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HomeMy WebLinkAboutBradley Lake PMC Meeting March 25,1997 2BRADLEY 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. 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 Bradley Lake Project Manz,-.1ent Committee Meeting Minutes Tuesday, March 25, 1997 Page 2 of 7 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 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 FY98 budget. She said the budget had been Bradley Lake Project Mana.-~..1ent Committee Meeting Minutes Tuesday, March 25, 1997 Page 3 of 7 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. 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. Us 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 Bradley Lake Project Mana,-..1ent Committee Meeting Minutes Tuesday, March 25, 1997 Page 4 of 7 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 impact 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 the lake is 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. 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 the 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 Bradley Lake Project Manz. ~..1ent Committee Meeting Minutes Tuesday, March 25, 1997 Page 5 of 7 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. , In response to Mr. Yerkes, Mr. Stead said the bid proposals would be provided to the O&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 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 ASCC-RCC 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 would be. 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 Bradley Lake Project Manz. ~..1ent Committee Meeting Minutes Tuesday, March 25, 1997 Page 6 of 7 to NTE $500,000 for the fish water bypass project, he would appoint a committee for the purpose of reviewing and reprioritizing the construction completion list. > Mr. McCrohan advised that since it related to construction expenses, AEA would take the lead 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 would be incorporated into the amended construction completion list. D. Construction Fund Residual Balance Mr. McCrohan said he had distributed a cover letter from himself to Mr. Stahr with an attachment from AEA’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 - Ms. Pease Referring to the letter and attachment from Mr. Randy Simmons to Mr. Stahr dated March 14, 1997, Mr. Bjornstad advised that forward refunding of the Bradley Lake project bonds may be a possibility, and this had been discussed with Ms. Pease. Mr. Bjornstad recommended that a 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. Bjornstad 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. Bradley Lake Project Manayeinent Committee Meeting Minutes Tuesday, March 25, 1997 Page 7 of 7 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. Bjornstad 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. 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: l . 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Pgh fox Aofs cork LILY? deel te bore pa~cargsdd (0) Comte, Connect a Nove. eee | | btel)| a J Mash hy Dé BB ITPO-Fy Play ots Teesdoy 2 0:00 am @ 7IL4+P a nd at ] Chere erie “a MW FD dest OUre a hy Mie | EB Cd > 00 en. ——— ee 03/24/97 07:49 9073434370 MOA INT. AUDIT @oo1 i lay one’ Peose Abi Hondeat WORKING DRAFT Not Intended for Reproduction, Attribution or Distribution Internal Audit Report 97-xx Bradley Lake Hydroelectric Project Alaska Energy Authority Charges Municipal Light and Power Introduction. We were requested by Municipal Light & Power (ML&P) and the Bradley Lake Project Management Committcc to perform an audit of charges to the Bradley Lake Hydroelectric Project (Project) by the Alaska Energy Authority (AEA) formerly known as the Alaska Power Authority (APA). According to APA’s Management Plan released in 1984, APA chosc to take a different approach to managing the Bradley Lake Project than it had for previous projects. This approach required providing more staff to manage and oversee the Project tor increased control over costs and increased coordination of scheduling tasks for the successful and timely completion of the Project. Scape. The objective of our audit was to determine whether costs charged to the Project by APA/AEA were within the scope of the Project. Specifically: 1. We reviewed the procedures used by APA/AEA to process Project expenditures. AEACOST1.WPD, March 20, 1997 (1:04pm) . 03/24/97 07:49 9073434370 MOA INT. AUDIT Internal Audit 97-xx Bradley Lake Hydroelectric Project aan WORKING DRAFT eee reie Not Intended for Reproduction, March xx, Attribution or Distribution 2. We reviewed the list of contracts charged to the Project by APA/AEA to determine whether they were within the scope of the Project. . We sclectively reviewed the description and amount of expenditures charged to the Project by APA/AEA through June 30, 1996 for reasonableness and applicability to the Project. . We totaled APA/AEA’s charges by fiscal year and budget category to assist us in our analysis. Summary of Findings. Based on our limited tests and selective review of records, we found no instances whcre the costs charged to the Project by APA/AEA were outside the scope of the Project. Charges to the Project by APA/AEA were generally processed through the State of Alaska Statewide Accounting System. Costs were then reimbursed to APA/AEA by the Trustee from the Construction Fund after certification that the costs were proper. As of June 30, 1996, a total of $17,939,474 was charged by APA/AEA to the Project. This was 5.5% of total Project costs and approximately 20% of APA/AEA's agency costs during this period. The charges consisted of the following: Operating Costs: executive office, accounting and administration, Bradley Lake Project, operations and engineering, and program development (see Attachment A for a schedulc of costs by year). $12,389,467 Services Costs: consulting, legal serviccs, risk management, land rights, Automated Maintenance Management System, financial and economic analysis, insurance, auditing, AEACOST!.WPD, March 20, 1997 (1:05pm) -2- Qoo2 % 03/24/97 =07:50 9073434370 MOA INT. AUDIT @oo3 Internal Audit 97-xx Brae Lake Hyérockctic Priject WORKING DRAFT Municipal Light end Power Not Intended for Reproduction, March xx, 1997 Attribution or Distribution bond counsel, Project Management Committee, turbine and governor tests, stream gauging and other. $2,208,953 Miscellaneous Contract: Bradley Lake Board of Consultants, Disputes Review Board, hydraulic data collection, legal services, seismic monitoring, stream gauging, various animal habitat studies and other. $3,341,054 Discussion With Responsible Officials. The results of this audit were discussed with responsible officials on March xx, 1997. Audit Staff: Amy McCollum AEACOST1.WPD, March 20, 1997 (1:04pm) 23- Operating Costs Charged To Bradley Lake Project By APA/AEA Personal Contractual | ser plies & [Equipment &j Interest Paid} Sale of Bid TOTAL Services wee Machinery jon Retention} Packages nee 1,052 boi 201,270 646,291 744,122 2223 4, sat 12,232 | 20,590 48,392 | ; 53,307 14,564! 133,532 211,528 3,500 “6 988 52,900 4,655 24,290! 12,831 } $14,775 $27,683 $191,371 $243,394 $862,163 $1,031,251 955,932 att 1,037,883] 1,242,974 1,427,715 457,281 | 152,785 70,992| 265,497 113,581 139,584 165,134 72,670 46,537 3,128 317,447 283,227 264,526 304,511 56,523 3,238 12,457 110,556 36,726| 22,612 | 2973| 208,770| 48,805; 0 2,405 + 1 sl (36,960 (26,359 (66,682) 125,734 | ~ $1,387,905 $1,699,462 $1,414,547 $1,825,880 $2,635,829 $749,070 $333,784 $34,656 c:\office\abbin\reports\reports\ AEAATTCA.WK4 $752,821| 31,880,943 $239,442 ~ $550,468| $753,059| ATTACHMENT A is og:20 26/F2/C0 olererc.06g Liadny “INI VOK roo “The 6 A. Bradley Lake Budget Subcommittee notes: The Bradley Lake Budget Subcommittee met by teleconference on March 5, 1997 to finalize the FY98 Budget. The budget was approved unanimously and the subcommittee recommends that the PMC formally adopt the attached FY98 budget to meet the trustee ’ requirement of receipt of an approved budget by April 1, 1997. The attached documents reflect the FY ’98 budget for Bradley lake, the monthly utility contributions, a summary of the operations and maintenance budget and detailed FERC account information on the O&M portion of the budget. PMC action will approve the following: Debt Service $13,389,435 O&M budget $ 2,087,200 Renewals and Replacements $ 25,000 Total FY °98 $15,501,635 The FY98 contributions will total $13,210,680 and are broken out by Utility on page 2 of the budget report. Additionally it has come to the attention of the subcommittee that the opportunity exists for the refinancing of a portion of the Bradley Lake First Series Bonds. This refinancing would yield approximately 5% to 6.6% present value savings, which translates to $3 to $4 million in present value terms. It is the recommendation of the budget subcommittee that the PMC approve a motion