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HomeMy WebLinkAboutBradley Lake PMC Meeting Tuesday, May 20, 1997 1 | | | i | | | wi 10. At: 12; BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING AGENDA Tuesday, May 20, 1997 - 10:00 a.m. Anchorage Municipal Light & Power Commission Room - 1200 East 1st Avenue CALL TO ORDER ROLL CALL (for Committee members) PUBLIC ROLL CALL (for all others present) PUBLIC COMMENT AGENDA COMMENTS APPROVAL OF MEETING MINUTES - March 25, 1997 BUDGET SUBCOMMITTEE REPORT A. Bradley Lake Construction Audit Briefing OPERATION AND DISPATCH SUBCOMMITTEE REPORT OLD BUSINESS A. Spinning Reserves Update B. Budget Subcommittee Bond Refunding C. Construction Fund Residual Balance NEW BUSINESS COMMITTEE COMMENTS A. Next Meeting Date ADJOURNMENT Stahr Raiskums Sieczkowski Lovas Pease McCrohan Stahr OOOO OOOO OOOO OOOO OOOO OOOO COCO OOOO OOOO OOOO OOOO OOOO OOOO OOOO CCCI CCC CCK TOTAL IM 9S PAGES: 2 JOO OO COCOA OOOO OOOO OOOO OOOO OO OOOO OOOO OOO OOOO OOOO OOOO OOOO IAA OOOO OOOO IAAI NIN NK KKK x P. 01 x x TRANSACTION REPORT x x ———————————— MAY-13-97 TUE 02:25 PH x X x x SEND (M) x x x k DATE START RECEIVER TX TIME PAGES TYPE NOTE M# DP x X x x MAY-13 02:23 PM 92635204 109" 2 SEND (M) OK 057 — sik x x x x x x X x X x @ ALASKA INDUSTRIAL DEVELOPMENT $ <_ / * AND EXPORT AUTHORITY {= ALASKA a ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 Facsimile Transmittal TO: 1aMes . od A COMPANY: Mb p Fax #: From: Date: Time: A Number of pages including cover page: Transmittal Contents: ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY /= ALASKA @@—— ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 Facsimile Transmittal Oz Lawes 5 Sstoli COMPANY: ML +? Fax#: a From: NWYow es Date: V 4ag Time: SAG p07 Number of pages including cover page: DA Transmittal Contents: Notice: This facsimile may contain confidential information that is being transmitted to and is intended only for the use of the recipient named above. Reading, disclosure, discussion, dissemination, distribution, or copying of this information by anyone other than the named recipient or his or her employees or agents is strictly prohibited. If you have received this facsimile in error, please immediately destroy it and notify us by telephone, (907) 269-3000. H/all/tammy/fax/one.doc ee Tuesday, May 13, 1997 sain dni snd py 6 ns elaine shah Atiton Notices Hae 3900 1 ALASKA ENERGY = EXPORT AUTHOR( “> Public Notice Bradley Lake Project. ment . Committee <will regular meeting to conduct the} affairs of the Committee at:the “Anchorage Municipal Light-& Power: offices,“ 1200 East <Ist |, Avenue, Anchorage, =Alask | This meeting will. commence | | at 10:00 a.m. on Tuesday, May. 20, ..1997.> For , additionak::infor~" mation, contact |, Thomas SR! Stahr,”.Chairman,* Anchorage’ Municipal Light & Power,:1200 East 1st: Avenue, i Anchorage, Alaska :99501.° The -State sof *Alaska*:(AIDEA),. complies with the’ Title {1-of the Ameri- cans with. Disabilities Act -of 1990.” Disabled ‘persons ‘requir- ing - special .‘modifications «to Participate should contact Al- DEA staff at-.(907)+269-3000 .. make special sirigrioements | /s/Alaska ‘Enersy Authority » Proiect. Magooement, Comm : ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY f= ALASKA iE =ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 May 12, 1997 FAXED: 5/12/97 2 PAGES Anchorage Daily News 1001 Northway Drive Anchorage, Alaska 99508 ATTENTION: Ms. Eva Kaufmann Legal Classified Subject: Public Notice Account # ALASO709 Enclosed is an advertisement for the Alaska Energy Authority which is to be published under “PUBLIC NOTICE” in the Legal Classified section in column format. This notice needs to be published for one day: Tuesday, May 13, 1997. After the publication date, please provide an Affidavit of Publication. If you have any questions, please do not hesitate to call me. Thank you, In Ld awe fn, CE Ay Shauna M. Dean Attachment hzall\eva\bradley\bladvtzg r ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY /= ALASKA i = ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 ALASKA ENERGY AUTHORITY/ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY Public Notice Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a regular meeting to conduct the affairs of the Committee at the Anchorage Municipal Light & Power offices, 1200 East 1st Avenue, Anchorage, Alaska. This meeting will commence at 10:00 a.m. on Tuesday, May 20, 1997. For additional information, contact Thomas R. Stahr, Chairman, Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska 99501. The State of Alaska (AIDEA), complies with Title Il of the Americans with Disabilities Act of 1990. Disabled persons requiring special modifications to participate should contact AIDEA staff at (907) 269-3000 to make special arrangements. /s/ Alaska Energy Authority Project Management Committee Publish: Tuesday, May 13, 1997 h:all\eva\bradley\bladvizg, KKK KKK KKK KKK RR KKK OK RRR KK KKK KR ROKR KK KKK RRR RK KOK KOK RRR ROKK KOK OK RK TOTAL 36S PAGES: 2 JOR KKK KKK KKK KKK KKK KK KKK KKK KK KKK KKK KKK KKK KKK KKK KK KK KKK KOK KK KOK x * ¢ P. 01 x x TRANSACTION REPORT x x —_——— MAY-12-97 MON 12:11 PMH =x x x x SEND (M) x x DATE START — RECEIVER TX TIME PAGES TYPE NOTE M# DP x 9 RRS ORR TEE ETE SNA a NANA x MAY-12 12:11 PM 92798170 36” 2 SEND (M) OK 035 : x x x x x X X x x ALASKA INDUSTRIAL DEVELOPMENT * AND EXPORT AUTHORITY / => ALASKA RD ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 May 12, 1997 FAXED: 5/12/97 2 PAGES Anchorage Daily News 1001 Northway Drive Anchorage, Alaska 99508 ATTENTION: Ms. Eva Kaufmann Legal Classified Subject: Public Notice Account # ALASO709 Enclosed is an advertisement for the Alaska Energy Authority which is to be published under “PUBLIC NOTICE” in the Legal Classified section in column format. This notice needs to be published for one day: Tuesday, May 13, 1997. A €ase Vetuyw to XC. 2 fo — AU NnNe- by Friday atternorn . yo hate, BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Sha Commission Room Anchorage Municipal Light & Power 1200 East 1st Avenue Anchorage, Alaska Tuesday, March 25, 1997 10:00 a.m. 1: CALL TO ORDER Chairman Tom Stahr called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:05 a.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Tom Stahr, Chairman Municipal Light & Power Eugene Bjornstad, Vice Chairman Chugach Electric Association Dave Calvert City of Seward Don Stead Homer Electric Association Dennis McCrohan Alaska Energy Authority Jim Hall Matanuska Electric Association Mike Kelly Golden Valley Electric Association Others Present: Stan Sieczkowski, Alaska Energy Authority Elaine McCambridge, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Brenda Fuglestad, AIDEA John S. Cooley, Chugach Electric Association Dora Gropp, Chugach Electric Association Brian Hickey, Chugach Electric Association Tim McConnell, Municipal Light & Power Mary Ann Pease, Municipal Light & Power Brad Evans, Golden Valley Electric Association Steve Haagenson, Golden Valley Electric Association Bob Hufman, AEG&T Mike Yerkes, AEG&T . Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 2 of 7 3. PUBLIC COMMENT There was no public comment. 4. AGENDA COMMENTS Mr. McCrohan requested that Item 8.D., Construction Fund Residual Balance, be added under Old Business. There being no further additions or corrections to the agenda, it was adopted by unanimous consent. 5. APPROVAL OF MEETING MINUTES - JANUARY 14, 1997 MOTION: Mr. Bjornstad moved, seconded by Mr. Hall, to approve the meeting minutes of January 14, 1996. It was noted that Jim Hall should be corrected to Wayne Carmony in the Roll Call. On page 2, under "Others Present," Wayne Carmony should be replaced with Jim Hall. On page 7, In the third paragraph, the first motion on that page, "Mr. Calvert voted...." should be corrected to read, "Mr. Calvert moved...” On page 6, in the first line of the fourth paragraph, “Homer Electric Association's current request for reimbursement of the $350,000 directly..." should be corrected to read, “Homer Electric Association's current request for reimbursement of late construction invoices, and the PMC's request for reimbursement of the $350,000 directly to the PMC for the utility portion of the Construction Fund balance would exceed the available funds." There being no other additions or corrections, a roll call vote was taken, and the minutes were unanimously approved as amended. 6. BUDGET SUBCOMMITTEE REPORT Chair Stahr reminded the Committee that the budget had to be adopted by Friday, March 28th. He said another meeting would be held prior to that date if necessary. A. FY98 Budget Proposal and Approval Ms. Pease reported that the Bradley Lake Budget Subcommittee had met via teleconference on Wednesday, March 5th, to finalize the FY 98 budget. She said the budget had been unanimously approved by the Budget Subcommittee at that meeting. She noted that the budget was attached to her meeting notes which were being distributed at this time. Ms. Pease reviewed the meeting notes containing the FY98 budget for Bradley Lake, the monthly utility contributions, and a summary of the operations and maintenance budget and detailed FERC account. In summary, the total budget proposed for approval was $15,501,635, which consisted of: debt service of $13,389,435, O&M budget of $2,087,200, and renewals and replacements at $25,000. MOTION: Mr. Kelly moved, and it was seconded by Mr. Bjornstad, to approve the FY98 budget as presented. There being no discussion, a roll call vote was taken, and the motion passed unanimously. . Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 3 of 7 Ms. Pease reported that two invoices were received from Ron Saxton at Ater, Wynne, et al., for legal services rendered, the December 1996 invoice in the amount of $4,114.50 and the January 1997 invoice in the amount of $8,063.87. She requested Committee approval for payment of those invoices. MOTION: Mr. Bjornstad moved, seconded by Mr. Kelly, to approve payment of the December 1996 and January 1997 invoices from Ater, Wynne, et al. There being no discussion, a roll call vote was taken, and the motion passed unanimously. 7. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the O&D Subcommittee had met via teleconference three times since the last PMC meeting to discuss the governor instability study proposals and the fish water bypass debris removal projects. Mr. Sieczkowski reported that on February 20th, the Subcommittee met via teleconference to discuss the governor scope of work, phase two. He noted that Chugach Electric had received comments at that meeting and had subsequently revised the scope of work. At the March 7th teleconference meeting, the Subcommittee had reviewed and approved the revised scope of work. Since that time, Chugach had issued the scope of work and requested proposals from several firms. At the March 7th meeting, the Subcommittee had also discussed the details of removing debris from the fish water bypass area. Mr. Sieczkowski reported that Chugach had been regulating the reservoir and coordinating the operation to have the lake down to an elevation of 1,070 by April 15th, with a further reduction to 1,060 by May 1st. He said the resource agencies have agreed to a reduction in the fish water flows to 30 CFS during the cleanup period. Mr. Sieczkowski said pumps would be on hand to provide the fish water releases during the low side flow periods. He noted that FERC had also been notified of the project, and their comments and approval were pending. During the March 20th teleconference meeting, the Subcommittee had discussed the Chugach proposed project operation guidelines during the low lake level periods and the debris cleanup procedures. Mr. Sieczkowski reported that AEA had drafted a construction services agreement between CEA and AEA, which was similar in form and content to the HEA/AEA agreement. He said this would cover the work performed by Chugach when construction funds are provided for the tasks such as the governor instability studies, purchase of the DSMs, and SVS equipment. He anticipated that the draft would be sent to Chugach for review next week. Mr. Hickey addressed the details of the governor instability study and the operations of the project. He reported that they were on schedule with the draw-down and had gone to single- unit operation when they had reached the 1,080 level. He said the governors had been converted to a four-jet operating mode to minimize the potential of a needle disintegration. He said the reservoir was currently at 1,078.9, and they had discontinued allocating spinning reserves from the project until bey rctong ey back above the 1,080 level. e Lake io With respect to the governor instability study project, Mr. Hickey reported that they had issued the RFQ to Southern Engineering, Power Engineers, Power Technologies, and Engineering Power Systems, and the responses are due today. He said they had completed compilation of the DSM data and the SCADA alarm data for 35 oscillation events that had occurred from July 14, 1993 to present, and they were currently analyzing the compiled data. He said they had determined that all of the events fell into one of three oscillation periods that the Kenai oscillates under, i.e., 750 milliseconds, 1.1 seconds, and 1.4 seconds. . Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 4 of 7 Mr. Hickey advised that the O&D Subcommittee was scheduled to meet on April 3rd to review the proposals and issue the contract for the governor instability study project. Mr. Stead reported that maintenance of the project had been on schedule and satisfactory since the last PMC meeting. There was one trip related to a SCADA programming change which was performed to provide Chugach with pen stock pressure for the draw-down. He said the problem had been corrected and the units were restored within about 10 minutes. Mr. Stead said O&D Subcommittee's primary focus at this time was the clean-out of the fish water intake area. He said the budget developed in 1995 for the construction punchlist to perform this job was $100,000; the current estimated cost of performing the job was $400,000. He said at the time the $100,000 was allocated, they were not aware of the pumping and equipment requirements. Mr. Stead requested Subcommittee approval to increase the budget from $100,000 to $400,000 for completion of this project. Discussion was heard regarding the source of the additional funds. Mr. Stead recommended that the PMC direct the O&D Subcommittee to re-evaluate other lower priority projects to see where funds could be taken from to reallocate