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HomeMy WebLinkAboutBPMC Meeting - May 17,1990 210. 11. 12 13. 14, 15. — BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE May 17, 1990 AGENDA CALL TO ORDER 9:30 A.M. Kelly Conference Room Alaska Energy Authority* 701 E. Tudor Road Anchorage, AK 99503 ROLL CALL PUBLIC COMMENT MODIFICATION OF AGENDA APPROVAL OF MINUTES April 6, 1990 BOND FINANCE TEAM REPORT Petrie TECHNICAL COORDINATING SUBCOMMITTEE REPORT Yerkes INSURANCE SUBCOMMITTEE REPORT Saxton a. Self-Insurance Existing Interties Kelly BUDGET SUBCOMMITTEE REPORT a. Review of Draft FY O&M "Dry-Run" Budget Ritchey OPERATING AND DISPATCH AGREEMENT SUBCOMMITTEE REPORT Shira REVIEW OF PROJECT STATUS Eberle OLD BUSINESS a. Discussion of Test Period Power Sales Agreement Saxton b. IBEW Lawsuit Saxton NEW BUSINESS a. Financial Advisor for Completion Bonds - Bradley Kelly b. Schedule Next Meeting Date, Location, Time COMMUNICATIONS ADJOURNMENT *Note: This is not the usual meeting location. LLIN RECORD COPY FILE NO pRo 2-H © ROS-b laine SIafyo BRADLEY 0&M BUDGET PRo 2-4! REVIEW BY BRADLEY BUDGET SUB-COMMITTEE STATUS REPORT Pheer May 17, 1990 A. Meetings of the Bradley Budget Sub-Committee to formulate the costs associated with the project operations and maintenance budget took place on the following dates: February 2, 1990; March 16, 1990; April 5, 1990; May 2, 1990; and May 15, 1990. B. Four Types of Bradley 0& costs were reviewed by the sub-committee: Direct non-personnel costs Direct personnel costs Non-personnel administrative costs Personnel administrative costs ° 000 The general direction the sub-committee had from the Bradley Project Management Committee was to defer loading costs in early years as much as possible. The annual costs in the official statement were stated as $3.8 million. The committee has been able to adjust the cost down to under $2.6 million. The sub-committee recommends that the utilities reserve the right to audit the Alaska Energy Authority costs charged to Bradley O&M. C. Direct Non-Personnel Costs e The sub-committee proposed not to fund a renewal and replacement account until after five years of Bradley operations. ° Salmon studies expenses will be capitalized as a FERC license requirement cost. S The sub-committee looked at contracting transmission line mainte- nance services from Bradley Lake to Bradley Junction to Homer Electric Association (HEA). These costs are higher than originally estimated. The sub-committee is still considering this item and has no recommendation at this time. The sub-committee reviewed the work of the insurance sub-committee. The estimate of premiums for the various policies is expected to change. Property premiums have decreased and the boiler and ma- chinery premium have increased from original estimates, primarily due to more sophisticated substation equipment than in use at other hydroprojects. The question is being addressed of possibly capitalizing the cost of the software for CEA Dispatching. The Project Management Committee wanted to amortize the cost over a ten year period at $20,000 per year and asked if this could be considered as a construction cost. If this is the case, the Energy Authority would purchase the 8189/DD61(1) software and licensing. After 10 years of usage, the software would have to be replaced. There is stil] a question whether this soft- ware would be included in Bradley O&M costs or whether dispatching software costs can be handled under other agreements. This item would become a future renewal and replacement expense. In addition, a CEA dispatching labor cost of $93,800 plus $36,000 for training was included in the O&M budget. The sub-committee is still con- sidering this item and has no recommendation at this time. ° FERC Inspection - The sub-committee is considering funding the 5 year FERC independent consultant inspection