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HomeMy WebLinkAboutBPMC Meeting January 12, 1995 1BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East lst Avenue Anchorage, Alaska Thursday, January 12, 1995 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 10:05 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. The following members were present: 2. ROLL CALL Alaska Energy Authority Dennis McCrohan, Designated Representative City of Seward Dave Calvert, Designated Representative Homer Electric Association Norm Story, Designated Representative Matanuska Electric Association Wayne Carmony, Designated Representative Anchorage Municipal Light & Power Tom Stahr, Designated Representative BOs Chugach Electric Association Eugene Bjornstad, Designated Representativ Golden Valley Electric Association Mike Kelly, Designated Representative (arrived at 10:15 a.m.) Others Present: Dan Beardsley, AEA Stan Sieczkowski, AEA Eva Carpenter, AEA Jim Hall, Matanuska Electric Association Myles Yerkes, Homer Electric Association Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt John S. Cooley, Chugach Electric Association Lee D. Thibert, Chugach Electric Association Brian Hickey, Chugach Electric Association Donald W. Edwards, Chugach Electric Association June Finkbiner, Municipal Light & Power Mary Ann Pease, Municipal Light & Power Tim McConnell, Municipal Light & Power Bob Hufman, AEG&T William Stow, Stone & Webster Management Consultants Bradley Lake Project Management Committee Meeting Minutes - Thursday, January 12, 1995 Page 2 of 7 3. PUBLIC COMMENT None. 4. AGENDA COMMENTS There were no changes or additions to the agenda. 5. APPROVAL OF MEETING MINUTES - NOVEMBER 10, 1994 MOTION: Mr. Stahr moved to approve the November 10, 1994 minutes. Seconded by Mr. Bjornstad. Ron pointed out the Roll Call indicated Mr. Kelly was absent; he arrived at 10:15 a.m. Mr. Cooley stated he was not present as reflected under "Others Present." A voice vote was taken, and the minutes were approved as amended. 6. BUDGET SUBCOMMITTEE REPORT A. First Quarter FY ‘95 Budget Report Ms. Pease presented the Budget Subcommittee report on behalf of Mr. Lovas. Ms. Pease reported the Budget Subcommittee had met via teleconfe- rence 1/4/95; she listed the members present. The following items were discussed: @ Ron Saxton’s Participation on the Budget Subcommittee: Now that the O&M legal issues have been settled with AIDEA, Ron’s role will be greatly reduced. His involvement will be limited to the finalization of the O&M budget prior to acceptance by the BPMC and any critical issues the Budget Subcommittee feels should be reviewed by Ron. @ Parisena-Stromberg Completion of the AIDEA Audit: A prelimi- nary report should be received within the next two weeks. A few minor items remain to be resolved with AIDEA, and no problems are anticipated. @ FY ‘95 Bradley Lake Budget Status: The Budget Subcommittee reviewed the project budget summary and projections updated through 11/94. The FY ‘95 budget was $1,177,800, and the expenditures through November 1994 were $665,100, for a balance of approximately $512,000. No adjustments are required at this time. Bradley Lake Project Management Committee Meeting Minutes - Thursday, January 12, 1995 Page 3 of 7 @ Self-Insurance Reserve: Ms. Pease said the meeting packets contained a letter from Tom Lovas dated 12/19/94. She reminded all utilities, with the exception of Chugach and ML&P, of the need to respond to the letter. She explained the letter addressed the individual utilities’ share of the self- insured risk deductible. Mr. Calvert asked why a $2,000,000 deductible was required? Mr. Beardsley responded it was the Insurance Subcommittee’s intent to place coverage for $1,000,000 self-insured retention. However, Willis Corroon, during the last meeting of the Insurance Subcommit- tee, had advised the market may shift, increasing the requirement for self-insured retentions to a $2,000,000 deductible. @ Cash Flow Information: The Subcommittee addressed the adequacy of reserve funds and the need to re-examine the reserve balances. A recommendation on a revised payment schedule will be submitted to the PMC. The Subcommittee is currently working with Elaine McCambridge, AIDEA Accounting Department, regarding the outstanding issue of non-receipt of actual cash flow information (i.e., utility income vs. outflows and payments). The