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HomeMy WebLinkAboutBPMC Meeting - August 29, 1988 3Bradley Lake Project Management Committee July 22, 1988 Draft DESIGNATED DESIGNATED REPRESENTATIVE ALTERNATE REPRESENTING Breet Pad Diener Bob Pets City of Seward POBax 167 Seward, AK 99664 224-3331 Robert E Leesche Brent N Petrie Alaska Power Authority P.O. Bax 190869 Anchorage, AK 99519-0869 61-7877 Jemes F. Palin Myles C Yerkes Matanusia Bectric Aswe, Ine. 163 Industrial Way PO Bx 229 Palmer, AK 99645-2929 745-3231 David L. Highess TmLows Chugach Becttic Assoc, Inc. 5601 Minnesota Drive PO Bax 196300 Anchorage, AK 99519-6300 563-7494 B Kent Wick S.C Mathews Homer Bectric Assoc, Inc. PO. Bax 429 3977 Lake Street Homer, AK 99603 235-8167 Michael P. Kelly Bob Hansen Golden Valley Bectric Assoc, Inc. PO Bax 1249 Faitbanks, AK 99707 452-1151 ‘Thoms R Sehr John Conley Municipal Light and Power Nesniicolie of! 1200 Fast 1st Avenue OTHERS ON BRADLEY LAKE PMC MAILING LIST July 27, 1988 Draft NAME REPRESENTING Goldstein Building, Room 208 POBxV Juneau, AK 99811 Ron Saxton Gaiden Valley Bectric Asse. Lincisay, Hart, Nel & Weigher 22S S. W.Cotumbia, Suite 1800 Pontiand, OR 97201-6618 OFFICERS ACIING CHAIRMAN Robart E LeResche VICBCHAIRMAN ‘TREASURER. SECRETARY SUBCOMMITTEES TECHNICAL COORDINATING COMMITTEE FINANCE Myles C. Yerkes ‘Bm Loves, CRA Robert E. LeResche, Power Authority Kathleen Jacobs, ML&P ‘TH Keffer, HEA Bob Hansen, GVEA Bob Peisson, Seward Mike Yerkes, MEA COUNTERPART of 21 BRADLEY LAKE HYDROELECTRIC PROJECT AGREEMENT FOR THE SALE AND PURCHASE OF ELECTRIC POWER ("POWER SALES AGREEMENT") by and among / THE ALASKA POWER AUTHORITY, An Agency Of The State Of Alaska, ("Seller"), and / the CHUGACH ELECTRIC ASSOCIATION, INC., “The GOLDEN VALLEY ELECTRIC ASSOCIATION, INC., “The MUNICIPALITY OF ANCHORAGE d/b/a MUNICIPAL LIGHT AND POWER, / The CITY OF SEWARD d/b/a SEWARD ELECTRIC SYSTEM, and The ALASKA ELECTRIC GENERATION & TRANSMISSION COOPERATIVE, INC., ("Purchasers") and / The HOMER ELECTRIC ASSOCIATION, INC., and / The MATANUSKA ELECTRIC ASSOCIATION, INC., (Additional Parties) Section Recitale@ 5 le le le: |e lel wll iol oll ello et wl wl) dl ek le Definitiong eed tet ol toll eel a tt 2. Term Of Agreement ........2+46e6-24e0e8e8 3. EXRLDLES 55 elie aio wll_o le! wie | _ tee) 0 o_o teow 4. Electric Service To Be Furnished ........ 5. Electric Power Reserves For The Project .... 6. Obligations Under Bond Resolution; Completion Of Project ......424+eee-e Ve Payment Obligation ........22426eee-. 8. Annual Project Costs ........2e-e«-e-eee 9. Obligations In The Event Of Default ...... 10. Purchasers' Systems .......+4+22ece08dcee8 11. Bond Resolution .... 2.2. 2. 2 1 2 ee we wee 12. Purchasers' Consent To Supplemental Resolutions To Construct The Project .......2.eee 13. Establishment Of The Committee ......... 14. End Of The Project . ... 2... +e ee ee eee 15. Records .. 2. 2 ee © eee © we we we we we we ww 16. Inspection Of Facilities ......+4+-+4+e4e-e 17. Covenants To Maintain Integrity Of Agreement . . 18. Assignment ... . 2. 2. 6 © © © © © © © © ow ew ow 19. Notices, Computation Of Time And Holidays ... 20. Applicable Law... 2. 2. 2 «© © © © © © © © wo 21. Availability Of Information .....-+ + «+ « « 22. Severability . . 2. 2. 6 2 2 © 2 © © © ew ew ee Index Of Sections 10 11 12 13 14 L7. 18 18 19 23 24 24 24 26 26 27 27 27 Section 23. Remedies Cumulative . 24. Waiver Not Continuing .. 25. Section Headings... 26. Multiple Copies ..... 27. Covenant To Act In Good Faith . 28. No Third Party Beneficiaries .. 29. Excess Payments .... ++. « 30. Special Arrangements Regarding AEG&T..... 31. Capitalization Of Certain Costs Of Purchasers 32. Efforts To Obtain Intertie ... Exhibit Exhibit Exhibit Exhibit Exhibit "A", "B", *c*,, "Dp" ’ "E* 7 Bond Resolution Delivery Point Description Of The Project 28 28 28 28 28 28 30 31 31 Purchasers' Percentage Shares Of Project Capacity And Of Annual Project Costs Form Of Certain Supplemental Bond Resolutions POWER SALES AGREEMENT _THIS AGREEMENT dated as of December 8, 1987, is entered into by and among the ALASKA POWER AUTHORITY (the "Authority") and the CHUGACH ELECTRIC ASSOCIATION, INC., the GOLDEN VALLEY ELECTRIC ASSOCIATION, INC., the MUNICIPALITY OF ANCHORAGE d/b/a MUNICIPAL LIGHT AND POWER, the CITY OF SEWARD d/b/a SEWARD ELECTRIC SYSTEM, and the ALASKA ELECTRIC GENERA- TION & TRANSMISSION COOPERATIVE, INC. (individually a “Purchas- er," and collectively the "Purchasers"), and the HOMER ELECTRIC ASSOCIATION, INC., and the MATANUSKA ELECTRIC ASSOCIATION, INC. (as additional Parties with some, but not all, of the rights and responsibilities of Purchasers). WITNESS ET #H: The Authority recites, agrees, represents and cove- nants as follows: (1) The Authority is a public corporation of the State of Alaska duly created, organized and existing pursuant to AS 44.83; (2) The Authority is authorized, and has taken all steps necessary pursuant to the Constitution and laws of the State of Alaska and the regulations and by-laws of the Authori- ty, to enter into this Agreement and to comply fully with the terms hereof; (3) The Authority desires to fulfill its legisla- tively established duty of providing residents of the State of Alaska ».=h long-term, stable, and economic sources of power and an adequate, economic, and reliable long-term supply of power; and (4) The Authority's execution and performance of this Agreement will not conflict with, violate, or constitute an event of default under any other resolution, contract, ag- reement, bond, note, mortgage, or other obligation of the Auth- ority, or with respect to any order, ruling, or decree of any court or regulatory agency to which the Authority is subject at the time the Authority executes this Agreement. Each Cooperative Purchaser (as hereinafter defined) and the Homer Electric Association, Inc. ("HEA") and the Mata- nuska Electric Assocation, Inc. ("MEA") recites, agrees, repre- sents and covenants as follows: (1) The Purchaser is a duly organized and constitut- ed electric cooperative under the laws of the State of Alaska and is currently a borrower from the Rural Electrification Ad- ministration, United States Department of Agriculture, under the Rural Electrification Act of 1936 (7 U.S.C. § 901 et seq.); BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 1 (2) The Purchaser is authorized, and has taken all steps necessary pursuant to its articles of incorporation and by-laws and applicable laws and regulations, to enter into this Agreement and to comply fully with the terms hereof; _ (3) The Purchaser performs the functions of a utili- ty and is a wholesale power customer eligible to purchase power produced from a project pursuant to AS 44.83; and (4) The Purchaser's execution and performance of this Agreement will not conflict with, violate, or constitute an event of default under any other resolution, contract, ag- reement, bond, note, mortgage, or other obligation of the Pur- chaser, or with respect to any order, ruling, or decree of any court or regulatory agency to which the Purchaser is subject at the time the Purchaser executes this Agreement. Each Municipal Purchaser (as hereinafter defined) re- cites, agrees, represents and covenants as follows: (1) The Purchaser is a duly organized and constitut- ed municipal corporation under the Constitution and laws of the State of Alaska; ees (2) The Purchaser is authorized, and has taken all steps necessary pursuant to the Constitution and laws of the State of Alaska and other applicable laws and regulations, and pursuant to its charter and ordinances, to enter into this Ag- reement and to comply fully with the terms hereof; (3) The Purchaser performs the functions of a utili- ty and is a wholesale power customer eligible to purchase power produced from a project pursuant to AS 44.83; and (4) The Purchaser's execution and performance of this Agreement will not conflict with, violate, or constitute an event of default under any other charter, ordinance, resolu- tion, contract, agreement, bond, note, mortgage, or other obli- gation of the Purchaser, or with respect to any order, ruling, or decree of any court or regulatory agency to which the Pur- chaser is subject at the time the Purchaser executes this Ag- reement. NOW, THEREFORE, the parties agree as follows: Section 1. Definitions. For the purposes of this Agreement, the following definitions apply: (a) "Act" or references to AS 44.83 mean Title 44, Chapter 83 of the Alaska Statutes (AS 44.83) as the same may be amended or supplemented from time to time. BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 2 (b) "Agreement" means this Power Sales Agree- ment. (c) “Annual Payment Obligation" means the total amount payable by a Purchaser in or for a Fiscal Year pur- suant to this Agreement. (d) "Annual Project Budget" means the budget for the Project as adopted or in effect for a particular Fiscal Year, and amended or supplemented from time to time, pursuant to Section 13. (e) “Annual Project Costs" shall have the mean- ing given it in Section 8 of this Agreement. (f) “Authority” means the Alaska Power Authori- ty as established by the Act, and any successor agency thereto. (g) "Bond Resolution" means (i) the document attached as Exhibit "A", or a resolution adopted by the Authority substantially in the form of Exhibit "A", as supplemented and amended from time to time in a manner consistent with Section 11 of this Agreement and with the provisions of the Act, or (ii) a further bond resolution, consistent with Section 11, adopted in connection with the issuance of bonds to refund the Bonds. (h) "Bonds" means bonds, notes or other evi- dences of indebtedness (including refunding bonds) issued pursuant to the Bond Resolution, the proceeds of which are used to pay or reimburse Costs of Acquisition and Con- struction and Required or Optional Project Work. (i) "Committee" means the Project Management Committee established pursuant to Section 13. (j) “Consultant” means an independent indivi- dual or firm (i) of nationwide and favorable reputation, having demonstrated expertise in the field or the matter or the item referred to it under various specific pro- visions of this Agreement, and (ii) approved by the Auth- ority and the Committee in accordance with rules of pro- cedure to be adopted by the Committee to govern such ap- proval, which approval shall not be unreasonably withheld. (k) "Cooperative Purchasers" means Chugach Electric Association, Inc., Golden Valley Electric Associ- ation, Inc., and Alaska Electric Generation & Transmission Cooperative, Inc. The term "Cooperative Purchasers" in- cludes Homer Electric Association, Inc., and Matanuska Electric Association, Inc., only to the extent specified in Section 30 of this Agreement. BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 3 : (1) "Cost of Acquisition and Contruction" means the Cost of Acquisition and Construction (as defined in Section 101 of the Bond Resolution) of the Project; pro- vided, that for purposes of this Agreement the Cost of Acquisition and Construction of the Project shall not in- clude the Cost of Acquisition and Construction of Capital Improvements (as defined in Section 101 of the Bond Res- olution). (m) "Date of Commercial Operation" means the date on which engineers retained for this purpose by the Authority have reasonably declared that the Project is fully available to be operated at not less than ninety megawatts (90 MW), and its output can be scheduled on a commercial basis. (n) "Debt Service" means amounts that the Auth- ority is required to set aside for the payment of princi- pal of, premium, if any, sinking fund payments, and inter- est on the Bonds, as the same are scheduled to become due under the Bond Resolution, and not by reason of any accel- eration. (o) “Delivery Point" means the Bradley Junction facilities, as identified and further described in Exhibit B. (p) “Electric power" or “power” means electric energy or electric capacity or both. Where the context of this Agreement requires a distinction, electric energy is specified and/or expressed in kilowatthours or megawatt- hours and electric capacity is specified and/or expressed in kilowatts or megawatts. (q) “Excess Payment Amount" means the amounts, if any, computed as provided in Section 29 and included in Annual Project Costs. (xr) "Fiscal Year" means that twelve-month peri- od starting July 1 of a calendar year through and includ- ing June 30 of the succeeding calendar year. The initial Fiscal Year for purposes of this Agreement is that portion of the twelve-month period starting on the Date of Commer- cial Operation through and including the following June 30. If the portion of the period is shorter than 90 days the parties