to the fish water bypass project. He emphasized the importance of addressing this project first. At Mr. Stahr's request, Mr. Stead described the extra work that needed to be done and who had provided the cost estimates for the project. He gave a breakdown of the estimated project costs. Mr. McCrohan concurred that the fish water bypass project should take priority. He advised that the construction completion list should be revised to reflect the changes proposed by Mr. Stead. Mr. McCrohan noted that the PMC would be discussing Items 8.B. and C later in the meeting, which would also impact the construction completion list. In response to Mr. Stahr regarding whether the O&D Subcommittee had reviewed this proposal, Mr. Stead stressed that time was of the essence as the bid process would need to commence immediately in order to get the pumps installed on schedule. Chair Stahr said this was a significant increase that was being requested, and he was not accustomed to being required to act so quickly on extras requests with so little supporting documentation. He said he understood that expediency was essential in this case, but he did not want this to become a precedent. Further discussion was heard regarding potential sources of funds that could be reallocated to the fish water bypass project to accommodate the expanded scope of the project. MOTION: Mr. Bjornstad moved that the fish water bypass project budget be increased from $100,000 to NTE $500,000. Seconded by Mr. Kelly. 3e 2 In response to Mr. Yerkes, Mr. Stead said the bid proposals would be provided to the &D Subcommittee for review once they were received so that the O&D Subcommittee could work with Mr. Stead pre-award. Discussion was heard regarding the probability of this situation reoccurring and the potential need for future projects of this type. There being no further discussion, a roll call vote was taken, and the motion passed unanimously. Chair Stahr said a working draft of the audit should have been distributed during Ms. Pease's report. He noted that this was being handed out at this time and would be an agenda item for Co ~A AS _ Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 5 of 7 discussion at the next PMC meeting. Ms. Pease added that Mr. Pete Raiskums and Ms. Amy McCullen had performed the audit, and they would address it at the next PMC meeting. 8. OLD BUSINESS A. Spinning Reserves Update Mr. Cooley said the ASE was scheduled to meet on April 2nd. He said they had earlier evaluated the cost to change the spinning reserves requirement to require 70 percent to be from responsive units, currently assumed to be combustion turbines. He said they would also determine what the technical effects of the increased responsive spin and the feasibility of expending additional funds for increased reliability. B. Reimbursement for Transfer Trip Scheme for HEA/CEA Late Invoices Mr. McCrohan reported that they had reviewed the late invoices, and they accept, in principle, that they were construction expenses chargeable to the construction punchlist. He noted that they had some questions regarding some of the sub-items contained in the invoices, and Ms. McCambridge was currently discussing these items with HEA. In response to Mr. Stahr, he advised that no action of the Committee was required. Chair Stahr advised that with respect to the earlier vote approving the increase from $100,000 to NTE $500,000 for the fish water bypass project, he would appoint a committee for the purpos reviewing and reprioritizing the construction completion list. Mr. McCrohan advised that since it related to construction expenses, AEA woul take ad on the review and reprioritization of the construction completion list. C. Bradley Governor Stability Funding Mr. McCrohan reported that AEA had reviewed the scope of work and the study, and they accepted, in principle, that the governor study is a construction completion expense item. He said it oo J hed the amended construction completion list. delete D. Construction Fund Residual Balance Mr. McCrohan said he had distributed a cover letter from himself to Mr. Stahr with an attachment from the PMC's bond counsel, Mr. Vassar. He said Mr. Vassar's letter explained how any residual funds in the Construction Fund would be disposed of to the utilities and the State. He said this letter had resulted from the discussion at the previous meeting regarding the PMC's request for reimbursement for the residual balance. Mr. McCrohan said AEA had been of the opinion, that they are not permitted to do this, but Mr. Vassar's letter described how the AEA could refund the utility portion. He recommended that Mr. Saxton review this matter and discuss it with Mr. Vassar, and they would hopefully come to agreement in principle upon the methodology to be used. Mr. McCrohan added that it would be the State's preference to get closure on the fund, with an adequate contingency, and then do the proper refunding of any remaining balance. Brief discussion was heard regarding potential issues that may arise with respect to this item. 9. NEW BUSINESS A. Bond Refunding - Mr. Story Shoold His bean O-ge nda item 2 Nb .. Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 6 of 7 Referring to the letter and attachment from Mr. Randy Simmons to Mr. Stahr dated March 14, nO Alo 1997, Mr. Story advised that forward refunding of the Bradley Lake project bonds may be a \“% possibility, and this had been discussed with Ms. Pease. Mr. Story recommended that a ter subcommittee be appointed for the purpose of reviewing this issue or inviting Goldman, Sachs, at its own expense, to give a presentation at the next meeting of the PMC to explain the forward refunding technique. Mr. Story invited Ms. Pease to elaborate. Ms. Pease stated that the market has been very volatile recently. She noted that there has been as much as a 20-basis-points change in the market in a given day, and one basis point on the PMC bonds represents approximately $50,000. She recommended that they should set a goal for a percentage of the refunded debt, perhaps 5%, or $3 to $5 million net present value savings, and begin compiling the necessary documents so they could act quickly to take advantage of the advance refunding through the forward mechanism if the market swings in their favor. She pointed out that if the market went against them, they did not have to proceed with the forward refunding, but they should be prepared in the event the market moves in a favorable direction for them so they did not miss a golden opportunity. Discussion was heard. Chair Stahr appointed an ad hoc Bond Refund Subcommittee to monitor the market and prepare for action in the event the market becomes favorable to do a forward refunding. The subcommittee was comprised of Mr. McCrohan, Chair, Ms. Pease, Mr. Bjornstad, and Mr. Evans. Mr. Kelly said he would check with Mike Cunningham regarding filling a seat on the subcommittee. Mr. McCrohan advised that he would contact ML&P, GVEA, and CEA for names of additional subcommittee members and would arrange for Goldman, Sachs' participation. ramet Mr. McCrohan added that AEA would have soft costs involved, and AEA would seek to have she : ie those recouped from the bond refunding, which is the typical procedure. He said if this could = sacle not be done, AEA would have to come back for a budget amendment to their admin costs. on ogei (tem e 10. COMMITTEE MEMBER COMMENTS There were no Committee member comments. A. Next Meeting Date The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for Tuesday, May 20, 1997, at 10:00 a.m. in the Commission Room of ML&P. 11. © ADJOURNMENT MOTION: Mr. Bjornstad moved, seconded by Mr. Kelly, to adjourn. There being no objection and no further business of the Committee, the meeting was adjourned at 11:00 a.m. BY: Tom Stahr, Chairman ATTEST: Alaska Energy Authority, Secretary “ "Nee te_ return te Shaun XC. Vi Jf by Friday atterncor ha Ag. SES BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East 1st Avenue Anchorage, Alaska Tuesday, March 25, 1997 10:00 a.m. l CALL TO ORDER Chairman Tom Stahr called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:05 a.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Tom Stahr, Chairman Municipal Light & Power Eugene Bjornstad, Vice Chairman Chugach Electric Association Dave Calvert City of Seward Don Stead Homer Electric Association Dennis McCrohan Alaska Energy Authority Jim Hall Matanuska Electric Association Mike Kelly Golden Valley Electric Association Others Present: Stan Sieczkowski, Alaska Energy Authority Elaine McCambridge, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Brenda Fuglestad, AIDEA John S. Cooley, Chugach Electric Association Dora Gropp, Chugach Electric Association Brian Hickey, Chugach Electric Association Tim McConnell, Municipal Light & Power Mary Ann Pease, Municipal Light & Power Brad Evans, Golden Valley Electric Association Steve Haagenson, Golden Valley Electric Association Bob Hufman, AEG&T Mike Yerkes, AEG&T Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 2 of 7 3. PUBLIC COMMENT There was no public comment. 4. AGENDA COMMENTS Mr. McCrohan requested that Item 8.D., Construction Fund Residual Balance, be added under Old Business. There being no further additions or corrections to the agenda, it was adopted by unanimous consent. 