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HomeMy WebLinkAboutBPMC Meeting March 3, 1993 4ATTACHMENT 1 BRADLEY LAKE OPERATION AND DISPATCH SUBCOMMITTEE SUMMARY OF MEETING JANUARY 7, 1993 CORRESPONDENCE Revised Allocation & Scheduling Procedures, November 24, 1992 Revised Allocation & Scheduling Procedures, December 23, 1993 OPERATIONS A draft operation summary report format was presented by AEA. Beginning with January data, the report will provide project generation statistics and reservoir information in a condensed format. The report will be distributed as an attachment to the O&D Subcommittee meeting minutes. The status of utility DECnet programming was discussed. Due to differing utility information needs and the limited availability of its system programmer, AEA requested AML&P and GVEA develop and implement their own DECnet programming. No significant problems were discovered during the annual maintenance performed in November. Minor problems, most attributed to contractor oversight, were corrected. As anticipated, a small amount of tunnel debris was found. Scarring (due to the debris) on two of the needle nozzles is causing insignificant leakage. No water was detected in the turbine bearing oil. A one day outage will be needed to accommodate repair of a nitrogen leak on one of the transformers. It is anticipated that, in order to clear and reconfigure the fish water by pass intakes, the reservoir level will need to be lowered to 1068 feet by May 1, 1993. A preliminary diving inspection indicated the intakes are obstructed by large rocks, debris and silt, preventing sufficient flow of water to meet minimum FERC flow requirements. In anticipation of the reservoir draw-down, AEA is preparing a reallocation plan to maximize use of project water between February and May. Bradley Lake O&D Subcommittee January 7, 1993 Meeting Summary page 2 of 2 ACTION ITEMS Revisions to the Allocation and Scheduling Procedures: The Subcommittee approved recommendation of the revised Allocation & Scheduling Procedures to the BPMC for adoption. The revised procedures will be distributed to the BPMC in sufficient advance for consideration at the February meeting. All revisions will be presented to the BPMC in a manner which clearly defines the differences between the original procedures and the proposed changes. HEA Line Losses: HEA has not completed line loss calculations. The information will be presented to the next Subcommittee meeting. NEXT MEETING Thursday, January 28, 1993 10:00 a.m. Alaska Energy Authority Main Conference Room Savi OF 2” Odd © 2°00. UNLUALH CLOLINIC™ AN ENERUT ALINORII1-F Lr GU Cy ATTACHMENT 2 ugach ELECTRIC ASSOCIATION, INC. 5601 Minnesota Orive sochemeaet nana SCAN FACSIMILE TRANSMITTAL SHEET Phone: 907-563-7494 DATE: 1/8/93 | TO: Stan Sieczkowski, Dir. Facilities Ops. & Eng. | ! 1 COMPANY: AEA | LOCATION: — Anch, | FAX NO.: 561-8584 Hl FROM: Dave [ighers SUBJECT: Bradley Draw-down COMMENTS/MESSAGE: ——— IPF TRANSMISSION IS INCOMPLETH, PLEASE CALL: (907) 762-4633 a Pee omer | mE mC vi ws Peso) ae Uae CMUGALM CLOCIRIC= aK ENERGY ALTHORITYs= 2/3 January 8, 1993 iLO: Mike Kelly, Golden Valley Electric Assn. FAX: 451-5633 Norman Story, Homer Electric Assn. FAX: 235-3323 Tom Stahr, Anchorage Municipal Light & Power FAX: 263-5204 Ken Ritchey, Matanuska Electric Assn. FAX: 745-9368 Paul Diener, Seward Electric Utility FAX; 224-3248 Bob Hufman, AEG&T FAX: 474-0549 FROM: David L. Highers RE: Bradley Lake Draw-déwn Please review the attached memo fram Gene Bjornstad to me regarding water draw-down at Bradley, This is 4 significant action on short notice that will have an extreme financial impact. I plan on this being discussed at the PMC meeting on the 14th. If you have comments, please call or fax as soon as possible. Attachment ce: Ron Saxton FAX: 503/226-0079 5601 Minnesota Drive = P.O. Box 196300 * Ancnorage, Alaska 99549-6300 Phone 907-503-/494 © FAX 907-562-0027 DENI bY: CHUGACH ELECTRIC ASSOCIATION, INC. Anchorage, Alaska January 8, 1993 TO: David L. Highers, General Manager FROM: Eugene N. Bjornstad, Executive ae rating Divisions SUBJECT: Bradley Lake Draw-down I was informed Thursday, January 7, 1993 by Dave Burlingame, our representative to the Technical Coordinating Committee, that Bradley Lake will have to be drawn down by May 1993 in order to perform debris cleaning work around tbe intakes to the fish water bypass system. This action is apparently necessary because of rocks and other debris