shall determine the initial Fiscal Year, which must end on a June 30 and may not be longer than 456 days. The last Fiscal Year for purposes of this Agreement shall be that portion of the twelve-month period between the end of the last full (i.e., twelve month) Fiscal Year and the expiration of this Agreement. (s) “Municipal Purchaser” means the Municipali- ty of Anchorage d/b/a/ Municipal Light and Power, and the BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 4 City of Seward d/b/a Seward Electrical System, (t) "Optional Project Work" means Project re- pairs, renewals and replacements, improvements, better- ments, additions, or expansions that do not constitute Required Project Work. (u) “Percentage Share" means the fraction, ex- pressed as a percent and set forth for each Purchaser in Exhibit D as that Exhibit may be amended from time to time, used to compute the amount of each Purchaser's en- titlement to Project Capacity and obligation to pay Annual Project Costs. (v) "Project" means the Bradley Lake Hydroelec- tric Project as described in Exhibit C. (w) "Project Capacity" means the amount of electric capacity capable of being produced by the Project (including capacity attributable to Required or Optional Project Work) at any and all times from the Date of Com- mercial Operation until the termination of this Agreement (or any renewal thereof) under the operating conditions that exist during such times, including periods when the Project may be not operating or inoperable or the opera- tion thereof is suspended, interrupted, interfered with, reduced, or curtailed, in each case in whole or in part for any reason whatsoever, after corrections for station and Project use, and depletions required under any federal license for the Project. (x) "Prudent Utility Practice" shall mean at a particular time any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry at such time, or which, in the exercise of reasonable judgment in light of facts known at such time, could have been expected to accomplish the de- sired results at the lowest reasonable cost consistent with good business practices, reliability, safety and rea- sonable expedition. Prudent Utility Practice is not re- quired to be the optimum practice, method or act to the exclusion of all others, but rather to be a spectrum of possible practices, methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. Prudent Utility Practice includes due regard for manufacturers' warranties and the requirements of gov- ernmental agencies of competent jurisdiction and shall apply not only to functional parts of a Project, but also to appropriate structures, landscaping, painting, signs, lighting and other facilities. In evaluating whether any matter conforms to Prudent Utility Practice, the parties shall take into account (i) the nature of the parties BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 5 hereto under the laws of the State of Alaska and their statutory duties and responsibilities, and (ii) the ob- jective of integrating Project Capacity with the generat- ing resources of the Purchasers, including resources available under contract, to achieve optimum utilization of the resources and achieve efficient and economical op- eration of each Purchaser's System. For purposes of this Agreement, “national standards for the industry" means Prudent Utility Practice. (y) "Purchaser" means, as of any particular time, such of the Municipality of Anchorage d/b/a Munici- pal Light and Power, Chugach Electric Association, Inc., Golden Valley Electric Association, Inc., the City of Seward as have executed this Agreement, and the Alaska Electric Generation & Transmission Cooperative, Inc. ("AEG&T). The term "Purchaser" includes Homer Electric Association, Inc., and Matanuska Electric Association, Inc., only to the extent specified in Section 30 of this Agreement. (z) "Purchaser's System" means a Purchaser's electric utility system for the distribution, transmis- sion, and generation of electrical power and which is owned and operated by the Purchaser. If Purchaser's elec- tric utility system is combined with other utilities of the Purchaser, then “Purchaser's System" includes only those facilities, activities, and revenues properly alloc- able to Purchaser's electric utility service. "Purchas- er's System" does not include the Project, regardless of whether the Purchaser operates the Project under a separ- ate agreement with the Authority. (aa) "Purchaser's Water Allocation" means the number of acre feet of water from the Project allocated for generation purposes by the Committee to a Purchaser from time to time, based on that Purchaser's Percentage Share. (bb) *"Railbelt" means the geographic area served by the Purchasers. (cc) “Railbelt Energy Fund" means a fund cre- ated by the legislature, the use of which is intended only for approved power supply and transmission projects in the Railbelt. (dd) "REA" means the Rural Electrification Ad- ministration, an agency of the United States Department of Agriculture. (ee) "“Recoverable Construction Cost" means an amount equal to $175,000,000 less one half the amount, if BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 6 any, by which $350,000,000 exceeds the Cost of Acquisition and Construction, plus the principal amount of additional Bonds (if any) issued pursuant to Section 31. (££) "Renewal and Contingency Reserve Fund" means the Renewal and Contingency Reserve Fund established pursuant to Section 502 of the Bond Resolution. (gg) “Required Action" means an action that must be taken in order for the Authority to comply with federal or state law, the orders of licensing and regula- tory agencies, the Bond Resolution, or this Agreement. (hh) "Required Project Work" means repairs, maintenance, renewals, replacements, improvements or bet- terments required by federal or state law, a licensing or regulatory agency with jurisdiction over the Project, or this Agreement, or otherwise necessary to keep the Project in good and efficient operating condition, consistent with (1) sound economics for the Project and the Purchasers, and (2) national standards for the industry. (ii) “Revenue Fund" means the Revenue Fund est- ablished pursuant to Section 502 of the Bond Resolution. (jj) “Trustee” means the trustee appointed pur- suant to Article IX of the Bond Resolution, or that Trust- ee's successor or successors and any other corporation which may at any time be substituted in that Trustee's place under the Bond Resolution. Section 2. Term Of Agreement. (a) Effectiveness. This Agreement shall become effective on the first date when (i) the Agreement has been executed and delivered by all Purchasers and by the Authority, and (ii) each Purchaser has obtained all nec- essary approvals of this Agreement and of all transmission and/or services agreements for the transmission of Project power to the Purchasers. An approval shall not be con- sidered “necessary" for purposes of this Section 2(a) un- less, prior to or contemporaneously with delivery of this Agreement, the person or entity from which such approval must be obtained has been identified to the other parties in writing by the Purchaser requiring such approval. It is the intent of each Purchaser to take all steps rea- sonably within its power to obtain all necessary approvals from its governing body no later than December 1, 1987. (b) Commencement of payment obligations. The payment obligations of each taser under this Agreement shall commence on the Date of Commercial Operation; pro- vided, that the Purchasers shall be obligated to pay those Committee costs referenced in the last sentence of Section BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 7 13(a) regardless of whether the Date of Commercial Opera- tion occurs. (c) Termination. This Agreement shall termi- nate (i) 50 years after the Date of Commercial Operation, or (ii) when no Bonds are Outstanding under the Bond Res- olution and all payment obligations under this Agreement (other than any payment obligations under Section 29) have been satisfied or provided for, whichever occurs later; provided, that if the Date of Commercial Operation does not occur before January 1, 1996, then this Agreement shall terminate on January 1, 1996. The parties may mu- tually agree to terminate or to renew this Agreement prior to termination, subject, however, to the written approval of the Administrator of REA if such written approval is then required, and the terms and conditions of covenants and agreements between the Authority and holders of Bonds. If such approval is then required, no amendment of this Agreement shall take effect without the written approval of the Administrator of REA. (d) Renewal. Any Purchaser may renew this Ag- reement on the same terms and conditions as provided here- in for successive additional terms (such terms to equal forty (40) years or, if shorter, the remaining useful life of the Project), upon written notice to the Authority by the Purchaser given no less than six and no more than twenty-four months prior to the end of the term of this Agreement. Purchasers electing to renew this Agreement shall be entitled to have their Percentage Shares adjusted pro rata, based on their Percentage Shares as set forth in Exhibit D as that Exhibit exists twenty-four months prior to the end of the initial term of this Agreement, so that the adjusted Percentage Shares of the Purchasers renewing this Agreement. total one hundred percent (100%). No re- newing Purchaser shall be required to accept the entirety of the Percentage Share to which that Purchaser becomes entitled, but if the Percentage Shares of all renewing Purchasers do not total one hundred percent, the Authority may sell to any other utility that is a qualified purchas- er of power under the Act any remaining Percentage Share or portion thereof upon the same terms and conditions ap- plicable to the renewing Purchasers, if the Authority rea- sonably determines that such utility is able to carry out the obligations of a Purchaser under this Agreement and that such sale to such utility will not adversely affect the tax exemption of interest on any Bonds Outstanding under the Bond Resolution that originally were issued on a tax-exempt basis. The Authority shall not be obligated to renew this Agreement if, after reasonable notice to the renewing Purchasers, Percentage Shares that total one hun- dred percent have not been sold to such Purchasers or to other qualified utility purchasers. BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 8 ; . Section 3. Exhibits. The following exhibits are incorporated by reference into this Agreement: (a) Exhibit "A", Bond Resolution, (b) Exhibit "B", Delivery Point, (c) Exhibit "C", Description of the Project, (d) Exhibit "D", Purchasers' Percentage Shares of Project Capacity and of Annual Project Costs, and (e) Exhibit "E", Form Of Certain Supplemental Bond Resolutions. Section 4. Electric Service To Be Furnished. (a) Sale and purchase. The Authority hereby sells, and each Purchaser hereby purchases, that Purchas- er's Percentage Share of Project Capacity (together with associated energy) from the Project in accordance with this Agreement. The actual delivery (if any) of electric capacity and associated energy to Purchasers from the Pro- ject shall be made in accordance with scheduling proce- dures adopted by the Committee. (b) Available Power. The Authority shall at all times, except when prevented by a cause or event not within the control of the Authority, make power available to the Purchasers from the Project in an amount equal to the amount the Purchasers may schedule from the Project, within the limitations imposed by available Project capab- ility, available water, and the scheduling procedures ad- opted by the Committee. (c) Required Project Work. The Authority shall make or cause to be made a Required Project Work, pro- vided that funds are legally available to the Authority for this purpose. The costs of Required Project Work shall be included in Annual Project Costs in the manner set forth in Section 8(a) (iv). The Authority shall give reasonable notification to all Purchasers prior to making or causing to be made any Required Project Work. Alterna- tive methods (if any) of carrying out and funding Required Project Work shall be subject to approval by the Committee under rules of procedure to be adopted pursuant to Section Lie BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 9 DRAFT REIMBURSEMENT OF TRAVEL AND PER DIEM EXPENSES 11.1 Committee Meetings. The Committee has established a policy for reimbursing the cost of travel and per diem expenses with respect to attendance at meetings of the Committee as follows: 11.1.1 Each party shall be reimbursed for the cost of travel and per diem necessary for its representative and alternate to attend meetings of the Committee, subject to the following policy: (a) Travel must be by the most direct route and will be reimbursed at no more than airline coach fare. (b) Per diem for allowable costs will not exceed $150.00 per day for a maximum of two days' travel and actual meeting days for each duly convened meeting of the Committee. 