to have the Authority take the necessary steps to be ready to access the market should interest rates remain favorable. DATE: 03/Ue/¥7 TIME: UB:36 AM TO: Mary Ann Pease # 9-Z63-5888 PAGE: vuz-UU/ ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT FY97 Fy94 FY95 FY96 FY97 REVISED FY98 ACTUALS ACTUALS ACTUALS BUDGET FORECAST] BUDGET REVENUES, EXPENSES & CHANGES IN SURPLUS REVENUES UTILITY CONTRIBUTIONS 13,919,892 13,919,892 13,054,836 12,984,178 12,984,178} 13,210,680 INTEREST INCOME 1,878,861 1,923,471 1,924,479 1,841,500 1,893,000] 1,799,998 FROM OPERATING RESERVE 90,000 AEA SETTLEMENT 250,000 PRIOR YEAR CORRECTIONS 1,756 TRANSFER FROM ARBITRAGE 25,465 15,888,753 16,095,119 15,004,780 14,825,678 14,877,178] 15,010,678 EXPENSES OPERATIONS 2,292,875 2,125,894 2,253,690 2,304,154 2,060,767] 2,087,200 RENEWALS/REPLACEMENTS 25,000 DEBT SERVICE 13,388,240 13,391,285 13,390,725 13,390,560 13,390,560] 13,389,435 RENEWALS/REPLACEMENTS 15,681,115 15,517,179 15,644,415 15,784,714 15,451,327 CURRENT YEAR SURPLUS (DEFICIT) 207,638 577,940 (639,635) (959,036) (574,149) (490,957) BEGINNING SURPLUS 1,019,163 __ 1,226,801 1,804,741 1,059,036 _ 1,165,106 590,957 ENDING SURPLUS 1,226,801 1,804,741 _‘ 1,165,106 100,000 590,957 ioe eae | BALANCE SHEET ASSETS REVENUE FUND 486,443 481,305 960,604 100,000 183,998 100,000 OPERATING FUND 1,516,838 _ 2,004,613 660,152 : 406,959 2,003,281 2,485,918 1,620,756 100,000 LIABILITIES & SURPLUS LIABILITIES 776,480 681,177 395,650 SURPLUS 1,226,801 __ 1,804,741 1,165,106 100,000 590,957 100,000 2,003,281 ___—-2,485,918 _—1,560,756 100,000 590,957 _ OTHER INFORMATION = OPERATING RESERVE : 535,000 ) 535,000 535,000 535,000 535,000 (— $28.000 MONTHLY CONTRIBUTIONS 1,159,991 1,159,991 1,087,903 1,082,015 1,082,015 1,100,890 Page 1 of 6 3/6/97/8:28 AM, 98 Bradley Budget DATE: Us/Uo0/¥/ TIM: UO:350 AM TU: mary ann rease © »~202-2000 emves ves vee BRADLEY LAKE Fy98 BUDGET MONTHLY UTILITY CONTRIBUTION PERCENT FY96 FY97 Fy98 POWER PURCHASER SHARE TOTAL TOTAL INCREASE CHUGACH ELECTRIC 30.4% 3,968,670 3,947,190 68,862 MUNICIPALITY OF ANCHORA 25.9% 3,381,203 3,362,902 58,658 AEG&T 25.8% 3,368,148 3,349,918 58,442 GOLDEN VALLEY ELECTRIC 16.9% 2,206,267 2,194,326 38,274 CITY OF SEWARD 1.0% 130,548 129,842 2,266 226,502 100.0% _ 13,054,836 12,984,178 13,210,680 PERCENT FY96 FY97 Fy98 FY98 POWER PURCHASER SHARE MONTHLY MONTHLY MONTHLY 2,087,200 CHUGACH ELECTRIC 30.4% 330,723 328,933 334,671 5,738 MUNICIPALITY OF ANCHORA 25.9% 281,767 280,242 285,130 4,888 AEG&T 25.8% 280,679 279,160 284,030 4,870 GOLDEN VALLEY ELECTRIC 16.9% 183,856 182,861 186,050 3,189 CITY OF SEWARD 1.0% 10,879 10,820 100.0% 1,087,904 COMPONENTS OF INCREASE IN CONTRIBUTIONS FY97 ANNUAL CONTRIBUTION 12,984,178 DECREASE IN BUDGETED INTEREST EARNINGS 41,502 —~ DECREASE IN BUDGETED O&M COSTS (306,954) / INCREASE IN BUDGEDTED RENEWAL AND REPLACEMENTS 25,000 ~ DECREASE IN DEBT SERVICE (1,125) DECREASE IN BUDGETED USE OF PRIOR YEAR SURPLUS j 468,079,“ FY98 ANNUAL CONTRIBUTION 13,210,680 0 er Page 2 of 6 3/6/97/8:28 AM, 98 Bradley Budget DATE: 03/06/97 TIME: 08:36 AM TO: Mary Ann Pease # 9-265~-5888 FAvB; vuanmyys BRADLEY LAKE OPERATIONS & MAINTENANCE FY98 BUDGET CHANGE Fys8 FY96 FY97 FROM BUDGET ACTUALS PROJECTED PROJECTED PROPOSAL SUMMARY HEA O&M Contract Total 796,034 693,100 142,500 835,600 “ eee CEA Dispatch and Substation/SVC Maintenance 212,060 85,000 (47,500) 37,500 v Other O&M 413,997 453,492 9,408 462,900 Insurance Costs 323,605 318,396 11,304 329,700 Regulatory Costs 142,747 197,400 (42,900) 154,500 1,888,443 1,747,388 72,812 1,820,200 Administrative Costs 365,248 313,379 (46,379) 267,000 2,253,691 2,060,767 26,433 2,087,200 rd Page 3 of 6 3/6/97/8:28 AM, 98 Bradley Budget DATE: Us/Uo/¥/ Time: Ub:30 AM TU: Mary ANN vease © ¥-z02-s000 wrens wee vee BRADLEY LAKE OPERATIONS & MAINTENANCE FY98 BUDGET CHANGE Fys8 FY96 FY97 FROM BUDGET ACTUALS PROJECTED PROJECTED PROPOSAL FERC 535 - Operation Supervision & Engineering HEA O&M Contract 107,658 97,700 22,800 120,500 Other 107,658 97,700 22,800 120,500 FERC 537 - Hydraulic Expenses HEA O&M Contract 12,239 5,900 14,100 20,000 12,239 5,900 14,100 20,000 FERC 538 - Electric Expenses HEA O&M Contract 147,140 152,900 1,200 154,100 147,140 152,900 1,200 154,100 FERC 539 - Misc. Hydraulic Power Generation Expenses HEA O&M Contract 114,919 108,300 40,700 149,000 DIS Voice/Data Circuits - Bradiey 95,599 107,400 1,800 109,200 DIS 2-way Radio Circuits - Bradley 29,624 40,800 (1,600) 39,200 Other (15) 240,127 256,500 40,900 297,400 FERC 540 - Rents Bradley Lake FERC land use fees 62,024 55,532 5,468 61,000 62,024 55,532 5,468 61,000 FERC 542 - Maintenance of Structures HEA O&M Contract 17,606 7,600 7,400 15,000 17,606 7,600 7,400 15,000 FERC 543 - Maintenance of Reservoirs, Dams & Waterways HEA O&M Contract 2,033 200 7,800 8,000 Other '96 / Nuka Diversion Repairs '97 1,350 5,000 5,000) 3,383 5,200 2,800 8,000 FERC 544 - Maintenance of Electric Plant HEA O&M Contract 283,734 228,100 32,900 261,000 283,734 228,100 32,900 261,000 FERC 545 - Maintenance of Misc. Hydraulic Plant HEA O&M Contract 95,205 86,700 12,300 99,000 Martin Airstrip Access Rebuild 0 QO 0 95,205 86,700 12,300 99,000 FERC 556 - System Control & Load Dispatching HEA O&M Contract 15,500 5,700 3,300 9,000 CEA Dispatch & Softwar 103,157 NOAA Weather Service 5,741 6,000 0 6,000 SCS Snow Measurement 10,931 12,500 0 12,500 UAA Seismic monitoring 50,000 53,000 2,000 55,000 USGS Minimum Flow Study 38,000 38,000 ° 38,000 USGS Streamguaging 120,210 119,260 740 120,000 Northern Ecological Minimum Flow Study 0 0 343,539 234,460 6,040 240,500 Page 4 of 6 3/6/97/8:28 AM, 98 Bradley Budget BRADLEY LAKE OPERATIONS & MAINTENANCE FY98 BUDGET FERC 562 - Station Expenses CEA SVC/Substation Maintenance Contract FERC 571 - Maintenance of Overhead Lines HEA Overhead Line Maintenance FERC 920 - Administrative Expense AEA Admin Fee Workers' comp refund AEA Administrative Costs PMC Costs Bradley Lake Audit fees Bradley Lake PMC Legal Bradley Lake Arbitrage Report Budget, recording, courier Bradley Lake Trustee fees PMC Costs TOTAL FERC 920 FERC 924 - Property Insurance Bradley Lake PMC Insurance Insurance Premiums Homer Electric Insurance RSA with Risk Management FERC 928 - Regulatory Commission Expenses FERC administrative fees Contractual Engineer - Bradley FERC Licensing Reimbursement from Const. Fund (airstrip, waterf Contractual Engineer - Perform 5 year inspection Contractual Engineer - Inspection follow-up TOTAL BRADLEY LAKE BUDGET CHANGE FY98 FY96 FY97 FROM BUDGET ACTUALS PROJECTED PROJECTED PROPOSAL 108,903 85,000 47,500) 37,500 108,903 85,000 47,500) 37,500 533 16,000 6,000 22,000 533 16,000 6,000 22,000 275,000 212,079 (12,079) 200,000 (24,600) 250,400 212,079 (12,079) 200,000 22,602 15,000 0 15,000 65,470 62,500 (32,500) 30,000 3,000 1,800 200 2,000 5,464 0 18,312 22,000 2,000 20,000 114,848 101,800 (84,300) 67,000 365,248 313,379 46,379) 267,000 7,808 7,800 700 8,500 267,594 260,296 6,704 267,000 29,112 31,100 3,900 35,000 19,091 19,200 0 19,200 323,605 318,306 11,304 329,700 116,029 120,000 6,000 126,000 27,098 28,500 0 28,500 (7.163) 6,783 28,900 (28,900) 0 20,000 20,000) 0 142,747 197,400 42,900) 154,500 2,253,691 2,060,767 26433 2,087,200 Page 5 of 6 3/6/97/8:28 AM, 98 Bradley Budget BRADLEY LAKE BUDGET ACTIVITY BY ACCOUNT Rev Fund Balance 6/30/96 900,604 O&M Fund 660,152 Debt Fund 2 Op Reserve 535,000 Sch Maint R&C 7,087,209 Cap Reserve Total 13,392,890 22,575,856 imurr FY97 Projection 12,984,178 Page 6 of 6 Revenues 12,984,178 Interest 1,893,000 22,000 1,915,000 Transfers to O&M (2,203,224) 2,203,224 - Transfers to Debt Service = (13,390,560) 13,390,560 2 96 O&M Reduisitions (395,650) (395,650) 97 O&M Reauisitions (2,060,767) (2,060,767) Debt Payment 1/1/97 (6,110,280) (5,110,280) Debt Payment 7/1/97 (8,280,280) (8,280,280) Projected Balance 6/30/97 183,998 406,959 2 535,000 7,109,209 13,392,890 21,628,057 FY98 Budget - Revenues 13,210,680 13,210,680 Interest 1,799,998 1,799,998 Transfers to O&M (1,705,241) 1,705,241 - Transfers to Debt Service (13,389,435) 13,389,435 a 98 O&M Reduisitions (2,087,200) (2,087,200) 98 Renewals/Replacements (25,000) (25,000) Debt Payment 1/1/98 (6,004,718) (5,004,718) Debt Payment 7/1/98 (8,384,718) (8,384,718) Projected Balance 6/30/98 100,000 - 2 535,000 7,109,209 13,392,890 21,137,101 5% of Annual O&M Budget 26% of Annual O&M Budget 3/6/97/8:28 AM, 98 Bradley Budget taiwa setanion uw ec:en Anan caz_e 2 mewes mw Krew Xa. SD. ALASKA INDUSTRIAL DEVELOPMENT : » ¢ AND EXPORT AUTHORITY {= ALASKA @@m =ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 March 14, 1997 Mr. Thomas Stahr Chairman Bradley Lake Project Management Committee Anchorage Municipal Light & Power 1200 E. First Avenue Anchorage, Alaska 99501 Dear Mr. Stahr: The purpose of this letter is to pass along some information regarding a financial opportunity which may be of interest to members of the Bradley Lake Project Management Committee (“PMC”). Market interest