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HomeMy WebLinkAboutBPMC Meetring - July 2, 1991 1FILE Copy FRITZ My _— BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE JULY 2, 1991 CALL TO ORDER Chairman Kelly called the Bradley Lake Project Management Committee to order at 10:08 a.m. in the Training Room at Chugach Electric Association in Anchorage, AK to conduct the business of the Committee per the agenda and the public notice. ROLL CALL Alaska Energy Authority Charlie Bussell, Representative Brent Petrie, Alternate Chugach Electric Association David L. Highers, Representative Joe Griffith, Alternate Golden Valley Electric Association Mike Kelly, Representative and Chairman City of Seward E. Paul Diener, Representative Homer Electric Association Norman L. Story, Representative Matanuska Electric Association Ken Ritchey, Representative Municipal Light and Power Thomas Stahr, Representative Hank Nikkels, Alternate Other Present: Ron Saxton, Purchasing Utilities Moe Aslam, Municipal Light and Power Dave Calvert, City of Seward Bradley Evans, Chugach Electric Association Tim McConnell, Municipal Light and Power Bob Hufman, Alaska Electric Generation & Transmission David Fair, Homer Electric Association David Burlingame, Chugach Electric Association Tom Lovas, Chugach Electric Association John Cooley, Chugach Electric Association David Eberle, Alaska Energy Authority Stanley Sieczkowski, Alaska Energy Authority DeAnna Scott, Alaska Energy Authority Patti Harper, Alaska Energy Authority Mark Harris, ARECA PUBLIC COMMENT There being no public comment, Chairman Kelly proceeded to agenda item 4. AGENDA COMMENTS Chairman Kelly asked if there were any additions to the agenda. Under number 13, New Business; Item A to reflect Election of Officers and Item 13 e added to include discussion on the Dedication Services of the Bradley Project. APPROVAL OF MINUTES Chairman Kelly asked for corrections or additions to the June 6, 1991 meeting minutes. Mr. Story corrected, Dave Fair is now with Homer Electric and not Chugach Electric. Mr. Saxton corrected under Bradley start-up and commercial operation "the life of operation is 9OMW level and should say although length operation at the 90 MW level is not covered under the Power Sales Agreement. Reasonable operation and scheduling output on a commercial basis is required." On page 8, "delete the PMC tax exempt status and insert, "bonds tax exempt status". On page 8, under CHAIRMAN KELLY instruction to the TCS it should read Chairman Kelly instructed the TCS, through Mr. Burlingame, to develop operating scenarios with 80 MW and 90 MW caps. Mr. Highers stated again on page 8, starting with "MR. HIGHERS stated this turbine would be on-line due to the absence of the second transmission line", add, "prior to Bradley Lake operation". The June 6, 1991 meeting minutes were approved with these modifications by acclamation. TECHNICAL COORDINATING SUBCOMMITTEE REPORT Mr. Burlingame reported there was one full committee and one subcommittee meeting. The full committee has requested SWEC to put together the operating guidelines, reports, and studies that have been completed and accepted for the use of the PMC. The Subcommittee of the TCS met to discuss the start-up and testing requirements. Mr. Burlingame stated there is an advisory memo attached to the TCS report which seeks guidance from the PMC, because the minimum operating criteria has the TCS bogged down. The Long Term Operating Limits study will be started after the Interim Operating and Import Study has been completed by PTI. Mr. Burlingame asked that the PMC refer to the memo addressing the Kenai Import Levels - Advisory Item. He stated the TCS is requesting future direction to properly address the acceptable level of load shedding and avoid contractual obligations. The TCS took eight cases out of the twelve months and evaluated what the limits of Bradley Lake would have to be to achieve the same risk of load shedding. This issue needs to be addressed. The TCS is asking for specific directions as to what percentage or stage of load shedding should HEA be subject to. Chairman Kelly asked that this subject be suspended and address Mr. Highers letter that was circulated between HEA and CEA that dealt with Bernice turbine. Mr. Highers stated that his staff along with Mr. Story and staff met and discussed at length the obligations of what would happen as far as running the turbine on the Kenai after Bradley is on line. Mr. Highers stated the letter signed by both he and Mr. Story gives basically the position that the TCS is in now. Mr. Highers suggested the letter be read because it may answer some of the questions. Mr. Highers stated that the last paragraph is a recommendation to the PMC for the Operations and Dispatch Subcommittee to have an assignment over this. Mr. Highers recommended the assignment to the TCS on the Minimum Operating Criteria not deal with contractural matters but to deal specifically with the issues that have been presented. Mr. Stahr suggested that a complete full load distribution curve for Homer be developed and applied against the total energy from Bradley to determine what remains available for dispatch and scheduling. Mr. Highers