11.1.2 Application must be made to the Secretary of the Committee for reimbursement. 11.2 Special Purpose Committee Meetings. The Committee has established a policy for reimbursing the cost of travel and per diem expenses with respect to attendance at meetings of the special purpose committees as follows: 11.2.1 Each party shall be reimbursed for the cost of travel and per diem necessary for its representative to attend special purpose committees created by the Project Management Committee, subject to the following policy: (a) Travel must be by the most direct route and will be reimbursed at no more than airline coach fare. (b) Per diem for allowable costs will not exceed $150.00 per day for a maximum of two days' travel and actual meeting days of the special purpose committee. 11.2.2 Application must be made to the Secretary of the Committee for reimbursement. 19 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRA; ARTICLE 12 OTHER POLICIES The Committee has established that all resolutions and actions adopted by the Committee shall be assigned a number. The first part of the number shall be the last two digits of the year in which the resolution or action is adopted (e.g., Resolution No. 88- ). The second part shall be a sequential number reflecting the order in which the resolution or action was adopted, beginning with the number "1," and increasing by one with the adoption of each subsequent resolution or action. The Secretary of the Committee shall establish and maintain an official journal for recording resolutions [and actions] of the Committee. 20 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFS DEFINITIONS PURSUANT TO THE AGREEMENT "Act" or references as to AS 44.83 mean Title 44, Chapter 83 of the Alaska Statutes (AS 44.83) as the same may be amended or supplemented from time to time. "Agreement" means the Agreement for the Sales and Purchase of Electric Power (the Power Sales Agreement). “Annual Payment Obligation" means the total amount payable by a Purchaser in or for a Fiscal Year pursuant to this Agreement. "Annual Project Budget" means the budget for the Project as adopted or in effect for a particular Fiscal Year, and amended or supplemented from time to time, pursuant to Section 13. “Annual Project Costs" shall have the meaning given it in Section 8 of the Power Sales Agreement. “Authority” means the Alaska Power Authority as established by the Act, and any successor agency thereto. “Authorized Officer" shall mean the Chairman of the Board of Directors, Vice Chairman of the Board of Directors, Executive Director, Secretary or Treasurer or any officer or employee of the Authority authorized to perform specific acts or duties by resolution duly adopted by the Board of Directors. “Bondholder" or "Holder of Bonds" shall mean any person who shall be the registered owner of the Bond or Bonds. “Bond Resolution" means (i) the Bradley Lake Power Revenue Bond Resolution, or a resolution adopted by the Authority substantially in the form as the Bradley Lake Power Revenue Bond Resolution, as supplemented and amended from time to time ina Manner consistent with Section 11 of the Power Sales Agreement and with the provisions of the Act, or (ii) a further bond resolution, consistent with Section 11 of the Power Sales Agreement, adopted in connection with the issuance of bonds to refund the Bonds. "Bonds" means bonds, notes or other evidences of indebtedness (including refunding bonds) issued pursuant to the Bond Resolution, the proceeds of which are used to pay or reimburse Costs of Acquisition and Construction and Required or Optional Project Work. "Bond Year"" shall mean each period of 12 calendar months ending on each July l. 21 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 "Capital Improvements" shall mean (a) repairs, maintenance, renewals, replacements, improvements or betterments required by federal or state law, a licensing or regulatory agency with jurisdiction over the Project, or the Power Sales Agreement, or otherwise necessary to keep the Project in good and efficient operating condition, consistent with (1) sound economics for the Project and the Purchasers and (2) national standards for the industry, which Capital Improvements constitute Required Project Work under the Power Sales Agreement; or (b) repairs, renewals and replacements, improvements, betterments, additions or expansions which Capital Improvements do not constitute Required Project Work, but which in each case are approved by the Committee as Optional Project Work pursuant to the Power Sales Agreement. For purposes of this Resolution, "national standards for the industry" shall mean Prudent Utility Practice. "Capital Reserve Fund" shall mean the Capital Reserve Fund established in Section 502 of the Bond Resolution. "Capital Reserve Requirement” shall mean (i) an amount equal to the lesser of Maximum Aggregate Debt Service or ten percent of the proceeds of Bonds; or (ii) such other lesser amount as is required in order to maintain the tax-exempt status of the Bonds. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Committee" means the Project Management Committee established pursuant to Section 13 of the Power Sales Agreement. "Consultant" means an independent individual or firm (1) of nationwide and favorable reputation, having demonstrated expertise in the field or the matter or the item referred to it under various specific provisions of this Agreement, and (ii) approved by the Authority and the Committee in accordance with rules of procedure to be adopted by the Committee to govern such approval, which approval shall not be unreasonably withheld. “Construction Fund" shall mean the Construction Fund established in Section 5.02 of the Bond Resolution. "Cost of Acquisition and Construction" means the Cost of Acquisition and Construction (as defined in Section 101 of the Bond Resolution) of the Project; provided, that for purposes of the Power Sales Agreement shall not include the Cost of Acquisition and Construction of Capital Improvements (as defined in Section 101 of the Bond Resolution). "Counsel's Opinion" or “Opinion of Counsel" shall mean an 22 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRA fy < opinion of counsel of nationwide recognized standing in the field of municipal bonds, selected by the Authority and satisfactory to the Trustee. "Date of Commercial Operation" means the date on which engineers retained for this purpose by the Authority have reasonably declared that the Project is fully available to be operated at not less than ninety megawatts (90 MW) and its output can be scheduled on a commercial basis. "Debt Service" means amounts that the Authority is required to set aside for the payment of principal of, premium, if any, sinking fund payments, and the interest on the Bonds, as the same are scheduled to become due under the Bond Resolution, and not be reason of any acceleration. "Debt Service Fund" shall mean the Debt Service Fund established in Section 5.02 of the Bond Resolution “Delivery Point" means the Bradley Junction facilities, as identified and further described in Exhibit B of the Power Sales Agreement. “Electric power" or "power" means electric energy or electricity or both. Where a distinction is required, electric energy is specified and/or expressed in kilowatthours or megawatthours and electric capacity is specified and/or expressed in kilowatts or megawatts. “Excess Investment Earnings" shall mean for each Bond Year, the excess of (i) the amount earned on certain investments held under this Resolution, or otherwise constituting gross proceeds of the Bonds under Section 148(£)(6)(B) of the Code, as specified in the Supplemental Resolution authorizing the issuance of such Bonds (excluding amounts held in the Excess Investment Earnings Funds and amounts in the Revenue Fund but including unrealized gains and losses upon the retirement of such Bonds over (ii) the amount that would have been earned on such investments at the yield on such Bonds (determined on a present value basis from the date of issuance of such Bonds, without adjustment for costs of issuance). “Excess Investment Earnings Fund" shall mean the Excess Investment Earnings Fund established in Section 502 of the Bond Resolution. "Excess Payment Amount" means the amounts, if any, computed as provided in Section 29 of the Power Sales Agreement and included in Annual Project Costs. "Fiscal Year" means, except for the first and last Fiscal Years, the twelve-month period used for budgeting purposes. The 23 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 Som. fee ey Frey By ‘Vee oe i « Fiscal Years shall each start on July 1 and shall end on June 30 of the next calendar year. The first Fiscal Year is that portion of the 12 month period starting on the Date of Commercial Operation through and including the following June 30. If the portion of the period is shorter than 90 days, the parties shall determine the initial Fiscal Year which must end on June 30 and May not be longer than 456 days. The last Fiscal Year shall be that portion of the 12-month period between the end of the last full (i.e. 12-month) Fiscal Year and the expiration of the Agreement. "Interest Account" shall mean the Interest Account in the Debt Service Fund established in Section 502. "Member" or "Members" are terms that refer to parties named in Section 13(a) of the Power Sales Agreement. “Operating Expenses" shall mean (i) the Authority's operation, maintenance, administrative and general expenses of the Project, and shall include, without limiting the generality of the foregoing, costs of the investigations, insurance, ordinary repairs of the Project which do not entail the acquisition and installation of a unit of property (as generally prescribed by the Federal Energy Regulatory Commission), fuel costs, rents, engineering expenses, legal and financial advisory expenses, Committee expenses, refunds for overpayments by Purchasers, salaries and required Project employee costs, any taxes or payments in lieu of taxes pursuant to the Act or otherwise pursuant to law, (ii) any other current expenses or obligations required to be paid by the Authority under the provisions of this Resolution or by law, all to the extent properly allocable to the Project, or required to be incurred under or in connection with the performance of the Power Sales Agreement, and (iii) the fees and expenses of the Fiduciaries. Operating Expenses includes all the items listed in Section 8(a) of the Power Sales Agreement under the definition of Annual Project Costs except the items listed under Section 8(a)(i), (ii) and (iv). Operating Expenses shall not include any costs or expenses for new construction or any allowance for depreciation. "Operating Fund" shall mean the Operating Fund established in Section 502 of the Bond Resolution. "Operating Reserve Account" shall mean the Operating Reserve Account established in Section 502 of the Bond Resolution. "Operating Reserve Account Requirement" shall mean an amount equal to 20 percent of the Operating Expense component of the Annual Budget as calculated annually, or such other amount as may be determined pursuant to the Power Sales Agreement. 