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HomeMy WebLinkAboutBPMC Meeting - May 4, 1989 1FILE Copy ERD ZIT yy) BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE May 4, 1989 1. CALL TO ORDER Chairman Kelly called the Bradley Lake Project Management Committee (PMC) to order at 11:00 a.m in the ninth floor Conference Room of the State Office Building in Juneau, Alaska to conduct the business of the Committee per the agenda and the public notice. Chairman Kelly clarified titles of Committees that report to the Project Management Committee. The Finance Group consisting of underwriters, Power Authority personnel and utility representatives, will be called the Finance Team. The Technical Coordinating Committee will be named the Technical Coordinating Sub-Committee. The Insurance Committee will be called the Insurance Sub-Committee. In general, all groups that report to the Project Management Committee will be called sub-committees in future correspondence and activities. 2. ROLL CALL The roll call was taken and a quorum was established. In attendance were the following: DESIGNATED DESIGNATED REPRESENTATIVES ALTERNATES REPRESENTING Brent Petrie Alaska Power Authority Everett Paul Diener City of Seward B. Kent Wick Homer Electric Association, Inc. David L. Highers Chugach Electric Association, Inc. Michael P. Kelly Golden Valley Electric Association, Inc. Thomas R. Stahr Municipal Light and Power dames F. Palin Matanuska Electric Association, Inc. OTHERS PRESENT Kurt Dzinich Senate Advisory Council Dave Hutchins Alaska Rural Electric Cooperative Association 3. PUBLIC COMMENT There being no public comment, Chairman Kelly proceeded to agenda item number 4. 6264/985(1) Bradley PMC May 4, 1989 Meeting Minutes Page 2 of 7 4. MODIFICATION OF AGENDA Chairman Kelly added two additional items under 13. New Business. These were 13a. Risk Assessment for Bradley Lake and 13b. Allocation and Scheduling Agreement. 5. APPROVAL OF MINUTES April 6, 1989 Chairman Kelly noted that reference to the Finance Committee should read Finance Team, reference to the Technical Coordinating Committee should read Technical Coordinating Sub-Committee, reference to Insurance Committee should read Insurance Sub-Committee, reference to Budget Committee should read Budget and Finance Sub-Committee, reference to Tax Committee should read Tax Sub-Committee, and reference to Operating and Dispatch Agreement Committee should read Operation and Dispatch Agreement Sub-Committee. Mr. Highers motioned and Mr. Palin seconded approval of the minutes of the April 6, 1989 PMC meeting as amended. The motion passed by acclamation. 6. FINANCE TEAM REPORT Written minutes of the April 11, 1989 Bradley Lake Finance Team meeting were read by the Committee. Mr. Palin asked if R.W. Beck had been in touch with utilities since April 11, 1989. Mr. Petrie responded he was not sure, but that the Team was to meet again May 23, 1989. (R.W. Beck subsequently reported that they had met with the staff of several of the utilities, but had not generally contacted the general managers.) Mr. Stahr noted that he would like all reports from sub-committees to point out activities which have been completed, as well as future items which need to be addressed. Mr. Kelly asked the Committee members to consider acceptance of the April 11, 1989 Bradley Lake finance team report. Hearing no objection, acceptance was approved. Te TECHNICAL COORDINATING SUB-COMMITTEE REPORT The Committee reviewed the report of the Technical Coordinating Sub- Committee for the May 4, 1989 PMC meeting that was prepared by Mike Yerkes of Matanuska Electric Association (MEA). Chairman Kelly asked the Committee to consider acceptance of the Technical Coordinating Sub-Committee report. Hearing no objection, the report was accepted. 6264/985(2) Bradley PMC May 4, 1989 Meeting Minutes Page 3 of 7 8. INSURANCE SUB-COMMITTEE REPORT A written summary of the March 16, 1989 and April 24, 1989 Insurance Sub-Committee meetings was reviewed by the Committee. Mr. Petrie reported that the Insurance Sub-Committee determined there was a need for a formal risk assessment of the Bradley Lake Project that would be required by insurers in order to develop quotes for property insurance for the project. It was felt that in order to determine levels of insurance or self insurance, a first step in determining proper levels and assisting with cost quotes would be to get a risk assessment from any of the three engineers working on the project, Stone and Webster Design Engineer; Bechtel Construction Manager; or R.W. Beck Consulting Engineers. Power Authority staff had been assigned this