rates are significantly lower today than they were when funding of the Bradley Lake First and Second Series Bonds (the “Bonds”) was completed. This, in combination with the ability included in the original financing documents to call the Bonds, creates an opportunity whereby the Alaska Energy Authority (“AEA”) could refund the Bonds and reduce debt service costs. As you know, “private activity bonds” such as the Bonds cannot be advance refunded. Instead, the most common technique is a “forward refunding” in which a buyer commits today to buy a series of current refunding bonds on the first legal date (basically 90 days before the first call date) at a yield level fixed today. Goldman, Sachs & Co., has for some time been monitoring the potential for such a forward refunding transaction. Their current analysis (see enclosed summary memorandum dated February 18, 1997) shows that savings levels associated with refinancing portions of the Bradley Lake First Series Bonds would yield approximately 5.0% to 6.6% present value savings as a percentage of refunded bonds. This would translate to $3.0 to $3.9 million dollars in present value terms. Since most issuers of tax exempt debt establish a savings target level of approximately 4% to 5%, the potential Bradley Lake forward refunding on February 18” was at a savings level which would make it worthwhile to pursue. The market has been quite volatile and many forecasters are concerned about rising rates; meanwhile with no transaction documents prepared we could not now access the market. If you are interested in having the Authority further investigate the potential of Mr. Thomas Stahr March 14, 1997 Page Two this transaction, the next step would be for us to explore the actual steps and work required to execute such a transaction. Essentially, the idea would be to figure out exactly what needs to be done and outline a plan for determining when and if a transaction should occur. Although the Authority is the issuer of the Bradley Bonds, the participating utilities are responsible for meeting debt service payments. The PMC will reap any benefits from the lowering of rates on the Bradley Bonds via a refunding. We are providing you with the enclosed information to determine the PMC’s interest in having the Authority proceed. The Authority is willing to explore, on your behalf, the forward refunding transaction if the PMC pays for the out-of-pocket costs, through a budget amendment, incurred on its behalf. The Authority will consider committing to such a financing that would result in reduced future payments to the participating utilities, assuming that any legal obstacles can be overcome and that details can be worked out between the Authority and the PMC, and provided that the Authority is not adverse'y affected in any way. Additionally, prior to proceeding in this vein, there are several open items that must be resolved between the Authority and the PMC, among which is the appropriate amount of outstanding bonds. lf you have any questions, please contact either myself or Valorie Walker at (907) 269-3000. If you have questions you would like Goldman, Sachs to address directly, you may call either Jeff Brown or Paul Bloom at (415) 393-7765, but | would appreciate your keeping AIDEA/AEA staff informed of the substance of such discussions. We look forward to working with you on this. [. D. Randy Simmons Executive Director Sincerely, DRS:bjf hiall\bjf\finance\vfw\bpmc bonds cc: Valorie F. Walker, Deputy Director - Development Dennis McCrohan, Deputy Director - Energy Mary Anne Pease, ML&P (w/attachmenit) Memorandum Date: February 18,1997 To: Randy Simmons Valorie Walker Keith Laufer From: Jeff Brown Paul Bloom Subject: Refunding Analysis of Bradley Lake First and Second Series Bonds As we discussed on the phone with Valorie the other day, please find attached a refunding analysis of the Bradley Lake Bonds which reflects market conditions on Tuesday, February 18, 1997. As you know, these Bonds cannot be refunded using a traditional approach (current or advance refunding). However, they are worth watching as the current call date for the First Series is only two years away, and there are a number of techniques available for refunding bonds in advance of the call date when a traditional advance refunding is not an option. Two of the most straightforward are a Municipal Forward and a Forward Swap or “Hedge Swap”. Enclosed is our analysis applying each of these two approaches to the Bradley Lake Bonds. Both techniques achieve essentially the same end, that is locking in a rate today which will effectively be used to currently call the bonds on the call dates of July 1, 1999 for the First Series and July 1, 2000 for the Second Series. A Municipal Forward can be thought of just like a traditional refunding with a very long period between pricing and closing. You price today and settle the transaction just before the call date. In order to lock ina rate today for bonds that are delivered in the future, you pay investors a “forward premium” which is driven primarily by 1) the length of time between pricing and the call, and 2) the relationship at pricing between short term and long term yields. The longer the forward period, the higher the premium. Our analysis assumes a forward premium over today’s spot rates of roughly 75 basis points on the longest maturity for the First Series Bonds. A Hedge Swap locks in the long-term rate using a forward commitment by AIDEA/AEA to enter into a fixed payor swap at the time the bonds are called. Under such a swap, AIDEA/AEA receives a floating payment and makes a fixed payment based on today’s rates, again plus a forward premium. At the call date, AIDEA/AEA issues variable rate bonds, and the payment is essentially offset by the floating swap payment AIDEA/AEA receives from Goldman Sachs. The proceeds of the floating rate issues are used to call the Bradley Lake Bonds. AIDEA/AEA is left with the fixed payment under the swap contract based on today’s low rates. While all of this sounds rather complicated, there is another alternative under the Hedge Swap approach which gets rid of the swap and the need to issue variable rate bonds. When the call date is reached, rather than executing the swap and issuing variable rate debt, AIDEA/AEA can unwind the swap and simply current refund the Bonds with fixed rate bonds at then current rates. If rates have gone down, AIDEA/AEA pays Goldman Sachs to unwind the swap; however, the new refunding bonds are issued at then current lower rates. If rates have gone up, Goldman Sachs pays AIDEA/AEA to unwind the swap and the new bonds are issued at higher rates. In either case, the unwind receipt in (or payment out), in combination with new bonds issued at July 1, 1999 rates would have an effective cost of funds virtually equal to the fixed payor rate established today in the swap contract. Under this approach, although AIDEA/AEA unwinds the swap before it actually kicks in, by entering into the swap contract you have effectively hedged yourself against rates going up substantially by the time the Bonds become callable (thus the name “Hedge Swap”). i When we first showed you refunding analyses of the Bradley Lake Bonds (in 1995 and again in early 1996), all of this was somewhat academic as under either approach the savings levels were well below your target range of 4-5%. However, current savings levels are high enough that we wanted to alert you and begin discussions as to how to get ready to take advantage of this market opportunity should you decide it makes sense. The results are summarized below: Bradley Lake First and Second Series Bonds Refunding Analysis: Market Rates on February 18, 1996 PV $ Savings/PV % Savings (dollar in $1,000s) Hedge Swap * | First Series _| $2,975/5.03% $3,904/6.60% mane aaee ee *Hedge swap results are typically better due the lower underlying hedging costs relating to the forward period. As you can see, the First Series results are at a level which are well within a sensible target savings range. In addition, as we get closer to the call date, the forward premium will decrease.We will keep an eye on these bonds and let you know how the results look as market conditions change. Please call with any questions. ce: Ingrassia x ‘ ladle» ALASKA INDUSTRIAL DEVELOPMENT » 4 AND EXPORT AUTHORITY > AA iE =SENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 \ fy <= 10. 11, BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING AGENDA Tuesday, March 25, 1997 - 10:00 a.m. Anchorage Municipal Light & Power Commission Room - 1200 East 1st Avenue CALL TO ORDER L” Stahr ROLLCALL L~ PUBLIC COMMENT Fitna ¢(3) AGENDA COMMENTS + 2 APPROVAL OF MEETING MINUTES - January 14, 1997 ae BUDGET SUBCOMMITTEE REPORT BAA A. FY98 Budget Proposal and Approval rae Pease” OPERATION AND DISPATCH SUBCOMMITTEE REPORT ; _ Sieczkowski ea Voted § (00,00? to FYD0,0c> ie eae « OLD BUSINESS A. Spinning Reserves apcueaee: Lovas B. Reimbursement for Transfer Trip Scheme Va Story/McCrohan for HEA/CEA Late Invoices CG} Bradley Governor Stability Funding is a McCrohan re pusess Core Fi-wel Raveden A. Bond Refunding \/ McCrohan COMMITTEE COMMENTS - A. Next Meeting Date 4 Stahr ADJOURNMENT vu “e ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY /= ALASKA im ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 March 25, 1997 §D) Mr. Thomas R. Stahr, Chairman Bradley Lake Project Management Committee Anchorage Municipal Light and Power 1200 E. First Avenue Anchorage, Alaska 99501 SUBJECT: Construction Fund Residual Balance Bradley Lake Project Dear Mr. Stahr: Attached is a letter from Mr. Ken Vassar of Wohlforth, Argetsinger, Johnson, and Brecht concerning disposition of any Bradley residual construction funds. This issue was raised in the January 24, 1997, PMC meeting where AEA was requested to transfer $350,524 (an estimate of the residual Utility contribution to the Construction Fund balance) plus interest to the PMC. The purpose of the letter from Mr. Vassar is to provide a legal opinion on an acceptable method for distribution of the Construction Fund balance. | have provided a copy of this letter to Mr. Ron Saxton. We suggest that Mr. Saxton and Mr. Vassar discuss this matter. A final construction completion list including contingency was previously approved by the PMC. At the March 25, 1997, PMC meeting we will be prepared to address the Transfer Trip Scheme invoices and the Bradley Governor Stability supply study as potential additions to the construction completion list. This will require an amended construction completion list to be agreed and reduce the balance of construction funds. Please let me know if you have any questions. Sincerely, Me Ch Dennis V. McCrohan, P.E. Deputy Director - Energy Attachment CC: Ken Vassar, Esq. Keith Laufer, Esq. Valorie Walker, Deputy Director - Finance Randy Simmons, Executive Director Ron Saxton/Ater Wynne WOHLFORTH, ARGETSINGER, JOHNSON & BRECHT A PROFESSIONAL CORPORATION JULIUS J. BRECHT TELEPHONE CHERYL RAWLS BROOKING (907) 276-6401 CYNTHIA L. CARTLEDGE BARBARA J. DREYER ATTORNEYS ATLAW FACSIMILE ROBERT M. JOHNSON (907) 276-5093 BRADLEY E. MEYEN 900 WEST 5TH AVENUE, SUITE 600 KENNETH E. VASSAR E-MAIL ERIC E. WOHLFORTH ANCHORAGE, ALASKA 99501-2048 wajb@alaska.net OF COUNSEL PETER ARGETSINGER March 24, 1997 Dennis McCrohan Alaska Energy Authority 480 West Tudor Road Anchorage, Alaska 99503 RE: Bradley Lake Construction Fund Residual Balance Our File No. 5379.0801 Dear Mr. McCrohan: You have asked that | prepare this letter for distribution to the members of the Bradley Lake Project Management Committee (the "PMC") regarding options for distribution of the remaining amounts in the Bradley Lake Construction Fund. As you know, | have previously written to Elaine McCambridge (letter dated August 5, 1996) on this subject, and this letter will reiterate the option mentioned previously in the letter to Ms. McCambridge. It is my understanding that the PMC and AEA have agreed on the construction completion list and an adequate budget, including contingency to complete the work. | understand that the PMC believes the residual amount in the Construction Fund should be used to redeem or purchase outstanding bonds that have been issued by the Alaska Energy Authority to finance the construction of the Bradley Lake project. However, the relevant provisions of the bond resolution clearly do not permit that use. While we cannot use the amount in the Construction Fund to pay principal of the bonds, the bond resolution does permit this amount to be used to pay interest on the bonds under certain circumstances. The resolution includes the following as a permissible "Cost of Acquisition and Construction" which may be paid from the Construction Fund: Interest accruing in whole or in part on Bonds prior to and during construction and for such additional period as the Authority may reasonably determine to be necessary for the placing of the Project . . . or any Dennis McCrohan March 24, 1997 Page 2 facility thereof in operation in accordance with the provisions of this Resolution. Thus, under this provision, if the Authority reasonably determines that it is necessary to do so for the placing of the Project in operation in accordance with the provisions of the bond resolution, the Authority could reach an agreement with the PMC that a portion of the remaining amount in the Construction Fund would be used to pay interest accruing on the outstanding bonds. If this money is so used, it would reduce the payment obligation of the utilities under the power sales agreement. Concurrently a payment will be remitted to the State for the residual balance. If the money in the Construction Fund is not used for this or another purpose authorized under the resolution, then the resolution requires that it be delivered to the State. | hope this has addressed your question. Please let me know if you would like further assistance. Sincerely, WOHLFORTH, ARGETSINGER, JOHNSON & BRE ce: D. Randy Simmons Executive Director Alaska Industrial Development and Export Authority Keith Laufer, Esq. Assistant Attorney General Attorney General's Office State of Alaska AFFO56B3/5379.0801 BRADLEY PMC VOTING DATE: S25 =T] Agenda Item No. Zt tem Pe Bk. 5 Ter A “Rell Call "Minha dyeh me maf te wn ae CITY OF SEWARD 01% et ail MATANUSKA ELEC ASSOC 14% (AL. Fl t CHUGACH ELEC ASSOC 30% D7 ral ZL HOMER ELEC ASSOC 12% at 71. GOLDEN VAL ELEC ASSOC 17% Zt Ht MUNI LIGHT & POWER 20% (ZL 71 ZI ALASKA ENERGY AUTHORITY a Tt 7 A=4+ OVER 51% B= AEA CONCUR With A C = UNANIMOUS D = MAJORITY VOTING METHOD A: Requiring four yeas with 51% of utilities, with no AEA vote: 1) Procedures for scheduling, production and dispatch of project power. 2) Establishment of procedures for use of each purchaser's water allocation (AEA assent required for license requirements). 3) Selection among alternative methods that do not involve AEA for funding required project work. VOTING METHOD B: Requiring 4 yeas with 51% of utilities and AEA concurrence: 1) Arranging operation and maintenance of project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) 3) 4) 5) 6) 7) 8) 9) Establishment of FY estimated annual payment obligation and schedule of each purchaser. Determination of annual project costs after each FY. Evaluation of necessity for and scheduling of required project work. Determination of appropriate amount of insurance. Adoption of additional minimum funding amounts for renewal and contingency reserve fund above that required by bond resolution. Selection among alternate methods that involve AEA for funding required project work. Adoption or amendment of procedural committee rules (except dispute resolution). 10) Adoption of project maintenance schedules. 11) 12) 13) 14) 15) Determination of rules, procedures and accounts necessary to manage project when no bonds outstanding. Evaluation and approval of optional project work and compensation for such work. Application of insurance claims proceeds not governed by bond resolution. Approval of procedures and any individual utility agreements relating to electric power reserves for project. Approval of consultants. VOTING METHOD C: Unanimous vote by all (including AEA) VOTING METHOD D: Majority vote (including AEA) Election of Officers 3-85-11 DATE: BRADLEY PMC VOTING a Agenda Item No. Te Lote ‘7. Ader We Lou. drctvee -Der-Stodd # 109000 +. #YJd2, 10 YES NO ABS YES NO ABS YES NO ABS CITY OF SEWARD 01% (ZF. MATANUSKA ELEC ASSOC 14% [WZ 71 CHUGACH ELEC ASSOC 30% Wr HOMER ELEC ASSOC 12% 7 Al GOLDEN VAL ELEC ASSOC 17% 71 MUNI LIGHT & POWER 26% fe L ALASKA ENERGY AUTHORITY V A=4+ OVER 51% B = AEA CONCUR With A C = UNANIMOUS D= MAJORITY VOTING METHOD A: 3) Establishment of FY estimated annual 11) Determination of rules, procedures and payment obligation and schedule of each accounts necessary to manage project when Requiring four yeas with 51% of utilities, with no purchaser. no bonds outstanding. AEA vote: 4) Determination of annual project costs after 12) Evaluation and approval of optional project 1) Procedures for scheduling, production and each FY. work and compensation for such work. dispatch of project power. 5) Evaluation of necessity for and scheduling of 13) Application of insurance claims proceeds not 2) Establishment of procedures for use of each required project work. governed by bond resolution. purchaser's water allocation (AEA assent required for license requirements). 6) Determination of appropriate amount of 14) Approval of procedures and any individual insurance. 3) Selection among alternative methods that do not involve AEA for funding required project work. VOTING METHOD B: Requiring 4 yeas with 51% of utilities and AEA concurrence: 1) Arranging operation and maintenance of project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) utility agreements relating to electric power reserves for project. 