24 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 “Optional Project Work" means Project repairs, renewals and replacements, improvements, betterments, additions, or expansions that do not constitute Required Project Work. “Paying Agent" shall mean any bank or trust company organized under the laws of any state of the United States or any national banking association designated as paying agent for the Bonds of any Series, and its successor or successors hereafter appointed in the manner provided in this Resolution. "Percentage Share" means the fraction, expressed as percent and set forth for each Purchaser in Exhibit D of the Power Sales Agreement as that exhibit may be amended from time to time, used to compute the amount of each Purchaser's entitlement to Project Capacity and obligation to pay Annual Project Costs. "Power Sales Agreement" shall mean the Power Sales Agreement for the purchase and sale of Project capacity (together with the associated energy) dated as of between the Authority and the Purchasers as the same may be amended. “Principal Account" shall mean the Principal Account in the Debt Service Fund established in Section 502 of the Bond Resolution. "Project" means the Bradley Lake Hydroelectric Project. "Project Capacity" means the amount of electric capacity capable of being produced by the Project (including capacity attributable to Required or Optional Project Work) at any and all times from the Date of Commercial Operation until the termination of this Agreement (or any renewal thereof) under the operating conditions that exist during such times, including periods when the Project may be not operating or inoperable or the operation thereof is suspended, interrupted, interfered with, reduced, or curtailed, in each case in whole or in part for any reason whatsoever, after corrections for station and Project use, and depletions required under any federal license for the Project. "Project Management Committee" means the committee established pursuant to Section 13 of the Power Sales Agreement. “Prudent Utility Practice" means, at any particular time, any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition, including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry prior thereto. In applying the standard of Prudent Utility Practice to any matter under the Agreement, equitable consideration should be given to the 25 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 wm . ™ a eae Bes re circumstances, requirements and obligations of each of the Purchasing Utilities, and the fact that the Purchasing Utilities are cooperative corporations, public corporations or political subdivisions of the State of Alaska. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum practices, methods or acts to the exclusion of all others, but rather is a spectrum of possible practices, methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. Prudent Utility Practice includes due regard for manufacturers' warranties and the requirements of governmental agencies of competent jurisdiction and shall apply not only to functional parts of the Project, but also to appropriate structures, landscaping, painting, signs, lighting and other facilities. "Purchaser" means, as of any particular time, such of the Municipality of Anchorage d/b/a Municipal Light and Power, Chugach Electric Association, Inc., Golden Valley Electric Association, Inc., the City of Seward as have executed the Power Sales Agreement, and the Alaska Electric Generation & Transmission Cooperative, Inc. ("AEG&T). The term “Purchaser" includes Homer Electric Association, Inc., and Matanuska Electric Association, Inc., only to the extent specified in Section 30 of the Power Sales Agreement. "Purchaser's Water Allocation" means the number of acre feet of water from the Project allocated for generation purposes by the Committee to a Purchaser from time to time, based on that Purchaser's Percentage Share. “"Railbelt" means the geographic area served by the Purchasers. "Railbelt Energy Fund" means a fund created by the legislature, the use of which is intended only for approved power supply and transmission projects in the Railbelt. "REA" means the Rural Electrification Administration, an agency of the United States Department of Agriculture. "Renewal and Contingency Reserve Fund" means the Renewal and Contingency Reserve Fund established pursuant to Section 502 of the Bond Resolution. "Renewal and Contingency Reserve Requirement" shall mean an amount equal to $5,000,000. "Required Action" means an action that must be taken in order for the Authority to comply with federal or state law, the orders of licensing and regulatory agencies, the Bond Resolution, or this Agreement. 26 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 "Required Project Work" means repairs, maintenance, renewals, replacements, improvements or betterments required by federal or state law, a licensing or regulatory agency with jurisdiction over the Project, or this Agreement, or otherwise necessary to keep the Project in good and efficient operating condition, consistent with (i) sound economics for the Project and the Purchasers, and (ii) national standards for the industry. “Revenue Fund" means the Revenue Fund established pursuant to Section 502 of the Bond Resolution. "Revenues" shall mean (i) all revenues, incomes, rents and receipts, derived or to be derived by the Authority from, or attributable to the ownership and operation of, the Project, including all revenues attributable to the Project or payment of the costs thereof including, without limitation, all revenues received or to be received by the Authority under the Power Sales Agreement or under any other contract for the sale of power, energy, transmission or other service from the Project or any part thereof or any contractual arrangement with respect to the use of the Project or any portion thereof or the services, output or capacity thereof, and (ii) interest received or to be received on any moneys or securities (other than in the Construction Fund or in the Excess Investment Earnings Fund) held pursuant to this Resolution and required to be paid into the Revenue Fund. "Series" shall mean all of the Bonds authenticated and delivered on original issuance and identified pursuant to this Resolution or a Supplemental Resolution authorizing such Bonds as a separate Series of Bonds, and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to Article III or Section 406 or Section 1106, regardless of variations in maturity, interest rate, Sinking Fund Installments, or other provisions. “Sinking Fund Installment" means, as of any particular date of determination and with respect to the Outstanding Bonds of any Series, the amount required by a Supplemental Resolution to be paid in any event by the Authority on a single future date for the retirement of Bonds of such Series which mature after said future date, but does not include any amount payable by the Authority by reason only of the maturity of a Bond. "Supplemental Resolution" shall mean any resolution supplemental to or amendatory of the Bond Resolution, adopted by the Authority in accordance with Article X of the Bond Resolution. "Trustee" means the trustee appointed pursuant to Article IX of the Bond Resolution, or that Trustee's successor or successors and any other corporation which may at any time be substituted in that Trustee's place under the Bond Resolution. 27 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 : (d) Optional Project Work. The Authority shall not make or cause to be made Optional Project Work unless such Optional Project Work is approved by the Committee. Any Optional Project Work shall be at the expense of the benefitted Purchaser(s), as determined in advance by the Committee, in proportion to the value of the benefit con- ferred upon each such Purchaser. If such Optional Project Work has an adverse impact upon the operations or finances of a Purchaser as determined by the Committee, the bene- fitted Purchaser(s) shall compensate the adversely affect- ed Purchaser(s) for the increased costs and reduced bene- fits resulting from such impact. In the event the Pur- chasers are unable to agree as to how any increased costs or compensation will be apportioned, or as to the amount of any increased costs or appropriate compensation, the parties shall submit the question to dispute resolution in accordance with the dispute resolution procedures adopted by the Committee under Section 13. Section 5. Electric Power Reserves For The Project (a) Need for reserves. The parties recognize that (i) electric power from the Project may be unavail- able periodically because of generation and transmission outages, repairs, maintenance, inspections, testing, and similar events, and (ii) under the Alaska Intertie Agree- ment or otherwise, each Purchaser is responsible for main- taining (or contracting for the use of) generation re- serves in amounts sufficient to protect its own loads in the event that Project power is unavailable. (b) Reserve presaduzes Promptly after its establishment, the Committee shall adopt and implement procedures under which, in as cost-effective a manner as possible: : (i) the Authority shall have the right to require the operation of specific amounts of generat- ing capacity owned by a Purchaser and made available to the Authority, and to use the power produced by such operation to provide reserves to requesting Pur- chasers for some or all Project power, to the extent such capacity would otherwise be idle or its output would otherwise not be needed by the owner of that capacity to enable that Purchaser to meet its own loads or to make power sales to other utilities; (ii) the additional costs incurred by any Purchaser in making such capacity available to the Authority and in operating the same for the Authority shall be computed equitably and reimbursed promptly to such Purchaser by the Authority; and BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 10 (iii) the costs of so reimbursing any Pur- chaser shall be included in Annual Project Costs. (c) Alternative reserves. Nothing in Section 5(b) shall: na! (i) relieve any Purchaser of the responsi- bility set forth in Section 5(a) (ii); . (ii) require any Purchaser to make reserve capacity available to the Authority under Section 5(b) (i)? or (iii) require any Purchaser to avail it- self of reserve power available from the Authority under Section 5(b) (i), or to bear any of the costs of such power if the Purchaser does not avail itself of such power, if the Purchaser chooses and is able to rely upon its own reserves to meet its loads when Project power is unavailable. Section 6. Obligations Under Bond Resolution; Com- pletion of Project. (a) Assignment or payment to Trustee. The par- ties recognize and agree that tty the Authority may assign its rights to receive payments under this Agreement as security for the payment of the Bonds to the Trustee under the Bond Resolution for the benefit of the holders of the Bonds, and (ii) the Authority may direct that amounts pay- able to it under this Agreement be paid directly to the Trustee. (b) Project funding. The Authority shall issue Bonds, or otherwise obtain funds (including appropria- tions), sufficient to pay or reimburse the Cost of Acqui- sition and Construction. Annual Project Costs shall in- clude Debt Service on Bonds issued to pay the Cost of Ac- quisition and Construction in an aggregate principal amount up to but not exceeding the Recoverable Construc- tion Cost. The Authority may estimate the Recoverable Construction Cost and issue Bonds at any time in amounts up to the amount of such estimate. As soon as practicable after the Date of Commercial Operation, the Authority shall adjust (and re-adjust when necessary) Annual Project Costs to reflect actual Recoverable Construction Cost. (c) Covenants of the Authority. The Authority covenants that it w not cause rates for Project Power to increase by reason of any bond resolution, covenant or agreement contained in any trust indenture or trust agree- ment entered into by the Authority in connection with a power project other than the Project, nor on account of any inadequacy in its actual or projected aggregate BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 11 revenues, other than revenues from the Project, nor will the Authority include in Annual Project Costs debt service payable on debt incurred for any purpose except in respect of the Project as provided herein. (d) Project completion and operation. The Authority agrees to use its best efforts to complete the Project expeditiously and in accordance with sound engin- eering practice and with the provisions of the Bond Reso- lution. The Authority shall also use its best efforts consistent with Prudent Utility Practice to construct and complete, and to operate and maintain the Project (or to arrange for such operation and maintenance) to provide power at the lowest reasonable cost to the Purchasers in a manner that is compatible with the Purchasers' Systems and consistent with the Act, the Bond Resolution, and this Ag- reement. (e) Best efforts by Committee members. To the extent that the cost of Project power is or May be affect- ed by actions of the Committee under Section 13, each Purchaser in its capacity as a member of the Committee agrees to use its best efforts consistent with Prudent Utility Practice to assist in assuring that the Project provides power at the lowest reasonable cost to the Pur- chasers in a manner that is compatible with the Purchas- ers' Systems and consistent with the Act, the Bond Resolu- tion, and this Agreement. Section 7. Payment Obligation. (a) Payment Obligation. Each Purchaser agrees to pay its Percentage Share of Annual Project Costs for each Fiscal Year. The procedures for determining the amount of and for making such payments are set forth in Section 