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HomeMy WebLinkAboutBradley Lake PMC Meeting Thursday, April 23, 2009 2BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES SPECIAL MEETING (via teleconference @ AIDEA/AEA) Anchorage, Alaska April 23, 2009 at 10:00 a.m. a5 CALL TO ORDER Chair Evans called the special meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Thursday, April 23, 2009, from the AIDEA/AEA Office, 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: Brad Janorschke Homer Electric Association (teleconference) Brad Evans Chugach Electric Association (teleconference) Henri Dale Golden Valley Electric Association (teleconference) -- Anchorage Municipal Light and Power (teleconference) Bryan Carey Alaska Energy Authority — Matanuska Electric Association — City of Seward 3. PUBLIC ROLL CALL Shauna Howell, AEA Linda MacMillan, AEA Shellie Helton, AEA Brian Bjorkquist, AEA Mark Johnson, CEA (teleconference) Mike Cunningham, CEA (teleconference) Burke Wick, CEA (teleconference) Don Zoerb, MEA (teleconference) Bob Day, HEA (teleconference) Aaron Remer, HEA (teleconference) Ken Langford, AML&P (teleconference) John Foutz, City of Seward (teleconference) 4. PUBLIC COMMENT There were no public comments. Page 1 of 3 BPMC Meeting April 23, 2009 5. NEW BUSINESS 5A. FERC Land Use Fees Discussion ensued as to the increase of the land use fees (see attached letter). Motion: Mr. Janorschke moved that the Bradley Lake PMC approve the hiring of the Van Ness Feldman, P.C. firm for joining in the protest on the land use fees. Seconded by Mr. Dale. Mr. Johnson briefed the group on the appeal noting that the appeal was filed on behalf of a group of utilities in the Lower 48. He has reviewed the brief and believes in the eyes of a former administrative law practitioner and decision maker that it is a well crafted brief and the arguments that are raised are primarily related to the due process is employed by a FERC in adopting rules from the forest service. His opinion is that the arguments that are raised are very solid and the record does not reflect that FERC independently considered and assessed the appropriateness of the piece. He considers this a very interesting litigation at this point and thinks this has a decent chance of success. He would urge people to support the legal work. Chair Evans said it needed to be discussed how they would manage this going forward. He asked if anyone had an issue with Kirk Gibson being the person who would look into this matter. Chair Evans asked that roll be called due to additional members joining in the teleconference (after the initial start of the meeting) and he also asked that a new motion be entertained as there was now a quorum. ROLL CALL Roll was called by Shauna Howell. The following members were present: Brad Janorschke Homer Electric Association (teleconference) Brad Evans Chugach Electric Association (teleconference) Henri Dale Golden Valley Electric Association (teleconference) --- Anchorage Municipal Light and Power (teleconference) Bryan Carey Alaska Energy Authority -- Matanuska Electric Association John (?) City of Seward (teleconference) Motion: Mr. Day moved that the BPMC join the class action suit, not to exceed $30,000 estimated in the letter (see attached), for the hiring of the Van Ness Feldman, P.C. firm for joining in the protest on the FERC land use fees. Seconded by City of Seward. Discussion ensued. Chair Evans restated that he would assign Kirk Gibson to keep the BPMC posted and let the group know if this moves through as well as provide updates. Page 2 of 3 BPMC Meeting April 23, 2009 A roll call vote was taken: City of Seward Yes Matanuska Electric Association: --- Chugach Electric Association: Yes Homer Electric Association: Yes Golden Valley Electric Association: Yes Municipal Light & Power: --- Alaska Energy Authority: Yes The motion unanimously passed. 