partially blocking the inlet. This blockage prevents the project from releasing the FERC mandated amount of water for fish spawning. This draw-down could have a major impact financially and also on the maintenance schedule of our combined cycle generation units. I suspect it also could have a significant impact on the other railbelt utilities. This issue should be placed on the agenda for the next PMC meeting so that all General Managers can come prepared to get some response to unanswered questions and discuss ABA's proposed plan of action. I believe it is appropriate that the AEA should address the following questions: I Why is it necessary to draw-down the lake levels to accomplish this cleaning? 2 Has an analysis of the situation been performed by an independent consultant? Are there othcr altcrnatives that have been fully explored? 3s Will the clean-up actions be characterized as maintenance to be paid for by the participants? by the project designers? contractors? 4, Will the proposed plan prevent situation this from developing again? 5 How much is the cost estimate? 6. What happens if AEA does nothing? Ue What happens if AEA delays one or more years? 1 would recommend that other utilities be apprised of this situation ASAP, 1- 8-98 : 2:07Ph : CHUGACH ELECT? 1C- AK ENERGY ALTHORITY:+ 2 ATTACHMENT 3 ALASKA POWER ADMINISTRATION (APA) Eklutna Purchase Agreement dated August 2, 1989, with Chugach, MEA and ML&P sets out the terms and conditions to implemented if Congress authorizes the sale. The utilities would get undivided interests in the project equal to their current power purchases. Interconnection and Wheeling Agreement dated April 25, 1974, with Chugach. Term of 35 years. Allows Chugach to wheel over APA facilities to MEA. Interconnection and Wheeling Agreement dated xxx, with ML&P. Term xx. Allows ML&P to interconnect its system with APA facilities. Power Sales Contract 85-79AP 10004, dated October 13, 1979, with Chugach expires December 31, 1993. Take-or-pay contract for 9 MW and 45,900,000 kWh of firm power. Similar contracts have been in existence since 1954. Power Sales Contract 85-79AP 10005, dated October 13, 1979, with ML&P expires December 31, 1993. Take-or-pay contract for 16 MW and 81,600,000 kWh of firm power. Similar contracts have been in existence since 1954. Power Sales Contract 85-79AP 10006, dated October 13, 1979, with MEA expires December 31, 1993. Take-or-pay contract for 5 MW and 25,500,000 kWh of firm power. Similar contracts have been in existence since 1954. Dispatch Agreement dated September 1992 with ML&P, expires in 1997. Provides for ML&P to dispatch the Eklutna Power plant. Transmission ROW Agreement dated xx with Chugach grants Chugach the right to build a double circuit 230 KV line on Eklutna right of way. In return APA gets to use one of the circuits for Eklutna power deliveries into Anchorage. Transmission Maintenance Agreement dated xx, 1987?, with ML&P for maintenance of 115 KV circuit along Northern Light Blvd to Anchorage Substation. Transmission Maintenance Agreement dated xx, 1987?, with MEA for maintenance of 115 KV circuit from Palmer to Fossil Creek. ALASKA ENERGY AUTHORITY (AEA) Alaska Intertie Agreement with Chugach, FMUS, AEG&T, ML&P and GVEA dated December 23, 1985. May be terminated at any time upon mutual consent of all participants, participants may terminate participation after 4 years advance written notice. Agreement provides for interconnected operation among the participants including obligations and ' Draft only, not yet signed 3878.JSC Agreements Among Railbelt Utilities January 11, 1993 2 responsibilities. Also provides for the operation and maintenance of the intertie facilities between Douglas and Goldhill with GVEA operating the northern half and ML&P operating the southern half. Establishes an Operating Committee which currently has the following subcommittees: Machine/Ratings; SCADA/Metering/Communications; Dispatch; and, Reliability/Protection. Addendum No. | to which all participants must be signatories establishes reserve capacity and operating reserve responsibility. Transmission Lease Agreement dated xx, 1985? with MEA for lease of the 115 KV line between Teeland and Douglas for use as part of the intertie. Transmission Maintenance Agreement dated xx, 1985? with MEA for maintenance of the southern half of the Alaska Intertie transmission line and substation facilities at Douglas. Transmission Maintenance Agreement dated xx, 1985? with