moved, seconded by Mr. Story that the TCS sets the operating criteria for Bradley based on Homer Electric and Seward being subject to no more than stage two load shedding for any single contingency event. . Mr. Stahr moved that this motion be tabled until the results from the other study are available. Mr. Stahr's motion failed for the lack of a second. Mr. Highers amended the motion to this interim operating criteria shall be used until such a time as that the final operating conditions are adopted by the PMC. Chairman Kelly asked the roll to be called. The motion with its amendment passed unanimously. Mr. Burlingame stated that there was one motion for the Operations and Dispatch Subcommittee. Mr. Highers_ moved, Mr. Stahr_ seconded that the PMC direct _the Operations and Dispatch Subcommittee to development a procedure to allow the Bradley participants to readily note or record Chugach's service needs for Kenai area combustion turbine versus those conditions of providing combustion turbine to support the operation of Bradley Lake. The roll was called and this motion passed unanimously. INSURANCE SUBCOMMITTEE REPORT Mr. Petrie stated that the Insurance Subcommittee had nothing to report at this meeting. BUDGET SUBCOMMITTEE REPORT Mr. Ritchey reported the Budget Subcommittee met and will be meeting on July 22, 1991. Mr. Ritchey stated the Budget Subcommittee members are in the process of reviewing the latest information distributed by Chugach Electric addressing the wheeling charges. The subcommittee has looked at the Homer Electric O&M expenses for the transmission line and had no problem with the numbers. The subcommittee has sent a letter to HEA and ask for a calculation under their wheeling agreement. The Budget Subcommittee recommends to the PMC the monthly payments be made at the beginning of the month to meet the mid-December obligation. 10. 11. The Subcommittee is working to delay as many expenses as possible in the first year. The committee is looking at reducing the reserve account to help pay the debt service. Mr. Saxton stated that the easy way to solve the cashflow problem would be to have higher payments for the first few months of the first year and anything left that would be left would stay to the benefit of the utilities which would be applied to the second year budget. Another suggestion was to have uneven payments for the first year operation. Both suggestions are at odds with the instructions the PMC gave to the Budget Subcommittee by having the absolute lowest payment possible for the first year. The uneven payments, however, are at odds with the language for 12 month payments. It is within the PMC's power to change both of those. The payments for the first four months would be about $100,000 higher and then the second 6-months the payment would be leveled but a lower cost. Chairman Kelly asked if the PMC had any objections to the first payments being higher for four months. No objections were stated. Chairman Kelly gave the subcommittee two directives from the PMC: 1) the first four months of FY92 the payments to the trustee would be higher to eliminate the cashflow problem and 2) the payments will be due on the first of each month. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the Operation and Dispatch Subcommittee met on June 20, 1991. There were no conclusions or decision coming out of that meeting. AEA is working on updating the allocation information developed by SWEC. Mr. Evans stated that CEA has submitted test power cost information for combustion turbines related to testing. CEA has agreed to certain conditions on test power and agreed to some fundamental load restoration. Work has been completed on dispatching to the Homer system to Dimond Ridge. Interchange schedules have been developed and passed out to all of the participants for comments. Station service accounting for the power plant was suppose to be submitted by Homer. A loss table for HEA is still pending so the subcommittee can schedule the project and know what losses to allocate to Homer BRADLEY LAKE AGREEMENT SUBCOMMITTEE REPORT Mr. Sieczkowski reported the Subcommittee met on June 13, 1991 and reviewed the existing agreements and went over the assignments. Future agreements that may need to be develop for the Bradley Project such as a Memorandum of Understanding for the interconnecting utility operation between CEA and Homer to direct them to perform switching. Another draft was received from CEA on June 21, 1991 for the Dispatch Agreement and it is being reviewed. The Subcommittee looked at the other agreements for consolidation and coverage. AEA will contact Homer Electric to pursue the AEG&T Transmission Line Agreement. Chairman Kelly asked if there were any comments or questions. The Dispatch Agreement is to be submitted to the Operations and Dispatch Subcommittee and the PMC for review. REVIEW OF PROJECT STATUS Mr. Eberle reported the General/Civil contractor is complete. There is some minor painting, guard rail repairs, and miscellaneous punch list items left to be done. The Construction Camp was closed July 1, 1991 and is in the process of being demoblized. The powerhouse construction is physically complete., Clean-up and on-staff support is all