cost of $50,000 in year 5. The sub-committee recommends funding cost of corrections result- ing from the inspection from the renewal and replacement fund. D. Direct Personnel Costs The sub-committee spent considerable time discussing the Alaska Energy Authority personnel costs that should be included in the Bradley O&M budget. As the discussion evolved, personnel associated with Bradley 0&M were divided into two groups. The first group was limited by the sub- committee to positions working directly on Bradley O&M operations super- vision and engineering, maintenance supervision and engineering, and permitting. The second group consists of those personnel providing administrative support for Bradley O&M. All or part of 12 specific positions were identified in the first group (the direct personnel costs). Some question remained as to whether some of those costs could be properly capitalized rather than being charged to O&M. Energy Authority staff subsequently determined that some of the costs could be capitalized. The following shows what part of the 12 positions are charged to Bradley O&M in FY92 in the attached Energy Authority material. The sub-committee still questions whether some of these costs could be capitalized, at least in the initial years of the project operation. Direct % to PCN Position Title Bradley 0&M NO03 Gen. Maint. Tech. - Bradley 100% NO04 Gen. Maint. Tech. - Bradley 100% NOO5 Gen. Maint. Tech. - Bradley 100% 0425 Dir. Facilities Ops. & Eng. 20% 0433 Mgr. Engineering Support 5% 0435 Project Mgr. - Property 10% 0440 Engineering/Graphics Tech. 20% 0449 Permits & R.O.W. Specialist 50% 0454 Accountant 100% 0482 Administrative Assistant II 30% 0485 Operations Engineer - Bradley 100% 0487 General Foreman - Bradley 100% 8189/DD61(2) E. Administrative Costs The sub-committee believes that a contract issue needs to be discussed by the Bradley Project Management Committee regarding the administrative costs. There are at least two interpretations of if and how much Alaska Energy Authority administrative costs should be paid by the participating utilities. One interpretation of the contract language would preclude the inclusion of such costs in the Bradley O& budget. In that case, the administrative costs would be zero. The other interpretation of the contract language would allow the inclusion of such administrative costs. If this second interpretation prevails, the sub-committee recommends that a portion of the Energy Authority administrative costs be charged to Bradley 0& based on some generally used ratio. Non-Personnel Costs - These include general administrative costs of Operating the ATaska Energy Authority such as office rental; office supplies and equipment, including repair and maintenance; administrative travel; and other administrative costs. Personnel Costs - In addition to the 12 Energy Authority positions identified as working directly on Bradley O&M operations supervision and engineering, maintenance supervision and engineering, and permitting, 33 other Authority personnel positions were identified as providing admini- strative support for Bradley O&M. As the sub-committee discussion evolved, consideration was given to whether the costs of the admini- strative support positions should be included, at what level they should be included, and how those costs should be charged to the Bradley 0&M budget. Methodology - The Energy Authority currently allocates administrative costs to its projects and programs on the basis of direct personnel costs. Using the second interpretation of the contract language, based on current estimates for FY92, approximately 15.8% of the Authority's non-personnel and personnel administrative costs would be charged to Bradley 0&M ($299,000 of administrative costs charged to Bradley O&M in this FY92 example out of a total of $1,887,000 of Alaska Energy Authority