Subcommittee hopes to procure that information prior to its January 17th meeting. @ FY ‘96 Budget: The FY ‘96 budget must be submitted to the PMC for approval by 4/1/95. The Budget Subcommittee is currently reviewing the proposed work plan and HEA’s O&M budget. The cash flow information will be reviewed at the next Budget meeting. @ Major HEA Capital Cost Impacts: Several capital expenditures were discussed, including site computer system, independent crane inspections, the digital infrared survey of plant, and the solicitation of an engineering company analyses for the fish water proposal. All of the aforementioned will be forwarded to the O0&D Committee for review and PMC finaliza- tion. The Budget Subcommittee will meet on 1/17/95 to do the detailed work on the FY ‘96 budget. Mr. Yerkes clarified that not all of the items discussed in the last-bulleted item were capital expenditures; some were O&M expenditures. 7. QPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported the O&D Subcommittee met 1/4/95. Project operations and maintenance have been routine and normal, with no unusual events to report. The O&D Subcommittee is in the process of reviewing the technical standards and plant O&M manuals. The O&D Subcommittee discussed a list of items provided by HEA. Bradley Lake Project Management Committee Meeting Minutes - Thursday, January 12, 1995 Page 4 of 7 Chugach Electric provided the annual maintenance plan, and it will be updated. HEA will review the major plant shutdown items and make recommendations to the Subcommittee. The Subcommittee approved the HEA work plan of 12/13/94 as submitted. Mr. Yerkes elaborated on the list of items HEA had provided to the Subcommittee. He said a primary ground fault at the plant a couple of months ago had resulted in a blackout on the Kenai Peninsula. The cause was a bad connector, and a digital infrared survey of the plant was conducted which detected other minor problems such as loose connections. He stated the digital infrared survey would be conducted on an annual basis. In relation to the outage, it was observed that there was undesir- able operation of some of the relays. The O&D Subcommittee approved HEA retaining an engineering firm to develop a design to improve the over-current protection on the 13.8 kv bus. Mr. Yerkes stated that, under OSHA regs, an annual independent crane inspection of the main crane systems must be conducted, and that is currently under way. The cost will be approximately $2,500. In addition, a needs analysis conducted by an independent computing firm resulted in a recommendation to upgrade the operating system, software, and server, at an approximate cost of $10,000. That upgrade is currently in process. The Subcommittee had authorized an RFP for engineering services for the purpose of identifying ways to improve the efficiency and reduce costs of the fish water bypass system. Mr. Yerkes explained areas where it was felt cost-savings and efficiencies could be obtained. The Subcommittee felt a detailed cost/benefit analysis could be conducted for less than $50,000. In response to Mr. Bjornstad’s question, Mr. Yerkes said the crane inspections would be expensed, not capitalized. 8. INSURANCE SUBCOMMITTEE REPORT A. Insurance Subcommittee Report Mr. Beardsley reported the following: @ Directors’ and Officers Liability Insurance: The Subcommittee had received a quote of $7,600 per year for coverage of $1,000,000 each occurrence/$1,000,000 aggregate. He said this was a substantial savings over the options the Subcommittee had previously considered, and he intended to procure the $1,000,000 coverage at $7,600 per year unless otherwise Bradley Lake Project Management Committee Meeting Minutes - Thursday, January 12, 1995 Page 5 of 7 instructed. He added that coverage for $5,000,000 each occurrence/$5,000,000 aggregate could be obtained for another $7,400 per year. @ General Liability Insurance for the Intertie: The Insurance Subcommittee had received an initial quote of $50,000 per year, up from $15,000/yr. in past years. The insurance broker was able to get that amount reduced to $32,000/yr., and received a subsequent quote of $31,000/yr. Mr. Beardsley said Rick Eckert and Tonya LaMothe plan to meet next month in Homer to look at other options for addressing these issues and to research more cost-effective insurance coverage. Mr. Beardsley answered