5. APPROVAL OF MEETING MINUTES - JANUARY 14, 1997 MOTION: Mr. Bjornstad moved, seconded by Mr. Hall, to approve the meeting minutes of January 14, 1996. It was noted that Jim Hall should be corrected to Wayne Carmony in the Roll Call. On page 2, under "Others Present," Wayne Carmony should be replaced with Jim Hall. On page 7, In the third paragraph, the first motion on that page, “Mr. Calvert voted...." should be corrected to read, "Mr. Calvert moved..." On page 6, in the first line of the fourth paragraph, "Homer Electric Association's current request for reimbursement of the $350,000 directly..." should be corrected to read, "Homer Electric Association's current request for reimbursement of late construction invoices, and the PMC's request for reimbursement of the $350,000 directly to the PMC for the utility portion of the Construction Fund balance would exceed the available funds." There being no other additions or corrections, a roll call vote was taken, and the minutes were unanimously approved as amended. 6. BUDGET SUBCOMMITTEE REPORT Chair Stahr reminded the Committee that the budget had to be adopted by Friday, March 28th. He said another meeting would be held prior to that date if necessary. A. FY98 Budget Proposal and Approval Ms. Pease reported that the Bradley Lake Budget Subcommittee had met via teleconference on Wednesday, March Sth, to finalize the FY 98 budget. She said the budget had been unanimously approved by the Budget Subcommittee at that meeting. She noted that the budget was attached to her meeting notes which were being distributed at this time. Ms. Pease reviewed the meeting notes containing the FY98 budget for Bradley Lake, the monthly utility contributions, and a summary of the operations and maintenance budget and detailed FERC account. In summary, the total budget proposed for approval was $15,501,635, which consisted of: debt service of $13,389,435, O&M budget of $2,087,200, and renewals and replacements at $25,000. MOTION: Mr. Kelly moved, and it was seconded by Mr. Bjornstad, to approve the FY98 budget as presented. There being no discussion, a roll call vote was taken, and the motion passed unanimously. Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 3 of 7 Ms. Pease reported that two invoices were received from Ron Saxton at Ater, Wynne, et al., for legal services rendered, the December 1996 invoice in the amount of $4,114.50 and the January 1997 invoice in the amount of $8,063.87. She requested Committee approval for payment of those invoices. MOTION: Mr. Bjornstad moved, seconded by Mr. Kelly, to approve payment of the December 1996 and January 1997 invoices from Ater, Wynne, et al. There being no discussion, a roll call vote was taken, and the motion passed unanimously. T. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the O&D Subcommittee had met via teleconference three times since the last PMC meeting to discuss the governor instability study proposals and the fish water bypass debris removal projects. Mr. Sieczkowski reported that on February 20th, the Subcommittee met via teleconference to discuss the governor scope of work, phase two. He noted that Chugach Electric had received comments at that meeting and had subsequently revised the scope of work. At the March 7th teleconference meeting, the Subcommittee had reviewed and approved the revised scope of work. Since that time, Chugach had issued the scope of work and requested proposals from several firms. At the March 7th meeting, the Subcommittee had also discussed the details of removing debris from the fish water bypass area. Mr. Sieczkowski reported that Chugach had been regulating the reservoir and coordinating the operation to have the lake down to an elevation of 1,070 by April 15th, with a further reduction to 1,060 by May 1st. He said the resource agencies have agreed to a reduction in the fish water flows to 30 CFS during the cleanup period. Mr. Sieczkowski said pumps would be on hand to provide the fish water releases during the low side flow periods. He noted that FERC had also been notified of the project, and their comments and approval were pending. During the March 20th teleconference meeting, the Subcommittee had discussed the Chugach proposed project operation guidelines during the low lake level periods and the debris cleanup procedures. Mr. Sieczkowski reported that AEA had drafted a construction services agreement between CEA and AEA, which was similar in form and content to the HEA/AEA agreement. He said this would cover the work performed by Chugach when construction funds are provided for the tasks such as the governor instability studies, purchase of the DSMs, and SVS equipment. He anticipated that the draft would be sent to Chugach for review next week. Mr. Hickey addressed the details of the governor instability study and the operations of the project. He reported that they were on schedule with the draw-down and had gone to single- unit operation when they had reached the 1,080 level. He said the governors had been converted to a four-jet operating mode to minimize the potential of a needle disintegration. He said the reservoir was currently at 1,078.9, and they had discontinued allocating spinning reserves from the project until they increase back above the 1,080 level. With respect to the