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HomeMy WebLinkAboutBPMC Meeting June 10, 1994 1BRADLE:1 LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East lst Avenue Anchorage, Alaska Friday, June 10, 1994 10:00 a.m. 1. CALL TO ORDER Chairman Norm Story called the meeting of the Bradley Lake Hydro- electric Project Management Committee to order at 10:15 a.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East lst Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. A quorum was established. 2. ROLL CALL Alaska Energy Authority Stan Sieczkowski, Alternate Golden Valley Electric Association Mike Kelly, Designated Representative City of Seward Dave Calvert, Designated Representative Homer Electric Association Norm Story, Designated Representative Matanuska Electric Association Jim Woodcock, Alternate Anchorage Municipal Light & Power Tom Stahr, Designated Representative Chugach Electric Association Eugene Bjornstad Others Present: Dan Beardsley, AIDEA/AEA Sharron Sigafoos, AIDEA Dave Eberle, AIDEA Jim Hall, Matanuska Electric Association Myles Yerkes, Homer Electric Association Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Bradley Evans, Golden Valley Electric Association Tom Lovas, Chugach Electric Association Dan Bloomer, Chugach Electric Association Tim McConnell, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Mary Ann Pease, Anchorage Municipal Light & Power Vince Mottola, Fairbanks Municipal Utilities System David Burlingame, Chugach Electric Association Allan Yost, REA John S. Cooley, Chugach Electric Association Bradley Lake Projecvc Management Committee Meeting Minutes - June 10, 1994 Page 2 of 9 3. PUBLIC COMMENT There were no public comments. 4. AGENDA COMMENTS Mr. Stahr requested adding "Dispatch" as Item C. under No. 10, New Business. A. Confirmation of Elected Officers in Accordance With Section II of the Alaska Energy Authority By-Laws Tabled until the August meeting. 5. APPROVAL OF MEETING MINUTES - APRIL 29, 1994 MOTION: Mr. Bjornstad moved to approve the April 29, 1994 minutes. Seconded by Mr. Sieczkowski. Mr. Woodcock commented that he was listed as an "Alter- nate" under ROLL CALL. Mr. Story responded that Mata- nuska Electric Association should send a letter to the Chairman stating that Mr. Woodcock was the new Represen- tative. Mr. Bijornstad stated that Chugach would also submit a letter designating him as their new representa- tive. Under ROLL CALL on page 1, "Brad Evans, Alternate" should be listed under Golden Valley Electric Association instead of "Mike Kelly, Designated Representative." Under “Others Present" on page 1, "Dan Bloumer"“ should be corrected to "Dan Bloomer." In the first line of the last paragraph on page 4 of 7, "Mr. Kelly" should be changed to "Mr. Yerkes." The question was called; the minutes were approved as corrected. 6. BUDGET SUBCOMMITTEE REPORT There was no Budget Subcommittee Report. 7. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the O&D Committee had met June 9th. Monthly project operations reports have been provided by ML&P, CEA, and HEA. Water allocation updates were provided by HEA, and HEA will commence reporting the water conditions to the dispatchers on a weekly basis during the high in-flow periods. HEA will also provide an FY 95 maintenance schedule for major projects. Mr. Sieczkowski stated that the O&D Committee had prepared a list of recommendations, and these had been provided to the Committee at the beginning of this meeting. Mr. Sieczkowski said he would Bradley Lake Project Management Committee Meeting Minutes - June 10, 1994 Page 3 of 9 summarize these recommendations under the New Business portion of the agenda. He said the Subcommittee had discussed capital projects. HEA had suggested that the O&D Subcommittee meet periodically at the Bradley Lake work site, and the O&D Subcommit- tee concurred subject to Committee approval. The Subcommittee had agreed to begin reviewing the operations and maintenance schedules as directed by the PMC, and a tentative schedule has been established. The Subcommittee would meet at least once every two months for that purpose, and based on that schedule, the Subcommittee anticipated that the review could be accomplished within a year. At the end of the review process, the Subcommittee would present its recommendation to the PMC for adoption of the Bradley Lake O&M standards. Mr. Burlingame reported that a capacitor failure had occurred the previous week; the capacitor had been replaced. The project was being operated at the Committee’s adopted water allocation production schedule. The lake level is expected to reach 1,178 feet, which is about 1-1/2 to 2 feet below spill level. Mr. Yerkes reported that one day of oil spill containment training and three days of Hazardous Conditions training had been completed. Annual maintenance has been scheduled for the September/October time frame when the project will be islanded. The machines will be disassembled one at a time, for approximately two to three weeks each, for significant maintenance. A detailed listing has been compiled with the estimated manhours and equipment to be ordered in preparation for the