GVEA for maintenance of the northern half of the Alaska Intertie transmission line and substation facilities at Healy and Goldhill. Substation Maintenance Agreement dated xx, 1985? with Chugach for maintenance of Alaska Intertie substation facilities at Teeland. SCADA Agreement dated xx, 1985? with ML&P for reimbursement for capital facilities required to support being the southern operator for the Alaska Intertie. SCADA Agreement dated xx, 1985? with GVEA for reimbursement for capital facilities required to support being the northern operator for the Alaska Intertie. Bradley Lake Power Sales Agreement with Chugach, AEG&T, GVEA, ML&P and SES dated December 8, 1987 with a term of 50 years. Take-or-pay contract for the output of the Bradley Lake project. Establishes a Project Management Committee to oversee operation of the project. The PMC currently has the following subcommittees: Budget; Insurance; Agreements; Operations & Dispatch; and, Technical Coordination. Bradley Lake Dispatch Agreement dated February 19, 1992, with Chugach. Provides for Chugach to dispatch the Bradley Lake Project. Transmission Maintenance Agreement dated xx, 1993 with HEA for maintenance of the 3radley Lake transmission facilities between the project and Bradley Junction. Substation Maintenance Agreement dated xx, 1993 with Chugach for the maintenance of the 3VC equipment at Daves Creek substation. Dratt only, not yet signed 3878.JSC aw) if of Agreements Among Railbelt Utilities January 11, 1993 4 Homer Lease Agreement dated September 1985 with HEA, expires on January 1, 2014. Provides for the lease to Chugach of 69 KV and 115 KV transmission lines between Bernice Lake and Soldotna, of 115 KV transmission line between Quartz Creek and Soldotna, and the majority of the 115 KV portion of the Soldotna substation. Chugach will operate and maintain (minor repairs only) the leased facilities. Bradley Lake Scheduling Agreement dated September 29, 1992, with HEA and AEG&T with a term of three years, renewable. Chugach pays HEA/AEG&T $112,000 annually for the right to schedule when HEA receives its share of the Bradley Lake project. For scheduling purposes HEA/AEG&T’s Bradley Lake energy is commingled with Chugach’s Bradley Lake energy. Soldotna 1 System Use & Dispatch Agreement dated December 1991 with HEA and AEG&T with a term of 10 years. Chugach provides dispatch service to HEA for Soldotna 1 when HEA decides that the unit is needed for HEA. Chugach provides an economical source of fuel for the unit and in return can use the unit for any system use that Chugach has. Variable O&M plus a margin is paid for actual use of the unit. Chugach agrees to generate 322,000 MWh on the unit during the term of the agreement. The term is extended by three years if Chugach uses the unit extensively during the last three years of the agreement. Interconnection Agreement dated December 3, 1983 with ML&P, expires December 31, 2014. Provides for interconnected operation with ML&P, sharing of operating reserves, sale and purchase of emergency, maintenance, and economy energy. Is generally superseded by the Alaska Intertie Agreement except when the line to Fairbanks is open. Established an Administrative Committee which has not been functional. Net Billing Agreement dated December 16, 1987, with MEA and AEG&T. Provides that MEA/AEG&T’s share of the output of the Eklutna and Bradley Lake projects will be commingled with Chugach’s other energy resources for scheduling and rate making. MEA/AEG&T will make the Eklutna and Bradley Lake payments but Chugach will credit MEA/AEG&T the equivalent amount on the power invoice from Chugach. Modified Tripartite Power Sales Agreement dated April, 1989 with MEA/AEG&T, expires on December 31, 2014. Provides for the sale of MEA’s full requirements of electric capacity and energy to AEG&T. MEA/AEG&T may transition to a net requirements status after a five year notice period. Semi-annual planning meetings among the parties is required. Non-Firm Power Sales Agreement dated May 18, 1988, with GVEA, expires on the 20th anniversary. Provides that Chugach will sell and GVEA will purchase all of GVEA’s non-firm energy needs from Chugach when available. Non-firm energy is defined as all of GVEA’s load in excess of that produced by GVEA units. Established an Operating Committee to meet ' Draft only, not yet signed 3878.JSC Agreements Among Railbelt Utilities January 11, 1993 5 quarterly that has not been functional. Joint Use Agreement