governor instability study project, Mr. Hickey reported that they had issued the RFQ to Southern Engineering, Power Engineers, Power Technologies, and Engineering Power Systems, and the responses are due today. He said they had completed compilation of the DSM data and the SCADA alarm data for 35 oscillation events that had occurred from July 14, 1993 to present, and they were currently analyzing the compiled data. He said they had determined that all of the events fell into one of three oscillation periods that the Kenai oscillates under, i.e., 750 milliseconds, 1.1 seconds, and 1.4 seconds. nN = heal , Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 4 of 7 Mr. Hickey advised that the O&D Subcommittee was scheduled to meet on April 3rd to review the proposals and issue the contract for the governor instability study project. Mr. Stead reported that maintenance of the project had been on schedule and satisfactory since the last PMC meeting. There was one trip related to a SCADA programming change which was performed to provide Chugach with pen stock pressure for the draw-down. He said the problem had been corrected and the units were restored within about 10 minutes. Mr. Stead said ORD Subcommittee's primary focus at this time was the clean-out of the fish water intake area. He said the budget developed in 1995 for the construction punchlist to erform this job was $100,000; the current estimated cost of performing the job was $400,000. le said at the time the $100,000 was allocated, they were not aware of the pumping and equipment requirements. Mr. Stead requested Subcommittee approval to increase the budget from $100,000 to $400,000 for completion of this project. Discussion was heard regarding the source of the additional funds. Mr. Stead recommended that the PMC direct the O&D Subcommittee to re-evaluate other lower priority projects to see where funds could be taken from to reallocate to the fish water bypass project. He emphasized the importance of addressing this project first. At Mr. Stahr's request, Mr. Stead described the extra work that needed to be done and who had provided the cost estimates for the project. He gave a breakdown of the estimated project costs. Mr. McCrohan concurred that the fish water bypass project should take priority. He advised / that the construction completion list should be revised to reflect the changes proposed by Mr. ~ Stead. Mr. McCrohan noted that the PMC would be discussing Items 8.B. and C later in the meeting, which would also impact the construction completion list. In response to Mr. Stahr regarding whether the O&D Subcommittee had reviewed this proposal, Mr. Stead stressed that time was of the essence as the bid process would need to commence immediately in order to get the pumps installed on schedule. , K Chair Stahr said this was a significant increase that Being requested, and he was not accustomed to being required to act so quickly o quests with so little supporting documentation. He said he understood that expedi s essential in this case, but he did not want this to become a precedent. Further discussion was heard regarding potential sources of funds that could be reallocated to the fish water bypass project to accommodate the expanded scope of the project. MOTION: Mr. Bjornstad moved that the fish water bypass project budget be increased from $100,000 to NTE $500,000. Seconded by Mr. Kelly. 3K ® In response to Mr. Yerkes, Mr. Stead said the bid proposals would be provided to the & D Subcommittee for review once they were received so that the O&D Subcommittee could work with Mr. Stead pre-award. Discussion was heard regarding the probability of this situation reoccurring and the potential need for future projects of this type. There being no further discussion, a roll call vote was taken, and the motion passed unanimously. { Chair Stahr said a working draft of the audit should have been distributed during Ms. Pease's _ feport. He noted that this was being handed out at this time and would be an agenda item for rtew Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 5 of 7 discussion at the next PMC meeting. a Ms. Pease added that Mr. Pete Raiskums and Ms. A McCullen)had performed the audit, ve and they would address it at the next PMC meeting. —— —— 8. OLD BUSINESS A. Spinning Reserves Update Mr. Cooley said the ASE was scheduled to meet on April 2nd. He said they had earlier evaluated the cost to change the spinning reserves requirement to require 70 percent to be from responsive units, currently assumed to be combustion turbines. He said they would also determine what the technical effects of the increased responsive spin and the feasibility of expending additional funds for increased reliability~ /jyouid be — ad B. Reimbursement for Transfer Trip Scheme for HEA/CEA Late Invoices Mr. McCrohan reported that they had reviewed the late invoices, and