annual maintenance project. Driftwood clean-up has been initiated at the dam site. Alaska Energy Authority (AEA) gave approval for the purchase of a new boom for the front-end loader for this project, and that has been ordered. Mr. Yerkes stated that this is a significant problem, and FERC had requested PMC to keep on top of it. Mr. Yerkes reported the following problems: (1) Contamination of a significant amount of oil, roughly 3,000 to 3,600 gallons was discovered in the governor system. The contami- nation was first noticed when the governor actuator was changed out and it locked up. They were advised at that time that there was sludge in the system. The oil had been tested by Woodward, and Moble lab since the filters had plugged with the sludge. The recommendations from Woodward and Moble were to clean the system and change the oil. AEA had been advised of the problem and had placed Fuji, the manufacturer of the system, on notice that the problem needed to be corrected. A response has been received from Fuji, and the Subcommittee is proceeding on that. Mr. Yerkes said this was a significant problem but was hopeful that it would be corrected when the system was taken out of service this fall. In Bradley Lake Project Management Committee Meeting Minutes - June 10, 1994 Page 4 of 9 response to a question by the Committee, Mr. Yerkes provided technical details of the problem. (2) During the Hazardous Conditions training, a specialist from the University of Mine Safety had examined the confined spaces and notified the Subcommittee that there were significant problems with the gate and bypass shafts. Mr. Yerkes provided a detailed explanation of the problem and stated that OSHA’s new confined space regulations classified the problem as "extreme." He said that both tunnels had been placarded and placed off limits. As an interim solution, approximately $10,000 in construction funds had been requested for the purchase of rigging, harnessings, etc., so that a power winch can be utilized on an emergency basis. A permanent solution is currently under consideration. He added that the shafts are out of compliance as the result of a change in the regulations. Committee discussion was heard on budget and maintenance issues. 8. INSURANCE SUBCOMMITTEE REPORT A. Insurance Review Proposal Mr. Beardsley directed the Committee to the draft RFP in the packet. He said the RFP will request an independent assessment of Bradley Lake’s insurance coverage with respect to their bond commitment. The RFP also requests that a risk analysis be conducted with respect to the entire scope of the project as it relates to insurance requirements. In addition, the RFP requests that a feasibility analysis be performed with respect to the need for establishing a self-insured risk retention fund and that recommendations be provided as to how the fund should be estab- lished. Mr. Beardsley said he thought the cost of the assessment would be in the range of $5,000 to $25,000 and felt that for what the Committee was requesting, $10,000 would be a ball park estimate. The proposed selection committee consists of himself, Mike Cunningham of Chugach Electric, and Brad Thompson of State of Alaska’s Risk Management. After the bid has been awarded, the draft insurance review would be completed within 75 days and would be presented to the Insurance Subcommittee and Committee for comment. After a 21-day comment period, the draft review would go back to the contractor for finalization within 120 days. The final would then be distributed to the bond holders. Mr. Stahr noted a concern with the language in the RFP dealing with project capability. He asked that the project capability be expressly stated in the RFP. Committee discussion was heard. Mr. Bjornstad requested that the SVC maintenance agreement be incorporated into the RFP. Bradley Lake Project Management Committee Meeting Minutes - June 10, 1994 Page 5 of 9 MOTION: Mr. Stahr moved that the Subcommittee be directed to proceed with the proposal. Seconded by Mr. Woodcock. Motion passed unanimously. B. Professional Liability Mr. Beardsley reported that he had spoken with Rick Eckert of HEA and Dave Gwaltny with respect to the professional liability. The problem they have encountered is that the underwriters’ have quoted a minimum fee of $18,000 per year for limited liability coverage with a high deductible on process engineering; $30,000 per year is the amount typically budgeted for process engineering. Since HEA will be responsible for these duties, the insurers require that they carry the liability insurance. Mr. Beardsley said there are essentially three options: (1) HEA could purchase the insurance, (2) the PMC could take a self-insured risk, i.e., HEA would perform the work, but the PMC would bear the liability of a loss, (3) utilize a professional engineering firm that provides its own coverage. In response to Mr. Story’s question, Mr. Beardsley stated that the process engineering is specifically excluded under the general liability provisions. Committee discussion was heard. Mr. Saxton stated there was a fourth option: HEA could bear the risk. C. Hydro Project Boiler and