,402 686,402 MONTHLY CONTRIBUTIONS 1,335,837 1,335,837 1,366,318 * Required to be 20% of budgeted operating expense 2/15/20071:51 PMH:\all\imacmillan\BradleyLake\F YO8BRADLEY\2008BradleyBdgt.xlsSchedule A-Budget Summary BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B 31-Dec-06 FY2006 FY2006 FY2007 FY2007 FY2008 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET SUMMARY (A) HEA Annual Operations & Maintenance 1,278,795 1,459,416 (180,621) 1,494,965 577,666 1,750,709 (B) CEA Dispatch and Substation/SVC Maintenance 105,200 89,640 15,560 130,000 7,920 103,356 (C) Other O&M and Maintenance Projects 437,131 429,866 7,265 444,521 159,401 453,740 (D) Insurance Costs 588,503 599,449 (10,946) 653,357 614,897 648,481 (E) Regulatory Costs 316,500 392,836 (76,336) 331,500 94,791 340,000 (H) Contingencies 94,919 0 94,919 100,000 0 100,000 2,821,048 2,971,207 (150,159) 3,154,343 1,454,675 3,396,286 (F) Administrative Costs 274,500 240,994 33,506 274,500 212,602 274,500 3,095,548 3,212,201 (116,653) 3,428,843 1,667,277 3,670,786 (G) BUDGET ADJUST ESTIMATE 0 0 0 0 0 0 3,095,548 3,212,201 (116,653) 3,428,843 1,667,277 3,670,786 2/15/2007 1:52 PM Page 1 of 4 H:\all\imacmillan\BradleyLake\FY O8BRADLEY\2008BradleyBdgt.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B 31-Dec-06 FY2006 FY2006 FY2007 FY2007 FY2008 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET FERC 535 - Operation Supervision & Engineering (A) HEA O&M Contract 185,214 176,529 8,685 125,569 83,993 140,357 (C) HEA On-Site Civil Project Manager 0 0 0 (C) HEA Digitize & Control Project Drawings 0 0 0 185,214 176,529 8,685 125,569 83,993 140,357 FERC 537 - Hydraulic Expenses (A) HEA O&M Contract 58,300 4,415 53,885 49,200 28,758 54,037 58,300 4,415 53,885 49,200 28,758 54,037 FERC 538 - Electric Expenses (A) HEA O&M Contract 94,200 222,062 (127,862) 222,000 83,190 235,672 (C) SOA BOILIER INSPECTION 0 0 0 0 0 0 94,200 222,062 (127,862) 222,000 83,190 235,672 FERC 539 - Misc. Hydraulic Power Generation Expenses (A) HEA O&M Contract 253,100 193,557 59,543 331,625 149,707 393,785 (C) Replace Two Way Radios 10,000 5,761 4,239 3,000 0 (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 28,740 28,746 (6) 28,740 14,373 28,740 381,840 318,064 63,776 453,365 209,080 512,525 FERC 540 - Rents (C) Bradley Lake FERC land use fees (5% increase bu 74,000 64,587 9,413 74,000 0 65,000 74,000 64,587 9,413 74,000 0 65,000 FERC 541 - Maintenance Supervision & Engineering (A) HEA O&M Contract 0 0 0 82,451 7,851 63,204 0 0 0 82,451 7,851 63,204 FERC 542 - Maintenance of Structures (A) HEA O&M Contract 53,500 116,324 (62,824) 90,400 55,831 93,347 (C) Other 0 0 0 0 0 0 53,500 116,324 (62,824) 90,400 55,831 93,347 FERC 543 - Maintenance of Reservoirs, Dams & Waterways (A) HEA O&M Contract 15,400 0 15,400 10,440 2,071 14,202 (C) 0 0 0 0 0 2/15/2007 1:52 PM Page 2 of 4 . H:\all\imacmillan\BradleyLake\F YO8BRADLEY\2008BradleyBdgt.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B 31-Dec-06 FY2006 FY2006 FY2007 FY2007 FY2008 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET (C) 0 0 0 0 0 (C) 0 0 0 0 0 (C) 0 0 0 0 0 (C) 0 0 0 0 15,400 0 15,400 10,440 2,071 14,202 FERC 544 - Maintenance of Electric Plant (A) HEA O&M Contract 295,000 296,380 (1,380) 280,200 105,137 247,020 (A) HEA O&M Contract-Runner Repairs 0 206,982 (206,982) 0 0 0 295,000 503,362 (208,362) 280,200 105,137 247,020 FERC 545 - Maintenance of Misc. Hydraulic Plant (A) HEA O&M Contract 274,000 171,116 102,884 213,000 39,690 184,455 (C) 0 0 0 0 0 0 274,000 171,116 102,884 213,000 39,690 184,455 FERC 556 - System Control & Load Dispatching (A) HEA O&M Contract 9,000 22,892 (13,892) 20,080 15,972 21,896 (A) HEA O&M Contract-contingency 5,081 18,736 (13,655) 0 0 (C) SCS Snow Measurement 9,000 15,966 (6,966) 9,000 (3,536) 10,000 (C) UAA Seismic monitoring and reporting 56,500 56,500 0 56,500 12,470 60,000 (C) USGS Streamguaging 168,791 168,206 585 183,281 90,894 200,000 (C) State of Alaska Permits 100 100 0 0 200 0 248,472 282,400 (33,928) 268,861 116,000 291,896 FERC 562 - Station Expenses (B) CEA SVC/Substation Maintenance Contract 105,200 89,640 15,560 130,000 7,920 103,356 (C) 0 0 0 0 0 0 105,200 89,640 15,560 130,000 7,920 103,356 FERC 571 - Maintenance of Overhead Lines (A) HEA Overhead Line Maintenance 36,000 30,423 5,577 70,000 5,466 302,734 36,000 30,423 5577. 70,000 5,466 302,734 (H) Contingencies 94,919 0 94,919 100,000 0 100,000 FERC 920 - Administrative Expense 2/15/2007 1:52 PM Page 3 of 4 H:\all\lmacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B 31-Dec-06 FY2006 FY2006 FY2007 FY2007 FY2008 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 0 8,500 (F) Bradley Lake PMC Legal 40,000 10,424 29,576 40,000 (670) 40,000 (F) Bradley Lake Arbitrage Report 6,000 4,875 1.125 6,000 4,475 6,000 (F) Bradley Lake Trustee fees 20,000 17,595 2,405 20,000 8,797 20,000 (F) PMC Costs 74,500 40,994 33,506 74,500 12,602 74,500 Bond Refunding Costs Reimburseable costs Refunding Costs 0 0 0 0 0 0 TOTAL FERC 920 274,500 240,994 33,506 274,500 212,602 274,500 FERC Insurance Premiums 528,503 525,909 2,594 581,357 567,014 578,500 (D) Homer Electric Insurance 60,000 56,285 3,715 57,000 28,495 54,981 (D) Risk Assessment 0 i255 (17,255) 15,000 19,388 15,000 | (D) 588,503 599,449 (10,946) 653,357 614,897 648,481 FERC FERC administrative fees 126,000 269,272 (143,272) 126,000 0 200,000 (E) FERC 5 Year Inspection 75,000 38,419 36,581 90,000 1,015 0 (E) Seismic Survey Spillway 0 0 0 (E) Contractual Engineer - FERC license issues 115,500 85,145 30,355 115,500 17,216 140,000 316,500 392,836 (76,336) 331,500 94,791 340,000 3,095,548 3,212,201 (116,653) 3,428,843 1,667,277 3,670,786 TOTAL BRADLEY LAKE BUDGET Page 4 of 4 2/15/2007 1:52 PM H:\all\lmacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xisSchedule B-Budget Detail BRADLEY LAKE MONTHLY UTILITY CONTRIBUTION SCHEDULE C ACTUAL BUDGET PERCENT FY2006 FY2007 FY2008 FY2008 POWER PURCHASER SHARE TOTAL TOTAL TOTAL DECREASE CHUGACH ELECTRIC 30.4% 4,392,444 4,984,332 4,982,436 (1,896) MUNICIPALITY OF ANCHORAGE 25.9% 3,742,248 4,246,512 4,244,904 (1,608) AEG&T-HEA 12.0% 1,733,856 1,967,496 1,966,752 (744) AEG&T-MEA 13.8% 1,993,944 2,262,624 2,261,760 (864) GOLDEN VALLEY ELECTRIC 16.9% 2,441,856 2,770,896 2,769,840 (1,056) CITY OF SEWARD 1.0% 144,492 163,956 163,896 (60) Rounding (15) Zz a 100.0% 14,448,825 16,395,818 16,389,590 (6,228) BUDGET FY2006 FY2007 PERCENT MONTHLY MONTHLY FY2008 FY2008 POWER PURCHASER SHARE AVERAGE AVERAGE MONTHLY | DECREASE CHUGACH ELECTRIC 30.4% 366,037 415,361 415,203 (158) MUNICIPALITY OF ANCHORAGE 25.9% 311,854 353,876 353,742 (134) AEG&T-HEA 12.0% 144,488 163,958 163,896 (62) AEG&T-MEA 13.8% 166,162 188,552 188,480 (72) GOLDEN VALLEY ELECTRIC 16.9% 203,488 230,908 230,820 (88) CITY OF SEWARD 1.0% 12,041 13,663 13,658 (5) 100.0% 1,204,070 1,366,318 1,365,799 519 COMPONENTS OF CHANGE IN CONTRIBUTION FY2007 ANNUAL CONTRIBUTION 16,395,817 Revenue Changes (INCREASE) DECREASE IN BUDGETED INTEREST EARNINGS 9,184 Expenditure Changes INCREASE (DECREASE) IN BUDGETED O&M COSTS 242,443 INCREASE (DECREASE) IN PAYBACK TO R&C FUND (238,851) INCREASE (DECREASE) CULVERT REPAIRS 31,546 INCREASE (DECREASE) HELICOPTER PAD REPAIRS (200,000) INCREASE (DECREASE) OTHER CAPITAL PURCHASES 122,000 INCREASE (DECREASE) IN DEBT SERVICE (4,100) INCREASE (DECREASE) IN EXCESS EARNINGS TRANSFER 8,555 INCREASE (DECREASE) IN OPERATING RESERVE TRANSFER 23,000 Other IMMATERIAL ROUNDING DIFFERENCES (2) NET INCREASE(DECREASE) (6,225) FY2007 ANNUAL CONTRIBUTION - 16,389,592 (0) 2/15/20071:52 PM H:\all\imacmillan\BradleyLake\F YO8BRADLEY\2008BradleyBdgt.xlsSchedule C Utility Contrib BRADLEY LAKE R&C FUND DISBURSEMENTS AND REPAYMENTS SCHEDULE D ACTUAL TO REPAY Description at 06/30/05 R&C FUND PROJECTS Governor (388,951.57) Replace RFLS 0.00 Replace Runners 0.00 Replace cable from