administrative costs). This would be converted to an administrative overhead rate applied to the actual personnel costs of the 12 positions authorized to charge directly to Bradley 0&4. The administrative costs overhead rate would be reviewed annually and, if necessary, adjusted by the Bradley Project Management Committee as part of the development process for the following year's budget. Whenever there is a major change affecting the Bradley 0&M budget, such as if the Energy Authority contracts the operating responsibility for Bradley, the entire budget process approach will need to be reevaluated. F. Miscellaneous The sub-committee also dealt with the proposed utilities budget for the Bradley Junction to Soldotna line. Some minor changes were made to the initial budget that Homer Electric Association proposed, mainly dealing with a percentage of allocations. 8189/DD61(3) A. c. ALASKA ENERGY AUTHORITY FYye TOTAL AEA AND BRADLEY O&M OPERATING 8UDGc, ESTIMATES "THE BIG PICTURE" -- AEA FY92 TOTAL OPERATING BUDGET Personnel Full-Time Equivalent . . (a) Positions Costs Personnel Working Directly on Bradley O&M . p-@ . 6 Personnel Working Directly on Other AEA Projects/Programs 39.65 . 2,725 ,869 6 Total Direct Personnel a $ TaD. Administrative Personnel 23.00©p. 1,243 676) p.6 Total Personnel 70.00 $F BI Non-Personnel Costs Costs Directly Related to Bradley O&M (b) $ 1,711,100 ©p4 Costs Directly Related to Other AEA Projects/Programs 2,438,900 Total Non-Personnel Costs Directly Related to Specific AEA Projects/Programs $ *648/200@ Administrative Costs 644 200 10 Total Non-Personnel Costs $4798, 200 , (a) Limited to all or part of 12 specific positions identified as working directly on Bradley 0&M operations supervision and engineering, maintenance supervision and engineering, and permit- ting. Direct personnel costs would be based on actual time recorded on timesheets by these (b) 12 personnel authorized to charge directly to Bradley O&M. Excludes Power Cost Equalization Program components of the operating budget; also not reflected are non-operating budget expenditures charged directly to the Energy Authority's capital and loans budgets. ALLOCATION OF ADMINISTRATIVE COSTS °Allocated to AEA projects/programs on basis of direct personnel costs °Percent Allocation to Bradley O&M: Bradley O&M Direct Personnel Costs _ 511,800 _ ota rect Personnel Costs 3,237,605 = 15.8% °Dollar Allocation to Bradley O&M: Bradley 08M Total AEA z Amount Administrative Personnel Costs yond, 15.8% 5 196,501 Non-Personnel Administrative Costs 644 200 15.8% 101,784 $1,887,876 $298,285 °Administrative overhead costs are generally charged as a percent of direct personnel costs. The $298,285 of administrative costs calculated above to be charged to Bradley O&M in FY92 would be converted to an overhead rate on direct personnel costs. °The actual administrative costs charged to Bradley O&M in FY92 would be higher/lower than the $298,285 calculated amount if the actual direct personnel costs are higher/lower than the $511,800 calculated amount. °The administrative costs overhead rate would be reviewed annually and, if necessary, adjusted by the — Project Management Committee as part of the development process for the following year's budget. BRADLEY O&M FY92 OPERATING BUDGET SUMMARY Direct Personnel = $ 512,000 20% Direct Non-Personnel Costs 1,711,100 68% Total Direct Costs $ 2,225,100 Bcd Allocated Administrative Costs 299 ,000 12% Total Costs $72,522,100 100% NOTE: Personnel costs used in this analysis are based on rates/benefits in effect on May 15, 1990; actual rates/benefits in FY92 may differ. 