Machinery Insurance Coverage Mr. Beardsley reported that the annual premium quotes should be received from the various insurance companies within the next week for boiler and machinery coverage. Because of the claim at Swan Lake on the Four Dam Pool project, the Subcommittee was concerned that Chubb would increase their premium. However, Protection Mutual is interested in submitting a bid for providing this coverage, and one of their inspectors had recently inspected the boiler and machinery on all of the hydro projects. Mr. Beardsley commented that perhaps the competition would enable them to keep their premiums down. 9. OLD BUSINESS A. Spinning Reserves Update Mr. Lovas reported that the RCC had met following the last PMC meeting and had reaffirmed the criteria previously considered and began to develop the framework for system studies to more specifi- cally determine the amount of spin required during various seasons. The RCC has identified dispatch scenarios for investigation and intends to perform detailed analyses which would support the development of the reliability parameters currently under con- sideration. Bradley Lake Proje Management Committee Meeting Minutes - June 10, 1994 Page 6 of 9 Mr. Lovas reported that the RCC’s recommendation was that the level of operating reserves on the Railbelt interconnected system should equal 100% of a large generation contingency, which affirms the level currently in effect. The RCC formally affirmed the operating reserve level based upon the largest known contingency. The RCC will refine the analysis and characteristics of the generating units used, or other provisions, including shed in lieu of spin. Chugach has provided their position statement as requested during the last PMC meeting, and it essentially coincides with the RCC’s. Committee discussion was heard. The RCC is scheduled to meet Tuesday, June 14th. The Committee concurred that the other utilities should develop their position statements and provide them to Mr. Lovas. This item will be an agenda item at the next PMC meeting. B. PMC Meeting Minutes - Recording and Transcribing Discussion was heard with respect to incorporating the duties of assembling the Committee packets, preparing the agendas, and scheduling and coordinating the PMC meetings into the service provided by the minute-taker/preparer. It was pointed out that these services would be "extra" and would incur additional charges. Meeting/minute services are not budgeted at this time. Mr. Kelly commented that the packet, meeting coordination, and minute preparation services provided by AEA to date have been excellent, and he felt the PMC should continue with the bundled services. MOTION: Mr. Kelly moved that the Committee solicit a quote from AEA as the provider of the meeting/minute services for the next year based on a review of cost estimates for provision of these services. Seconded by Mr. Bjornstad. Discussion was heard with respect to in-house manpower and budget- ing for meeting/minute services. The following alternatives were suggested: (1) Mr. Stahr said he would look into the possibility of ML&P employee availability for the purpose of recording and pre- paring the PMC’s meeting minutes. (2) Dawn Scott Services, who prepares Four Dam Pool’s minutes, was suggested. (3) Denise Bur- ger, a former AEA employee, had expressed an interest in providing these services on a contract basis. It was suggested that the Budget Subcommittee meet on this issue, review AEA’s cost estimate along with the other suggested alternatives, and return to the PMC with a recommendation. Mr. Story suggested that the original motion be amended to read: "AEA would prepare a cost estimate for meeting/minute services and review the cost estimate and task list with the Budget Subcommit- tee. The Budget Subcommittee would then review AEA’s cost estimate along with the other suggested alternatives and present a recommen- dation to the PMC." There were no objections from Mr. Kelly (maker Bradley Lake Projecc Management Committee Meeting Minutes - June 10, 1994 Page 7 of 9 of the original motion) or Mr. Bjornstad (who seconded the original motion). The question was called, and the amended motion was passed unanimously. 10. NEW BUSINESS A. AEA Agreement Revision Schedule Mr. Beardsley advised that the Master Operating Agreement and the O&M Agreement have been completed, executed, and provided to the Committee. The Committee has been provided with a listing of sub- agreements that need to be conformed to the Master Operating Agreement. MOTION: Mr. Stahr moved to request AEA and the attorneys to proceed with conforming the project agreements and amendments to the Master Operating Agreement and provide a monthly progress report to the PMC Committee. Seconded by Mr. Bjornstad. Motion passed unanimously. B. Approval of Legal Expenses and Other Payments Mr. Bjornstad reported that Mr. Lovas had discussed the disputed legal expenses with AEA. He asked Mr. Lovas to advise the Committee of the status. As background, Mr. Lovas stated that outstanding charges from Ater, Wynne dating back to February 1993 had slipped between the cracks in the transition from