7) Adoption of additional minimum funding amounts for renewal and contingency reserve 15) Approval of consultants. fund above that required by bond resolution. VOTING METHOD C: 8) Selection among alternate methods that involve AEA for funding required project Unanimous vote by all (including AEA) work. VOTING METHOD D: 9) Adoption or amendment of procedural committee rules (except dispute resolution). Majority vote (including AEA) 10) Adoption of project maintenance schedules. Election of Officers Agenda Item No. DATE: _37e&5-97] BRADLEY PMC VOTING YES NO ABS YES NO ABS YES NO ABS CITY OF SEWARD 01% | MATANUSKA ELEC ASSOC 14% CHUGACH ELEC ASSOC 30% HOMER ELEC ASSOC 12% GOLDEN VAL ELEC ASSOC 17% MUNI LIGHT & POWER 26% a es ALASKA ENERGY AUTHORITY A=4+ OVER 51% B = AEA CONCUR With A C = UNANIMOUS D= MAJORITY VOTING METHOD A: 3) Establishment of FY estimated annual 11) Determination of rules, procedures and payment obligation and schedule of each accounts necessary to manage project when Requiring four yeas with 51% of utilities, with no purchaser. no bonds outstanding. AEA vote: 4) Determination of annual project costs after 12) Evaluation and approval of optional project 1) Procedures for scheduling, production and each FY. work and compensation for such work. dispatch of project power. 5) Evaluation of necessity for and scheduling of 13) Application of insurance claims proceeds not 2) Establishment of procedures for use of each required project work. governed by bond resolution. purchaser's water allocation (AEA assent required for license requirements). 6) Determination of appropriate amount of 14) Approval of procedures and any individual insurance. utility agreements relating to electric power 3) Selection among alternative methods that do not involve AEA for funding required project work. VOTING METHOD B: Requiring 4 yeas with 51% of utilities and AEA concurrence: 1) Arranging operation and maintenance of project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) reserves for project. 7) Adoption of additional minimum funding amounts for renewal and contingency reserve 15) Approval of consultants. fund above that required by bond resolution. VOTING METHOD C: 8) Selection among alternate methods that involve AEA for funding required project Unanimous vote by all (including AEA) work. VOTING METHOD D: 9) Adoption or amendment of procedural committee rules (except dispute resolution). Majority vote (including AEA) 10) Adoption of project maintenance schedules. Election of Officers Agenda Item No. CITY OF SEWARD MATANUSKA ELEC ASSOC CHUGACH ELEC ASSOC HOMER ELEC ASSOC GOLDEN VAL ELEC ASSOC MUNI LIGHT & POWER ALASKA ENERGY AUTHORITY A=4+ OVER 51% BRADLEY PMC VOTING 01% 14% 30% 12% 17% 26% B = AEA CONCUR With A DATE: YES NO ABS YES ABS YES NO 1S C = UNANIMOUS D= MAJORITY VOTING METHOD A: Requiring four yeas with 51% of utilities, with no AEA vote: 1) Procedures for scheduling, production and dispatch of project power. 2) Establishment of procedures for use of each purchaser's water allocation (AEA assent required for license requirements). 3) Selection among alternative methods that do not involve AEA for funding required project work. VOTING METHOD B: Requiring 4 yeas with 51% of utilities and AEA concurrence: 1) Arranging operation and maintenance of Project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) 3) 4) 5) 6) 7) 8) 9) Establishment of FY estimated annual payment obligation and schedule of each purchaser. Determination of annual project costs after each FY. Evaluation of necessity for and scheduling of required project work. Determination of appropriate amount of insurance. Adoption of additional minimum funding amounts for renewal and contingency reserve fund above that required by bond resolution. Selection among alternate methods that involve AEA for funding required project work. Adoption or amendment of procedural committee rules (except dispute resolution). 10) Adoption of project maintenance schedules. 11) 12) 13) 14) 15) Determination of rules, procedures and accounts necessary to manage project when no bonds outstanding. Evaluation and approval of optional project work and compensation for such work. Application of insurance claims proceeds not governed by bond resolution. Approval of procedures and any individual utility agreements relating to electric power reserves for project. Approval of consultants. VOTING METHOD C: Unanimous vote by all (including AEA) VOTING METHOD D: Majority vote (including AEA) Election of Officers Agenda Item No. CITY OF SEWARD MATANUSKA ELEC ASSOC CHUGACH ELEC ASSOC HOMER ELEC ASSOC GOLDEN VAL ELEC ASSOC MUNI LIGHT & POWER ALASKA ENERGY AUTHORITY A=4+ OVER 51% BRADLEY PMC VOTING 01% 14% 30% 12% 17% 26% B = AEA CONCUR With A DATE: YES NO ABS YES ABS YES NO & C = UNANIMOUS D= MAJORITY VOTING METHOD A: Requiring four yeas with 51% of utilities, with no AEA vote: 1) Procedures for scheduling, production and dispatch of project power. 2) Establishment of procedures for use of each purchaser's water allocation (AEA assent required for license requirements). 3) Selection among alternative methods that do not involve AEA for funding required project work. VOTING METHOD B: Requiring 4 yeas with 51% of utilities and AEA concurrence: 1) Arranging operation and maintenance of project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) 3) 4) 5) 6) 7) 8) 9) Establishment of FY estimated annual payment obligation and schedule of each purchaser. Determination of annual project costs after each FY. Evaluation of necessity for and scheduling of required project work. Determination of appropriate amount of insurance. Adoption of additional minimum funding amounts for renewal and contingency reserve fund above that required by bond resolution. Selection among alternate methods that involve AEA for funding required project work. Adoption or amendment of procedural committee rules (except dispute resolution). 10) Adoption of project maintenance schedules. 11) 12) 13) 14) 15) Determination of rules, procedures and accounts necessary to manage project when no bonds outstanding. Evaluation and approval of optional project work and compensation for such work. Application of insurance claims proceeds not governed by bond resolution. Approval of procedures and any individual utility agreements relating to electric power reserves for project. Approval of consultants. VOTING METHOD C: Unanimous vote by all (including AEA) VOTING METHOD D: Majority vote (including AEA) Election of Officers XO. DVAVY ALASKA INDUSTRIAL DEVELOPMENT = > ¢ AND EXPORT AUTHORITY f= => ALASKA 7 i ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 March 14, 1997 Mr. Thomas Stahr Chairman Bradley Lake Project Management Committee Anchorage Municipal Light & Power 1200 E. First Avenue Anchorage, Alaska 99501 Dear Mr. Stahr: The purpose of this letter is to pass along some information regarding a financial opportunity which may be of interest to members of the Bradley Lake Project Management Committee (“PMC”). Market interest rates are significantly lower today than they were when funding of the Bradley Lake First and Second Series Bonds (the “Bonds”) was completed. This, in combination with the ability included in the original financing documents to call the Bonds, creates an opportunity whereby the Alaska Energy Authority (“AEA”) could refund the Bonds and reduce debt service costs. As you know, “private activity bonds” such as the Bonds cannot be advance refunded. Instead, the most common technique is a “forward refunding” in which a buyer commits today to buy a series of current refunding bonds on the first legal date (basically 90 days before the first call date) at a yield level fixed today. Goldman, Sachs & Co., has for some time been monitoring the potential for such a forward refunding transaction. Their current analysis (see enclosed summary memorandum dated February 18, 1997) shows that savings levels associated with refinancing portions of the Bradley Lake First Series Bonds would yield approximately 5.0% to 6.6% present value savings as a percentage of refunded bonds. This would translate to $3.0 to $3.9 million dollars in present value terms. Since most issuers of tax exempt debt establish a savings target level of approximately 4% to 5%, the potential Bradley Lake forward refunding on February 18" was at a savings level which would make it worthwhile to pursue. The market has been quite volatile and many forecasters are concerned about rising rates; meanwhile with no transaction documents prepared we could not now access the market. If you are interested in having the Authority further investigate the potential of Mr. Thomas Stahr March 14, 1997 Page Two this transaction, the next step would be for us to explore the actual steps and work required to execute such a transaction. Essentially, the idea would be to figure out exactly what needs to be done and outline a plan for determining when and if a transaction should occur. Although the