8175/D061(1) Prepared May 15, 1990 ALASKA ENERCY AUTHORITY ESTIMATE OF PERSONNEL COSTS Fy92 Direct & Personnel Costs Distribution Total Bradley 08 Direct Current Bradley| Bradley Allocated Personnel FERC Bradley Const/ PCN Position Title Incumbent Range | Const. Other x Costs Amount Account | Other Direct Allocated 0401 29 8 858 $ 107,570 0 --_I|$ 16,135 | $ 91,435 [0402 [Project Mgr Bradley Lake | — 25 104,535 0 -- 104 ,535, 0 F obasts [Dtressar’ Agency Operations =] Petrie 26 358 608 104 ,391 0 = 41,756 62,635 | 0406 [Director Acctg & Admin Mane 25 30% 658 97,704 0 -- 34,196 63,508 | 0407__|Sentor Economist 23 100% 88,959 0 -- 88,959 0 [0408 [information Officer | —_ 18 208 53,112 0 = 13,278 39,834 oe eee eee 90% 35,478 0 =: 31,930 3,548 Es a = a 48,994 0 = oO 48,998 a 208 61,491 ° = 14,143 47,388 pd Johnson — 37,376 0 -- 0 37,376 29,692 0 -- o 29,692 Denig-Chakroff 100% 0 -- 85,766 0 renee = ae 0 = 18,905 75,621 | cow 20,907 535 83,628 0 p q [vecont S| 23 fT tn 0 = 73,570 0 [0432 [Operations Engineer S| Lang =| 2? | tN -- 78,201 0 | 0433 [Mgr Engineering Support | Khan | 28 | 108 | — ‘4,570 535 86,834 0 | 0435 [Project Mgr/Propert: fseett | 70} 100 | 7,405 535 48,129 18,511 | 0436 [Remote Const/Maint wir | | 1008 | -- 59,481 0 ef el —— | 0480 _|Engineert ics Tech 20% 535 24,431 8,143 Fossett tngeent exit [sities af] = 84,612 4864 [0685 [Dep Proj Mgr-Bradley/Cons | | 1008 | -- 83,235 0 | 0446 [Manager Rural Projects paris fp 2 - 73,570 0 [0448 [Administrative Clerk 100% = 25,518 o [0449 [Permits & ROW Specialist | 50% ry 41,963 928 33,569 8393 ae 2 = — [| 0453 Accountant 1008 -: 66,989 0 [ose [accountant 1008 69,282 535 0 0 | O45S [Administrative Asst I! 4 100% -- 42,615 0 | 0457 [Administrative Clerk n 218 = 7,849 29,527 pot fPectannel Officer 18 -- 0 61,248 Records/Library Supervisor Vacant 14 = 0 40,091 0463 __| Info Sys Analyst/Programer Waer 7 100% = 48,998 o O46 [Administrative Asst 111 Barsness 16 cS oO 50,664 8170/D061(1) ALASKA ENERGY AUTHORITY ESTIMATE OF PERSONNEL COSTS Fv92 Direct 8 Personnel Costs Distribution Total Current Bradley Allocated Personnel FERC Bradley Const/ PCN Position Title Incumbent ge Const. Other s Costs Account | Other Direct Allocated 0465 [Development Specialist I! a 100% 71,672 0 -- 71,672 T0466 [Development Spectaltst 1 | Vecont 100% 52,319 0 = 52,319 | 0467 [Accounting Technician __—|_ tut 108 908 39,517 9 = 3,952 35,565 : . 100% 44,635 0 =: 0 44,635 658 52,380 0 -- 18,333 34,047 100% 32,821 o = 32,821 38 97% 0 =: 985. 31,836 100% 0 = 32,031 100% 32,031 o = 32,031 100% 57,867 o =< 57,467 o 758 258 88 ,959 0 = 66,719 22,240 1008 69,276 0 = 89,276 0 [| | 1008 63,502 0 -- 63,502 0 1008 52,739 0 = $2,739 0 100% 52,739 0 =: 52,739 0 1008 71,672 ° = 71,672 0 308 70% 41,174 12,352 535 28 ,822 0 0 = 69,282 0 100% 88,959 535 0 100% 0 -- 48,463 0 100% __ 69,282 69,282 Sat 0 | 0888 [Documents Processor = 100% o = 36,420 | 0489 [Remote Const/Maint Wkr It Donathan La 100% 0 = 63,502 0 fA flontracte Officer Costanzo 20% 358 0 = 49,728 26,776 0491 [Remote Const/Maint Wkr I! Jensen 1008 0 = 61,2488 | 0493 [Accountant Choe 30% 70% 0 -- 20,785 48,497 Senior Auditor Whitney 158 70% 158 0 =: 68,696 12,123 Info Systems Supervisor Crosby 1008 0 =: 71,672 | 0497 [Project ger Marchegiant 1008 0 -- 89,276 Compliance Officer Flanagan _ 0 -- on Remote Const/Maint Wkr I! Noonan 100% 0 - 59,199 6003 [Gen Maint Tech - Bradley Vacant 1008 Sal NO04 _|Gen Maint Tech - Bradley _ Vacant 100% 5a1 NO00S [Gen Maint Tech - Bradley Vacant 100% a TOTAL 5938 7358 3.3728 2,300% 481 4345 3) yt © ® *position abolished U (A) NOTE: Two Power Cost Equalization Program positions not included in this analysis Revised May 10, 1990 8170/0061(2) DRAFT BRADLEY LAKE ANNUAL FY O&M BUDGET HYDRAULIC POWER GENERATION Operatioa Op. Supervisioa, Enginecring ‘Water for Power Hydraulic Expenses Electric Expenses Misc. Hydraulic Power Geacration Expenses Maintenance of Structures Page 1 of 3 AEA calculates, check funds cach ycar for annual amounts, any changes as budget changes, and repicnishmeat requircmcats. Replcaishmecat req. to $625 k, cash flow cashioa, cash flow issuc Fully funded