6. ADJOURNMENT Meeting adjourned at 10:23 a.m. NS BY: Cu Bri ans, Chai ATTEST: Ke = laska Energy Authority,Secretary Page 3 of 3 BPMC Meeting April 23, 2009 BPM ilefot 5A} FERe [and Ve Fee. Lill CtheX, np Pred — ee foica ? Bee egy ae Commits > Aikounw ©@ 10:23 AM fosin. He. Ake active sult ‘Che dl tion 2 Mow +4 BPM legprra ie Metin Heian : vg 0 dc tia teen a ou te PE The FERC | Le. Uso Ftes . Bradley Lake PROJECT MANAGEMENT COMMITTEE MEETING (Date) (Location) PLEASE SIGN IN No. NAME REPRESENTING ill eae ee AEA 2 6. pon G aly 4LE 3 Henri D Gvé&s 4 Biel ie LEA 5 Don 2 _LEA 6 Bt D HEA AAG 2 AeA 8 Bean 8 Aén 9 Auten R HEA 10 Bead E CEA 1 ew ae | HEA 12 Re alli MLsP [13 Doha City of Seunrl 14 15 16 17 18 19 20 21 22 92Q2\IT9884 OE = ALASKA IDEN. f= @@m_) ENERGY AUTHORITY + * Alaska Inalusttal Development and Export Authority BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE SPECIAL MEETING via TELECONFERENCE AGENDA Thursday, April 23, 2009 — 10:00 a.m. (via electronic media at AIDEA/AEA 813 W. Northern Lights Blvd.) 1. CALL TO ORDER Evans 2. ROLL CALL (for Committee members) 3. PUBLIC ROLL CALL (for all others present) 4. PUBLIC COMMENT 5. NEW BUSINESS A. FERC Land Use Fees Evans 6. COMMENTS A. Next Meeting Date Evans 7. ADJOURNMENT 813 West Northern Lights Boulevard * Anchorage, Alaska 99503-2495 www.aidea.org * 907/771-3000 * FAX 907/771-3044 ® Toll Free (Alaska Only) 888/300-8534 * www.akenergyauthority.org | _____¢pygace POWERING ALASKA’S FUTURE April 21, 2009 Dear BPMC Member: A rulemaking by the Federal Energy Regulatory Commission (FERC) earlier this year has resulted in a substantial increase to many hydro licensees' annual charges for their project’s use and occupancy of federal lands. AEA recently received its annual invoice from FERC for the federal lands used by the Bradley Lake Project. The increase was significant, going from an amount of about $62,000 last year to over $378,000; a six-fold increase. Bryan Carey has been working this issue for AEA. I had Kirk Gibson look into it last week. Derivation of Rates The new rates are derived by means of a methodology originally developed by the US Forest Service and then adapted by the FERC that uses 13 “Zone Rates” ranging from $11.18 to $4,620.52 per acre. Counties in most states are assigned a Zone Rate that is then assessed against the projects’ federal-land acreage in that county. Alaska was the exception. It was divided into five, initially undefined, areas: (i) Aleutian Islands; (ii) Anchorage; (iii) Fairbanks; (iv) Juneau; and (v) Kenai Peninsula. The per-acre rates in the published rule were, respectively: (i) $5.78; (ii) $46.21; (iii) $23.10; (iv) $1,155.13; and (v) $ 34.66. On March 26, 2009, Bradley Lake’s fees were assessed based upon a Zone 4 rate of $69.32 per acre. As a result, the fees went from $62,000 last year to $370,000 for this year, which is about a six-fold increase. Clearly the boundaries of the areas are critical, but the rate methodology was adopted in a procedure that did not allow comments or discussion of the classifications. Current Appeal Efforts A group of utilities, both publicly and privately owned, have formed an ad hoc group to appeal this new methodology, the way it was adopted and the way it has been applied. The legal firm of Van Ness Feldman, P.C., in Washington, D.C. is doing the legal work for the group. Currently, the group consists of the City of Idaho Falls, (Idaho); City of Tacoma, Puget Sound Energy, PUD No. 1 of Chelan County, (Washington); El Dorado Irrigation District, Sacramento Municipal Utility District, and Turlock Irrigation District (California); PacifiCorp; Portland General Electric (Oregon). It is my understanding that Southeast Alaska Power Agency and Kodiak Electric Association are happy with their bills and are not entertaining any participation in the group’s efforts. The group have already asked the FERC to stay the effectiveness of the new fee schedule until the deficiencies in the procedure under which they were adopted had been rectified. FERC did not respond to the request, so the group filed an emergency stay request with the D.C. Circuit. That court has been asked to rule by April 30 so the members have enough time to pay their bills from FERC if the fees are not suspended. 639736/1/KHG/04 1019-0003 Chugach Electric Association, Inc. 5601 Electron Dive, PO Box 196300. Anchorage, Alaska 99519-6300 © (907) 563-7494 Fax [907] 562-0027 © (800) 478-7494 www chugachelectric.com * info@chugacheleciric com This process is separate from any challenge of the actual bills issued by FERC. The attorneys for the group are in the process of preparing an administrative appeal of the bills. The bills must be paid by May 11, and the appeal must be filed on the same date. The attorneys have asked each project to supply the data for the appeal (i.e., facts pertaining to why the valuation used by FERC was inappropriate given the project’s specific situation). The group is being asked to respond with this data so a draft can be prepared by May 1". Costs of Group The legal fees are being shared by the group based upon each members percentage of