dated September 1984 with Seward with a term of 25 years. Provides for joint use of ROW between Daves Creek substation and Lawing. Net Billing Agreement dated June 7, 1991, with Seward. Provides that SES’s share of the output of the Bradley Lake project will be commingled with Chugach’s other energy resources for scheduling and rate making. SES will make the Bradley Lake payments but Chugach will credit SES the equivalent amount on the power invoice from Chugach. Wholesale Power Agreement dated September 1984 with Seward, automatically renewed annually upon completion of the initial term of ten years. Chugach agrees to sell and Seward agrees to purchase electric power up to the maximum demand listed in the contract. ' Draft only, not yet signed 3878.JSC ATTACHMENT 3 CHUGACH ELECTRIC ASSOCIATION. INC. Anchorage, Alaska RECORD Copy FILE NO March 3, 1993 -fRo_ 3-! I mad i ! z/ TO: Bradley Lake Project Management Committee S731 9% FROM: David W. Burlingame, Manager, Power Control u SUBJECT: Bradley Lake SVC Testing On February 22, 1993 while setting up the system to perform testing for the SVCs, the Kenai peninsula suffered an outage to approximately 60% of the HEA consumers for approximately 1-1/2 minutes and 12,000 Chugach and Golden Valley consumers for 3 minutes. The following is a synopsis of the outage and the follow-up performed since the event: Bradley Lake was operating at 115 MW Bernice Lake unit 3 was on-line at 23 MW Exports as measured at Daves Creek were 68 MW and 73 MW at Quartz Creek. Quartz Creek breaker to Anchorage tripped on a power swing above 80 MW, islanding the Kenai. This relay was originally set to protect the Kenai for an overexport condition. Immediately following the Kenai separation, the Bernice Lake 115/69 KV transformer was tripped by the transformer differentials, islanding the Bernice Lake Power Plant and Golden Valley and Chugach shed consumer load ac) og s | NZ. Bradley Lake islanded by itself, one unit was placed in deflector by Chugach SCADA upon detection of islanding. Chugach and GVEA restored their consumers but CEA but did not realize the system was separated in three places. The Dispatcher was in contact with the Bradley power plant and the operator did not mention his frequency of 64 Hz. Approximately 4 minutes later, both Bradley Lake units tripped on overfrequency, blacking out the Kenai. Bernice Lake stayed on-line since it was separated from the rest of the Kenai and no service interruptions were experienced by Tesoro or other industrials. Following blackout of the Kenai, HEA load was picked up by closing in from Anchorage. It was 5 minutes before a Bradley Lake unit was synchronized to the system. The overcurrent relay at Quartz Creek has been reset and will no longer trip for power swings. A Chugach SCADA change was made to place a unit in deflector after checking fo: a gas turbine status and also to block the Bradley units from raise pulses after the needles are fully open. There is still a problem of not having a reliable, fast response frequency source on the Kenai for Bradley Lake, should Bradley become islanded from Bernice. We are working with the AEA to install a frequency source into our SCADA computer via microwave to eliminate this problem. Bradley Lake has been tested up to its full power output of 115 MW. The SVC systems have performed very well, although some problems have been experienced with Bradley Lake. On March 2, 1993 the Bradley units were allowed to synchronize onto the system by a synch-check relay while on an overspeed condition @nits were at 61.25 Hz). The closing caused a large power swing and voltage oscillations on the Kenai. AEA is investigating the problem. The only remaining tests are the Kenai islanding and possible staged fault tests. Testing should be completed by March 6, 1993. US/ 02/935 11:31 503 226 0079 HEWITT DODSON & SKERRITT ATTORNEYS AT LAW ATER WYNNE 001/006 Suite 1800 222 SW. Cohumbis Portland, Oregon 97201-6618 (503) 226-1191 Fax (5303) 226-0079 FACSIMILE TRANSMITTAL NOTICE: This facsimile contains confidential information that is being transmitted to and is intended only for the use of the recipient named below. 