Hydro/T. Replacemeat, includes switches (cst. $300k) Hydro Reserve (20%) based oa Bur of Reciam figures (cst. $440k) 'T. Line Reserve (20%) of T. Fac. Annual Costs (cst. $35k) Reserves included in $650k + $5 M R&C Fund Debt Service (fixed), ref. Bond Res. (for Ist $105 M) Refereace backup 1 tripfmo. Anch. to Homer by AEA Ops staff-$5k Bay. travel-$2500duck, $500moose, $13200 temp mon heli thru FY95 Misc. coatracts O&M Coasulting Helicopter transportation to dam site when road closed Fixed wing transportation Barge rental-$1200/mo. trip, to decrease in later years Plant production supervisor, Range 723A 3 maint /emer. operators, Range 22, 2 elec. tech., 1 mech. tech. (2 trips/wk. site-Homer crew changes Training Maintcaancc mamagemcat sysicm upgradcs-$2k +$2_5k installation Materials DRAFT BRADLEY LAKE ANNUAL FY O&M BUDGET 35,000 | Electric testing/inspection by other than AEA 15,000 SCADA system maintenance, incl. $4k for Decknet option, $11k CEA 20,000 | Anaual relay/metcr inspection, testing, calibration 55,000 |Divcom microwave maintenance 40,000 |Misc. maintenance coatracts-to other than AEA Alaska Intertic budget compoacat, ref. IOC/AEA Maintenance Supervision & Enginccring Maintenance of Structures Maintenance of Station Equipmeat Maintenance of Overhead Lincs 0,000 |T. line inspection/maintenance/repair - 1/4 towers ea. yr., $17M dbl line © JROW cicaringfimspection/maintcnance Maintenance of Underground Lines Maintenance of Misc. Transmission Plaat Page 2 of 3 DRAFT BRADLEY LAKE ANNUAL FY O&M BUDGET mea] gw | Acct. p Source/Commeat ADMINISTRATIVE, GENERAL, AND : REGULATORY EXPENSES 920 |Administration & Geacral Expcascs, Operation a. Bradicy PMC Costs i. Travel/Per Dicm, PMC 23,000 |assumes 6 migs./yr. in Anch. Subcommiticc 15,000 | Assumes 12 subcommittee mtgs. /year ii. Mecting Expenses 15,000 | Secretarial support/mtg. costs lb. Administration i Allocated $& 299,000 |Refercace backup 923 | Outside Services Employed ja. Legal 50,000 | Utility & ABA (i.c., AG) lb. Project Andit 924 |Insurance ja. Transmission Lincs '? transmission linc scif insurance b. Property 1$1M deductible ic. Boiler and Machincry $25 k deductible 1d. General Liability lc. Watercraft & Aviation i. Deductibles and Exclusions from RAC ig¢- Business Interruption [Utilities to consider 928 |Regulatory Commission Expcascs ja. FERC i. Fees-Land Use Administrative ii. 5S yr. Indepeadcat Consultant Inspec 7 of saving multi-yr. for 5 yr. $50k ind. cons. inspection, corrections to be b. Permitting funded from Reserve Fuad ic. On-going Studics 5S AEA Permits Spec. to decrease to .25 over 2 yrs. i. Stream Gaging USGS, FERC requiremeat, Add’l $75k funded by USGS ii. Snow Measuremcat for a minimum of 5 years, SCS, required for ops forecasting program iii. Scizanic Monitoring Ist 5 years, $10-20 k/yr. thereafter, UAF iv. Climatologic Under discussion-analysis of USGS data & forecasting program mod’s thru FY2036-travel cost only (incl. in FERC acct. 535) From Construct, $144k FY92, $151k FY93, $60k FY94, $63k FY95, NES v. Moose Mitigatioa Trustec vi. Salmon Escapement vii. Duck Monitoring thru FY97, AEA travel, obs, report prep., labor incl. in Accts. 535,541 viii. Water Quality FERC req. at Ist and Sth years TOTAL FY COST $2,523,100 — 312,000 Less Personnel Costs and Non~ Personne] Administra tive Overhead Costs (x items) © FTN, 100 Bredley OFM Direct Now -Aveonnel Costs ——— Page 3 of 3 9 ALASKA ENERGY AUTHORITY SUMMARY OF NON-PERSONNEL ADMINISTRATIVE COSTS (OTHER THAN BRADLEY 0&M DIRECT COSTS) Administrative Travel - Travel required for coordination and administration of the Energy $ 87,400 Authority which are not directly chargeable to specific Authority projects/programs. Office Rental - Lease of Energy Authority office space. 