13 of this Agreement. (b) Purchaser's Obligations. Each Purchaser shall make payments in @ amounts and at the times re- quired by this Agreement notwithstanding a suspension or reduction in the amount of power supplied by the Project. Such payments shall not be subject to any reduction, by offset or otherwise. The parties intend and interpret the foregoing two sentences to mean that the obligation to make such payments shall be absolute and unconditional and unaffected by any interruption, interference, or curtail- ment in whole or in part of power supplied by the Project. In the event that (i) the Project is no longer operable, or its operation is interrupted or curtailed for any rea- son whatsoever in whole or in part, and (ii) the Authority does not restore the Project to full operation within a reasonable time, then the Purchasers may upon reasonable notice to the Authority and at their own expense take such action as they deem necessary to so restore the Project. BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 12 The taking of such action by the Purchasers shall not al- ter each Purchaser's obligation to pay its Percentage Share of Annual Project Costs. . Section 8. Annual Project Costs (a) Annual Project Costs defined. Annual Pro- ject Costs means all of the costs resulting from the own- ership, operation, maintenance of and renewals and re- placements to the Project, properly incurred or paid dur- ing each Fiscal Year, including: (1) Amounts required to be set aside by the Authority for the payment of Debt Service on Bonds issued to pay the Cost of Acquisition and Con- struction in an aggregate principal amount up to but not exceeding the Recoverable Construction Cost; (ii) Amounts required to be set aside for the payment of Debt Service on other Bonds and debt service on other obligations approved in accordance with Sections 11 and 13; (iii) Amounts required to restore the funds established under the Bond Resolution to the levels required by the Bond Resolution to be main- tained therein; (iv) Amounts which may be required to pay for Required Project Work, to the extent that such costs are not covered by insurance or Bond proceeds or by the Renewal and Contingency Reserve Fund; (v) Other amounts determined by the Com- mittee to be necessary or appropriate to supplement and to be paid into the Funds established under the Bond Resolution; (vi) Excess Payment Amounts, if any, com- puted in accordance with Section 29; (vii) All other costs of producing and de- livering Project power (excluding depreciation) not accounted for by the payments out of funds and re- serves specified in the foregoing sections and prop- erly chargeable to the Project under the Uniform Sys- tem of Accounts, less any credits against said costs by reason of revenues from sources other than the di- rect sale of power to Purchasers, and also less any credits for interest earned during oe and available for Project purposes; prov , that income from interest earned on reserve funds shall be used at least annually to accumulate and maintain said reserve funds in the amounts required under the Bond BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 13 Resolution or in such greater amounts as may be de- termined by the Committee, or to reduce Annual Pro- ject Costs. Such other costs shall include: ; (A) Project operating and maintenance costs, in accordance with the Annual Budget adopted in accordance with Section 13; (B) Costs of Project-related insur- ance, and, to the extent permitted with respect to each Purchaser under Section 5, the costs of electric power reserves for the Project; (Cc) Project-specific administrative and general expenses of the Authority, such as costs of safety inspections and investigations; (D) Costs of the Committee, whether incurred by the Authority or incurred by a Pur- chaser on behalf of the Committee; and (E) Such other Project costs as the Committee may from time to time approve for in- clusion in Annual Project Costs in accordance with procedures to be adopted by the Committee. (b) Proceeds of a taking. Any payment received by the Authority as a result of a taking of the whole or any portion of the capacity, facilities, available water, or output of the Project by any state or federal govern- ment agency shall be used by the Authority, after consult- ation with the Committee, to (i) reduce Annual Project Costs, (ii) retire Bonds, or (iii) reimburse the State of Alaska for a portion of the State's capital contribution to the Project (recognizing the separate sources of Pro- ject funding under Section 6(b)), whichever of these uses or combination of such uses shall be equitable and proper under the circumstances existing at the time of the tak- ing. Section 9. Obligations In The Event Of Default. (a) Enforcement. Upon failure of a Purchaser to perform any obligation herein, the Authority may bring any suit, action or proceeding at law or in equity ("Suit"), including mandamus, injunction and action for specific performance, as may be necessary or appropriate to enforce any covenant, agreement or obligation of this Agreement against that Purchaser. The Authority may bring such Suit (i) thirty days after giving the Purchaser a written demand for performance, in the case of default by the Purchaser on any obligation other than a payment obli- gation, and (ii) immediately, in the case of default by the Purchaser on any payment obligation. Each Purchaser BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 14 shall continue to make payments in the event of any dis- pute regarding performance of any obligation by any party under this Agreement or in the event of any dispute under the Bond Resolution, and this obligation of continued pay- ment pending resolution of disputes shall be immediately enforceable by any party upon application to any court of competent jurisdiction. (b) Additional rights and remedies. In addi- tion to the Authority's anes under Section 9(a), if a Purchaser has for any reason suspended or reduced, or has failed to make or has been prevented from making, payments required under this Agreement, the Authority may terminate or suspend the delivery of power to that non-paying Pur- chaser if, after consulting with the other Purchasers, the Authority reasonably determines that such termination or suspension is more effective than other available alterna- tives in minimizing adverse impacts on such other Purchas- ers. (1) If the Authority so terminates or sus- pends deliveries, the Authority shall: | (A) offer to other Purchasers, on terms and conditions applicable to other power sold under this Agreement, any power not deliv- ered to the non-paying Purchaser, and if neces- sary allocate such power pro rata on the basis of Percentage Shares among Purchasers accepting such offer; (B) offer any power not sold under Section 9(b) (i) (A) to any qualified utility (in- cluding the other Purchasers) on terms and con- ditions deemed favorable by the Authority after consultation with the Committee; and (C) if the Authority projects that the amounts to be deposited into the Revenue Fund will nonetheless be insufficient to pay Annual Project Costs, increase every other Purchaser's Percentage Share of Annual Project Costs and Project Capacity pro rata to the extent and for the period necessary to compensate for such in- sufficiency; provided, that no Purchaser's Per- centage Share s be increased by more than twenty-five (25) percent above the amount set forth in Exhibit D without the written consent of that Purchaser. (ii) If the Authority determines that the process of offering power to others under Sections 9(b) (i) (A) or (B) would delay exercise of the Author- ity's rights under Section 9(b) (i) (C), and that as a BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 15 result the Authority will be unable to make deposits when required under the Bond Resolution, the Authori- ty may exercise its rights under (C) immediately and take the actions required under (A) and (if neces- sary) under (B) as soon as practicable thereafter. No exercise by the Authority of any of its rights (or any failure by the Authority to exercise any of its rights) under this Section 9(b) shall relieve any non-paying Purchaser of any payment obligation under this Agreement or relieve such Purchaser of any lia- bility for damages resulting from non-payment. In particular, sales of power under Section 9(b) (i) (A) and (B) are intended to reduce the financial impact of any Purchaser's non-payment on other, paying Pur- chasers. Such sales are not intended to, nor shall they, reduce the payment obligations of the non- paying Purchaser or the damages for which such non- paying Purchaser may be liable. (iii) To the extent that the Authority uses Project reserve funds to permit it to make time- ly payments under the Bond Resolution following non- payment by a Purchaser, the amount needed to replen- ish such reserve funds shall be added to the Annual Payment Obligation of the non-paying Purchaser, and if the non-paying Purchaser fails to make payment of its Annual Payment Obligation as so increased, the Authority may exercise any of the rights available to it under this Section 9(b)}. (c) Litigation. If Purchasers' Percentage Shares are increased pursuant to Section 9(b) (i) (C), then the Authority shall, and any other Purchaser(s) may, im- mediately initiate and diligently pursue litigation in any court of competent jurisdiction to compel full and timely payment by the non-paying Purchaser, to recover amounts needed to compensate Purchasers whose Percentage Shares have been increased, and to obtain such other relief as shall be fair and equitable. The same or similar litiga- tion against any non-paying Purchaser may also be initi- ated and pursued by the Authority and/or by any paying Purchaser if in response to any non-payment the Authority takes action pursuant to Sections 9(b) (i) (A) or (B). (4) Default by the Authority. In the event of any default by the Authority er any covenant, agreement or obligation under this Agreement with respect to a Pur- chaser, that Purchaser may, upon thirty (30) days written notice to the Authority, bring any suit, action or pro- ceeding, at law or in equity, including mandamus, injunc- tion and action for specific performance, as may be neces- sary or appropriate to enforce any covenant, agreement or obligation of this Agreement against the Authority. No BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 16 payment obligation of a Purchaser under this Agreement is subject to offset, however. Section 10. Purchasers' Systems. (a) Character of expense. The amounts payable under this Agreement are operating expenses of each Pur- chaser's System, and are valid and binding obligations of each Purchaser, payable only from the gross revenues of said Purchaser's System as a cost of purchased electric power, and not payable from any taxes. (b) Purchasers' rate covenants. In order to afford, permit, and make timely payments as specified in this Agreement, each Purchaser agrees that it will estab- lish, charge and collect rates, fees, and charges with respect to that Purchaser's System in accordance with ap- plicable law to provide revenues sufficient to meet its obligations under this Agreement and sufficient to pay, together with any other funds or monies available there- for, any and all other amounts payable from or which con- stitute or may constitute a charge and lien upon such rev- enues including, but not limited to, amounts sufficient to meet obligations to service debt incurred by the Purchaser to finance the Purchaser's System. (c) Operation and maintenance of Purchasers' Systems. Each Purchaser covenants agrees that it wi operate and maintain its System in good repair, working order and condition, and in accordance with Prudent Utili- ty Practice. (ad) Limitation on certain contracts. Each Pur- chaser covenants and agrees not to enter voluntarily into any contract or agreement to take or to take or pay for power, other than this Agreement, payable from the rev- enues of the Purchaser's System on a parity with or super- ior to the payment of its obligations under this Agree- ment, except that a Purchaser may enter into such a con- tract or agreement of not to exceed two years' duration under which the Purchaser's payment obligation is on a parity with the payment of its obligations under this Ag- reement. The limitations of this Section 10(d) shall not apply to contracts or agreements creating obligations on a parity with obligations under this Agreement if a written opinion from a Consultant is rendered that (i) the con- tract or agreement is reasonably expected to contribute to the conduct of the business of the Purchaser's System in an efficient