they accept, in principle, that they were construction expenses chargeable to the construction punchlist. He noted that they had some questions regarding some of the sub-items contained in the invoices, and Ms. McCambridge was currently discussing these items with HEA. In response to Mr. Stahr, he advised that no action of the Committee was required. Chair Stahr advised that with respect to the earlier vote approving the increase from $100,000 to NTE $500,000 for the fish water bypass project, he would appoint a committee for the purpos' reviewing and reprioritizing the construction completion list. Mr. McCrohan advised that since it related to construction expenses, AEA woul take ad on the review and reprioritization of the construction completion list. of Bradley Governor Stability Funding Mr. McCrohan reported that AEA had reviewed the scope of work and the study, and they accepted, in principle, that the governor study is a construction completion expense item. He said it bite ait ate j oe amended construction completion list. de D. construction Fund Residual Balance Mr. McCrohan said he had distributed a cover letter from himself to Mr. Stahr with an attachment from the PMC's bond counsel, Mr. Vassar. He said Mr. Vassar's letter explained how any residual funds in the Construction Fund would be disposed of to the utilities and the State. He said this letter had resulted from the discussion at the previous meeting regarding the PMC's request for reimbursement for the residual balance. Mr. McCrohan said AEA had been of the opinion, that they are not permitted to do this, but Mr. Vassar's letter described how the AEA could refund the utility portion. He recommended that Mr. Saxton review this matter and discuss it with Mr. Vassar, and they would hopefully come to agreement in principle upon the methodology to be used. Mr. McCrohan added that it would be the State's preference to get closure on the fund, with an adequate contingency, and then do the proper refunding of any remaining balance. Brief discussion was heard regarding potential issues that may arise with respect to this item. 9. NEW BUSINESS A. Bond Refunding - Mr. Story ’ is toold this Leon Ofenda- item 2 Bradley Lake Project Management Committee Meeting Min; Tuesday, March 25, 1997 Page Referring to the letter and attachment from Mr. Randy Simmons to Mr. Stahr dated March 1 1997, Mr. Story advised that forward refunding of the Bradley Lake project bonds may be possibility, and this had been discussed with Ms. Pease. Mr. Story recommended that subcommittee be appointed for the purpose of reviewing this issue or inviting Goldman, Sachs) at its own expense, to give a presentation at the next meeting of the PMC to explain the forward refunding technique. Mr. Story invited Ms. Pease to elaborate. Ms. Pease stated that the market has been very volatile recently. She noted that there has been as much as a 20-basis-points change in the market in a given day, and one basis point on the PMC bonds represents approximately $50,000. She recommended that they should set a goal for a percentage of the refunded debt, perhaps 5%, or $3 to $5 million net present value savings, and begin compiling the necessary documents so they could act quickly to take advantage of the advance refunding through the forward mechanism if the market swings in their favor. She pointed out that if the market went against them, they did not have to proceed with the forward refunding, but they should be prepared in the event the market moves in a favorable direction for them so they did not miss a golden opportunity. Discussion was heard. Chair Stahr appointed an ad hoc Bond Refund Subcommittee to monitor the market and prepare for action in the event the market becomes favorable to do a forward refunding. The subcommittee was comprised of Mr. McCrohan, Chair, Ms. Pease, Mr. Bjornstad, and Mr. Evans. Mr. Kelly said he would check with Mike Cunningham regarding filling a seat on the subcommittee. Mr. McCrohan advised that he would contact ML&P, GVEA, and CEA for names of additional subcommittee members and would arrange for Goldman, Sachs' 0 participation. Mr. McCrohan added that AEA would have soft costs involved, and AEA would seek to have those recouped from the bond refunding, which is the typical procedure. He said if this could not be done, AEA would have to come back for a budget amendment to their admin costs. 10. COMMITTEE MEMBER COMMENTS There were no Committee member comments. A. Next Meeting Date The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for Tuesday, May 20, 1997, at 10:00 a.m. in the Commission Room of ML&P. 11. ADJOURNMENT MOTION: Mr. Bjornstad moved, seconded by Mr. Kelly, to adjourn. There being no objection and no further business of the Committee, the meeting was adjourned at 11:00 a.m. BY: Tom Stahr, Chairman ATTEST: Alaska Energy Authority, Secretary