Authority is the issuer of the Bradley Bonds, the participating utilities are responsible for meeting debt service payments. The PMC will reap any benefits from the lowering of rates on the Bradley Bonds via a refunding. We are providing you with the enclosed information to determine the PMC’s interest in having the Authority proceed. The Authority is willing to explore, on your behalf, the forward refunding transaction if the PMC pays for the out-of-pocket costs, through a budget amendment, incurred on its behalf. The Authority will consider committing to such a financing that would result in reduced future payments to the participating utilities, assuming that any legal obstacles can be overcome and that details can be worked out between the Authority and the PMC, and provided that the Authority is not adverse'y affected in any way. Additionally, prior to proceeding in this vein, there are several open items that must be resolved between the Authority and the PMC, among which is the appropriate amount of outstanding bonds. If you have any questions, please contact either myself or Valorie Walker at (907) 269-3000. If you have questions you would like Goldman, Sachs to address directly, you may call either Jeff Brown or Paul Bloom at (415) 393-7765, but | would appreciate your keeping AIDEA/AEA staff informed of the substance of such discussions. We look forward to working with you on this. [. D. Randy Simmons Executive Director Sincerely, DRS:bjf h:all\bjf\finance\vfw\bpmc bonds cc: Valorie F. Walker, Deputy Director - Development Dennis McCrohan, Deputy Director - Energy Mary Anne Pease, ML&P (w/attachment) \~ SS SES BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES S\hauncy I Commission Room | Anchorage Municipal Light & Power 1200 East 1st Avenue Anchorage, Alaska Tuesday, January 14, 1997 10:00 a.m. ae 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 Norm Story 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 Shauna Dean, Alaska Energy Authority John Cooley, Chugach Electric Association Lee Thibert, Chugach Electric Association Brian Hickey, Chugach Electric Association Don Stead, Homer Electric Association Bob Price, Municipal Light & Power Mary Ann Pease, Municipal Light & Power ‘Bradley Lake Project Mar ment Committee Meeting Minutes Tuesday, January 14, 1997 Page 2 of 9 Wayne Carmony, Matanuska Electric Association Brad Evans, Golden Valley Electric Association Bob Hufman, AEG&T Mike Yerkes, AEG&T Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Steve Haagenson , Go\don imine electric Assoc 3. PUBLIC COMMENT Mr. Hufman introduced Mike Yerkes, planning engineer, who was hired by AEG&T and came on board January 8, 1997. There were no other public comments. 4. AGENDA COMMENTS Mr. Bjornstad requested that Item 9.B., Bradley Lake Instability and Control Problems, be added under New Business for discussion and action. Mr. McCrohan asked that Item 9.C., AIDEA/AEA Management Changes, be added under New Business as an informational item. There being no further additions or corrections to the agenda, it was adopted by unanimous consent. 5. APPROVAL OF MEETING MINUTES - NOVEMBER 19, 1996 MOTION: Mr. Bjornstad moved, seconded by Mr. Story, to approve the meeting minutes of November 19, 1996. There being no additions or corrections, a roll call vote was taken, and the minutes were unanimously approved as presented. 6. BUDGET SUBCOMMITTEE REPORT Ms. Pease reported that the Budget Subcommittee had met twice since the last PMC meeting: on December 4, 1996, and on January 13, 1997. Ms. Pease summarized the content of the Janua i 14, 1997 memo contained in the Committee members' packets. ord She said after lengthy discussjén on the disposition and status of Bradley Lake bonds, a motion was made and passed unarlimously approving Pete Raiskums_to imfnediately proceed with an audit of the administrati sts incurred by the (bower administration and to reconcile the debt service schedules with’AIDEA’s Referencing Mr. Raiskums' memo fo the Budget Subcommittee, dated January 13, 199 s. Pease stated that an adjustment of $350,524 needed to be made to reflect the actual recoverable construction costs of the project. Ms. Pease noted that Mr. Saxton would distribute copies of a subsequent memo on that issue. 7 ‘Bradley Lake Project Mar ment Committee Meeting Minutes Tuesday, January 14, 199/ Page 3 of 9 Budget Subcommittee recommendations submitted for PMC approval: » That Mr. Raiskums be authorized to perform the preliminary audit of the Bradley Lake Project Funds as of June 30, 1996, in conjunction with Parisena, Stromberg. » That Mr. Saxton's invoices for legal services, in the amounts of $3,045.82 and $2,739.01, be approved and forwarded to AIDEA for payment. ia ? » That Mr. Raiskums be authorized to conduct a feasibility analys ab perform an audit of AIDEA's and AEA's charges to the Bradley Lake Construction Fund. » That Mr. Saxton be directed to issue a memo to the Bradley Lake Managers requesting that the excess debt service payments be remitted back to the participants. Ms. Pease reported that the Subcommittee had reviewed the FY '98 budget. She said several changes needed to be made by the Subcommittee, and it would be finalized and,submitted to the PMC for approval at the February meeting. B Teeutesseen Ms. Pease said there had been a consensus that the budget for the Junction to Soldotna portion of the line needed to be submitted to the Budget Subcommittee for review. She said Mr. Stead would provide that within the next two weeks. Referencing the summary of financial condition as of January 7, 1997, contained in the Subcommittee's memo, Ms. Pease said the PMC was under budget at this time by approximately $340,000, and at year-end close-out, they would be under by approximately $300,000. With respect to the last recommendation, Mr. Saxton said he had been requested by the Budget Subcommittee to draft a letter to Mr. Randy Simmons requesting that AEA transfer funds to the Bradley PMC in the amount of $350,524. Due to AEA's failure to make the required adjustment at the date of Commercial Operation, the utilities had overpaid debt service, principal, and interest in excess of their contractual obligations under the Section 8 (a) (i) limitation. Mr. Saxton noted a typographical error in the last three lines of the first paragraph of the letter. Ms. Pease clarified that the $350,524 did not include interest. Mr. Saxton said interest would have to be calculated and added to that amount for the total amount due the PMC. MOTION: Mr. Bjornstad moved, and it was seconded by Mr. Calvert, that the Budget Subcommittee report and all recommendations be approved. Mr. McCrohan stated that AEA had not had an opportunity to review the request that AEA reimburse the PMC in the amount of $350,524. He noted his no vote for the record at this time. A roll call vote was taken, and the motion passed with one nay. ‘Bradley Lake Project Mar ment Committee Meeting Minutes Tuesday, January 14, 1997 Page 4 of 9 Ts OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the O&D Subcommittee had met the previous day and had discussed the following topics: Homer Electric was making the necessary preparations to have the fish water bypass intake and the diversion facility cleaned out this spring. The lake will be drawn down below elevation 1,065; some water may have to be pumped to bypass the area in order to supply the required fish water releases. Chugach and Homer Electric are scheduling the draw-down rate and energy deliveries to accommodate the work. The governor studies are progressing. Chugach Electric has developed the historical data and is prepared to submit for PMC approval its proposal that the O&D Subcommittee continue the project. The O&D Subcommittee has scheduled a teleconference following the PMC's action on this item to discuss and schedule the necessary procedures to carry out the work. Mr. Hickey reported that operations are a little ahead of schedule for the May 1, 1997, draw-down. He noted that some of the information that had come to light through the historical data on the govermor problems had led them to believe that the instability problem was caused by the transition from speed to deflector mode, causing them to be unable to put the units in deflector mode. At the present time, the Kenai turbine is being operated to meet load. He said the turbine would have been operated 24 hours a day regardless; however, at some point in the spring, they would be forced to continue to operate the turbine because they do not have the ability to control frequency on the Kenai without the deflector mode of the Bradley units should the transmission line open. Mr. Stead reported that maintenance on the units is current with one exception: The dam survey had not been performed in 1996 due to a clerical error. He said the 1996 survey was being performed this week, and another survey (1997 survey) would be conducted in August 1997. There were no other maintenance problems. Mr. Sieczkowski reported that the O&D Subcommittee continued its work on the renewal and replacement list, and that information would be presented to the PMC upon completion. MOTION: Mr. Story moved, seconded by Mr. Bjornstad, to accept the report of the O&D Subcommittee. There being no discussion, a roll call vote was taken and the motion passed unanimously. There was a consensus of the PMC that Item 8.A. be deferred until Mr. Lovas was in attendance to give the report. Agenda Item 9.4. was taken up next out of order. 