and economical manner consistent with Prudent Utility Practice, and (ii) the contract or agreement will not impair the ability of the Purchaser to raise revenues sufficient to meet its obligations under this Agreement. BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 17 Section 11. Bond Resolution. (a) Amendment or supplementation of Bond Reso- lution. Except as provided in Section 12, the Authority will not amend or supplement the Bond Resolution in any manner, or adopt a new Bond Resolution in connection with the refunding of the Bonds, which would materially ad- versely affect the ability of a Purchaser to fulfill the terms of this Agreement or impose any increased burden or obligation, financial or otherwise, on a Purchaser, with- out the consent of the Purchaser, unless: (i) the Committee has approved the Auth- ority's proposed action by a resolution adopted by the affirmative vote of members whose Percentage Shares equal or exceed eighty percent (80%) of Pro- ject Capacity and of Annual Project Costs; or (ii) the Committee by majority vote of the Purchasers requests that Required Project Work be paid for out of the proceeds of Bonds, and such Work is projected to cost in excess of the amount of money then available in the Renewal and Contingency Reserve Fund established pursuant to the Bond Resolution, plus available insurance proceeds, in which event, if such Bonds can then be legally issued and can be sold, the Authority shall issue such Bonds, payable from the Revenues of the Project (as defined in the Bond Resolution), to pay the portion of such costs which exceed insurance proceeds, if any, and to re- store said Reserve Fund to its required level. (b) Insurance. The Authority will maintain physical loss insurance to the extent required by the Bond Resolution, and the Authority will consult with the Com- mittee as provided in Sections 12 and 13 with respect to the disposition of proceeds of said insurance received as a consequence of physical destruction or impairment of the Project, including but not limited to disposition for the purpose of redemption of Bonds, replacement of the Pro- ject, or replacement of power. The Committee shall advise the Authority from time to time as to the appropriate ex- tent of insurance coverage. (c) Information. The Authority shall provide each Purchaser a copy of any report, certificate, letter, or other communication which the Authority is required to furnish to the Trustee under the Bond Resolution or that the Trustee furnishes to the Authority. Section 12. Purchasers' Consent To Supplemental Bond Resolutions To Construct consent to the adoption by the Authority of supplemental Bond Resolutions pursuant to Section 11(a), as necessary to comply BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 18 with the Authority's obligation to finance and construct the Project pursuant to Section 6(b) and the Authority's obligation under Section 6(d) to use its best efforts to complete the Pro- ject expeditiously and in accordance with sound engineering practices and with the provisions of the Bond Resolution. The Authority shall consult with the Purchasers regarding the pro- visions to be included in such supplemental Bond Resolutions, and shall use its reasonable best efforts to comply with the requests of the Purchasers with respect thereto. Unless other- wise approved in accordance with Section 11(a) (i), such supple- mental Bond Resolutions shall: (a) provide that the total amounts required for the payment of Debt Service when due shall be, on an an- nual basis, as nearly equal as practicable; (b) provide that the final maturity of Bonds issued pursuant to such supplemental Bond Resolutions shall not be earlier than twenty-five (25) years from the date when the first of such Bonds is issued; (c) be substantially in the form attached here- to as Exhibit E, except to the extent that the Authority finds that modifications are necessary to sell the Bonds on a tax-exempt basis; and (ad) be adopted no earlier than January 1, 1989. Section 13. Establishment Of The Committee. (a) Formation and composition of the Committee. The parties eee eee eee eee Ce ("Committee") shall be established on January 15, 1988, or on such earlier date as may be agreed to by the parties. The Committee shall consist of the Authority and the Pur- chasers (including as Purchasers for this purpose both Homer Electric Association, Inc., and Matanuska Electric Association, Ine., for themselves and for AEG&T as a Pur- chaser represented by and through those utilities). No Committee member shall obtain an additional vote through merger with, acquisition of, or assignment from any other Committee member, and AEG&T shall have no direct vote, but shall be represented by and through Homer Electric Associ- ation, Inc., and Matanuska Electric Association, Inc., each of which shall be entitled to vote as a Purchaser member for purposes of Committee procedure. Each Commit- tee member entitled to vote shall name one representative to serve on the Committee and one designated alternate for that representative. Each such member shall notify all other members in writing of the names, addresses, and tel- ephone numbers of its representative and designated al- ternate. After it is established, the Committee shall meet not less than once each quarter. Costs of the Com- mittee (other than costs incurred by the Authority) which BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 19 are incurred prior to the Date of Commercial operation shall be borne by the Purchasers in accordance with the Percentage Shares of each. (b) Adoption of rules of procedure. The Com- mittee shall adopt. by the affiraative vote oF a satority of the Purchasers and the affirmative vote of the Authori- ty, procedural rules governing the conduct of the Commit- tee's affairs. Such rules shall address, among other mat- ters, procedures for the periodic selection of Committee officers, the conduct of Committee meetings, dispute res- olution, the approval (including possible pre-approval) of Consultants, and modification of the Committee's procedur- al rules, and, to the extent not otherwise specified in this Agreement, such rules shall also specify the applic- able voting requirements for approval of matters to be decided by the Committee. Committee approval of opera- tions and maintenance arrangements for the Project, the sufficiency of the annual budget and wholesale power rates, and the undertaking of Optional Project Work shall require the affirmative vote of a majority of the Purchas- ers and the affirmative vote of the Authority. (c) Committee responsibilities; approval by the Authority. (i) As the legal owner and licensee of the Project, the issuer of Project debt, and the agency charged by statute with various duties affecting or affected by the Project, the Authority has certain non-delegable rights, duties, and responsibilities with respect to the Project. Subject to such non- delegable rights, duties, and responsibilities, the Committee shall be responsible for the management, operation, maintenance, and improvement of the Pro- ject, in recognition that as take-or-pay purchasers of Project Capacity after the Date of Commercial Op- eration, the Purchasers have substantial long-term financial interests in, and service and planning re- sponsibilities affected by, the Project. (ii) The Committee shall take the follow- ing actions, subject to the provisions of the Bond Resolution, federal and state law, the requirements of licensing and regulatory agencies, and the rights of the Authority and the Purchasers under other pro- visions of this Agreement: (A) Arrange for the operation and maintenance of the Project, and the scheduling, production, and dispatch of Project power; (B) Establish procedures for the use of each Purchaser's Water Allocation in a manner BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 20 consistent with the needs and desires of other Purchasers and the capabilities of the Project; (C) Adopt in each Fiscal Year (and revise as necessary or prudent during such Fisc- al Year) a budget of Annual Project Costs for that Fiscal Year, which budget shall be in an amount estimated by the Committee to be suffic- ient to pay all Annual Project Costs; (D) Establish for each Fiscal Year the estimated Annual Payment Obligation of each Purchaser, together with a schedule for each Purchaser of equal monthly payments that such Purchaser shall be required to make during that Fiscal Year, which payment schedule shall be (I) designed to recover such estimated Annual Pay- ment Obligation from that Purchaser during the Fiscal Year, and (II) revised during such Year to reflect any revisions to the budget of Annual Project Costs for that Fiscal Year; (E) Determine after the conclusion of each Fiscal Year the actual Annual Project Costs for that Fiscal Year, the actual Annual Payment Obligation of each Purchaser for that Fiscal Year, and the amount of any additional payment required from (or the amount of any refund to be returned to) each Purchaser to ensure that the total of all payments received from each Pur- chaser for each Fiscal Year is equal to that Purchaser's actual Annual Payment Obligation for that Fiscal Year; (F) Evaluate and select among altern- ative methods (if any) of carrying out and fund- ing (including through issuance of bonds) Re- quired Project Work; (G) Adopt provisions to evaluate and approve Optional Project Work, and to determine the compensation (if any) to be provided in ac- cordance with Section 4(d) of this Agreement if the Committee approves any such Optional Project Work; (H) Adopt procedures consistent with Section 13(f) for the resolution of disputes that may arise between or among the Purchasers and the Authority concerning the interpretation of this Agreement, the obligations created by this Agreement, or the performance of such ob- ligations; BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 21 (I) Make an initial determination of "customary" insurance within the meaning of Section 714 of the Bond Resolution and determine the appropriate amount of, and obtain, insurance for or related to the Project, in addition to such insurance as may be required by the Bond Resolution; _ @d) Adopt maintenance schedules for the Project that do not interfere unreasonably with the operations of the Purchasers; (K) Adopt and implement procedures relating to electric power reserves for the Pro- ject in accordance with Section 5; and (L) Consider the need for and approve any additional amount to be added to the Renewal and Contingency Reserve Fund over and above the Renewal and Contingency Reserve Requirement pro- vided under the Bond Resolution. (iii) If and when no Bonds are outstanding under the Bond Resolution, and the Bond Resolution is therefore no longer effective, the Committee shall provide for the establishment of such accounts and the taking of such actions as may be necessary to manage the Project. (ad) Payment obligation unimpaired. Notwith- standing any hemareees action or Taaaeten under this Ag- reement, each Purchaser's obligation to make the monthly payments necessary to pay its Purchaser's Percentage Share of Debt Service, costs of operation and maintenance, and all other amounts to be paid by Purchasers under this Ag- reement shall be absolute and unimpaired. (e) The Authority's Ab nope to take Required Action. In the event the Committee fails to take any o the actions set forth in Section 13(c) (ii) (C)-(E) in a timely fashion, or fails to take any other action which the Authority believes to be a Required Action, and as a result the Authority determines that it will be unable to meet any of its obligations imposed by statute, by the Bond Resolution, by this Agreement, or by any licensing or regulatory agency, then the Authority may (i) adopt a bud- get of Annual Project Costs, (ii) estimate the Annual Pay- ment Obligation of each Purchaser, (iii) require each Pur- chaser to make payments on the basis of such estimated Annual Payment Obligation, and (iv) take such other action as the Authority deems necessary to meet such obligations. Failure of the Committee to adopt an Annual Project Budget by the ninetieth (90th) day prior to the beginning of a Fiscal Year shall permit the Authority to adopt an Annual BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 22 Project Budget pursuant to this subsection. All actions and determinations under this Section 13(e) shall be taken and made in accordance with Prudent Utility Practice. (£) Purchasers' duties and rights of review. Each Purchaser shall make payment as required by the Auth- ority as a result of any action taken by the Authority under Section 13(e), but such payment shall not constitute a waiver