the group's total federal-lands acreage. The current total for the group is roughly 47,000 federal acres so as things currently stand, it is estimated that Bradley Lake (5,498 federal acres)would pay about 10 percent of the fees if it were to join the group. To date, the group has incurred approximately $55,000.00 in fees. These fees represent the work in filing the appeal at FERC regarding the rate methodology, the filing at the DC Circuit to stay FERC’s invoicing, and a memo to the group’s participants setting forth the legal basis for the appeal and current strategy. The next step is to file the information regarding the derivation of the rates for each specific project. It is estimated that filing the individual project data, in a group format, would be approximately $20,000.00. Consequently, should Bradley Lake join the group, its costs incurred up to May 1, 2009, would be: Bradley Lake’s Cost Sharing — 1) Research, Appeal at FERC, Stay at DC Circuit $5,500.00 2) Filing of protest of charges on specific projects 2.000.00 Total Cost to Date $7,500.00 It is difficult to estimate the expenses as the group goes forward because we do not have FERC’s response yet and we do not know the desire of the group to appeal any bad results it may receive as it moves forward with the case. Kirk Gibson estimates that the maximum that the efforts should cost to Bradley Lake (barring any unforeseen issues or appeals) is a share in the amount of $30,000.00. If successful, the group’s efforts help all hydroelectric projects in the nation. Bradley Lake will benefit from any success the group achieves irrespective of whether it joins the group with respect to the appeal of the regulations. Bradley Lake will more than likely need to advance the cause of the FERC invoice specific to its project. Bradley Lake can join the group and use the group’s size to assist it in its efforts specific to Bradley Lake issues, or the BPMC can use its counsel, Ater Wynne to represent it with respect to the specific bill on Bradley Lake. Given the time frame and cost effectiveness we’can achieved with participating as part of the group, Kirk Gibson believes it is most efficient to use the group’s efforts to leverage the activities at FERC and recommends that the BPMC use the group to advance its issues. 639736/1/KHG/04 1019-0003 Moreover, if Bradley Lake decides to join the group, BPMC can always leave the group and move forward separately if we perceive Bradley Lake’s interests not being satisfactorily represented. There should be several opportunities to reevaluate Bradley Lake’s participation as the appeals and other work moves forward. BPMC Approval Under the BPMC Bylaws, the BPMC will need to approve the hiring of the group’s consultant’s (attorneys at Van Ness Feldman, P.C.), should the BPMC want to use them to represent the BPMC on these issues. [Option A: I will be calling a teleconference meeting to discuss working with the group to appeal and protest the increase in FERC’s land use fees. Option B: Please respond to this email by hitting “Reply All” with your comments regarding your position on working with the group to appeal and protest the increase in FERC’s land use fees.] In the interim, please do not hesitate to contact me, or Kirk Gibson, should you have any questions or desire further information. Sincerely, eeleseaon} ans, Chair 639736/1/KHG/041019-0003 FEL \L ENERGY REGULATORY COMMISS "~~ ST ENT OF ANNUAL CHARGES FOR U.S. LAN FOR PERIOD BEGINNING: 10/01/2008 ENDING: 09/30/2009 PAYMENT MUST BE RECEIVED BY: 05/10/2009 DATE OF STATEMENT: 03/26/2009 BILL NO.: L90293-00 PROJECT NO.: 08221 + LOCATION : ALASKA ENERGY AUTHORITY AK KENAI PENINSULA BRYAN CAREY 813 WEST NORTHERN LIGHTS BLVD ANCHORAGE, AK 99503-2407 LIC. EFFECTIVE: 12/01/1985 LIC.ISSUED: 12/31/1985 LIC. TYPE: Conventional CHARGES FOR USE OF GOVERNMENT LANDS (INCLUDING LANDS SUBJECT TO THE PROVISIONS OF SECTION 24 FPA. EXCLUDING INDIAN LANDS) CHARGE AMOUNT DUE FERC USE A. EXCLUSIVE OF TRANSMISSION LINES ZONE: 04 5,412.000 AC $ 375,159.84 $ 375,159.84 FIXED CHARGE B. TRANSMISSION LINES ZONE: 04 86.000 AC 2,980.76 2,980.76 FIXED CHARGE SUBTOTAL: $ 378,140.60 CREDIT: TOTAL CHARGE DUE: $ 378,140.60 LICENSEE COPY COMPANY-ID: 042889 YEAR: 2009 ZONE RATES RATES PER ACRE EXCLUSIVE OF MAX EXCLUSIVE OF ZONE TRANSMISSION LINES TRANSMISSION LINES TRANSMISSION LINES MAX TRANSMISSION LINES 01 $ 11.56 $ 11.56 $ 5.78 $ 5.78 02 $ 23.10 $ 23.10 $ 11.55 $ 11.55 03 $ 46.20 $ 46.20 $ 23.10 $ 23.10 04 $ 69.32 $ 69.32 $ 34.66 $ 34.66 