dam to power house 0.00 Replace power system stabilizer 0.00 Replace two RTUs 0.00 0.00 (388,951.57)| Current Year R&C Repayment Adjust fpr Current Year Budget Less Interest in Fund Applied to Repayment Net Transfer from Revenue Fund Cumulative Prior Years R&C Repayments Retained Interest R&C Fund Interest NET DUE TO R&C FUND R&C FUND CASH FLOW PROJECTION Beginning Investment Balance Disbursements-current year accrued Disbursements-prior year accrued Utilities’ R&C Repayment Interest earnings retained in fund Accrued R&C Payable at year end Ending Investment Balance PROJECTED NET DUE + ENDING INVESTMENT BALANCE REPAYMENT AMOUNT $1,649,677 X 25% $4,473,687 X 25% $1,338,000 X 25% Actual Disburse 1,401,084.54 0.00 598,761.00 38,783.54 0.00 0.00 2,038,629.08 Actual TO REPAY at 06/30/06 1,012,132.97 0.00 598,761.00 38,783.54 0.00 0.00 0.00 1,649,677.51 (412,419.38) (452,824.42) (452,824.42) 784,433.71 5,994,816.84 (2,038,629.08)| 0.00 0.00 202,517.49 56,861.04 4,215,566.29 5,000,000.00 412,419.38 412,419.38 PROJECTED Disburse 1,754,368.00 0.00 1,154,285.00 1,560,434.00 0.00 4,600.00 4,473,687.00 PROJECTED TO REPAY at 06/30/07 2,766,500.97 0.00 1,753,046.00 1,599,217.54 0.00 4,600.00 0.00 6,123,364.51 (1,530,841.13) 48,607.13 0.00 (1,482,234.00) (412,419.38) 343,851.24 4,572,562.37 4,215,566.29 (4,473,687.00) (56,861.04) 412,419.38 330,000.00 0.00 427,437.63 5,000,000.00 412,419.38 1,118,421.75 1,530,841.13 PROJECTED Disburse 0.00 85,000.00 0.00 973,000.00 200,000.00 80,000.00 1,338,000.00 PROJECTED TO REPAY at 06/30/08 2,766,500.97 85,000.00 1,753,046.00 2,572,217.54 200,000.00 84,600.00 0.00 7,461,364.51 (1,865,341.13) 0.00 621,958.37 (1,243,382.76) (1,894,653.38) 0.00 (1,894,653.38) 4,323,328.37 427,437.63 (1,338,000.00) 0.00 1,482,234.00 105,000.00 0.00 676,671.63 5,000,000.00 412,419.38 1,118,421.75 334,500.00 1,865,341.13 2/15/20071:54 PM H:\all\imacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xlsSchedule D R&C Disb & Repay BRADLEY LAKE BUDGET PROJECTED CASH FLOW BY FUND SCHEDULE G Rev Fund O&M Fund Debt Fund Op Reserve R&C Cap Reserve Total FY2007 Budget Revenues 16,395,817 : 16,395,817 Interest 983,711 - - 330,000 1,3 13)7 1 Transfers to O&M (3,428,343) 3,428,343 - - Transfers to Debt Service (12,273,950) 12,273,950 - Payback of R&C Fund (412,419) (534,187) 412,419 (534,187) Other Prior Year Payables (45,479) O&M Reauisitions (3,428,343) (3,428,343) Due To R&C at Year End - : - Capital Requistions (250,000) 250,000 - (4,530,548) (4,530,548) Renewals/Replacements (250,000) - - (250,000) To Excess Earnings fund (250,000) (250,000) Debt Payments (12,273,950) (12,273,950) Increase Op Reserve (25,000) 25,000 - 6/30/2007 Projected Balance 1,152,235 0 - 686,400 427,437 12,834,000 15,145,552 a FY2008 Budget - Revenues 16,389,592 - 16,389,592 Interest 1,199,527 105,000 1,304,527 Transfer back interest - - Transfers to O&M (3,670,786) 3,670,786 - - Transfers to Debt Service (12,269,850) 12,269,850 - Payback of R&C Fund (1,482,234) 1,482,234 - 2008 O&M Requisitions (3,670,786) (3,670,786) 2008 Capital Requistions (203,546) 203,546 - - Renewals/Replacements (203,546) - (1,338,000) - (1,541,546) To Excess Earnings fund (258,555) (258,555) Payment of Prior Year Deficit - Debt Payments (12,269,850) (12,269,850) Increase Op Reserve (48,000) 48,000 - 6/30/2008 Projected Balance 808,383 0 - 734,400 676,671 12,834,000 15,098,933 Assumption: should be 20.00% For purpose of budget cash flows, July 01 debt service projected 20.01% is assumed to be disbursed on June 30 Ending balance in Revene Fund equals Projected R&C repayment net of interest retained in R&C Fund Repayment occurs in subsequent fiscal year FY07 FY08 Budget Repay 1,482,234 1,243,383 Interest Retained (330,000) (435,000) 1,152,234 808,383 2/15/20071:54 PM H:\all\imacmillan\BradleyLake\F YO8BRADLEY\2008BradleyBdgt.xlsSchedule G-Cash balances BRADLEY LAKE BUDGET PROJECTED INTEREST INCOME SCHEDULE! Beginning Balance Receipts Utility Contributions. Interest Income Received Equipment Sale Repay Prior Year Deficit Disbursements Prior year accrued expenses O.& MExpenses R&C Fund Disbursement-Sch D Debt Service Payment SCH A Capital Excess Eamings Transfer Other Adjustment-Equal Sch G Adjust to Actual Ending Balance Interest Income Projection Estimated Accrued Interest Adjust to Actual Received TOTAL Julo7 A Ui Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Mar-08 08 May-08 Jun-08 OTHER ADJ 75,145,551.61 15,145,551.61 16,076,499.92 16,794,921.26 _17,586,094.59 16,441,083.92 19,526,455.26 20,620,302.59 19,049,164.62 20,137,074.96 21,221,883.29 22,294,427.62 _23,396,675.96 24,248,104.29 16,389,592,00 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 ADJ INTEREST 1,304,526.65 800,000.00 0.00 0.00 0.00 0.00 0.00 594,133.70 0.00 0.00 0.00 0.00 0.00 {I(B9/607105) TO ACCRUAL BASIS 0.00 0.00 0.00 0.00 0.00 77,694,118.65 __2,165,799.53 _1,065,790.33 1,365,799.33 1,365,799.33 _1,065,799.33 _1,965,799.33 1,959,933.03 _1,965,799.33 _1,365,799.33_1,365,799.33_—1,965,799.33 __1,365,799.33 (89,607.05) 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 (3,670,786.00) (976,296.00) (220,090.00) (220,090.00) (220,090.00) (220,090.00) (220,090.00) (228,590.00) (220,090.00) (220,090.00) (220,090.00) (220,090.00) (485,090.00) (1,338,300.00) 0.00 (315,288.00) (382,536.00) (246,720.00) (58,338.00) (49,862.00) (75,556.00) (50,000.00) (60,000.00) (60,000.00) (20,000.00) (20,000.00) (12,269,850.00) 0.00 0.00 0.00 * 0.00 0.00 — (3,224,925.00) (9,044,925.00) ASSUME DEBT (203,546.00) 0.00 (112,000.00) (2,000.00) (14,000.00) (2,000.00) (2,000.00) (2,000.00) (7,799.00) (901.00) (13,165.00) (23,461.00) (8,281.00) (14,939.00) SERVICE PD 06/30/08 (258,555.02) (258,555.02) 0.00 0.00 0.00 0.00 (17.741,037.02) __(1,234,851.02) (647,376.00) (604,626.00) (480,810.00) (280,428.00) (271,952.00) _(3,531,071.00) (277,889.00) (280,991.00) (293,255.00) (263,551.00) (514,371.00) _(9,059,864.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15,098,633.24 _16,076,499.92 _16,794,921.26 _17,556,094.59 _ 18,441,083.92 _19,526,455.26 _20,620,302.59 _19,049,164.62__20,137,074.96__21,221,883.29 _22,294,427.62 _23,396,675.96 _24,248,104.29 _15,098,633.24 1,304,526.65 87,616.92 91,532.32 95,680.72 100,503.91 106,419.18 112,380.65 103,817.95 109,747.06 115,659.26 121,504.63 127,511.88 132,152.17 7,304 526.65 87,616.92 197,532.32 95,680.72 100,503.91 106,419.18 712,380.65 103,817.95 109,747.06 __ 115,659.26 121,504.63 127,511.88 132,152.17 0.00 Payment of Accrued Interest 594,133.70 2/15/20071:55 PM H:\all\Imacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xlsSchedule I-Interest Inc R&C PROJECTS DISBURSEMENTS Governor Project FY02 FY03 FY04 FY05-PD FROM R&C IN 06 FY06 FY07 as of 01/31/07 ESTIMATED ADDT'L FY07 COMPLETED BY FY08 PROJECTED ADDITIONAL PROJECTED TOTAL Needle Repairs FY02 FY03 FY04 COMPLETED IN FY04 Runner Repairs FY02 FY03 FY04 FY0S FY06 FYO7 as of 01/31/07 ESTIMATED ADDT'L FY07 COMPLETED BY FY08 PROJECTED ADDITIONAL PROJECTED TOTAL SCADA FY02 FY03 FY04 COMPLETED Cable Repair FY06 FY07 as of 01/31/07 ESTIMATED ADDT'L FY07 ESTIMATED ADDT'L FY08 PROJECTED ADDITIONAL PROJECTED TOTAL RTU Replacements FYO7 as of 12/31/06 ESTIMATED ADDT'L FY07 ESTIMATED ADDT'L FY08 PROJECTED ADDITIONAL PROJECTED TOTAL R&C Fund Construction FD Total 263.17 0.00 263.17 103,213.18 0.00 103,213.18 135,710.34 0.00 135,710.34 256,783.06 1,238,667.17 1,495,450.23 1,144,301.48 577,446.49 1,721,747.97 1,065,367.89 0.00. 1,065,367.89. 