of any Purchaser's rights under this Agreement. Any Purchaser may seek review of such action in accordance with the dispute resolution procedures adopted by the Com- mittee, or may seek to enforce this Agreement judicially in accordance with Section 9(d) if no applicable dispute resolution procedures have been adopted. Section 14. End Of Project (a) Authority's declaration. The Authority shall declare the Project ended, and the Authority's ob- ligations to make power available to the Purchasers and to operate and maintain (or to assure the operation and main- tenance of) the Project shall also end, if and when (i) such a declaration is required under Section 14(b), or (ii) the Project can no longer be operated in accordance. with Prudent Utility Practice. (b) Consultant's report. The Authority shall make the declaration described i Section 14(a) if all of the following conditions are met: (i) the Project cannot be operated at full capacity in a manner consistent with Prudent Utility Practice absent repairs, modifications, or additions ("Repairs") to the Project; (ii) a Consultant retained by the Commit- tee concludes that such Repairs are not cost- effective in comparison with other power supply alt- ernatives then available to the Purchasers; and (iii) Committee members who are Purchasers and whose Percentage Shares total eighty percent (80%) vote that such Repairs should not be undertak- en. After the Authority each Purchaser shall complete its payment obligation for Pro- ject Capacity and associated energy delivered to such Pur- Chaser before the Project ended, and shall do so by paying its Percentage Share of Annual Project Costs until all Bonds have been paid or provision has been made for the payment of the Bonds in accordance with the Bond Resolu- tion; provided, that from the date on which the Authority BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 23 declares the Project ended, Annual Project Costs shall no longer include (except with Committee approval) costs oth- er than those set forth in Sections 8(a) (i), 8(a) (ii), 8(a) (iii), 8(a) (vii) (C), and 8(a) (vii) (D). _ Section 15. Records. In addition to meter records, the parties shall keep log sheets and other records as May be needed for the purposes of this Agreement. In keeping books of account, each Purchaser will, to the extent that different rules are not prescribed by this Agreement or by federal and state laws or agencies, follow the system of accounts pre- scribed for public utilities and licensees by the Federal Ener- gy Regulatory Commission, except that as long as a Purchaser is a borrower from REA then it shall follow the system of accounts prescribed by REA for its electric borrowers. Section 16. Inspection Of Facilities. For purposes of this Agreement, each party may, but sha not be obligated to, inspect any other party's facilities relating to the Pro- ject at any time upon reasonable notice, but such inspection or failure to inspect shall not render the inspecting party, its officers, agents or employees, liable or responsible for any injury, loss, damage, or accident resulting from defects in such electric installation, or for violation of this Agreement. Section 17. Covenants To Maintain Integrity Of Ag- reement. (a) Retail rate approval. Each Purchaser will affirmatively and promptly pursue all administrative and judicial remedies necessary to secure Alaska Public Utili- ty Commission approval of retail rates required to meet the terms of this Agreement where Commission approval is required. (b) Compliance with law. ach Purchaser will take all necessary steps to comply with applicable federal and state laws and regulations, licenses and permits re- lating to the use and operation of the Purchaser's System. (c) Sales and assignments. No Pur- chaser shall abandon, sell, mortgage, lease or otherwise dispose of the Purchaser's System or any assets of that System (including by sale to or merger with any other utility), or assign this Agreement or any interest there- under to any assignee or successor in interest, unless: (1) such disposal or assignment accords with the terms of any of the Purchaser's covenants or agreements with the holders of the Purchaser's bonds, notes or other evidences of indebtedness relating to the abandonment, sale, mortgage, lease or other dis- position of property of the Purchaser's System; and BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 24 (2) such disposal or assignment is: ; (A) consented to in writing by a maj- ority of the Committee, including the Authori- ty's representative; or (B) made to another utility that is already a Purchaser under this Agreement and is able to meet the obligations resulting from the disposal or assignment; or (C) limited to assets that the Pur- chaser determines to be surplus to the needs of that Purchaser's System, but the depreciated value of assets so disposed of or assigned in any given year shall not exceed five percent (5%) of the depreciated value of the assets of the Purchaser's System prior to the disposal or assignment; or (D) evaluated by a Consultant and that Consultant certifies that, taking into ac- count the other obligations of the Purchaser or of. the assignee or successor in interest (as the case may be), the Purchaser or the assignee or successor in interest will have (A) substantial- ly the same or greater ability to produce suf- ficient revenues to meet its payment obligations as would the Purchaser absent the transaction, and (B) the ability to perform all obligations under this Agreement. Any assignee of this Agreement must assume in writing all of the assigning Purchaser's obligations hereunder, must pay any amounts due and owing from the assigning Purchaser hereunder, and (unless the assignee is already a Purchas- er) must provide the Authority and the Purchasers with an opinion of counsel that this Agreement is enforceable against the assignee. (ad) Status of Bonds. The parties will not take any action, including entry into power sales agreements, which would cause the interest on any Bond which is orig- inally issued on a tax-exempt basis to become taxable un- der the Internal Revenue Code of 1986, as the same may be amended from time to time. (e) Licenses and rmits. The parties will take all necessary steps within their control to comply with applicable federal and state laws and regulations, and to obtain and thereafter comply with all applicable licenses and permits relating to the use and operation of the Project, including without limitation, the Federal Energy Regulatory Commission license applicable to the BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 25 Project. The Authority will take all necessary steps to cause the Federal Energy Regulatory Commission license to be renewed, if necessary, so that it is in effect during the term of this Agreement or any renewal hereof. Section 18. Assignment. ; (a) bssigurens generally: This Agreement shall inure to the benefit of, and shall be binding upon the respective successors and assigns of the parties to this Agreement; provided, that this Agreement or any interest herein may be transferred or assigned by a Purchaser only in accordance with the provisions of Section 17(c). (b) Specific rights and transactions. Notwith- standing Sections 17 (c) = 18(a): (1) A Cooperative Purchaser shall have the right to assign its assets, including its rights un- der this Agreement for security purposes to REA, or to a lender or guarantor in connection with loans to such Cooperative Purchaser where the proceeds of such loans are used to refinance obligations of such Coop- erative Purchaser to REA or the Federal Financing Bank under Section 311 of the Rural Electrification Act or otherwise; Brovidet: however, that (A) neither REA nor any secur ender or guarantor exercising any rights, powers or privileges with respect to this Agreement under any mortgage, deed of trust or other security agreement shall be entitled to exercise the rights of the Cooperative Purchaser under this Agree- ment unless the obligations of such Cooperative Purchaser hereunder shall have been performed, (B) no such assignment shall in any way relieve such Cooper- ative Purchaser of any obligations hereunder, and (C) no assignment shall be permitted hereunder if such assignment would adversely affect the tax exemption of interest on any Bonds Outstanding under the Bond Resolution that originally were issued on a tax- exempt basis. . (2) A Purchaser's agreement to resell pow- er from the Project shall not be deemed a transfer or assignment of this Agreement, but neither shall any such resale of Project power relieve the Purchaser of any payment obligation under this Agreement. Section 19. Notices, Computation Of Time And Holi- days. Any notice require this Agreement to given to any party shall be effective when it is received by such party, and in computing any period of time from such notice, such period shall commence at 12:01 p.m. prevailing time at the place of receipt on the date of receipt of such notice. Whenever this Agreement calls for notice to or notification by any party the BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 26 same (unless otherwise specifically provided) shall be in writ- ing directed to the Authority's executive director or a Pur- chaser's general manager. If the date for making any payment or performing any act is a day on which banking institutions are closed in the place where payment is to be made or a legal holiday, Payment may be made or the act performed on the next succeeding day which is neither a legal holiday nor a day when banking institutions are closed in such place. Section 20. Applicable Law. The laws of the State of Alaska (including withote limitation the equal opportunity laws set forth in AS 18.80.220, as the same may be amended from time to time) shall govern the interpretation and application of this Agreement and the actions of the parties hereunder. Section 21. Availability Of Information. The par- ties shall make available to each other, for inspection and copying during business hours, all books, records, plans and other information relating to any calculation or determination to be made pursuant to this Agreement. Section 22. Severability. (a) Severabiiity generatly. If any section, paragraph, clause or provision of this Agreement or any agreement referred to in this Agreement shall be finally adjudicated by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall be unaffected by such adjudication and all the re- maining provisions of this Agreement shall remain in full force and effect as if such section, paragraph, clause or provision or any part thereof so adjudicated to be invalid had not been included herein. (b) Correction and substitution. If any sec- tion, paragraph, Clause or provision of this Agreement or any agreement referred to in this Agreement shall be fi- nally adjudicated by a court of competent jurisdiction to be invalid or unenforceable, then and in such event the parties agree that they shall exercise their best efforts to correct such invalidation and substitute appropriate agreements and contractual arrangements to achieve the intent of this Agreement. (c) References to REA. From and after the time any Cooperative Purchaser is no longer indebted to REA under any mortgage or other security agreement with REA, all references to REA and required approvals of the Admin- istrator of REA provided for in this Agreement shall be of no further force and effect with respect to that Coopera- tive Purchaser. Section 23. Remedies Cumulative. No remedy confer- red upon or reserved to the parties hereto is intended to be BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 27 exclusive of any other remedy or remedies available hereunder or now or hereafter existing at law, in equity, by statute or otherwise, but each and every such remedy shall be cumulative and shall be in addition to every other such remedy. Section 24. Waiver Not Continuing. Any waiver at any time by either party to this Agreement of its rights with respect to any default of the other party hereto, or with re- spect to any other matter arising in connection with this Ag- reement, shall not be considered a waiver with respect to any subsequent default, right or matter. Section 25. Section Headings. The section headings in this Agreement are for convenience only, and do not purport to, and shall not be deemed to, define, limit or extend the scope or intent of the section to which they pertain. Section 26. Multiple Copies. This Agreement shall be executed in several counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. Section 27. Covenant To Act In Good Faith. In order to permit this Agreement, throughout its term, to be fully