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, (503) 226~1191. DATE: Mars602)71 993. TO: SEE _BELOW ——e ———————E CITY/STATE: ee ee FAX NUMBER: OFFICE NUMBER: FROM: See ee ee DOCUMENT : : rc e: PAGES (INCL. COVER) 6 USAGE TIME CLIENT NUMBER: _53844-0000 Fax No. Office No. Dave Highers, Tom Lovas, CEA, Anchorage, AK 907/562-0027 907/563-7494 Ken Ritchey, MEA, Palmer, AK 907/745-9368 907/745-3231 Paul Diener, City of Seward, Seward, AK 907/224-3248 907/224-3331 Norm Story, HEA, Homer, AK 907/235-3313 907/235-8167 Mike Kelly, GVEA, Fairbanks, AK 907/451-5633 907/452-1151 Tom Stahr, ML&P, Anchorage, AK 907/263-5204 907/263-5201 Ron, zin Brent Petrie, tan Sieczkowski;pEA , Anchorage ——~907/561-8584 907/561~7877 RLS\BPMC. fax ATER WYNNE el Fo ver ee 10844 “ATER WYNNE nw HEWITT Poland, Og #70168 DODSON Fax (509) 2260079, & SKERRITT RECEIVEDFLE NO ATTORNEYS AT LAW FEB 23 1993 TRO at Min 3/3/53 FACSIMILE ‘TRANSMITTAL ALASKA ENERGY AUTHORITY. ~ NOTICE: This facsimile contains confidential information that is being transmitted to and is intended only for the use of the recipient named below. 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, (503) 226-1191. DATE: M0 a) ee) oo TO: SEE BELOW CITY/STATE: SEE BELOW FAX NUMBER: OFFICE NUMBER: FROM: Lon Saxton DOCUMENT: Memo re: Bradley Lake Refinancing PAGES (INCL. COVER) 3 USAGE TIME CLIENT NUMBER: _ 53844-0000 Fax No. Office No. Dave Highers, CEA, Anchorage, AK 907/562-0027 907/563-7494 Ken Ritchey, MEA, Palmer, AK 907/745-9368 907/745-3231 Paul Diener, City of Seward, Seward, AK 907/224-3248 907/224-3331 Norm Story, HEA, Homer, AK 907/235-3313 907/235-8167 Mike Kelly, GVEA, Fairbanks, AK 907/451-5633 907/452-1151 Tom Stahr, ML&P, Anchorage, AK 907/263-5204 907/263-5201 Brent Petrie, AEA, Anchorage 907/561-8584 907/561-7877 RLB\BPMC. fax ATTACHMENT 4 State of Alaska DS Walter J Hickel. Governor Alaska Energy Authority A Public Corporation MEMORANDUM VIA FAX AND REGULAR MAIL TO: Bradley Lake Project Management Committee rae il Mr. Ron Saxton, Ater Wynne Hewitt Dodson and Skerritt rin Mr. Jim Seagraves, John Nuveen & Company -_PRO 3=),) mm Mr. Eric Wohlforth, Wohlforth Argetsinger Johnson & Brecht 3/3 /33 ! vi Y FROM: BrentN.Petrie © JJ. 7 Stow Alaska Energy Authority SUBJECT: Partial Refunding of Bradley Lake Bonds DATE: February 24, 1993 Attached is an information item on the possibility of refinancing a limited portion of the outstanding Bradley Lake bonds. Bradley Lake Project Management Committee Chairman Dave Highers has agreed to place this item on the agenda for March 3. We can discuss it further at that time but will need an agreement from the BPMC on whether or not to proceed soon since these bonds can be refunded only until June 30, 1993. There is also a risk that any investment of time would be lost if interest rates move up half a point from where they are today (February 24, 1993). See you on March 3. BP:tg Attachment as stated Distribution: Mr. David Highers, Chairman, BPMC, Chugach Electric Association Mr. Norm Story, Vice Chair BPMC, Homer Electric Association Mr. Ken Ritchey, Matanuska Electric Association Mr. Paul Diener, City of Seward Mr. Michael Kelly, Golden Valley Electric Association Mr. Thomas Stahr, Municipal Light and Power PO. Box 190869 701 East Tudor Road = Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584 Refunding of Bradley Lake Bonds Information Item Over the last several months, the Energy Authority has received three proposals from underwriting firms for refunding a portion of the Bradley Lake bonds. The first two proposals were submitted to us by Merrill Lynch and by Dean Witter in Fall 1992. Both proposals were quickly withdrawn, however, once the firms discovered that the Bradley Lake bonds are "private activity" bonds which are not normally eligible for advance refunding. The most recent proposal is from Nuveen and is based on certain "multi-purpose allocation rules" that expire July 1, 1993. Nuveen believes, and Eric Wohlforth agrees, that these rules allow the Authority to refund Bradley Lake bonds that are properly allocable to Anchorage ML&P and Seward, that roughly $28 million in callable bonds can be so allocated, and that all savings realized from the refunding would be melded under terms of the power purchase contracts to reduce costs to all purchasers. The most recent estimates provided by Nuveen (2/24/93) are as follows: Net savings in debt service would be about $120,000 per year. Total net savings over the life of the bonds would be 3.6 million. The present value of savings over the life of the bonds would be $1.8 million. The present value of savings as a percent of the bonds being refunded would be 6.5%. This assumes of course that interest rates at the time of refunding are the same as they were on 2/24/93. All