that is on-site. Synchronized test was completed a couple of weeks ago and units loaded to ten percent power. The week of June 24, 1991 there was no active testing, they were working on some punch list work. The week July 1, 1991, remote start and 12 3: stop testing will begin and the week of July 8, 1991 we will get into the serious loading of the units and load rejection tests. The target date for utility testing is set for July 26, 1991. Water in the reservoir, on July 2, 1991, was at level 1121. The run off should continue very heavy throughout July and August. If there is not a tremendous amount of water used during the testing phase, we should have a full pool by September 1, 1991. UNFINISHED BUSINESS A. Bernice Lake Gas Turbine Generator Operation Costs This item was addressed under Item number 6, Technical Coordinating Subcommittee Report. NEW BUSINESS A. Election of Officers Chairman Kelly appointed Mr. Diener, Mr. Ritchey and Mr. Story to serve on the nominating Committee for the Bradley Lake PMC offices. The PMC recessed at 11:50 a.m. in order to allow the Nominating Committee to meet and select their nominees. The Bradley Lake PMC meeting reconvened at 12:00 p.m. Chairman Kelly asked for a report from Mr. Diener Chairman of the Nominating Committee. Mr. Diener reported the Nominating Committee agreed unanimously to moved that the current office holders be extended for the next term.:Chairman,Mike Kelly; Golden Valley Electric, Vice-Chairman, David Highers; Chugach Electric and, Charlie Bussell, Secretary/Treasure, Alaska Energy Authority. Mr. Highers seconded. The roll was call. This action passed unanimously. B. Resolution Regarding Project Completion and Commercial Operation Mr. Saxton reported that this resolution was completed on July 1, 1991. This resolution restates the cost of acquisition and construction will continue until the project is completed which will be after commercial operation. Mr. Saxton requested the PMC to review the resolution. The resolution was reviewed by the PMC members and Mr. Stahr moved, Mr. Ritchey seconded that the Bradley Lake PMC adopt the Bradley Lake Project Management Committee Concerning the Alaska Energy Authority Obligation to Complete the Bradley Lake Hydroelectric Project and to Share the Cost of Acquisition and Construction With the Power Purchasers Until the Project is Complete Resolution. The roll was called. This action passed unanimously. Cc Upper Battle Creek Diversion Mr. Eberle reported he is awaiting some detailed survey information. Mr. Eberle went to the area the week of June 24, 1991 and thinks the scope of work can significantly reduced. He would hope to do it for $250,000 or less based on what was seen. AEA should have more information the week of July 8, 1991. 14. Allocation and Scheduling Procedure Mr. Sieczkowski reported that the Operation and Dispatch Subcommittee recommended the Allocation and Scheduling Agreement be adopted subject to the completion of Exhibits A and B. Mr. Ritchey moved, Mr. Highers seconded the recommendation. Mr. Sieczkowski stated that on Exhibit A is a description of the reservoir operation model and as it was explained, this was the model to be used by the dispatchers. Exhibit B is a description of the project operating criteria and will define operational issues. Mr. Fair stated that HEA propose to make the change to delete the $5.00 per MWH at this point. Chairman Kelly asked if this was being made in the form for of an motion or to amend the motion. Chairman Kelly asked if there was a second to the motion to amend? Hearing no second the motion to amend dies for the lack of a second. Considering the main motion, Chairman Kelly asked if there were further comments or questions. Mr. Highers asked if it was appropriately stated as a procedure? Mr. Saxton stated, back in December this document was changed from an Agreement to a Procedure to be adopted by the PMC. Mr. Story stated that under Section 1 (aa) to add systems condition. Mr. Story moved seconded by Mr. Highers to amend the motion to include under a_on page 3 (aa) to add language after account to state as system conditions, equipment and project administration. Chairman ask if there was any discussion on the motion to amend, being none the roll was called. The roll was called with Messrs. Story, Kelly, Bussell, Diener, Ritchey voting yes and Mr. Stahr voting no. The motion passed. With the main motion being on the floor, Chairman Kelly asked there was further discussion on the main motion, being none the roll was called. This motion passed unanimously. Bradley Lake Dedication Mr. Eberle stated that August 23, 1991 is the date preferred by the Governor's Office. Mr. Bussell stated that AEA is developing the program around August 23, 1991. The list is being developed to determine and define details. As soon as AEA has ironed out the detains, we will have a draft to the PMC for review. COMMUNICATIONS A. Scheduled Meeting August 16, 1991 Chugach Electric Association Training Room - 10:00 A.M. 15. ADJOURNMENT Having no further business to britg before the Committee, the meeting was adjourned at 1:10 p.m. Ny, / Chairman Kelly Att Charlie Bussell, Secretary Approved at the August 23, 1991 PMC Meeting