task of exploring these options further and would report to the Sub-Committee and Committee at a future date. 9. BUDGET SUB-COMMITTEE REPORT Minutes of the April 11, 1989 Budget Sub-Committee report were provided to the Committee for review. Mr. Stahr moved not to approve the minutes due to the Operation and Maintenance Agreement discussion of the APA as the initial Project Operator and items that would be included in the Official Statement to bond holders. Mr. Stahr then changed his motion to accept the minutes of the Budget Sub-Committee and urged that the Committee members vote not to accept the minutes as presented. Mr. Highers moved to table the motion to accept the April 11, 1989 minutes of the Budget Sub-Committee seconded by Mr. Diener. The motion was then tabled. Discussion ensued among Committee members as to the role of the Budget Sub-Committee and the presentation of reports. Mr. Kelly stated that he would like future correspondence to 1) clarify members of the Sub- Committee, 2) indicate whether the Sub-Committee had actually approved the minutes; 3) if the Sub-Committee had approved the minutes, mark the minutes as approved by the Sub-Committee, or if not, mark them draft. He stated that the PMC should only be voting on actions that the sub- committee has approved and presented to the full PMC. The sub-committee should submit action reports with recommendations or questions that need to be addressed. 6264/985(3) Bradley PMC May 4, 1989 Meeting Minutes Page 4 of 7 10. OPERATING AND DISPATCH AGREEMENT SUB-COMMITTEE REPORT The Committee reviewed the April 5, 1989 report by Mr. Don Shira, APA, Chairman Operating Dispatch Agreement Sub-Committee. The April 5, 1989 report of the Operating and Dispatch Agreement Sub-Committee was accepted without objection. 11. REVIEW OF PROJECT STATUS Mr. Petrie reported that the Technical Coordinating Sub-Committee report accurately reflected the current status of the Bradley Lake Project construction. Mr. Petrie also noted that the tunnel boring machine had set a world's record at Bradley Lake for the longest distance for 15 foot diameter tunnel boring machine production in a 24 hour period at 274 feet, breaking the previous world's record of 250 feet. Mr. Palin asked if various transmission system support would be included in the Bradley Project budget, such as static var system, deflectors, breaking resistor, and series capacitors. Mr. Petrie replied the plan was for those improvements that would be onsite at Bradley Lake to be included in the project budget. However, Mr. Petrie stated at this time that it was an open question as to how to handle fixes that would be reinstalled elsewhere on the transmission system. 12. OLD BUSINESS a. Homer Transmission line status Mr. Wick gave a report on the status of the Fritz Creek to Soldotna transmission line project. In response to Robert LeResche's memorandum of April 11, 1989, Mr. Wick had talked to Mr. Belluzo of the Rural Electrification Administration (REA). Mr. Wick stated that REA is not tieing REA approval of the Bradley Lake Power Sales Agreement to the Fritz Creek transmission line and that REA is not holding up approval of these agreements pending the outcome of construction issues for the transmission line. Mr. Wick stated he was meeting with Kenai Peninsula legislators and hoped that there was a fifty-fifty chance of tapping the Railbelt Energy Fund for $7 million’ for construction of the Fritz Creek transmission line and Southern intertie (reference House Bill 319). If funding was provided by the State, Homer Electric Association (HEA) would construct the line using their own forces, but may still be liable for bid preparation costs by bidders. Homer Electric has engaged the firm of Atkinson, Conway, and Gagnon for an additional legal opinion regarding their status in constructing the project using force account labor. 6264/985(4) Bradley PMC May 4, 1989 Meeting Minutes Page 5 of 7 Mr. Wick said that $7 million would cover construction costs and overhead and that HEA would need at least $5.4 million to cover just the construction costs. Mr. Wick thought that REA may have some problem approving the use of force account labor if funding was lower than that. HEA would also need to negotiate some concessions from the IBEW in order to come in at a competitive cost, but felt that $5.4 million would work. May 9, 1989 is the next HEA Board meeting. HEA has not yet awarded the job and will consider options at their next Board meeting. Mr. Wick again felt that REA will not hold up the agreements, but also noted that REA did not say when they would approve the agreements. REA will not permit an award to the second bidder. REA will likely not approve force account methods unless the legislature appropriates funds for the project. b. REA Approval Status Mr. Kelly reported that Ron Saxton had advised him that REA was not holding up approvals of Bradley Lake agreements due to the Fritz Creek problem. Mr. Palin asked if REA knew of stability problems with the Kenai Peninsula transmission system that might affect delivery of Bradley power. Mr. Wick responded that he felt that they knew about the issue and the problem, but also felt that it could be resolved. 