2,705,639.12 1,816,113.66 _4,521,752.78 689,000.00 0.00 689,000.00 0.00 0.00 0.00 689,000.00 0.00 689,000.00 3,394,639.12 1,816,113.66 _5,210,752.78 14,645.52 0.00 14,645.52 909,158.20 0.00 909,158.20 560,510.51 0.00 560,510.51 1,484,314.23 0.00 1,484,314.23 14,256.00 0.00 14,256.00 27,631.63 0.00 27,631.63 78.76 0.00 78.76 0.00 0.00 0.00 598,760.80 0.00 598,760.80 5,285.59 0.00 5,285.59 646,012.78 0.00 646,012.78 1,149,000.00 0.00 1,149,000.00 0.00 0.00 0.00 1,149,000.00 0.00 _1,149,000.00 1,795,012.78 0.00 _1,795,012.78 115,049.07 0.00 115,049.07 173,697.03 0.00 173,697.03 305.35 0.00 305.35 289,051.45 0.00 289,051.45 38,783.54 0.00 38,783.54 47,434.30 0.00 47,434.30 86,217.84 0.00 86,217.84 1,513,000.00 0.00 1,513,000.00 973,000.00 0.00 973,000.00 2,486,000.00 0.00 _2,486,000.00 2,572,217.84 0.00 2,572,217.84 627.21 0.00 627.21 627.21 0.00 627.21 4,000.00 0.00 4,000.00 80,000.00 0.00 80,000.00 84,000.00 0.00 84,000.00 84,627.21 0.00 84,627.21 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT FY 2006 FY 2007 ACTUALS FY2007 ACTUALS FINAL BUDGET AS OF 12/31/06 REVENUES, EXPENSES & CHANGES IN SURPLUS REVENUES UTILITY CONTRIBUTIONS 14,448,825 16,395,817 8,197,908 INTEREST INCOME 1,896,353 1,313,711 1,026,108 SALE OF SURPLUS : - 5,656 16,345,178 17,709,528 9,229,671 EXPENSES OPERATIONS 3,212,202 3,428,343 1,667,278 R&C REPAYMENTS 412,419 1,482,234 - (a) R&C INTEREST APPLIED AS REPMT 202,517 é 182,054 PURCHASE OF VEHICLE - CULVERT REPAIRS 50,000 2,431 HELICOPTER PAD REPAIRS 200,000 TRANSFER TO OPERATING RESERVE 25,000 25,002 DEBT SERVICE (net of Capital Reserve Reduction) 12,276,325 12,273,950 6,136,975 TRANSFER TO ARBITRAGE 241,714 250,000 258,555 REFUND PRIOR YEAR SURPLUS 704,801 - 17,049,979 17,709,527 8,272,296 CURRENT YEAR SURPLUS(DEFICIT) (704,801) 1 957,376 PRIOR YEAR SURPLUS (DEFICIT) 704,801 - BEGINNING SURPLUS (DEFICIT) (1) COMMITTED CY EXP & DEBT SVC (957,376) ENDING SURPLUS (DEFICIT) (0) 0 - BALANCE SHEET ASSETS REVENUE FUND 457,898 - 1,372,736 OPERATING FUND 534,188 196,739 DUE TO REV FUND (surplus sale cash in transit) - 656 PREPAID SCADA MAINT & D&O Insurance 20,525 17,929 RECEIVABLES - FY06 SHORTFALL 70,648 70,648 1,083,260 : 1,658,709 LIABILITIES & SURPLUS CURRENT LIABILITIES 670,840 - 285,972 DUE TO OP RESERVE - PREPAID REVENUE - 415,361 COMMITTED CY EXP & DEBT SVC - - 957,376 FY06 R&C REPAYMENT 8/16/06 412,419 - 1,083,260 - 1,658,709 ©) - (0) OTHER INFORMATION OPERATING RESERVE 661,402 686,402 MONTHLY CONTRIBUTIONS 1,335,837 1,366,318 Total R&C Fund receivable at 12/31/06: $1,789,195 Note (a) The annual R&C repayment is processed at year end after all current year R&C expenditures have been processed. 2007 Sum and Cash Bal.xls - B-SUM Page 1 of 4 BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B SUMMARY (A) HEA Annual Operations & Maintenance (B) CEA Dispatch and Substation/SVC Maintenance (C) Other O&M and Maintenance Projects (D) Insurance Costs (E) Regulatory Costs (H) Contingencies (F) Administrative Costs (G) Bond Refunding Costs Note (a) YTD Budget amount at 12/31/06 is a prorated 50% of the total annual budget, except for the Admin Fee, Arbitrage, Risk Assessment and the 5 Year Plan which were budgeted to be 100% complete at 12/31/06. Note (b) Over (Under) Budget amounts are the difference between the prorated budget at 12/31/06 and actuals at 12/31/06. Current variances reflect the sporatic nature of when expenses occur throughout the year. APPROVED BUDGET ACTUALS OVER FY2007 YTD YTD (UNDER) BUDGET 12/31/06 (a) 12/31/06 BUDGET (b) 1,494,965.00 747,482.50 577,667.16 (169,815.34) 130,000.00 65,000.00 7,920.38 (57,079.62) 444,521.00 222,260.50 159,401.10 (62,859.40) 653,356.60 624,856.60 614,896.61 (9,959.99) 331,000.00 210,500.00 94,790.46 (115,709.54) 100,000.00 50,000.00 - (50,000.00) 3,153,842.60 | 1,920,099.60 | 1,454,675.71 (465,423.89) 274,500.00 240,250.00 212,602.25 (27,647.75) 3,428,342.60 | 2,160,349.60 | 1,667,277.96 | (493,071.64) 3,428,342.60 | 2,160,349.60 | 1,667,277.96 | (493,071.64) FYO7BdgtStatusRpt.xls APPROVED BUDGET ACTUALS OVER FY2007 YTD YTD (UNDER) BUDGET 12/31/06 (a) 12/31/06 BUDGET (b) ee FERC 535 - Operation Supervision & Engineering (A) HEA O&M Contract 125,569.00 62,784.50 83,992.64 21,208.14 (C) HEA On-Site Civil Project Manager - - - (C) HEA Digitize & Control Project Drawings E1201 53500 00000000 24301 220201 E1201 53500 04270007 924301 «= 220201 E1201 53500 04270008 24301 220201 sss 125,569.00 62,784.50 83,992.64 21,208.14 FERC 537 - Hydraulic Expenses E1201 53700 00000000 24301:« 220201 :«00) (A) HEA O&M Contract 49,200.00 24,600.00 28,757.62 4,157.62 49,200.00 24,600.00 28,757.62 4,157.62 FERC 538 - Electric Expenses £1201 53800 00000000 © 24301-«-220201:«00) (A) HEA O&M Contract 222,000.00 111,000.00 83,190.02 (27,809.98) £1201 53800 00000000 24303 «= 220201:~00} (C) SOA BOILIER INSPECTION - - - 222,000.00 111,000.00 83,190.02 (27,809.98) FERC 539 - Misc. Hydraulic Power Generation Expenses £1201 53900 00000000 + 24301:« 220201 :«00) (A) HEA O&M Contract 331,625.00 165,812.50 149,707.42 (16,105.08) £1201 53900 05270002 24301:«-220201:«00| (C) Replace Two Way Radios 3,000.00 1,500.00 (1,500.00) £1201 53900 00000000 + 24302-»« 220201 :-«00) (C) HEA Circuits and Radio - To Bernice Lake 90,000.00 45,000.00 45,000.00 - £1201 53900 00000000 24312» 220201 :~«00) (C) CEA Circuits -Bernice Lake to Anchorage 28,740.00 14,370.00 14,373.00 3.00 453,365.00 226,682.50 209,080.42 (17,602.08) FERC 540 - Rents £1201 54000 00000000 00000 220201 ~00| (C) Bradley Lake FERC land use fees (5% increase budgeted) 74,000.00 37,000.00 - (37,000.00) 74,000.00 37,000.00 - (37,000.00) FERC 541 - Maintenance Supervision & Engineering E1201 54100 00000000 24301 «= 220201:~«00) (A) HEA O&M Contract 82,451.00 41,225.50 7,851.48 (33,374.02) 82,451.00 41,225.50 7,851.48 (33,374.02) FERC 542 - Maintenance of Structures £1201 54200 00000000 © 24301.:~«220201:«00) (A) HEA O&M Contract 90,400.00 45,200.00 55,831.19 10,631.19 E1201 54200 220201 (C) Other Ea es : 90,400.00 45,200.00 55,831.19 10,631.19 FERC 543 - Maintenance of Reservoirs, Dams & Waterways £1201 54300 00000000 -24301-~«-220201:«00} (A) HEA O&M Contract 10,440.00 5,220.00 2,070.68 (3,149.32) E1201 54300 04270001 + 24301 -«-220201:«00| (C) Bradley Lake Dam Repair - E1201 54300 04270002» 24301-«-220201:«00) (C) Nuka Diversion = E1201 54300 04270004 + 24301-«-220201:«00| (C) Middle Fork Diversion - £1201 54300 04270005 + 24301-~«-220201:«00| (C) Kachemak Creek Gauging Station - E1201 54300 (C) Other O&M 10,440.00 5,220.00 2,070.68 (3,149.32) Page 2 of 4 FYO7BdgtStatusRpt.xis APPROVED BUDGET ACTUALS OVER FY2007 YTD YTD (UNDER) BUDGET 12/31/06 (a) 12/31/06 BUDGET (b) FERC 544 - Maintenance of Electric Plant E1201 54400 00000000 24301» 220201 (A) HEA O&M Contract 280,200.00 140,100.00 105,137.50 (34,962.50) ss E1201 54400 04270012 24301 «220201 (A) HEA O&M Contract-Runner Repairs 280,200.00 140,100.00 105,137.50 (34,962.50) FERC 545 - Maintenance of Misc. Hydraulic Plant £1201 54500 00000000 24301 ~« 220201 :~«00) (A) HEA O&M Contract 213,000.00 106,500.00 39,690.17 (66,809.83) £1201 54500 220201 (C) Penstock Drain Clean-out : - - 213,000.00 106,500.00 39,690.17 (66,809.83) FERC 556 - System Control & Load Dispatching E1201 55600 00000000 24301 220201 :~«00} (A) HEA O&M Contract 20,080.00 10,040.00 15,972.21 5,932.21 £1201 55601 00000000 00000 220201 +100) (C) NOAA Weather Service - - E1201 55602 00000000 00000 220201 +00) (C) SCS Snow Measurement 9,000.00 4,500.00 (3,536.21) (8,036.21)|PY exp redux E1201 55603 00000000 00000 + 220201 +00} (C) UAA Seismic monitoring and reporting 56,500.00 28,250.00 12,469.97 (15,780.03) E1201 55604 00000000 00000 + 220201 +00! (C) USGS Streamguaging 183,281.00 91,640.50 90,894.34 (746.16) 1201 55604 © 00000000 24303 «220201 :~«00) (C) State of Alaska Permits 200.00 200.00 268,861.00 134,430.50 116,000.31 (18,430.19) FERC 562 - Station Expenses £1201 56200 00000000 24312» 220201:~«00} (B) CEA SVC/Substation Maintenance Contract 130,000.00 65,000.00 7,920.38 (57,079.62)|thru 11/06 E1201 56200 05270006 + 24312 -»=«-220201:~«00} (C) SVC Condition Assessment/Staff Training - - - 130,000.00 65,000.00 7,920.38 (57,079.62) FERC 571 - Maintenance of Overhead Lines £1201 57100 00000000 + 24301 +~=« 220201 :~«00} (A) HEA Overhead Line Maintenance 70,000.00 35,000.00 5,466.23 (29,533.77)|thru 9/06 70,000.00 35,000.00 5,466.23 (29,533.77) (H) Contingencies 100,000.00 50,000.00 (50,000.00) FERC 920 - Administrative Expense E1201 58300 00000000 00000 +=220201 +100} (F) AEA Admin Fee 200,000.00 200,000.00 200,000.00 -__|thru 6/07 AEA Administrative Costs 200,000.00 200,000.00 200,000.00 - PMC Costs £1201 58301 00000000 00000: 220201 :«00) (F) Bradley Lake Audit fees 8,500.00 4,250.00 (4,250.00) £1201 58302 00000000 00000 + 220201 +400] (F) Bradley Lake PMC Legal 40,000.00 20,000.00 (670.00) (20,670.00)|PY exp redux £1201 58303 © 00000000 00000 += 220201 :~«00| (F) Bradley Lake Arbitrage Report 6,000.00 6,000.00 4,475.00 (1,525.00)|thru 6/07 £1201 58305 00000000 00000 220201 +00] (F) Bradley Lake Trustee fees 20,000.00 10,000.00 8,797.25 (1,202.75) PMC Costs 74,500.00 40,250.00 12,602.25 (27,647.75) Bond Refunding Costs Reimburseable costs Refunding Costs - - 5 a TOTAL FERC 920 274,500.00 240,250.00 212,602.25 (27,647.75) Page 3 of 4 FY0/BdgtStatusRpt.xis E1201 E1201 E1201 E1201 E1201 E1201 £1201 Page 4 of 4 58401 58401 58306 58800 58801 58801 58801 00000000 00000000 00000000 00000000 06270006 04270020 03270010 24301 24312 00000 00000 00000 00000 220201 220201 220201 220201 220201 220201 220201 00 sseses FERC 924 - Property Insurance (D) Insurance Premiums (D) Homer Electric Insurance (D) Risk Assessment FERC 928 - Regulatory Commission Expenses (E) FERC administrative fees (E) FERC 5 Year Inspection (E) Seismic Survey Spillway (E) Contractual Engineer - FERC license issues TOTAL BRADLEY LAKE BUDGET APPROVED BUDGET ACTUALS OVER FY2007 YTD YTD (UNDER) BUDGET 12/31/06 (a) 12/31/06 BUDGET (b) ees 581,356.60 581,356.60 567,014.00 (14,342.60)|thru 6/07 57,000.00 28,500.00 28,495.11 (4.89) 15,000.00 15,000.00 19,387.50 4,387.50 653,356.60 624,856.60 614,896.61 (9,959.99) 126,000.00 63,000.00 F (63,000.00) 90,000.00 90,000.00 77,574.67 (12,425.33)|thru 11/06 115,000.00 57,500.00 17,215.79 (40,284.21)|thru 11/06 331,000.00 210,500.00 94,790.46 (115,709.54) 3,428,342.60 | 2,160,349.60 | 1,667,277.96 (493,071.64) * Budget 100% at 12/31/06 for: Admin Fee, Arbitrage, Risk Assess, Insurance Prem & 5 yr inspection FY07BagtStatusRpt.xls Agenda Item: 7¢ MOTION: Move: Second: Resolved, that pursuant to section 13(c)(ii)(A) of the Bradley Lake Agreement for the Sale and Purchase of Electric Power, the Committee approves the execution of the Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project - Amendment No. 3 in the form presented to the Committee. AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT AMENDMENT NO. 3 THIS AGREEMENT entered into this 23" day of February, 2007, 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 five years and automatically renewed 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, 2007, the term of the Agreement shall be five years and the term shall automatically be renewed for successive five-year periods, until terminated as provided in the Agreement. 2 Section 5 of the Agreement is hereby amended by adding the following sentence: In performing its duties under paragraph 5(q), not less than seven days prior to executing any contract for project work valued in excess of one million dollars, the Operator will forward by express mail or overnight delivery service a complete copy of the unexecuted contract to each Purchaser for review and comment. 3. 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 Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project 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. 4. Paragraph 13(a)(8) of the Agreement is amended to read as follows: (8) | A copy 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. 5. 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. 6. 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 loss 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. [Intentionally left blank] Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project 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 If you are unable to attend the meeting in person, please use the following phone instructions: TELECONFERENCE INSTRUCTIONS Friday, February 23, 2007 — 10:00 a.m. To join the meeting, please do the following: Dial 1-800-315-6338 Enter 0223# Oe ALASKA Alt a — [= ALASKA Alaska Industrial Development WA ind Export Authority BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Friday, February 23, 2007 — 10:00 a.m. (via electronic media at CEA’s Board Room - 5601 Minnesota Drive) 43 CALL TO ORDER Stewart 2 ROLL CALL (for Committee members) 3. PUBLIC ROLL CALL (for all others present) 4. PUBLIC COMMENT 5. AGENDA COMMENTS 6. APPROVAL OF MEETING MINUTES December 15, 2006 te NEW BUSINESS A. FY 08 Operating and Capital Budget MacMillan B. FY 07 Interim Budget Report MacMillan Cc. Homer O&M Agreement Janorschke 8. COMMITTEE REPORTS / COMMENTS A. Operators Report » Update on Governor Modification Project Governor Committee B. Next Meeting Date Stewart 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 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES (held @ CEA’s Board Room) Anchorage, Alaska Friday, December 15, 2006 — 10:00 a.m. 1. CALL TO ORDER Chair Stewart called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Friday, December 15, 2006, from Chugach Electric Association’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: Bill Stewart Chugach Electric Association Steve Haagenson Golden Valley Electric Association Bradley Janorschke Homer Electric Association Wayne Carmony Matanuska Electric Association Jim Posey Anchorage Municipal Light & Power Tim Barnum City of Seward Bryan Carey Alaska Energy Authority 3. PUBLIC ROLL CALL Tuckerman Babcock, Matanuska Electric Association Elvi Gray Jackson, Anchorage Municipal Light & Power John Cooley, Chugach Electric Association Bob Price, Anchorage Municipal Light & Power Rick Miller, Anchorage Municipal Light & Power Mike Cunningham, Chugach Electric Association Linda MacMillan, Alaska Energy Authority Brian Hickey, Chugach Electric Association Henri Dale, Golden Valley Electric Association Charles O’Hare, Homer Electric Association Jenny Trieu, AterWynne Suzanne Gibson, Chugach Electric Association Gary Stromberg, Parisena, Stromberg & Company (teleconference) Bradley Lake Project Management Committee Meeting December 15, 2006 Page 2 of 3 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES - July 26, 2006 Mr. Haagenson moved to approve the minutes of the July 26, 2006 meeting, seconded by Mr. Janorschke. The meeting minutes were unanimously approved as presented. te NEW BUSINESS 7A. Bradley Lake Audit Status Report — Gary Stromberg Mr. Stromberg presented the final draft of the audited financial statements and other financial information for Bradley Lake Project Management Committee Operating and Revenue Funds for the period ending June 30, 2006 and 2005. The group would like to receive an interim or budget variance report throughout the year. MOTION #06-10: Mr. Haagenson moved the Bradley Lake Project Management Committee accept the results of the Bradley Lake Project Management Committee Operating and Revenue Funds as of June 30 2006, as presented by Parasena, Stromberg & Company, APC. Seconded by Mr. Posey. A voice vote was taken and the motion passed by unanimous approval. MOTION #06-11: Mr. Posey moved the Bradley Lake Project Management Committee instruct the utilities to pay their proportionate share of the FY06 short fall ($70,648.40) to the bond trustee, U.S. Bank, on or before February 1, 2007. Seconded by Mr. Janorschke. A voice vote was taken and the motion passed by unanimous approval. 7B. Insurance Coverage — Mike Cunningham Mr. Cunningham gave an overview of a 2-page handout on commercial property and boiler and machinery. The group discussed comfort levels with amount of insurance coverage as well as premium prices. 