AEA to AIDEA/AEA. In addition, questions had been raised regarding the nature of some of the charges and the appropriateness of payment by AEA with Bradley Lake project funds. Consequently, payment of approximately $66,000 in outstanding charges had been approved for payment by the PMC but had been withheld since 10/93. Mr. Lovas reported that he had met with Mr. Beardsley and Mr. McCrohan in May to discuss the outstanding legal fees issue. Asa result of that meeting, the following resolutions were agreed upon: (1) It was decided that approximately $4,763 in charges would be paid to the new intertie project. (2) Since the new interties are now moving into an independent project phase, as of July 1, charges associated with the new interties would be considered as Intertie project related as opposed to Bradley project related, and those expenses would be paid through the budgets of the new intertie project. (3) Future charges that are Bradley related will be paid by the Bradley project as long as appropriate supporting documenta- tion is submitted with billing invoices. Mr. Lovas reported that the issues related to the outstanding invoices have been resolved, and Ater, Wynne has already been paid for the majority of the outstanding $66,000 amount. Supporting invoice data on a $2,000 charge has been requested, and Mr. Bradley Lake Project Management Committee Meeting Minutes - June 10, 1994 Page 8 of 9 Sieczkowski is processing the payment to Ater, Wynne on behalf of the Alaska Intertie project. Mr. Bjornstad reported that total outstanding charges for March 1994 are $13,412.70, and for April, $6,280.45, for a total of $19,693.15. When these have been paid, the PMC will be current on the payment of legal fees. MOTION: Mr. Bjornstad moved to approve payment of $19,693.15 for the months of March and April 1994. Seconded by Mr. Calvert. The motion passed unanimously. C. Dispatch Referencing a letter regarding the new arrangements worked out between Chugach and GVEA, Mr. Stahr said he would like this to be scheduled as an informational agenda item at the next PMC meeting for further explanation and clarification on how it would impact the various Bradley Lake Project agreements. Mr. McConnell provided further information on this item. Committee discussion was heard. It was agreed that the requested information would be provided at the next couple of meetings. D. Capital Expenditures Mr. Sieczkowski reported that the O&D Committee was presented with HEA’s projects list through AEA. Referencing the handout to the Committee, he noted the 0&D Committee’s recommendations with regard to the projects list. MOTION: Mr. Sieczkowski moved that Capital Projects 1 through 7 be refunded from construction funds in an amount not to exceed that reflected on Mr. Sieczkowski’s handout. Seconded by Mr. Bjornstad. Brief discussion was heard. The question was called, and the motion passed unanimously. With respect to the confined space regulations discussed earlier in the meeting, the O&D Committee requested the PMC to authorize the expenditure of up to $10,000 for providing an interim solution, consisting of evacuation equipment and procedures as required by the confined space regulation. MOTION: Mr. Sieczkowski moved that the PMC authorize the expendi- ture of up to $10,000 for an interim solution, as stated above, to the confined space regulations. Seconded by Mr. Woodcock. Motion passed unanimously. MOTION: Mr. Stahr moved that the Committee direct the O&D Committee to research possible long-term/permanent solutions to remedy the situation where a single failure of Bradley equipment Bradley Lake Project Management Committee Meeting Minutes - June 10, 1994 Page 9 of 9 could cause a shutdown of both units and present recommendations at the August PMC meeting. Seconded by Mr. Sieczkowski. Passed unanimously. 11. COMMITTEE COMMENTS A. Next Meeting Date The next PMC meeting was scheduled for Thursday, August 4, 1994, at 10:00 a.m., in the Commission Room of ML&P. It was commented that the Committee may want to consider holding quarterly meetings with interim teleconferences on an as-needed basis. 13. ADJOURNMENT There being no further business of the Committee, the meeting was adjourned. BY: Norm Story, Gren A ATTEST: PM Cohan Dennis V. McCrohan, Secretary Bradley Lake PROJECT MANAGEMENT COMMITTEE MEETING June 10, 1994 (Date) Anchorag 16 MtL+¢P (Location) PLEASE SIGN IN + Azad 07 © Maa Exes _Thranteym! so _ No. NAME REPRESENTING 1 | Seu Sieczko hk IE FY) [DELP 2 | Gene DB ovnsted eres 3 Leands Alf LPEW 4 | Tim Weoodcocic MCA Ke M ER- : CL e AEA Ls | Kom fAxTos/ Peed | ata 9 | Brod, Guan GveA fol Mike rT wie: toils | gock 12 he Bloomer ag ae uim ACY | mee 14 —h- Lge 3 LY xp ALEP 16_| Mo 4 Clan aac mde 17 ni ee Lettre hipsh 18 ai Ye / 0 Cee a 5 20 Sal ach Is ar Chag acl | 22 ieee We. ALOR. SES 92Q2\IT9884 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% DATE: lL BRADLEY PMC VOTING | Koll Cal] YES NO ABS YES NO ABS YES NO ABS 01% 14% (Ty u 30% |e 122% [(7[_] oJ 17% (ZT _] ee [ 26% [ZT T] wi d i 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) 71) 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