13. NEW BUSINESS a. Risk Assessment Mr. Petrie reported on the suggestion of the Insurance Sub- Committee to engage one of the engineers familiar with the project to provide an initial risk assessment to help deter- mine levels of property insurance for the Bradley Lake Project. After some discussion it was determined that the design engineer might be the most logical to provide a quick assess- ment of possible damage in the event of an earthquake, fire, storm, etc. Mr. Wick motioned and Mr. Highers seconded a_motion that the APA engage the services of an engineer to perform a_risk assessment for the Bradley Lake Project and that this be considered a cost of the Project. The motion passed by acclamation. 6264/985(5) Bradley PMC May 4, 1989 Meeting Minutes Page 6 of 7 Allocation and Scheduling Agreement Mr. Petrie reported that the Operating and Dispatch Agreement Sub-Committee desired to engage the services of a consultant to assist with drafting language for the Allocation and Scheduling Agreement. Chugach Electric Association (CEA) had scoped out the services in consultation with the Sub-Committee and were willing to contract for the services estimated at $20,000 as long as it was considered a Bradley Lake Project cost. Mr. Stahr objected to CEA contracting for drafting the Allocation and Scheduling Agreement. He based his objection on the fact that Chugach would likely be the dispatcher for the project. Discussion ensued about how to contract for the services. Mr. Palin volunteered that MEA would be willing to act as the designated paying agent as long as MEA was reimbursed and the Operations and Dispatch Agreement Sub-Committee selected the consultant and controlled the work through the Sub-Committee. This position was accepted without objection. (Subsequent to this meeting, the Operations and Dispatch Agreement Sub- Committee met and reviewed a proposal from the Power Authority to have one of its contracted engineering firms assist with preparation of the documents. The Sub-Committee supported this arrangement and the agreement and scope of work were subsequently developed and _ executed. The Sub-Committee desired this approach because MEA was not a member of the Operations and Dispatch Agreement Sub-Committee and was not participating in the discussions and it did not have staff attending meetings.) Schedule Next Meeting The next meeting of the Bradley PMC was scheduled for 10 a.m. at Chugach Electric Association offices in Anchorage, Alaska on June 8, 1989. Mr. Stahr requested that an agenda item be added, which discussed a surge tank as a possible option to solve stability problems on the transmission line. 14. COMMUNICATIONS There being no further communications or business, the motion was made to adjourn. 6264/985(6) Bradley PMC May 4, 1989 Meeting Minutes Page 7 of 7 17. ADJOURNMENT The Committee adjourned at 12:45 p.m. by acclamation. Chairman Wd ATTEST: BLhUS Sécretary, Alaska Power Authority Approved at PMC meeting held July 28, 1989. 6264/985(7) aes OO Oe Ye -- ood oo voyvsava 4 a ib ari State of Alaski | Alaska Energy Auaiority — 701 East Tudor Road | P.O. Box 190869 Anchorage, Alaska 99519-0869 Re ccc EB a en rrrctctesteticinmosrenpneescnnnneinanchiien Golden Valley Electric Assoc. P.O. Box 1249 Fairbanks, AK 99707 GENTLEMEN: WE ARE SENDING YOU CXAttached O Under separate cover via____.._—=—=—==—==—=SSSSSsthe following items: O Shop drawings O Prints O Plans O Samples O Specifications O Copy of letter O Change order _Meeting Minutes, BPMC COPIES i DESCRIPTION THESE ARE TRANSMITTED as checked below: O For approval O Approved as submitted O Resubmit__________ copies for approval O For your use O Approved as noted O Submit_________ copies for distribution O As requested O Returned for corrections O Return _________ corrected prints 0 For review andcomment (4 _For signature and return O FOR BIDS DUE —______19____©) PRINTS RETURNED AFTER LOAN TO US REMARKS COPY TO | SIGNED: Gulud. Decline =—— | If enclosures are not as noted, kindly notify us at once. Julie Becker =e | oF ™~o