7C. Homer O&M Agreement — Brad Janorschke Mr. Janorschke presented the group with HEA’s request to have a 5-year renewable instead of a year-to-year Agreement. The 5-year Agreement would be easier for HEA in regards to planning and training. HEA is requesting a 5-year Agreement and change the year to 2007. After discussion, the Chairman said that the group who would be tasked with looking this Agreement over would bring back something to the BPMC in 60 days. Each utility will have one person designated to perform the review and report back. Chair Stewart will have someone Bradley Lake Project Management Committee Meeting December 15, 2006 Page 3 of 3 from his office schedule the meeting with an invitation for the utilities to send someone to participate. 8. COMMITTEE REPORTS 8A. Operators Report / Update on Governor’s Modification Project— Charlie O’Hare Mr. O’Hare gave an overview of an update handout, which included budget information, available spin limit, and power and fiber cable replacement — the report states that the Bradley governor project is 95% complete. There was some discussion as to the total expenditures and Mr. O'Hare said he will have the total expenditures to date at the next meeting. He also stated that the O&D recommends the BPMC rescind the present limits on Bradley Lake spinning reserve in favor of new limits and/or use requirements developed by the IOC Dispatch Subcommittee when they have been finalized. After some discussion, Mr. O'Hare said he would take this back to the O&D Committee and re-address it. The issue of the power and fiber cable replacement was discussed, with the emphasis being on the over projected project cost of $200,000. HEA will provide a budgetary update at the next BPMC meeting to include a budget amendment request, if required. HEA will have Rick Baldwin review and approve the construction contract bid selection. After approval, they will be forwarded to the BPMC Chair. 8B. NEXT MEETING DATE The next meeting date will be in February at the call of the Chair. 9. ADJOURNMENT The meeting was adjourned at 11:20 a.m. BY: Bill Stewart, Chairman ATTEST: Alaska Energy Authority, Secretary Agenda Item: 7A MOTION: Move the Bradley Lake Project Management Committee approve the fiscal year 2008 Operating and Capital budget as presented. Move: Second: OVERVIEW OF BUDGET CHANGES BETWEEN FY07 AND FY08 FY07 Utility Contributions DECREASES R&C Fund transfer due to application of interest retained in fund offset by additional expenditures to repay Decrease in one time repairs on Schedule A Decrease in debt service TOTAL DECREASES INCREASES Operating budget increase mainly due to increased FERC Admin Fees and right of way clearing work Increase in transfer to operating reserve due to increased operating budget Reduced interest earnings due to projected less investment balances Increase in projected arbitrage transfer TOTAL INCREASES FY08 Utility Contributions 16,395,817 (238,851) (46,456) (4,100) (289,407) 242,443 23,000 9,184 8,555 283,182 16,389,592 BRADLEY LAKE HYDROELECTRIC PROJECT Schedule A FY05S FY06 FY2007 INC(DEC) ACTUALS ACTUALS BUDGET BUDGET FROM PY REVENUES, EXPENSES & CHANGES IN SURPLUS REVENUES UTILITY CONTRIBUTIONS, 15,325,245 14,448,825 16,395,817 16,389,592 (6,225) INTEREST INCOME 1,770,987 1,896,353 1,313,711 1,304,527 (9,184) SALE OF VEHICLE 0 0 0 0 0 FEMA GRANT REVENUE 293,170 oO oO 0 0 17,389,402 16,345,178 17,709,528 17,694,119 (15,409) EXPENSES OPERATIONS 2,977,028 3,212,203 3,428,343 3,670,786 242,443 RENEWALS/REPLACEMENTS (R&C FUND REPAYMENTS 1,896,543 614,936 1,482,234 1,243,383 (238,851) CULVERT REPAIRS 0 oO 50,000 81,546 31,546 HELICOPTER PAD REPAIRS 0 oO 200,000 0 (200,000) PURCHASE MAN-LIFT, TRUCK & PLOW ATTACHMENT 0 0 0 122,000 122,000 TRANSFER TO OPERATING RESERVE 15,000 0 25,000 48,000 23,000 DEBT SERVICE (net of Capital Reserve Reductions) 12,273,050 12,276,325 12,273,950 12,269,850 (4,100) ARBITRAGE TRANSFER 227,782 241,714 250,000 258,555 8,555 PRIOR YEARS SURPLUS (DEFICIT) oO oO oO oO 0 17,389,403 16,345,178 17,709,527 17,694,120 (15,407) CURRENT YEAR SURPLUS (DEFICIT) (1) 0 BEGINNING SURPLUS (DEFICIT) oO 0 ENDING SURPLUS (DEFICIT) —_ ) oO a BALANCE SHEET ASSETS REVENUE FUND 524,901 457,899 OPERATING FUND 650,866 534,187 RECEIVABLE FROM UTILITIES. - 70,648 PREPAID EXPENSES - 20,525 RECEIVABLE-FEMA GRANT 293,170 : ___1,468,937___1,083,259 LIABILITIES & SURPLUS LIABILITIES 416,101 670,840 PREPAID UTILITY CONTRIBUTION 348,035 - PAYABLE TO UTILITIES 704,801 - R&C REPAYMENT : 412,419 1,468,937 ‘1,083,259 ERIS 5 5 E OTHER INFORMATION OPERATING RESERVE * 661,402 661,402 686,402 MONTHLY CONTRIBUTIONS 1,335,837 1,335,837 1,366,318 1,365,799 Required to be 20% of budgeted operating expense 2/15/20071:51 PMH:\all\Iimacmillan\BradleyLake\F YO8BRADLEY\2008BradleyBdgt.xlsSchedule A-Budget Summary BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B 31-Dec-06 FY2006 FY2006 FY2007 FY2007 FY2008 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET SUMMARY (A) HEA Annual Operations & Maintenance 1,278,795 1,459,416 (180,621) 1,494,965 577,666 1,750,709 (B) CEA Dispatch and Substation/SVC Maintenance 105,200 89,640 15,560 130,000 7,920 103,356 (C) Other O&M and Maintenance Projects 437,131 429,866 7,265 444,521 159,401 453,740 (D) Insurance Costs 588,503 599,449 (10,946) 653,357 614,897 648,481 (E) Regulatory Costs 316,500 392,836 (76,336) 331,500 94,791 340,000 (H) Contingencies 94,919 0 94,919 100,000 0 100,000 2,821,048 2,971,207 (150,159) 3,154,343 1,454,675 3,396,286 (F) Administrative Costs 274,500 240,994 33,506 274,500 212,602 274,500 3,095,548 3,212,201 (116,653) 3,428,843 1,667,277 3,670,786 (G) BUDGET ADJUST ESTIMATE 0 0 0 0 0 0 3,095,548 3,212,201 (116,653) 3,428,843 1,667,277 L 3,670,786 2/15/2007 1:52 PM Page 1 of 4 H:\all\lmacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xisSchedule 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 (A) HEA O&M Contract (C) Replace Two Way Radios (C) HEA Circuits and Radio - To Bernice Lake (C) CEA Circuits -Bernice Lake to Anchorage FERC 540 - Rents (C) Bradley Lake FERC land use fees (5% increase bu FERC 541 - Maintenance Supervision & Engineering (A) HEA O&M Contract FERC 542 - Maintenance of Structures (A) HEA O&M Contract (C) Other (A) HEA O&M Contract (C) Page 2 of 4 FERC 539 - Misc. Hydraulic Power Generation Expenses FERC 543 - Maintenance of Reservoirs, Dams & Waterways 31-Dec-06 FY2006 FY2006 FY2007 FY2007 FY2008 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET 185,214 176,529 8,685 125,569 83,993 140,357 0 0 0 0 0 0 185,214 176,529 8,685 125,569 83,993 140,357 58,300 4,415 53,885 49,200 28,758 54,037 58,300 4,415 53,885 49,200 28,758 54,037 94,200 222,062 (127,862) 222,000 83,190 235,672 0. 0 0 0 0 0 94,200 222,062 (127,862) 222,000 83,190 235,672 253,100 193,557 59,543 331,625 149,707 393,785 10,000 5,761 4,239 3,000 0 90,000 90,000 0 90,000 45,000 90,000 28,740 28,746 (6) 28,740 14,373 28,740 381,840 318,064 63,776 453,365 209,080 512,525 74,000 64,587 9,413 74,000 0 65,000 74,000 64,587 9,413 74,000 0 65,000 0 0 0 82,451 7,851 63,204 0 0 0 82,451 7,851 63,204 53,500 116,324 (62,824) 90,400 55,831 93,347 0 0 0 0 0 0 53,500 116,324 (62,824) 90,400 55,831 93,347 15,400 0 15,400 10,440 2,071 14,202 0 0 0 0 0 2/15/2007 1:52 PM H:\all\imacmillan\BradleyLake\F YO8BRADLEY\2008BradleyBdgt.