of these savings are projected as net of financing costs including underwriter’s discount and issuance expenses. If interest rates increased by about 50 basis points from the levels reached on 2/24/93, no savings would be realized. The Authority has also heard that a refunding proposal has been prepared by Smith Barney and presented to Chugach. However, we have not yet seen it. In order for the Authority to proceed with one of these refunding plans, authorization from the Bradley PMC will be necessary. Expenses would be incurred by Authority staff, bond counsel, and financial advisor that would have to be paid directly by the utilities if the refunding is prepared but not implemented due to future increases in interest rates. If the refunding occurs, the expenses would still have to be paid by the utilities but can presumably be capitalized. In addition, according to Nuveen’s lawyer, a certificate of agreement by the Bradley PMC (to the effect that the refunding will not create an increased burden or obligation) will be necessary in accordance with Section 11 of the Power Sales Agreement. Prenared 7/94/02 noe ATTACHMENT 2 BRADLEY LAKE OPERATION AND DISPATCH SUBCOMMITTEE RECORD VOPY SUMMARY OF MEETING FILE NO ef RO B=) iW) JANUARY 28, 1993 ie CORRESPONDENCE Bradley Draw-down, January 8, 1993 Update on Fish Water Bypass Intake Obstruction, January 19, 1993 OPERATIONS Participant subcommittee voting rights were discussed by the Subcommittee. It was noted that questions regarding voting rights had been previously raised at the BPMC level and that Mr. Saxton was investigating the issue. The Chairman will request Mr. Saxton provide written procedural guidelines for the subcommittees. It was reported that a second dive inspection of the fish water bypass intake area disclosed approximately 40 yards of material covering the intake. Because the size of the material is small (generally under 6 inches), the debris could potentially be vacuumed from the intake area. The work will be done in April at a proposed reservoir elevation of 1108' with minimal impact to the scheduling utilities. A reservoir draw-down to the 1068' level would not be required. The utilities will be requested to use an additional 9,000 acre feet of water over current schedule in order to reach the 1108' reservoir level by April 1, 1993. Responsibility for the remaining DECnet installation work was discussed by the Subcommittee. AEA recommended that the DECnet be installed and maintained by the utilities using it. GVEA and AML&P will discuss AEA's recommendation. It was noted that, ultimately, the issue may need to be re-addressed by the TCS and that any additional expenses to complete the task would need to be approved by the BPMC. ACTION ITEMS Transient Stability Analysis Study: The Subcommittee approved recommendation of a transient stability analysis study to be done by Stone & Webster Engineering Corporation for an amount not to exceed $10,000. The study is needed in order to determine potential transient effects in the tunnel in the event of a sudden needle closure at a reservoir elevation below 1080". .VO/ US/ BO Lu,oL ATER WYNNE HEWITT DODSON & SKERRITT ATTORNEYS AT LAW NOTICE: (503) 226-1191. wove “£20 VUTY ALEK WYNNE ae PACSIMILE TRANSMITTAL prohibited, ‘ aecoRU “FILE NO Portland. Oregon S720. 6618 (503) 226-1191 Fax (503) 226-0079 This facsimile contains confidential information that is being transmitted to and is intended only for the use of the recipient named below. 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 facsimile in error, please immediately destroy it and notify us by telephone, If you have received this DATE: March 2, 1993 TO: _SEE_ BELOW CITY/STATE: _SEE_BELOW FAX NUMBER: OFFICE NUMBER: FROM: DOCUMENT: Ron Saxton _Memo re: Master Operating Agreement Qutline_ PAGES (INCL. COVER) fo USAGE TIME. ’ CLIENT NUMBER: _53844-0000 Dave Highers, CEA, Anchorage, AK Ken Ritchey, MEA, Palmer, AK Paul Diener, City of Seward, Seward, AK Norm Story, HEA, Mike Kelly, GVEA, Fairbanks, AK 2 Ss int, ‘Bre Homer, AK Anchorage, AK mt Petrie, Fax No. 907/562-0027 907/745-9368 907/224-3248 907/235-3313 907/451-5633 907/263-5204 907/561-8584 RLS\BPMC. fax 0 No. 907/563-7494 907/745-3231 907/224-3331 907/235-8167 907/452-1151 907/263-5201 907/561-7877 03/02/93 «10:51 503 226 0079 ATER WYNNE 002/006 ATER WYNNE Suite 1800 222 SW. Columbia HEWITT Portland, Oregon 97201-6618 (503) 226-1291 DODSON Fax (503) 226-0079 ATTORNEYS AT LAW VIA IMIL