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Home My WebLink AboutBPMC Meeting - January 20, 1989 1BPMC MEETING MINUTES JANBRAI P+) FILE COPMcE1 ors JANUARY 20, 1989 —PRO-2 LT WN BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE January 20, 1989 1. CALL TO ORDER Chairman Kelly called the Bradley Lake Project Management Committee to order at 1:50 p.m. in the Training Room of Chugach Electric Association to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL The roll call was taken and a quorum was established. In attendance were the following: Designated Representative Designated Alternate Representing Robert E. LeResche Brent N. Petrie Alaska Power Authority James F, Palin Myles C. Yerkes Matanuska Electric Association Dave Highers Tom Lovas Chugach Electric Association Kent Wick Homer Electric Association Michael Kelly Golden Valley Electric Association Thomas R. Stahr John Cooley Municipal Light and Power E. Paul Diener Bob Peirson City of Seward Sam Mathews Homer Electric Association Robert Hansen Golden Valley Electric Association Others Present Ron Saxton Golden Valley Electric Association Dave Hutchens Alaska Rural Electric Coop Assoc Carol Johnson Chugach Electric Association Marcey Rawitscher Alaska Power Authority Julie Becker Alaska Power Authority Dave Eberle Alaska Power Authority 3. PUBLIC COMMENT There being no public comment, Chairman Kelly proceeded to agenda item 4. 4. MODIFICATION OF AGENDA No modifications to the revised agenda were made. grantee UL BPMC MEETING MINUTES (JANBRAV.CHP) PAGE 20F 4 JANUARY 20, 1989 5. APPROVAL OF MINUTES Mr. Highers motioned, seconded by Mr. Cooley, that the minutes of the November 30, 1988 mecting be approved. The mo- tion passed without objection. 6. FINANCE COMMITTEE REPORT Mr. LeResche noted that interest rates are favorable, and are anticipated to remain favorable through the remainder of 1989. Ms. Rawitscher distributed copies of her January 17, 1989 memorandum to the PMC, subject, costs associated with Brad- ley Lake variable rate demand bonds. 7. TECHNICAL COORDINATING COMMITTEE REPORT Mr. Yerkes reported that the TCC met with Power Technologies Inc. (PTI) recently regarding SEI’s assessment of reliability of the Bradley Junction to Fritz Creek transmission line. Mr. Stahr expressed the concern that the Bradley Lake Hydroelectric Project budget not be reduced until the cost of stability is determined. Mr. LeResche responded that approximately 3 weeks ago, the Power Authority reduced the budget cstimate to $350,000,000, which included $328,000,000 as the estimated cost of construction and $80,000,000 of the $328,000,000 as contingency. Mr. LeResche noted that the revised estimate does not reduce the total funds available; however, Mr. Le- Resche hopes that the cost of the solution to the stability issue will fall within the revised estimate. Mr. LeResche said that the remainder of the $175,000,000 in appropriations is held in a trustee account and that these funds cannot be reap- propriated by the Legislature until such time as the project is declared complete. 8. REVIEW OF PROJECT STATUS Mr. Eberle said that the Powerhouse Construction Contract was awarded to H.C. Price Construction Company with a bid price of $31,700,000. H.C. Price Construction Company will be on site in March - April of 1989. The General Civil Con- struction Contract (i.e., power tunnel excavation) is slightly behind schedule. The Tunnel Boring Machine (TBM) is cur- rently being overhauled and will be shipped to the site in February of 1989. The TBM should be operational by mid March, 1989. 9. OLD BUSINESS Mr. Saxton said that a timeline needs to be established for the following three outstanding items regarding the Rural Electrification Administration approvals: 1) Letter Agreement All but ML&P have approved. Letter Agreement will go with the Homer Transmission Agreement to the ML&P City Council for approval. Subsequently, the Power Authority will approve and Messrs. Petrie and Saxton will submit the ex- ecuted Letter Agreement to REA. ’ BPMC MEETING MINUTES (JANBRA P) PAGE 3 OF 4 JANUARY 20, 1989 2) REA requests for additional information REA has completed their requests for additional information. HEA will be sending their final response by January 23, 1989. 