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B 31-Dec-06 FY2006 FY2006 FY2007 FY2007 FY2008 BUDGET ACTUAL VARIANCE BUDGET YTD ACTUAL BUDGET (C) 0 0 0 0 0 (C) 0 0 0 0 0 (C) ) 0 ) 0 0 (C) 0 0 0 0 15,400 0 15,400 10,440 2,071 14,202 FERC 544 - Maintenance of Electric Plant (A) HEA O&M Contract 295,000 296,380 (1,380) 280,200 105,137 247,020 (A) HEA O&M Contract-Runner Repairs 0 206,982 (206,982) 0 0 0 295,000 503,362 (208,362) 280,200 105,137 247,020 FERC 545 - Maintenance of Misc. Hydraulic Plant (A) HEA O&M Contract 274,000 171,116 102,884 213,000 39,690 184,455 (C) 0 0 0 0 0 0 274,000 171,116 102,884 213,000 39,690 184,455 FERC 556 - System Control & Load Dispatching (A) HEA O&M Contract 9,000 22,892 (13,892) 20,080 15,972 21,896 (A) HEA O&M Contract-contingency 5,081 18,736 (13,655) 0 0 (C) SCS Snow Measurement 9,000 15,966 (6,966) 9,000 (3,536) 10,000 (C) UAA Seismic monitoring and reporting 56,500 56,500 0 56,500 12,470 60,000 (C) USGS Streamguaging 168,791 168,206 585 183,281 90,894 200,000 (C) State of Alaska Permits 100 100 0 0 200 0 248,472 282,400 (33,928) 268,861 116,000 291,896 FERC 562 - Station Expenses (B) CEA SVC/Substation Maintenance Contract 105,200 89,640 15,560 130,000 7,920 103,356 (C) 0 0 0 0 0 0 105,200 89,640 15,560 130,000 7,920 103,356 FERC 571 - Maintenance of Overhead Lines (A) HEA Overhead Line Maintenance 36,000 30,423 5,577 70,000 5,466 302,734 36,000 30,423 5,577 70,000 5,466 302,734 (H) Contingencies 94,919 0 94,919 100,000 0 100,000 FERC 920 - Administrative Expense 2/15/2007 1:52 PM Page 3 of 4 H:\all\lmacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B 31-Dec-06 FY2006 FY2006 FY2007 FY2007 FY2008 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 0 8,500 (F) Bradley Lake PMC Legal 40,000 10,424 29,576 40,000 (670) 40,000 (F) Bradley Lake Arbitrage Report 6,000 4,875 1,125 6,000 4,475 6,000 (F) Bradley Lake Trustee fees 20,000 17,595 2,405 20,000 8,797 20,000 (F) PMC Costs 74,500 40,994 33,506 74,500 12,602 74,500 Bond Refunding Costs Reimburseable costs Refunding Costs 0 0 0 0 0 0 TOTAL FERC 920 274,500 240,994 33,506 274,500 212,602 274,500 FERC Insurance Premiums 528,503 525,909 2,594 581,357 567,014 578,500 (D) Homer Electric Insurance 60,000 56,285 3,715 57,000 28,495 54,981 (D) Risk Assessment 0 17,255 (17,255) 15,000 19,388 15,000 (D) 588,503 599,449 (10,946) 653,357 614,897 648,481 FERC FERC administrative fees 126,000 269,272 (143,272) 126,000 0 200,000 (E) FERC 5 Year Inspection 75,000 38,419 36,581 90,000 77,575 0 (E) Seismic Survey Spillway 0 0 0 (E) Contractual Engineer - FERC license issues - 115,500 85,145 30,355 115,500 17,216 140,000 316,500 392,836 (76,336) 331,500 94,791 340,000 3,095,548 3,212,201 (116,653) 3,428,843 1,667,277 3,670,786 TOTAL BRADLEY LAKE BUDGET 2/15/2007 1:52 PM Page 4 of 4 H:\all\lmacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xlsSchedule B-Budget Detail BRADLEY LAKE MONTHLY UTILITY CONTRIBUTION SCHEDULE C ACTUAL BUDGET i PERCENT FY2006 FY2007 FY2008 FY2008 POWER PURCHASER SHARE TOTAL TOTAL TOTAL DECREASE CHUGACH ELECTRIC 30.4% 4,392,444 4,984,332 4,982,436 (1,896) MUNICIPALITY OF ANCHORAGE 25.9% 3,742,248 4,246,512 4,244,904 (1,608) AEG&T-HEA 12.0% 1,733,856 1,967,496 1,966,752 (744) AEG&T-MEA 13.8% 1,993,944 2,262,624 2,261,760 (864) GOLDEN VALLEY ELECTRIC 16.9% 2,441,856 2,770,896 2,769,840 (1,056) CITY OF SEWARD 1.0% 144,492 163,956 163,896 (60) Rounding (15) Zi a 100.0% 14,448,825 16,395,818 16,389,590 (6,228) BUDGET FY2006 FY2007 PERCENT MONTHLY MONTHLY FY2008 FY2008 POWER PURCHASER SHARE AVERAGE AVERAGE MONTHLY DECREASE CHUGACH ELECTRIC 30.4% 366,037 415,361 415,203 (158) MUNICIPALITY OF ANCHORAGE 25.9% 311,854 353,876 353,742 (134) AEG&T-HEA 12.0% 144,488 163,958 163,896 (62) AEG&T-MEA 13.8% 166,162 188,552 188,480 (72) GOLDEN VALLEY ELECTRIC 16.9% 203,488 230,908 230,820 (88) CITY OF SEWARD 1.0% 12,041 13,663 13,658 (5) 100.0% 1,204,070 1,366,318 1,365,799 519) COMPONENTS OF CHANGE IN CONTRIBUTION FY2007 ANNUAL CONTRIBUTION Revenue Changes (INCREASE) DECREASE IN BUDGETED INTEREST EARNINGS Expenditure Changes INCREASE (DECREASE) IN BUDGETED O&M COSTS INCREASE (DECREASE) IN PAYBACK TO R&C FUND INCREASE (DECREASE) CULVERT REPAIRS INCREASE (DECREASE) HELICOPTER PAD REPAIRS INCREASE (DECREASE) OTHER CAPITAL PURCHASES INCREASE (DECREASE) IN DEBT SERVICE INCREASE (DECREASE) IN EXCESS EARNINGS TRANSFER INCREASE (DECREASE) IN OPERATING RESERVE TRANSFER Other IMMATERIAL ROUNDING DIFFERENCES NET INCREASE(DECREASE) FY2007 ANNUAL CONTRIBUTION 16,395,817 9,184 242,443 (238,851) 31,546 (200,000) 122,000 (4,100) 8,555 23,000 SUE (2) (6.225) 16,389,592 (0) 2/15/20071:52 PM H:\all\imacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xlsSchedule C Utility Contrib BRADLEY LAKE R&C FUND DISBURSEMENTS AND REPAYMENTS SCHEDULE D ACTUAL TO REPAY Description at 06/30/05 R&C FUND PROJECTS Governor (388,951.57) Replace RFLS 0.00 Replace Runners 0.00 Replace cable from dam to power house 0.00 Replace power system stabilizer 0.00 Replace two RTUs 0.00 0.00 (388,951.57) Actual Disburse 1,401,084.54 0.00 598,761.00 38,783.54 0.00 0.00 2,038,629.08 Actual TO REPAY at 06/30/06 1,012,132.97 0.00 598,761.00 38,783.54 0.00 0.00 0.00 1,649,677.51 PROJECTED Disburse 1,754,368.00 0.00 1,154,285.00 1,560,434.00 0.00 4,600.00 4,473,687.00 PROJECTED TO REPAY at 06/30/07 2,766,500.97 0.00 1,753,046.00 1,599,217.54 0.00 4,600.00 0.00 6,123,364.51 PROJECTED Disburse 0.00 85,000.00 0.00 973,000.00 200,000.00 80,000.00 1,338,000.00 PROJECTED TO REPAY at 06/30/08 2,766,500.97 85,000.00 1,753,046.00 2,572,217.54 200,000.00 84,600.00 0.00 7,461,364.51 Current Year R&C Repayment Adjust fpr Current Year Budget Less Interest in Fund Applied to Repayment Net Transfer from Revenue Fund ‘Cumulative Prior Years R&C Repayments Retained Interest R&C Fund Interest NET DUE TO R&C FUND R&C FUND CASH FLOW PROJECTION Beginning Investment Balance Disbursements-current year accrued Disbursements-prior year accrued Utilities’ R&C Repayment Interest earnings retained in fund Accrued R&C Payable at year end Ending Investment Balance PROJECTED NET DUE + ENDING INVESTMENT BALANCE REPAYMENT AMOUNT $1,649,677 X 25% $4,473,687 X 25% $1,338,000 X 25% (412,419.38) 0.00 0.00 (452,824.42) (452,824.42) 784,433.71 5,994,816.84 (2,038,629.08) 0.00 0.00 202,517.49 56,861.04 4,215,566.29 5,000,000.00 412,419.38 412,419.38 (1,530,841.13) 48,607.13 (1,482,234.00) (412,419.38) 343,851.24 4,572,562.37 4,215,566.29 (4,473,687.00) (56,861.04) 412,419.38 330,000.00 0.00 427 437.63 5,000,000.00 412,419.38 1,118,421.75 1,530,841.13 (1,865,341.13) 0.00 621,958.37 (1,243,382.76) (1,894,653.38) 4,323,328.37 427,437.63 (1,338,000.00) 0.00 1,482,234.00 105,000.00 0.00 676,671.63 5,000,000.00 412,419.38 1,118,421.75 334,500.00 1,865,341.13 2/15/20071:54 PM H:\all\imacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xlsSchedule D R&C Disb & Repay BRADLEY LAKE BUDGET PROJECTED CASH FLOW BY FUND SCHEDULE G Rev Fund O&M Fund Debt Fund Op Reserve R&C Cap Reserve Total FY2007 Budget Revenues 16,395,817 - 16,395,817 Interest 983,711 - - 330,000 A onal Transfers to O&M (3,428,343) 3,428,343 - = Transfers to Debt Service (12,273,950) 12,273,950 5 Payback of R&C Fund (412,419) (534,187) 412,419 (534,187) Other Prior Year Payables (45,479) O&M Requisitions (3,428,343) (3,428,343) Due To R&C at Year End - - - Capital Requistions (250,000) 250,000 - (4,530,548) (4,530,548) Renewals/Replacements (250,000) - - (250,000) To Excess Earnings fund (250,000) (250,000) Debt Payments (12,273,950) (12,273,950) Increase Op Reserve (25,000) 25,000 - 6/30/2007 Projected Balance 1,152,235 0 : 686,400 427,437 12,834,000 15,145,552 a FY2008 Budget - Revenues 16,389,592 - 16,389,592 Interest 1,199,527 105,000 1,304,527 Transfer back interest - - Transfers to O&M (3,670,786) 3,670,786 - - Transfers to Debt Service (12,269,850) 12,269,850 - Payback of R&C Fund (1,482,234) 1,482,234 - 2008 O&M Requisitions (3,670,786) (3,670,786) 2008 Capital Requistions (203,546) 203,546 - - Renewals/Replacements (203,546) - (1,338,000) - (1,541,546) To Excess Earnings fund (258,555) (258,555) Payment of Prior Year Deficit - - Debt Payments (12,269,850) (12,269,850) Increase Op Reserve (48,000) 48,000 - 6/30/2008 Projected Balance 808,383 0 - 734,400 676,671 12,834,000 15,098,933 