9. NEW BUSINESS A. Reimbursement for Transfer Trip Scheme - Mr. Story “Bradley Lake Project Mar ment Committee Meeting Minutes Tuesday, January 14, 1997 Page 5 of 9 Mr. Story distributed backup documentation to support the billing request for reimbursement for transfer trip scheme costs dating back to 1991. Referring to HEA's letter to Tom Stahr dated August 28, 1996, Mr. Story provided the history and sequence of events relating to the request. HEA requested PMC approval for reimbursement to HEA in the total amount of $173,853.28 for the Diamond Ridge to Soldotna and the Soldotna to Quartz Creek transfer trip schemes. Mr. Story also reviewed the HEA and CEA invoices attached to the August 28th letter. He noted that reimbursements in the amount of $35,000 for CEA and $62,000 for HEA for the Soldotna to Quartz Creek scheme had been approved by the BPMC at its August 23rd, 1991 meeting. Mr. Kelly asked if there were any time constraints on the request that would preclude Budget Subcommittee review. Mr. Story said there was not, and he would provide the documentation to the Subcommittee for review. Chair Stahr referred the matter to the Budget Subcommittee for review and recommendation to the PMC. Discussion was heard regarding what percentage of the requested amount would be allocable to construction expense. B. Bradley Lake Instability and Control Problems - Mr. Biornstad ae Acoon Phan Mr. Bjornstad distributed and explained a motion with attached plan—ef-eetiér’ to correct the instability and control problems of the Bradley Lake Project. MOTION: Mr. Bjornstad moved, seconded by Mr. Story, that: (1) The Bradley Lake O&D Subcommittee be authorized to request proposals from consulting engineers to perform Phases |, Il, and Ill of the action plan entitled "Action Plan for Correction of Bradley Lake Project Instability and Control Problems." (2) Funds in an amount not to exceed $145,000 be allocated to Phases |, Il, and Ill of the plan from the remaining Bradley Lake Construction Funds, and that the O&D Subcommittee provide regular interim reports to the BPMC of progress in completing the action plan. (3) That the O&D Subcommittee, after technical evaluation of the proposals, be authorized to award task order contracts in an amount not to exceed $145,000 in the aggregate to consulting firms, based on qualifications and costs, to complete Phases 1, Il, and Ill of the action plan, and that final reports be submitted to the BPMC no later than July 31, 1997. (4) And that upon completion of Phases |, Il, and Ill, the O&D Subcommittee will return to the BPMC with findings and a revised action plan detailing the steps required to complete the remaining tasks. Bradley Lake Project Mar ment Committee Meeting Minutes Tuesday, January 14, 1997 Page 6 of 9 Mr. Bjornstad reviewed the action plan with the PMC. Discussion was heard, and it was agreed by unanimous consent that Item II on page 1,be revised to read: "//, Resolve the instability problem. ", \ \ of Dre Aeron Plan ah pane c nstructio register his vote at this time as AEA would have to review whether usage of the Construction Xn Funds was Allowable. He pointed out that there was currently only about $700 000_availab Constructi¢n Fundand the-current requests from ome A atior’for Feimburs A cers $352:090 ‘would sar-exeeedthe-avaitable fusds(7He suggested that the $2.3 million set-aside*tor 0,0 construction items that had been approved by the PMC about a year ago, be reassessed and vc 4 reprioritized in order to obtain additional fund POREPPET peat Ncotd? — afoutnc ~Atthe-Chairs-tequesf, Mr. Saxton advised that Mr. McCrohan's no vote would effectively veto the motion because the construction process is under the State's control. He explained that the remedy on the construction items is not a voting right, it was that the State is obligated to pay 50 percent of construction costs. In other words, the BPMC does not have the right to spend construction funds without AuibentF-Agreement. Discussion was heard regarding whether the BPMC could approve the engineering phase to proceed at this time, as time was of the essence in correcting the instability and control problems of the project. Mr. Saxton advised that the BPMC would run the risk of having to pay 100 percent of the costs as utility costs instead of the 50 percent as construction costs. Mr. Kelly suggested that the BPMC vote on the motion contingent upon receiving approval from AEA. Mr. Bjornstad said if AEA declined to provide approval, the BPMC could fund the project with O&M funds. Further discussion was heard regarding alternative solutions. inh Ah The question was called, and a roll call vote was taken. Thefnotion passed with Ae 2 Cacennote MOTION: Mr. Kelly moved, seconded by Mr. Story, that AEA irected—t6- determi = whether the study should be deemed Construction Funds, and further, Duatpegarciens of the AEA's determination, that the study proceed with the understanding that should the AEA determine that it is not a construction fund expense, the BPMC will fund the study from FY '97 O&M budget funds. In response to Mr. Calvert, Mr. Kelly said if AEA declined the usage of the Construction Fund, the project would still be pursued. Mr. McCrohan said he would expect to have a decision within a week and a half. He reminded the Committee that there were currently three separate actions requesting reimbursement from the Construction Funds. 4 Discussion was heard regarding the funding priority that would be given to the study. To ensure that the record was clear, Mr. Saxton advised that if the BPMC proceeded to fund the project with FY ‘97 budget funds, the BPMC was doing so under protest, that they considered this an emergency need, but they would preserve their rights to pursue the matter of funding with AEA. In other words, the BPMC does not concede any legal issues; thay have only agreed to acanee sho WEA Syilliw vio fp a AX homor Fleckric Ss Cece enh roqvesk ee Feuie ee Sis. 350K Aivrackt\y p Te PME foc ee vole octnen of OT oredetioels ox Fund Balace word exceed tte avail finto O Bradley Lake Project Man nent Committee Meeting Minutes Tuesday, January 14, 1997 Page 7 of 9 funds from the O&M budget so that the project would not be delayed and the work could proceed on an interim basis. Mea, Kelly moved Awith-the-apprevetof his secord, to amend his motion to include that should EA determine that it is not a construction fund expense, the BPMC would fund the study from FY ‘97 O&M budget funds under protest. There being no further discussion, the question was called and a roll call vote was taken. The amended motion passed unanimously. With respect to Agenda Item No. 6, Mr. Calvert asked for clarification of the Committee's earlier action regarding Mr. Saxton's letter to the Bradley Lake managers requesting that the excess debt service payment be remitted back to the participants. Chair Stahr responded that the Board had approved the letter being sent to Mr. Simmons, notthat the matter should be referred to the Budget Subcommittee. Mr. Calvert felt that a letter ee hould also be drafted requesting a refund in the amount of $350,524. 4 Es MOTION: Mr. Calvert voted to reconsider the motion to accept the report of the Budget Subcommittee. Seconded by Mr. Story. Discussion was heard regarding the form of the motion and Mr. McCrohan's options with respect to the reimbursement matter. There being no further discussion, the question was called on the motion to reconsider, and a roll call vote was taken. The motion passed unanimously. ( lean (yp wre covisieed at Ts tA) 6. BUDGET SUBCOMMITTEE REPORT (On Reconsideration Agenda Item No. 6 was back on the floor for reconsideration at this time with respect to the following Budget Subcommittee recommendation: » That Mr. Saxton be directed to issue a memo to the Bradley Lake managers requesting that the excess debt service payment be remitted back the participants. MOTION: Mr. Bjornstad moved, seconded by Mr. Kelly, the Budget Subcommittee's report be accepted by the BPMC with the exclusion of the above-mentioned recommendation to send the memo. Mr. McCrohan said he would still have to vote no as the Committee's meeting notes state that it would be recoverable construction costs. At Chair Stahr's request, Mr. Saxton advised that this was not a veto-able vote. TET There being no further discussion, the question was called, and a roll call vote was taken, Paes themotion to amend. The motion passed with one nay. ae “Bradley Lake Project Mar ment Committee Meeting Minutes Tuesday, January 14, 1997 Page 8 of 9 The question was called on the main motion to approve the Budget Subcommittee's report as amended, and a roll call vote was taken. The main motion passed as amended ‘i one nay. 9. NEWBUSINESS (CONTINUED) =—= Cc: AIDEA/AEA Management Changes - Mr. McCrohan Mr. McCrohan reported that at its December Board meeting, the -Acting-Executive-Birectol Mr Randy Simmons, was appointed Executive Director of AIDEA. Mr. McCrohan advised that Mr. Dan Beardsley, who had handled the Authority's insurance matters and contract agreement work with the Bradley group had resigned from the Authority. However, he would continue working with the Authority on a contract basis for six to nine months and would be available to work on the Bradley matters and would continue to be the focal point for agreements and insurance issues. 