05 $ 92.42 $ 92.42 $ 46.21 $ 46.21 06 $ 138.62 $ 138.62 $ 69.31 $ 69.31 07 $ 231.04 $ 231.04 $ 115.52 $ 115.52 08 $ 462.04 $ 462.04 $ 231.02 $ 231.02 09 $ 924.10 $ 924.10 $ 462.05 $ 462.05 10 $ 1,386.16 $ 693.08 $ 693.08 $ 1,386.16 11 $ 2,310.26 $ 2,310.26 $ 1,155.13 $ 1,155.13 12 $ 4,620.52 $ 4,620.52 $ 2,310.26 $ 2,310.26 13 $ 11.18 $ 11.18 $ 5.59 $ 5.59 Fr="RAL ENERGY REGULATORY COMMISSIO™~ HYDROPOWER ANNUAL CHARGES SUMMARY OF BILLS FOR U.S. LANDS FOR BILL YEAR 2009 Payment must be received by: 05/10/2009 Company-id: 042889 ALASKA ENERGY AUTHORITY BRYAN CAREY 813 WEST NORTHERN LIGHTS BLVD ANCHORAGE, AK 99503-2407 . ; ‘ PLEASE INDICATE Bill Number Project-id Amount Due AMOUNT PAID L90293-00 08221 378,140.60 TOTAL AMOUNT DUE $ 378,140.60 Please indicate amount paid by project/bill by completing the last column intitled AMOUNT PAID. The total AMOUNT PAID should equal the total of the check(s) being submitted. RETURN THIS COMPLETED FORM AND CHANGE OF ADDRESS FORM WITH REMITTANCE(S) TO: Federal Energy Regulatory Commission P.O. Box 979010 St. Louis, MO 63197-9000 LICENSEE COPY PAGE 1 OF 1 GENERAL PAYMENT INSTRUCTIONS Make your check or money order payable to FERC. Please write BILL NUMBER(S) on your check or money order. Return the summary sheet with your check or money order. Include BILL NUMBER(S) on instructions for ACH transfer. * Payment must be received at the Lock Box by the due date to avoid penalty and administrative charges. Correspondence sent to the lock box will NOT be received by FERC staff. * NO LONGER VALID — SEE BELOW FOR NEW INSTRUCTIONS ACH Credit: JP Morgan * Wire: JP Morgan * ABA Number 071000013 ABA Number 021000021 FERC’s Account Number 11-14115 FERC’s Account Number 11-14115 * FERC will no longer accept ACH Credit and Wire payments transmitted through JP Morgan Chase after March 31, 2009. To avoid rejected payments please use the following ACH Credit and Wire instructions: * ACH Credit: Federal Reserve Bank of Richmond Wire: Federal Reserve Bank of NYC ABA Number 051036706 ABA Number 021030004 FERC’s Account Number 540032 BENEFICIARY: FERC 89000004 Bill Number Bill Number Courier: US Bank Mail: Federal Energy Regulatory Commission Attn: Government Lockbox P.O. Box 979010 1005 Convention Plaza St. Louis, MO 63197-9000 SL-MOCIGL St. Louis, MO 63101 REQUIREMENTS The basis for the submission of this statement of annual charges is Section 10(e) (annual charges) or 10(f) (headwater benefits assessments) of Part I of the Federal Power Act for licensees, and Section 3401 of the Omnibus Budget Reconciliation Act of 1986 for exemptees. Payment is due 45 days from the statement issue date. Penalty and administrative charges accrue on an unpaid balance after the due date and may be assessed monthly. Payments made “under protest” will be placed in a suspense account until a determination is made on the appeal (and subsequent rehearing, if one is filed). Making a payment “under protest” alone is not sufficient to appeal the bill. This statement of annual charges is subject to subsequent correction in case of error, even though payment will have been made. In such event, if the correction shows a decrease in the total charges, credit will be given on the statement for the following year. If the correction shows an increase, additional remittance will be required, upon notification. APPEALS If you believe this statement is incorrect, you must file an appeal with the Chief Financial Officer, no later than 45 days after rendition of the statement. Written appeals may be sent to: Federal Energy Regulatory Commission, Chief Financial Officer, 888 First Street, NE, Washington, DC, 20426. You may call Mr. Norman Richardson at (202) 502-6219 or Ms. Fannie Kingsberry at (202) 502-6108, with any questions. You must still make timely payment of the charges assessed to avoid penalty and administrative charges. REQUESTS FOR REHEARING For the Commission to consider an argument of law or policy, you must file a Request for Rehearing, no later than 30 days from the Chief Financial Officer’s decision on the appeal (18 CFR, 385.713). The request for rehearing is not a stay of the Commission’s statement, and if you have not yet paid or, as a result of the disposition of your appeal, now owe additional sums, you must still pay the charges to avoid any penalty and administrative charges. Send requests for rehearing to: Federal Energy Regulatory Commission, Secretary Kimberly Bose, 888 First Street, NE, Washington, DC, 20426. FERC’s Federal ID: 52-1383541