MEMORANDUM TO; BPMC FROM: Ron Saxton and Tom Lovas DATE: March 2, 1993 RE: Bradley Lake Project Management Committee Master Operating Agreement Outline - Alternatives For Bradley Lake BPMC Involvement In Project Management Consistent With the Project Power Sales Agreement For scu t_W a ting. At the last BPMC meeting, Ron was given the assignment to develop a proposal for clarifying the role of the BPMC in the various Bradley operating agreements. The assignment was to draft these agreements in a way that recognized the BPMC's role in decisions about operating matters. Tom Lovas assisted Ron in the development of the following proposal. In summary, our proposal is to keep the individual agreements between the AEA and each contractor, but to make all such agreements subject to terms in a Master Operating Agreement to which the BPMC is a party. This approach provides protection of the BPMC concerns, while still allowing individual arrangements between AEA and individual contractors. JACK! The Bradley Project Management Committee was established in the Bradley Lake Project Power Sales Agreement to provide the RLS\S3 deren Seattle, Washingron Washington, DC. San Francisco, California Affiliated offices in (206) 623-471] (202) 785-0303 (415) 422-4143 Anchorage, Fairbanks Fax (206) +67-8406 Fax (202) 785-8676 Fax (415) 989-1263 und Juncau, Alaska 03/02/93 10:52 503 226 0079 ATER WYNNE 003/008 ATER WYNNE BPMC March 2, 1993 Page 2 purchasers of Bradley Lake power a direct participatory role in the management of the Project. The BPMC is “responsible for the management, operation, maintenance, and improvement of the Project" to the extent such responsibilities are consistent with AEA's ownership of the Project. That responsibility can be handled through direct BPMC participation in contract administration, or by making the BPMC the contracting entity for Bradley Lake activities. In either case, the AEA, as a State agency, owner and holder of the FERC license, must retain control of matters affecting its obligations under State law and the FERC license. The existing contracts between AEA and its O&M contractors place the BPMC only in a budget review mode, after AEA and the contractor have reviewed and agreed to the essentials for the following year. The issues that count most to BPMC members are schedule and cost. If the BPMC is involved after the fact, the matters most important to them have already been decided. PROPOSAL The easiest way to remedy the lack of BPMC involvement is to revise the format of the contracts to make the BPMC's role central in the planning and budgeting process. The AEA would continue its role as contractor, but would use the BPMC (or a subcommittee) to review the schedules, plans and budgets submitted by the contractor. For all matters excepting those where AEA's legal responsibilities are paramount, the BPMC's decision would control. The advantage of this type of revision is that it would require the least change in BPMC/AEA relationships. The following is an outline of the key terms of such an Operating Master Agreement: i f£ Br e Pr t ter zi Agr . Lin Parties. AEA, BPMC (acting on behalf of the Bradley Lake Power Sales Agreement Parties) and Contractors for O&M of the Bradley Lake Project and related transmission and communication facilities. Ri Nature of Agreement. All Bradley Lake subcontracting would be subject to the same planning and budgetary provisions as provided in the basic agreement. Specific responsibilities would RLS Ser nem "03/02/93 =10:52 503 226 0079 ATER WYNNE {004/006 ATER WYNNE BPMC March 2, 1993 Page 3 be included in separate exhibits to the agreement and executed by the AEA and the individual contractor. 3. Term. The term of the Master Operating Agreement would extend until the Bradley Lake Power Sales Agreement terminates. Each of the exhibits signed by AEA and a Contractor would state the term of the exhibit based upon the particular circumstances. 