Assumption: should be 20.00% For purpose of budget cash flows, July 01 debt service projected 20.01% is assumed to be disbursed on June 30 Ending balance in Revene Fund equals Projected R&C repayment net of interest retained in R&C Fund Repayment occurs in subsequent fiscal year FY07 FY08 Budget Repay 1,482,234 1,243,383 Interest Retained (330,000) (435,000) 1,152,234 808,383 2/15/20071:54 PM H:\all\lmacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xlsSchedule G-Cash balances BRADLEY LAKE BUDGET PROJECTED INTEREST INCOME SCHEDULE | TOTAL Jul-07 Aug-07 Sep-07 Oct-07 Nov-07, Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 OTHER ADJ Beginning Balance 15,145,551.61 15,145,551.61 16,076,499.92 16,794,921.26 17,556,094.59, 18,441,083.92 19,526,455.26 20,620,302.59 19,049,164.62 — 20,137,074.96 21,221,883.29 = 22,294,427.62 — 23,396,675.96 24,248,104.29 Re Utility Contributions 16,389,592.00 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33 1,365,799.33—_1,365,799.33 ‘ADJ INTEREST Interest Income Received 1,304,526.65 800,000.00 0.00 0.00 0.00 0.00 0.00 594,133.70 0.00 0.00 0.00 0.00 0.00 #9 {69,607:05) TO ACCRUAL BASIS Equipment Sale 0.00 0.00 0.00 Repay Prior Year Deficit 0.00 0.00 77,694,118.65 2,165,799.33 1,305,799.33 _1,905,799.08 1,965,799.33 _1,365,799.33 _1,305,799.33 _1,959,933.03__1,365,799.331,365,799.33_1,365,799.33_1,365,799.33__1,365,799.33 (69,607.05) 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 & MExpenses (3,670,786.00) (976,296.00) (220,090.00) (220,090.00) (220,090.00) (220,090.00) (220,090.00) (228,590.00) (220,090.00) (220,090.00) (220,090.00) (220,090.00) (485,090.00) R&C Fund Disbursement-Sch D (1,338,300.00) 0.00 (315,288.00) (382,536.00) (246,720.00) (58,338.00) (49,862.00) (75,556.00) (50,000.00) (60,000.00) (60,000.00) (20,000.00) (20,000.00) Debt Ser Payment (12,269,850.00) 0.00 0.00 0.00 0.00 0.00 (3,224,925.00) (9,044,925.00) ASSUME DEBT SCH A Capital (203,546.00) 0.00 (112,000.00) (2,000.00) (14,000.00) (2,000.00) (2,000.00) (2,000.00) (7,799.00) (901.00) (13,165.00) (23,461.00) (9,281.00) (14,939.00) SERVICE PD 06/30/08 Excess Eamings Transfer (258,555.02) (258,555.02) 0.00 0.00 0.00 Other Adjustment-Equal Sch G 0.00 (i7,741,037.02) (1,234,851.02) (647,376.00) (604,626.00) (480,810.00) (280,428.00) (271,952.00) _(3,531,071.00) (277,889.00) (280,991.00) (293,255.00) (263,551.00) (514,371.00) __(9,059,864.00) Adjust to Actual 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ‘0.00 Ending Balance 15,098,633.24 _16,076,499.92 _16,794,921.26 _17,556,094.59 _18,447,083.92__19,526,455.26 __20,620,302.59__19,049,164.62_20,137,074.96_21,221,883.29 _ 22,294,427.62_23,396,675.96 _24,248,104.29 _15,098,633.24 Interest Income Projection Estimated Accrued Interest 1,304,526.65 87,616.92 91,532.32 95,680.72 100,503.91 106,419.18 112,380.65 103,817.95 109,747.06 115,659.26 121,504.63 127,511.88 132,152.17 Adjust to Actual Received 1,304,526.65 87,616.92 91,532.32 (95,680.72 100,503.91 106,419.18 112,380.65 103,817.95 109,747.06 __115,659.26 121,504.63 127,511.88 132,152.17 0.00 Payment of Accrued Interest 594,133.70 2/15/20071:55 PM H:\all\Imacmillan\BradleyLake\FYO8BRADLEY\2008BradleyBdgt.xIsSchedule I-Interest Inc R&C PROJECTS DISBURSEMENTS Governor Project FY02 FY03 FY04 FY05-PD FROM R&C IN 06 FY06 FYO7 as of 01/31/07 ESTIMATED ADDT'L FY07 COMPLETED BY FY08 PROJECTED ADDITIONAL PROJECTED TOTAL Needle Repairs FY02 FY03 FY04 COMPLETED IN FY04 Runner Repairs FY02 FY03 FY04 FY05 FY06 FYO7 as of 01/31/07 ESTIMATED ADDT'L FY07 COMPLETED BY FY08 PROJECTED ADDITIONAL PROJECTED TOTAL SCADA FY02 FY03 FY04 COMPLETED Cable Repair FY06 FYO7 as of 01/31/07 ESTIMATED ADDT'L FY07 ESTIMATED ADDT'L FY08 PROJECTED ADDITIONAL PROJECTED TOTAL RTU Replacements FY07 as of 12/31/06 ESTIMATED ADDT'L FY07 ESTIMATED ADDT'L FY08 PROJECTED ADDITIONAL PROJECTED TOTAL R&C Fund Construction FD Total 263.17 0.00 263.17 103,213.18 0.00 103,213.18 135,710.34 0.00 135,710.34 256,783.06 1,238,667.17 1,495,450.23 1,144,301.48 577,446.49 = 1,721,747.97 1,065,367.89 0.00 _1,065,367.89 2,705,639.12 1,816,113.66 4,521,752.78 689,000.00 0.00 689,000.00 0.00 0.00 0.00 689,000.00 0.00 689,000.00 3,394,639.12 1,816,113.66 _5,210,752.78 14,645.52 0.00 14,645.52 909,158.20 0.00 909,158.20 560,510.51 0.00 560,510.51 1,484,314.23 0.00 1,484,314.23 14,256.00 0.00 14,256.00 27,631.63 0.00 27,631.63 78.76 0.00 78.76 0.00 0.00 0.00 598,760.80 0.00 598,760.80 5,285.59 0.00 5,285.59 646,012.78 0.00 646,012.78 1,149,000.00 0.00 1,149,000.00 0.00 0.00 0.00 14,149,000.00 0.00 _1,149,000.00 1,795,012.78 0.00 _1,795,012.78 115,049.07 0.00 115,049.07 173,697.03 0.00 173,697.03 305.35 0.00 305.35 289,051.45 0.00 289,051.45 38,783.54 0.00 38,783.54 47,434.30 0.00 47,434.30 __ 86,217.84 0.00 86,217.84 1,513,000.00 0.00 1,513,000.00 973,000.00 0.00 973,000.00 2,486,000.00 0.00 _2,486,000.00 2,572,217.84 0.00 2,572,217.84 627.21 0.00 627.21 627.21 0.00 627.21 4,000.00 0.00 4,000.00 80,000.00 0.00 80,000.00 84,000.00 0.00 84,000.00 84,627.21 0.00 84,627.21 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT FY 2006 FY 2007 ACTUALS FY2007 ACTUALS . FINAL BUDGET AS OF 12/31/06 REVENUES, EXPENSES & CHANGES IN SURPLUS REVENUES _UTILITY CONTRIBUTIONS 14,448,825 16,395,817 8,197,908 INTEREST INCOME 1,896,353 1,313,711 1,026,108 SALE OF SURPLUS - - 5,656 16,345,178 17,709,528 9,229,671 EXPENSES OPERATIONS 3,212,202 3,428,343 1,667,278 R&C REPAYMENTS 412,419 1,482,234 - (a) R&C INTEREST APPLIED AS REPMT 202,517 182,054 PURCHASE OF VEHICLE - CULVERT REPAIRS 50,000 2,431 HELICOPTER PAD REPAIRS 200,000 TRANSFER TO OPERATING RESERVE 25,000 25,002 DEBT SERVICE (net of Capital Reserve Reduction) 12,276,325 12,273,950 6,136,975 TRANSFER TO ARBITRAGE 241,714 250,000 258,555 REFUND PRIOR YEAR SURPLUS 704,801 - 17,049,979 17,709,527 8,272,296 CURRENT YEAR SURPLUS(DEFICIT) (704,801) 1 957,376 PRIOR YEAR SURPLUS (DEFICIT) 704,801 - BEGINNING SURPLUS (DEFICIT) (1) COMMITTED CY EXP & DEBT SVC (957,376) ENDING SURPLUS (DEFICIT) (0) 0 - BALANCE SHEET ASSETS REVENUE FUND 457,898 - 1,372,736 OPERATING FUND 534,188 196,739 DUE TO REV FUND (surplus sale cash in transit) - 656 PREPAID SCADA MAINT & D&O Insurance 20,525 17,929 RECEIVABLES - FY06 SHORTFALL 70,648 70,648 1,083,260 : 1,658,709 LIABILITIES & SURPLUS CURRENT LIABILITIES 670,840 - 285,972 DUE TO OP RESERVE : - PREPAID REVENUE - 415,361 COMMITTED CY EXP & DEBT SVC - - 957,376 FY06 R&C REPAYMENT 8/16/06 . 412,419 - 1,083,260 : 1,658,709 (0) = (0) OTHER INFORMATION OPERATING RESERVE 661,402 686,402 MONTHLY CONTRIBUTIONS 1,335,837 1,366,318 Total R&C Fund receivable at 12/31/06: $1,789,195 Note (a) The annual R&C repayment is processed at year end after all current year R&C expenditures have been processed. 2007 Sum and Cash Bal.xls - B-SUM BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B APPROVED BUDGET ACTUALS OVER FY2007 YTD YTD (UNDER) BUDGET 12/31/06 (a) 12/31/06 BUDGET (b) SUMMARY (A) HEA Annual Operations & Maintenance 1,494,965.00 747,482.50 577,667.16 (169,815.34) (B) CEA Dispatch and Substation/SVC Maintenance 130,000.00 65,000.00 7,920.38 (57,079.62) (C) Other O&M and Maintenance Projects 444,521.00 222,260.50 159,401.10 (62,859.40) (D) Insurance Costs 653,356.60 624,856.60 614,896.61 (9,959.99) (E) Regulatory Costs 331,000.00 210,500.00 94,790.46 (115,709.54) (H) Contingencies 100,000.00 50,000.00 - (50,000.00) 3,153,842.60 | 1,920,099.60 | 1,454,675.71 (465,423.89) (F) Administrative Costs 274,500.00 240,250.00 212,602.25 (27,647.75) 3,428,342.60 | 2,160,349.60 1,667,277.96 (493,071.64) (G) Bond Refunding Costs - - L ey 3,428,342.60 | 2,160,349.60 1,667,277.96 (493,071.64) Note (a) YTD Budget amount at 12/31/06 is a prorated 50% of the total annual budget, except for the Admin Fee, Arbitrage, Risk Assessment and the 5 Year Plan which were budgeted to be 100% complete at 12/31/06. Note (b) Over (Under) Budget amounts are the difference between the prorated budget at 12/31/06 and actuals at 12/31/06. Current variances reflect the sporatic nature of when expenses occur throughout the year. Page 1 of 4 FYO7BdgtStatusRpt xls APPROVED BUDGET ACTUALS OVER FY2007 YTD YTD (UNDER) BUDGET 12/31/06 (a) 12/31/06 BUDGET (b) FERC 535 - Operation Supervision & Engineering E1201 53500 00000000 24301 +220201 +100} (A) HEA O&M Contract 125,569.00 62,784.50 83,992.64 21,208.14 £1201 53500 04270007 24301 «220201 «00 (C) HEA On-Site Civil Project Manager - - - £1201 53500 04270008 += 24301-»«-220201:«00) (C) HEA Digitize & Control Project Drawings : - - 125,569.00 62,784.50 83,992.64 21,208.14 FERC 537 - Hydraulic Expenses £1201 53700 00000000 24301 «220201 «00 (A) HEA O&M Contract 49,200.00 24,600.00 28,757.62 4,157.62 49,200.00 24,600.00 28,757.62 4,157.62 FERC 538 - Electric Expenses £1201 53800 00000000 24301 +220201 +100} (A) HEA O&M Contract . 