3) Homer Transmission Agreement Attorneys for all parties have signed off on this agreement and the redraft is ready for signature. Mr. Saxton said that all substantive issues with regard to securing REA approvals have been completed. Mr. Wick distributed copies of "Counterpart ____ of 15, Bradley Lake Hydroelectric Project, Amendment to Agreement for Sale of Transmission Capability by and among The HEA and CEA, GVEA, ML&P, and AEG&T." Mr. Saxton said that the parties need to take this agreement to their respective boards/assemblies for authorization to sign. Board/Assembly Approvals Governing Body Action Dates GVEA January 23, 1989 (Done) AML&P February 14, 1989 CEA February 1, 1989 HEA January 10, 1989 (Done) AEG&T by February 14, 1989 (will call a special meeting, since next regular meeting is March, 1989). Twelve copies of the signatory page to the Amendment to Agreement for Sale of Transmission Capability were signed by Messrs. Wick and Kelly for HEA and GVEA, respectively. The signatory pages were then provided to Mr. Highers for sig- nature subsequent to CEA Board approval. Due to the governing body action dates, the consensus was for Mr. Highers to provide the signatory pages to Mr. Wick (i.e., AEG&T), who in turn would provide them to Mr. Stahr (i.c., AML&P). Mr. Saxton said that he and Mr. Baldwin will submit copies of the Amendment to Agreement for Sale of Transmission Capability to REA for review purposes. The executed amendment will be provided once all of the signatures have been obtained. REA has already been provided with unsigned copies of the Letter Agreement for review purposes. 10. OTHER BUSINESS The next meeting was scheduled to begin at 10:00 a.m. on March 3, 1989 in the Training Room of Chugach Electric As- sociation. 6. FINANCE COMMITTEE REPORT (Continued) Mr. LeResche explained the costs associated with Bradley Lake Variable Rate Demand Bonds, as outlined in Ms. Rawitscher’s January 17, 1989 memorandum. It was noted that costs of issuance totaling $3,476,379 were paid for the $267,500,000 Bradley Lake Variable Rate Demand Notes issuance. John Nuveen and First Boston were paid $1,800,000 for management fees, sales commissions and expenses. Their counsel (i.¢., underwriter’s counsel) was paid $220,000. First Southwest (Financial Advisor) was paid $1.25 per bond or $351,000. $40,000 was paid as an origination fee to the trustee (i.e., Bank of New York). Letters of Credit Fee for the first year was $700,000 and paid to three Japanese banks. Wohlforth , oe a BPMC MEETING MINUTES (JANBRA P) PAGE 4 OF 4 JANUARY 20, 1989 & Flint was paid $222,000 for bond counsel services. Additional costs of issuance included Trustee Counsel, Bank Coun- sel, Bond Rating, and Printing. The net earnings on this issuance are approximately $7,000,000 (i.e., net interest earnings minus total costs of issuance). It was noted that the next Bradley Lake bond issuance will have separate fees. 9. OLD BUSINESS (Continued) Mr. Saxton read "A Resolution of the Bradley Project Management Committee Requesting REA Approval of all Docu- ments Relating to the Bradley Lake Hydroelectric Project." This resolution provided that fully executed copies of all docu- ments be delivered to REA no later than February 20, 1989. Mr. Wick motioned, seconded by Mr. Stahr, that the PMC adopt this resolution. The motion passed without objection adopting this as Resolution 89-3. 11. COMMUNICATIONS There were no further communications or business. 12. ADJOURNMENT The PMC adjourned at 2:40 p.m. CHAIRMAN ATTEST: oe SECRETARY APPROVED AT PMC MEETING HELD __ March 3, 1989 :