4. PM nd Obligation a. Exhibit Approval. BPMC approval would be required before any exhibit (or amendment thereto) detailing the duties of a contractor is executed by the AEA. b. Budget Approval. All plans and budgets would be submitted to the AEA and the BPMC for approval. The AEA and the individual contractor would be responsible for the preparation of the initial submission of plans and budgets. Gc. AEA Rights. The relationships of the BPMC and the AEA would continue as provided in the Power Sales Agreement. (The limitations on BPMC actions consistent with AEA's legal responsibilities and obligations as a State agency and FERC licensee would be preserved.) Specific procedural requirements (time for approval, payment of obligations, contractor performance) would be included in the Master Operating Agreement with the right of the AEA to proceed in the event of disagreement. d. Dispute Resolution. All disputes would be subject to mediation for a limited period prior to invoking arbitration or litigation. The BPMC would be responsible for setting up mediation and would be a stated party to any mediation or arbitration. e. BPMC Status. The BPMC would sign the Agreement acting on behalf of all the Parties to the Power Sales Agreement. It would continue to act as a non-incorporated body without any separate legal status. 5. Standard Contractor Provisions. a. Independent Contractor. Unless otherwise agreed, each of the contractors signing an exhibit will act as an independent contractor. RLS deren 03/02/93 10:53 503 226 0079 ATER WYNNE 005/008 ATER WYNNE BPMC March 2, 1993 Page 4 5. Bi epar. . Unless otherwise agreed, all contractors will be subject to the same requirements regarding budget submission and subsequent approval process by the BPMC (and AEA). Gn Invoice and Payment. Standard procedures for invoices and payments of contractor costs will be included in the Master Operating Agreement. d. Dispute Resolution. Consistent with BPMC description above. e. Insurance. The base agreement would contain guidelines but leave details to each contractor's exhibit. re i it n ce M » Same for all contractors. 6. Contractor Exhibit. Each Contractor for the Project would execute a detailed exhibit with AEA and be obligated to the terms and conditions affecting Contractors included in the Master Operating Agreement. The specific duties relating to the work performed by the Contractor would be contained in the exhibit. All exhibits would be subject to BPMC approval prior to execution or amendment. An Example (Outline) of the contents of an exhibit based upon the current AEA-Chugach O&M Agreement for Daves Creek follows: 1. Parties to Exhibit. AEA and Chugach. Ze Definitions. The exhibit would contain definitions specifically related to the exhibit (Party, SVC, SVC Facilities). x Term of Exhibit. Separate Term and Termination provision. 4. ainten of Faci ies. Similar to existing O&M Agreement. 5. Maintenance Plan, Schedule and Budget. Section would only include provisions that are unique to the exhibit, RLS\63 bcter.cem 03/02/93 10:54 503 226 0079 ATER WYNNE % 006/006 ATER WYNNE BPMC March 2, 1993 Page 5 6. Payment, Accounts, Records and Audits, Extraordinary Maintenance, Insurance, Indemnity, Uncontrollable Forces and other “boiler plate” provisions would be part of the Master Operating Agreement. 7. Li AEA M uipmen bit B). The exhibit to the Master Operating Agreement would contain a similar list of equipment. List adi Proje ments. The following is a list of agreements between AEA and individual Bradley Lake participants which could be included in a "Master Operating Agreement". Le Dispatch Agreement between AEA and CEA. 25 Maintenance Agreement between AEA and Maintenance Contractor. 34 Transmission Facilities Maintenance Agreement between AEA and AEG&T. 4. Facilities Interconnected Dispatch Agreement between AEA and HEA, 5 Communications Equipment Agreement between AEA and DIVCOM. 6. Static VAR Compensator Systems at Daves Creek and Soldotna Maintenance Agreement between AEA and CEA. We Operating Agreement with Bradley Lake contract operator. Distribution: Paul Diener, Seward Ken Ritchey, MEA Dave Highers, CEA Norm Story, HEA Mike Kelly, GVEA Tom Stahr, ML&P Ron Garzini, AEA Brent Petrie, AEA Stan Sieczkowski, AEA LGIN194igh doc A Fax From The Alaska Ener. Authori A Public Corporation of tha Stata of Alaska Rawaid 4. ie P.O. Box 190869 vor eg EE edd Floor Anchorage, AK 99319-0869 Anchorage, AK e303 Main Teicphone Number (907) $61-7877 Fax Number: (907) 561-8584 Deliver Fax to: Company Name: Company Adcdress: Fax Phone #: Sendar: Sender's Phone # # of Pages Sent: —\ Date Fax Sent: ———. a tnaindiog thin once sham) DS APN Sy co eee oe Uren ens EST BELEN SPECLAL INSTRUCTIONS TO FAX reciprenT:__Thy> inte “Ow Oe TRANSMISSION REPORT THIS DOCUMENT (REDUCED SAMPLE ABOVE) WAS SENT *%* COUNT *x # #7 we SEND ak [i | 1 [No] REMOTE STATION I. D. START TIME DURATION | #PAGES COMMENT | 9074655442 3- 3-93 8:45 | a'o3" | 7 | TOTAL 0:04'09" 7 XEROX TELECOPIER 7020