questions and discussion was heard. B. Aircraft Accident Status Report Mr. Beardsley advised this item deals with the February 1993 aircraft accident at Bradley. He provided background on staffing and stated that staff has reviewed the types of claims submitted to Risk Management and the insurance companies for reimbursement. SouthCentral paid all claims with respect to the initial accident itself; none were reimbursed by AEA. A Bradley Lake crane and minimal staff manhours were utilized for the crash cleanup; equipment hours and manhours were not tracked as they were nominal. The Insurance Subcommittee will request reimbursement from the insurance company for its additional staff cost (Ron Kron’s position); the difference between Wolf’s and Zidalis’ salary and indirect costs associated therewith, minus what has already been reimbursed by Workers Comp; and administrative costs. The claim will be submitted to Juneau next week. When the amounts have been quantified, the Insurance Subcommittee will report back to the PMC how much the project should be reimbursed from the claim. 9. QLD BUSINESS A. Spinning Reserves Update Mr. Cooley reported that the Reliability and Criteria Subcommittee had made progress during its meetings. The belief that the total amount of operating reserve should be as much as the largest generation contingency reserved was reaffirmed. The RCC also reviewed the amount of responsive spin required to avoid load-shed, focusing on winter conditions, and concluded that responsive spin should equal the amount of generation initially lost during the contingency. The RCC is currently reviewing studies to determine if this applies in the summer as well. A clerk was hired to enter FY ‘94 data with respect to how much responsive spin was actually carried during the year. The suggested criteria of responsive spin larger than the largest Bradley Lake Project Management Committee Meeting Minutes - Thursday, January 12, 1995 Page 6 of 7 combustion turbine had been met approximately 60% of the time in 1994. For 90% of the time, they were over 60 megawatts. The next step will be to look at a dispatch model and quantify what would be required to meet the standard 100% of the time. B. Status Update of Agreements Mr. Beardsley reported the Dispatch Agreement, the Bradley Transmission Line Maintenance Agreement, and the Bradley Transmis- sion Interconnect Agreement were currently being worked on. With respect to the Dispatch Agreement, the parties are in agreement on everything except the clause relating to the indemnity issue. AEA’s position is the indemnity clause in the Master Operating Agreement should be used. Mr. Saxton has concerns regarding the applicability of that clause based on recent conversations with AEA’s legal counsel. Discussions to resolve this issue are ongoing. The Bradley Transmission Line Maintenance Agreement and the Bradley Transmission Interconnect Agreement have been drafted, and Mr. Saxton has reviewed them briefly and made minor comments. Mr. Beardsley said he and Mr. Saxton would discuss these agreements with Rick Baldwin next week. Mr. Beardsley said the two substation Maintenance Agreements are technical in nature, and he would enlist Mr. Sieczkowski’s assistance on the required follow-up. In response to Chair Story’s question, Mr. Beardsley stated the substation agreements are substantially drafted but must be correlated to the Master Agreement. 10. NEW BUSINESS A. Approval of Legal Expenses and Other Expenses Mr. Bjornstad reported that a bill had been received from Ater, Wynne, Hewitt, Dodson & Skerritt in the amount of $3,958.88 for the month of November 1994. MOTION: Mr. Bjornstad moved to approve payment of the above- mentioned legal expenses in the amount of $3,958.88. Seconded by Mr. Kelly. A voice vote was taken, and the motion passed unani- mously. 11. COMMITTEE COMMENTS A. Next Meeting Date The next PMC meeting was scheduled for Tuesday, February 21, 1995, at 10:00 a.m., in the Commission Room of ML&P. Bradley Lake Project Management Committee Meeting Minutes - Thursday, January 12, 1995 Page 7 of 7 12. ADJOURNMENT MOTION: Mr. Bjornstad moved to adjourn. Seconded by Mr. Calvert. A voice vote was taken, and the motion passed unanimously. There being no further business of the Committee, the meeting was adjourned at 10:35 a.m. BY: 4 ; a Chair: Norm Story, ATTEST: t Dennis V. McCrohan, Secretary