8. OLD BUSINESS A. Spinning Reserves Update Mr. Lovas reported that the ASCC Reliability Criteria Committee was continuing its work on the economic evaluation of the 70-percent response to spin requirement. He said they expected to have the initial results on the impact to the Railbelt to the BPMC for review by mid-February. Mr. Lovas said the ASCC/RCC had completed the draft scope of engineering services required to evaluate the specifications, requirements, and method of installation of a demand dynamic system monitor throughout the Railbelt. He added that the monitor would provide verification of unit responsiveness. Mr. Lovas said Mr. Stahr had requested the ASCC and the individual utilities to do a review of an economic dispatch of a system using a frequency-based reserve policy. The ASCC/RCC had reviewed the request and had some questions regarding the implementation and methodology. Mr. McConnell had agreed to forward the ASCC/RCC's questions to the authors of the policy for clarification on some aspects of the operation of the system model that is used to predict the frequency response impact of various contingencies. Mr. Lovas said once the ASCC/RCC received the feedback, they would consider the matter as a potential alternative during a full session of the ASCC. Mr. Lovas advised that CEA had been requested by Mr. Stahr of ML&P to investigate Siemans, the manufacturer and provider of the new SCADA system being installed, and to look at the availability and applicability of a system model. The ASCC had taken this request under advisement, and no action has yet been taken. Mr. Lovas reported that proposed bylaw changes had been submitted to the NAERC that would impact the various regions' involvement in the Regional Coordination Councils. The suggested revisions to the bylaws included mandatory membership in regional councils and mandatory adoption of and compliance with operating and reliability standards. The suggested revisions had been approved by the NAERC Board. - Bradley Lake Project Mar ment Committee Meeting Minutes * Tuesday, January 14, 19y/ Page 9 of 9 Mr. Lovas said the RCC was tasked with evaluating the approved bylaw changes and reporting back to the ASCC with a recommendation. The RCC had scheduled an all-day meeting on Friday, January 17th, to evaluate the NAERC bylaw changes and the potential impacts to reliability standards and operating criteria in the Railbelt. He said the RCC would prepare a report and provide its recommendations to the ASCC at the March 3rd meeting in Juneau. 10. COMMITTEE MEMBER COMMENTS Mr. Saxton advised Ms. Pease that she needed to act on approving the budget prior to April 2, 1997. Chair Stahr advised that a brief RUG meeting would be held before the IPG commenced. There were no other comments. A. Next Meeting Date The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for Tuesday, March 25, 1997, at 10:00 a.m. in the Commission Room of ML&P. 11. ADJOURNMENT MOTION: Mr. Calvert moved, seconded by Mr. Story, to adjourn. There being no objection and no further business of the Committee, the meeting was adjourned at 11:15 a.m. BY: Tom Stahr, Chairman ATTEST: Alaska Energy Authority, Secretary a 10. oti ys Ne ge At fe 4“ BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING AGENDA Tuesday, March 25, 1997 - 10:00 a.m. Anchorage Municipal Light & Power Commission Room - 1200 East 1st Avenue CALL TO ORDER ROLL CALL PUBLIC COMMENT AGENDA COMMENTS APPROVAL OF MEETING MINUTES - January 14, 1997 BUDGET SUBCOMMITTEE REPORT A. FY98 Budget Proposal and Approval OPERATION AND DISPATCH SUBCOMMITTEE REPORT OLD BUSINESS A. Spinning Reserves Update B. Reimbursement for Transfer Trip Scheme for HEA/CEA Late Invoices C: Bradley Governor Stability Funding NEW BUSINESS A. Bond Refunding COMMITTEE COMMENTS A. Next Meeting Date ADJOURNMENT Stahr Pease Sieczkowski Lovas Story/McCrohan McCrohan McCrohan Stahr LOCO OOO 0000000000100000100 0100001100120 1K OOK OK OK OK OK OR OKO OR OKO KOKO RK KOR RA x P. 01 x x TRANSACTION REPORT x x ——————— MAR-18-97 TUE 02:21 PM x X X x SEND (IM) ; x ; x DATE‘ START — RECEIVER TX TIME PAGES TYPE NOTE Mt DP x x X x MAR-18 02:19 PM 92635204 1’ 08" 2 SEND (M) OK 181 x x x x x k TOTAL IM 8S PAGES: 2 k x x OOO OOOO OOOO OOOO OOO 20000 0 00 000 2.0.0 0.00 0 000000 —0 OO 000000000 2 0000000022. 000 0X 1A AK ALASKA INDUSTRIAL DEVELOPMENT ‘% AND EXPORT AUTHORITY s= ALASKA @R ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 Facsimile Transmittal TO: _ ooos Shh _Leneiped. Lp eP ¥ Pbusey- Fax #: KOS - SROY From: Shana Leow Date: Aea.nuK Ld, 7777 Time: _ 6-22 Ls Number of pages including cover page: A Transmittal Contents: i ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY {= ALASKA @@E_ ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 Facsimile Transmittal Fax#: KOS ~ SOY From: <4 2c Deaw Date: vos Ld 1777 Time: "20 Dy . at Number of pages including cover page: A Transmittal Contents: Comments: Notice: This facsimile may contain confidential information that is being transmitted to and is intended only for the use of the recipient named above. Reading, disclosure, discussion, dissemination, distribution, or copying of this information by anyone other than the named recipient or his or her employees or agents is strictly prohibited. If you have received this facsimile in error, please immediately destroy it and notify us by telephone, (907) 269-3000. H/all/cheryl/fax/one.doc Le BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE a MEETING AGENDA Qw tI ir, Tuesday, March 25, 1997 - 10:00 a.m. , Vv Anchorage Municipal Light & Power ty Commission Room - 1200 East Ist Avenue ow 1. CALL TO ORDER Stahr ys ROLL CALL 3. PUBLIC COMMENT 4. AGENDA COMMENTS t Apprera| 5. APPROVAL OF MEETING MINUTES - Nos 6. BUDGET SUBCOMMITTEE REPORT AS Pease 7. Cuan AND DISPATCH SUBCOMMITTEE REPORT Sieczkowski 8. OLD BUSINESS A. Spinning Reserves Update wi rEA/CE ee Reimbursement for Transfer Trip Scheme eee hath, \ ame Story/ NY Cost TWVARA Co 10 Bar ee . (Geren StBidy . We : Next Meeting Date 1 Stahr ee 4 Lovas 11. ADJOURNMENT Dua\ “ par md eng We Cis h:all\eva\bradley\agenda o YIQAnw Dani 5 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING AGENDA Tuesday, March 25, 1997 - 10:00 a.m. Anchorage Municipal Light & Power Commission Room - 1200 East 1st Avenue 1. CALL TO ORDER Stahr 2s ROLL CALL 3: PUBLIC COMMENT 4. AGENDA COMMENTS 5. APPROVAL OF MEETING MINUTES - November 19, 1996 6. BUDGET SUBCOMMITTEE REPORT Pease 7. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Sieczkowski 8. OLD BUSINESS A. Spinning Reserves Update Lovas 9. NEW BUSINESS A. Reimbursement for Transfer Trip Scheme Story 10. COMMITTEE COMMENTS A. Next Meeting Date Stahr 11. ADJOURNMENT h:all\eva\bradley\agenda YOOX AIK KIKI A KAKA E XI KKK RRA A AAA KA IK KKK KTR DD A BA PhO fi TRANSACTION REPORT x SEE NAR-13-97 THU 02:55 PM = x q. : SEND (M) x DATE START RECEIVER TX TIME PAGES TYPE NOTE Mt DP ‘ MAR-13 02:53 PM 92798170 36" 2 SEND (M) OK 123 : x ; TOTAL 36S PAGES: 2 : BR HIOKIAIOOIAOIIII III III ODI I III REI XI ROD KI EK ALASKA INDUSTRIAL DEVELOPMENT a AND EXPORT AUTHORITY (= ALASKA ENERGY AUTHORITY pepe Satter age ATI 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 March 13, 1997 FAXED: 3/13/97 2 PAGES Anchorage Daily News 1001 Northway Drive Anchorage, Alaska 99508 ATTENTION: Ms. Eva Kaufmann Legal Classified Subject: Public Notice Account # ALAS0709 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: Monday, March 17, 1997. rs ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY = ALASKA i =ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 March 13, 1997 FAXED: 3/13/97 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: Monday, March 17, 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, £7 Shauna M. Dean Attachment h:all\eva\bradley\bladvizg 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, March 25, 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: Monday, March 17, 1997 h:all\eva\bradley\bladvizg