100 ,000 Communications - Telephone and postage costs; courier costs not directly chargeable to 126 ,900 specific Energy Authority projects/programs. Administrative Legal Services - Department of Law charges for general administrative 41,500 services not directly chargeable to specific Energy Authority projects/programs. Annual Fiscal Audit and Annual Report - The annual fiscal audit and annual report of the 31,000 nergy Authority are statutory requirements. Advertising and Printing - General administrative newspaper advertising and printing 21,700 5 costs not chargeable to specific Energy Authority projects/programs. General Training - Training of Energy Authority personnel not chargeable to specific 22 ,800 uthority projects/programs. Miscellaneous Professional Services - General administrative professional services not 21,800 Chargeable to specific Energy Authority projects/programs. Office Equipment - Purchase, rental, and repair of general administrative office 87 ,000 Saitlent not chargeable to specific Energy Authority projects/programs. Office Supplies - General administrative office supplies. 86 ,300 Other - Vehicles, membership dues, risk management charges, and data processing charges 17 ,800 from Department of Administration not chargeable to specific Energy Authority projects/programs. ® $ 644,200 8219/DD61(1) 10 hye RECORD COPY F am ELECTRIC ASSOCIATION. INC. gupneeptowemeledtD ADM 2-77 . PHONE 907-563-7494 5601 MINNESOTA DRIVE * PO. BOX 196300 * ANCHORAGE. ALASKA 99519-6300 * on 907-562-0027 April 9, 1990 Alaska Energy Authority P.O. Box 190869 ALASKA & Anchorage, AK 99509-0869 AUTHC. + Attention: Mr. David R. Eberle Project Manager Subject: New Microwave Interface Dear Dave: Mike Ridge and I have had several discussions regarding the new microwave link that we will be installing between Chugach and the State of Alaska, Department of Telecommunications this year. The conclusion we have reached is that one agency needs to order the equipment for both ends of the microwave system. Due to the rules that each of us have to follow in purchasing equipment, we could end up with different and possibly incompatible equipment on the two ends of the link if we purchase separately. I believe Mike has talked to you about this problem. At our last discussion, he suggested that I write this letter to you and proposed that Chugach purchase all the equipment for the link. We would then provide the State their half, and they would install it at their facility. The total cost of the link will be the same either way. Attached for your review is an equipment list for the entire system. This list has been coordinated with Mike and he agrees with its content. Please review the list and let me know if it is acceptable for Chugach to proceed with the order. If you have any questions, please contact me at 762-4711. Very truly yours, CHUGACH ELECTRIC ASSOCIATION, INC. Vance Cord, lf Vance Cordell Manager of Electronics vce:mc:105 Attachment MATERIALS COS ¢ ITEM QTNY| DESCRIPTION | 1. 20a Collins MOR-3118 Radio, 2. 2ea Service channel for MOR-3116 Radio os 294 Test Lead and Tool Kit 4. PCM Multiplex 2ea Channel Comm Equipment dea CU-Voice (FXS or FXO) dea CU-Data dea CU-dW E&M 2ea DS1 -DS1 Muxer 5. 2 Badger 16 Point Alarm Remote 5. 2ea Andre antenna HP6-180E 7 6oft. Elliptical Waveguide, Ew180 8. dea Connectors, 11600C 9. 288 Pressure Window, 55000-12 19. 2ea Nitrogen Tank Fitting, 85C i. 2ea Nitrogen Tank Adapter, 55751 12. 2e8 wall Feed Thru, 35849-i18 13. 2ea waveguide Boot - 4° 14. 22a Antenna Accessory Kit,432! 1 15. 2ea Mounting Foles and materiais 16 22a Misc. Installation Materials Total Matartals S FD aa) te aa c> ih > oO i | |e 2 2 2 : eo [= <ai> $72,705 ENGINEERING AND SERVICE COSTS ITEM DESCRIPTION PRICE 1. FCC License and Frequency Coordination $1,600 2 Path Study $ 450 Total $2,050 MANPOWER (CEA Only) Sixman days @ $40 per hour= 6 X 10 X $40 = $1920 TOTAL COST $78,705 + $2,050 + 1.920 = $82.675* *Does not include labor cost for State of Alaska