222,000.00 111,000.00 83,190.02 (27,809.98) E1201 53800 00000000 © 24303»««-220201:«00} (C) SOA BOILIER INSPECTION - - - 222,000.00 111,000.00 83,190.02 (27,809.98) FERC 539 - Misc. Hydraulic Power Generation Expenses £1201 53900 00000000 24301 -«—«- 220201 :~«00) (A) HEA O&M Contract 331,625.00 165,812.50 149,707.42 (16,105.08) £1201 53900 05270002 + 24301 :+«220201:~«00) (C) Replace Two Way Radios 3,000.00 1,500.00 (1,500.00) £1201 53900 00000000 24302 -»«- 220201 :~«00) (C) HEA Circuits and Radio - To Bernice Lake 90,000.00 45,000.00 45,000.00 - £1201 53900 00000000 + 24312 += 220201:~«00} (C) CEA Circuits -Bernice Lake to Anchorage 28,740.00 14,370.00 14,373.00 3.00 453,365.00 226,682.50 209,080.42 (17,602.08) FERC 540 - Rents £1201 54000 00000000 00000 +220201:~00| (C) Bradley Lake FERC land use fees (5% increase budgeted) 74,000.00 37,000.00 - (37,000.00) 74,000.00 37,000.00 - (37,000.00) FERC 541 - Maintenance Supervision & Engineering E1201 54100 © 00000000 + 24301-« 220201 :~«00) (A) HEA.O&M Contract 82,451.00 41,225.50 7,851.48 (33,374.02) 82,451.00 41,225.50 7,851.48 (33,374.02) FERC 542 - Maintenance of Structures E1201 54200 00000000 + 24301-~=«-220201:«00) (A) HEA O&M Contract 90,400.00 45,200.00 55,831.19 10,631.19 E1201 54200 220201 * (C) Other - - - 90,400.00 45,200.00 55,831.19 10,631.19 FERC 543 - Maintenance of Reservoirs, Dams & Waterways E1201 54300 00000000 += 24301» 220201 :~«00) (A) HEA O&M Contract 10,440.00 5,220.00 2,070.68 (3,149.32) E1201 54300 04270001 += 24301-« 220201~«00) (C) Bradley Lake Dam Repair 7 E1201 54300 04270002» 24301-«« 220201 :«00) (C) Nuka Diversion - £1201 54300 04270004 =. 24301_-««- 220201 :«00) (C) Middle Fork Diversion : £1201 54300 04270005 += 24301-~«-220201:«00) (C) Kachemak Creek Gauging Station - £1201 54300 (C) Other O&M 10,440.00 5,220.00 2,070.68 (3,149.32) Page 2 of 4 FY07BdgtStatusRpt.xis £1201 £1201 E1201 1201 £1201 £1201 E1201 £1201 £1201 E1201 E1201 E1201 E1201 E1201 E1201 E1201 E1201 E1201 Page 3 of 4 54400 54500 54500 55600 55601 55602 55603 55604 55604 56200 56200 57100 58300 58301 58302 58303 58305 00000000 04270012 00000000 00000000 00000000 00000000 00000000 00000000 00000000 00000000 05270006 00000000 00000000 00000000 00000000 00000000 00000000 24301 24301 24301 24301 00000 00000 00000 24303 24312 24312 24301 00000 00000 220201 220201 220201 220201 220201 220201 220201 220201 220201 220201 220201 220201 220201 220201 220201 220201 220201 220201 8s 3ssses 00 00 00 00 s8ses 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 (C) Penstock Drain Clean-out FERC 556 - System Control & Load Dispatching (A) HEA O&M Contract (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 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 PMC Costs Bond Refunding Costs Reimburseable costs Refunding Costs TOTAL FERC 920 PY exp redux thru 11/06 thru 9/06 thru 6/07 PY exp redux thru 6/07 APPROVED BUDGET ACTUALS OVER FY2007 YTD YTD (UNDER) BUDGET 12/31/06 (a) 12/31/06 BUDGET (b) 280,200.00 140,100.00 105,137.50 (34,962.50) 280,200.00 140,100.00 105,137.50 (34,962.50) 213,000.00 106,500.00 39,690.17 (66,809.83) 213,000.00 106,500.00 39,690.17 (66,809.83) 20,080.00 10,040.00 15,972.21 5,932.21 9,000.00 4,500.00 (3,536.21) (8,036.21) 56,500.00 28,250.00 12,469.97 (15,780.03) 183,281.00 91,640.50 90,894.34 (746.16) : : 200.00 200.00 268,861.00 134,430.50 116,000.31 (18,430.19) 130,000.00 65,000.00 7,920.38 (57,079.62) 130,000.00 65,000.00 7,920.38 (57,079.62) 70,000.00 35,000.00 5,466.23 (29,533.77) 70,000.00 35,000.00 5,466.23 (29,533.77) 100,000.00 50,000.00 (50,000.00) 200,000.00 200,000.00 200,000.00 : 200,000.00 200,000.00 200,000.00 - 8,500.00 4,250.00 (4,250.00) 40,000.00 20,000.00 (670.00) (20,670.00) 6,000.00 6,000.00 4,475.00 (1,525.00) 20,000.00 10,000.00 8,797.25 (1,202.75) 74,500.00 40,250.00 12,602.25 (27,647.75) 274,500.00 240,250.00 212,602.25 (27,647.75) FYO7Bdgt itatusRpt.xis E1201 E1201 E1201 E1201 £1201 £1201 E1201 Page 4 of 4 58401 58401 58306 58801 58801 58801 00000000 06270006 04270020 03270010 24301 24312 220201 220201 220201 220201 220201 220201 220201 8 s3ss8s FERC 924 - Property Insurance (D) Insurance Premiums (D) Homer Electric Insurance (D) Risk Assessment FERC 928 - Regulatory Commission Expenses (E) FERC administrative fees (E) FERC 5 Year Inspection (E) Seismic Survey Spillway (E) Contractual Engineer - FERC license issues TOTAL BRADLEY LAKE BUDGET APPROVED BUDGET FY2007 YTD ACTUALS YTD BUDGET 12/31/06 (a) 12/31/06 BUDGET (b) OVER (UNDER) 581,356.60 581,356.60 567,014.00 (14,342.60)|thru 6/07 57,000.00 28,500.00 28,495.11 (4.89) 15,000.00 15,000.00 19,387.50 | 4,387.50 653,356.60 624,856.60 614,896.61 (9,959.99) 126,000.00 63,000.00 F (63,000.00) 90,000.00 90,000.00 77,574.67 (12,425.33)|thru 11/06 115,000.00 57,500.00 17,215.79 (40,284.21)|thru 11/06 331,000.00 ID 210,500.00 94,790.46 (11 S:709'54)/ 3,428,342.60 | 2,160,349.60 | 1,667,277.96 (493,071.64) * Budget 100% at 12/31/06 for: Admin Fee, Arbitrage, Risk Assess, Insurance Prem & 5 yr inspection FYO7BdgtStatusRpt.xls Agenda Item: 7¢ MOTION: Move: Second: Resolved, that pursuant to section 13(c)(ii(A) of the Bradley Lake Agreement for the Sale and Purchase of Electric Power, the Committee approves the execution of the Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project - Amendment No. 3 in the form presented to the Committee. AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT AMENDMENT NO. 3 THIS AGREEMENT entered into this 23" day of February, 2007, 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 five years and automatically renewed 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, 2007, the term of the Agreement shall be five years and the term shall automatically be renewed for successive five-year periods, until terminated as provided in the Agreement. 2. Section 5 of the Agreement is hereby amended by adding the following sentence: In performing its duties under paragraph 5(q), not less than seven days prior to executing any contract for project work valued in excess of one million dollars, the Operator will forward by express mail or overnight delivery service a complete copy of the unexecuted contract to each Purchaser for review and comment. 3. 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 Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project 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. 4. Paragraph 13(a)(8) of the Agreement is amended to read as follows: (8) A copy 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. 5. 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. 6. 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 loss 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. [Intentionally left blank] Agreement Amending and Extending the Term of the Operation and Maintenance Agreement for Bradley Lake Project 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