ef- fective in accordance with the original intent of the parties, each party agrees that it shall at all times act in good faith in performing its obligations and in exercising its rights under this Agreement. Section 28. No Third Party Beneficiaries. Notwith- standing that the operation of this Agreement may and is in- tended to confer benefits on third parties who are not signa- tories to this Agreement, this Agreement shall be enforceable only in accordance with its provisions expressly governing en- forcement. In promising performance to one another under this Agreement, the parties intend to create binding legal obliga- tions to and rights of enforcement in (a) one another, and (b) such assignees or successors in interest of the parties as may enjoy a right to enforce this Agreement by virture of provis- ions of this Agreement that expressly create such a right in such assignees or successors in interest. By entering into this Agreement, the parties expressly do not intend to create any obligation or promise any performance to any other third party, nor have the parties created for any other third party any right to enforce this Agreement. Section 29. Excess Payments. (a) Payments in Recognition of Efforts to Ob- tain Intertie. In recognition of the Railbeit Energy Counc s commitment to continue efforts to obtain a sat- isfactory transmission intertie between Fairbanks and the Kenai Peninsula, and the Railbelt Energy Council's recog- nition of the importance of such an intertie to the well- BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 28 béing of the Railbelt region and the Purchasers’ ratepay- ers, and in anticipation of legislative funding of such an intertie, the Purchasers agree to make the payments de- scribed below in excess of actual debt service required for retirement of Bonds issued to pay Recoverable Con- struction Costs. The Purchasers' obligations to make pay- ment under this Section 29 are not contingent upon the success of such continued efforts to obtain a satisfactory transmission intertie between Fairbanks and the Kenai Pen- insula. (b) Calculation of Excess Payment Amount. Sub- ject to the limitations set fort n Sections 29(e) and 29(f), upon the retirement of all Bonds issued to pay Re- coverable Construction Costs (and of all Bonds issued to refund such Bonds) and the consequent reduction of Debt Service includable in Annual Project Costs, there shall be added to and included in Annual Project Costs an amount (the "Excess Payment Amount") calculated as follows: (i) The average annual Debt Service on such retired Bonds, less . (ii) any debt service included in Annual Project Costs that is associated with bonds or other debt issued to fund Required Project Work. In no event shall the Excess Payment Amount be negative. (c) Payment of Excess carbene Amount. Each Purchaser shall pay its Percentage Share of the Excess Payment Amount as part of that Purchaser's Annual Payment Obligation so long as that Purchaser continues to purchase Project power under this Agreement or any renewal thereof. (da) piszesieior of Payments. All Excess Pay- ment Amounts receiv rom Purchasers, and all additional charges paid pursuant to Section 29(b), shall be paid to the Authority for deposit into the Railbelt Energy Fund. (e) Limitation. Notwithstanding any other pro- vision of this Section 29, no Purchaser's Annual Payment Obligation shall include a charge with respect to any Ex- cess Payment Amount in excess of four cents ($0.04) per kilowatthour of Project power delivered to such Purchaser. (f) Duration. The provisions of this Section 29 shall not serve to extend the term of this Agreement or any renewal thereof, and shall cease to be effective upon the expiration or termination of this Agreement (as the same may be extended through any renewal thereof). BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 29 Section 30. Special Arrangements Regarding AEG&T. (a) Contracts acknowledged. The parties recog- nize that Homer Electric Association, Inc. ("HEA") and Matanuska Electric Association, Inc. ("MEA"), have previ- ously entered into contracts with the Alaska Electric Gen- eration & Transmission Cooperative, Inc. ("AEG&T"), and that under such contracts AEG&T is to sell and HEA and MEA are to buy electric power in amounts necessary to meet the full requirements of HEA and MEA, such power to be gen- erated by AEG&T or to be purchased by AEG&T from other suppliers. Under this Agreement, therefore, AEG&T is a Purchaser on behalf of HEA and MEA, and AEG&T's payment obligations are secured by HEA's and MEA's respective ob- ligations to provide at all tines the monies necessary for the performance of AEG&T's payment obligations, as more fully described in Section 30(b). (b) Treatment of HEA and MEA as Purchasers for certain purposes. HEA and MEA shall have all the rights and eet isetions of individual Purchasers and/or Coopera- tive Purchasers with respect to Sections 2(a), 4(d), 6(e), 8(a) (vii) (D), 10, 13(c), 13(d), 15, 17, 18, 31, and 32, unless the context otherwise requires. If AEG&T at any time fails to meet its payment obligations under this Ag- reement, then to the extent of such failure by AEG&T and for so long as such failure continues, HEA and MEA shall each be obligated to meet directly its respective share of AEG&T's payment obligations in the same manner as if HEA and MEA were individual Purchasers obligated to make pay- ment in accordance with Section 7 and Section 9. All rights and remedies available to the Authority and/or to the other Purchasers against AEG&T shall also be available to the Authority and the other Purchasers against HEA and MEA to the extent of the respective individual share of HEA and/or MEA, as applicable. For purposes of this Sec- tion 30(b), HEA's share shall be a Percentage Share of Project Capacity equal to 12.0 percent, and MEA's share shall be a Percentage Share of Project Capacity equal to 13.8 percent. (c) Arrangements among HEA, MEA, and AEG&T. In accordance with the provisions of section 30(a) and sub- ject to the provisions of Section 30(b), AEG&T as a Pur- chaser hereunder shall act on behalf of HEA and MEA for purposes of power deliveries, billing, payment, notifica- tion, and other communications under this Agreement. AEG&T shall be, on behalf of HEA and/or MEA, the Purchaser from the Authority and the re-seller to HEA and/or MEA of power to be taken by HEA and/or by MEA under this Agree- ment. Further, AEG&T will receive, on behalf of HEA and/or MEA, all billings and other communications under BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 30 this Agreement, and AEG&T will be required to pay such bills for and on behalf of HEA and/or MEA from funds made available to AEG&T by HEA and/or MEA for this purpose. Section 31. Capitalization Of Certain Costs Of Pur- chasers. (a) Promptly after the Committee is formed, and before the Authority first issues Bonds, the Purchaser members of the Committee shall determine by the affirma- tive vote of members whose Percentage Shares equal or ex- ceed eighty percent (80%) of Project Capacity and of An- nual Project Costs: (i) whether and to what extent the costs borne by the Purchasers pursuant to the last sentence of Section 13(a) should be capitalized through issu- ance of additional Bonds, with the costs of debt ser- vice on those additional Bonds to be added to Annual Project Costs; and (ii) whether and to what extent the costs incurred by the individual Purchasers in conjunction with this Agreement prior to the Date of Commercial Operation should be capitalized and reimbursed through issuance of additional Bonds, and whether and to what extent the costs of debt service on those additional Bonds should be added to Annual Project Costs and allocated among Purchasers either in ac- cordance with their respective Percentage Shares or in some other manner. i (b) If the Purchasers provide the Authority with a written determination that additional Bonds should be issued for either or both of the foregoing purposes, then notwithstanding any other provision of this Agree- ment, the Authority shall issue additional Bonds in the requisite principal amount, allocate the proceeds of such additional Bonds among the appropriate Purchasers in ac- cordance with such written determination, and include the costs of debt service on such additional Bonds in Annual Project Costs; provided, that the Authority shall not be obligated to issue such additional Bonds unless the Auth- ority is reasonably able to do so in conjunction with the issuance of other Bonds; and provided further, that the allocation among Purchasers of the costs of debt service on additional Bonds issued for the purpose set forth in Section 31(a) (ii) shall be made in the manner specified in such written determination. Section 32. Efforts To Obtain Intertie. The Pur- chasers recognize the importance of the completion of a satis- factory high-capacity Fairbanks to Kenai Peninsula transmission BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 31 intertie, and of full $218 million funding for the Project, and agree to continue all reasonable efforts to obtain sufficient state funding for such transmission intertie and Bradley Lake. IN WITNESS WHEREOF, the parties have caused this Ag- reement to be executed the day and year first above written. THE ALASKA POWER AUTHORITY By As ALASKA ELECTRIC GENERATION & TRANSMISSION COOPERATIVE, Inc. By As CHUGACH ELECTRIC ASSOCIATION, INC. By. As HOMER ELECTRIC ASSOCIATION, INC. By. As BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 32 GOLDEN VALLEY ELECTRIC ASSOCIATION, INC. By As MATANUSKA ELECTRIC ASSOCIATION, INC. By As As THE MUNICIPALITY OF ANCHORAGE d/b/a MUNICIPAL LIGHT AND POWER As THE CITY OF SEWARD d/b/a SEWARD ELECTRIC SYSTEM By As BRADLEY LAKE PROJECT POWER SALES AGREEMENT Page 33 BM puree 1@ August 12, 1988 RECEIVE) AUG 1 5 1988 ; ALASKA POWER Dear Brent: AUTHORITY, The enclosed draft Bylaws have been revised in response to your and Ron's suggestions and directions. Ron, however, has not gotten a chance to review my changes, so he is not responsible for any of my errors or ommissions. In addition, I have included a draft cover letter from you and Ron to the members of the PMC that you should distribute with the Bylaws. The letter is of the general form that Ron suggested to me, but neither he nor I have any pride of authorship if you wish to make changes. I will call you on Monday, August 15, to see if everything is clear for your distribution and to answer any questions. Sincerely, <font. fo Jennifer L. Forrence August , 1988 DRAFT Members of the PMC RE: Draft Bradley PMC Bylaws Dear 2 Enclosed please find a draft of the Bradley PMC Bylaws which you requested we prepare in the June 30, 1988 organizational meeting. In reading through the draft Bylaws, you should keep in mind that they do not include many hard and fast requirements. For the most part, this draft document represents possible resolutions to policy questions that must be addressed by the BPMC as a whole. Other requirements are derived from the Bond Resolution, which provides procedures for amendment, or from the Power Sales Agreement. There will be ample opportunity at the upcoming BPMC meeting for you to add your insight and suggestions for revisions. Some areas needing particular attention are the open meetings issue and the budget process. The reason we have only described the budget in general terms is that as we have worked through the budget and funding requirements of the Budget Resolution, we have come to the conclusion that some modification is necessary before the process will be workable. Rather than create policies out of the complex requirements of the Bond Resolution, we have set out some simple steps for Committee funding prior to Project completion and left open "after completion" policies. The insurance section will also need attention because of potential conflicts between the insurance requirements of the Bond Resolution and the Power Sales Agreement. Again, these Bylaws represent only a first-cut effort to provide a basis for debate in the upcoming meeting. Your input will be greatly appreciated during the discussion of these issues. Sincerely, Brent Petrie Ronald L. Saxton JLFbbs110 BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS DRAFT DRAFT TABLE OF CONTENTS Page Te OFFICES so 0:00:58 :6:0:0:6:6 0 c1'910 010010 0 0010 6 oi00's vieeie wees 0 vie a II. REPRESENTATIVES... cccccccccccccccccccccccccccce 2 III. COMMITTEE MEETINGS... ccccececcccccvccccccccces w Annual Meeting... ..ccecccccccccccccccevece Regular Meetings... .cccccccccccsccvccccees Special MeetingS.....ccceccccccccsccccvece Notice of MeetingsS.....cccscccccccccccsees Waiver Of NOtCice.....ccccccccccccccccvvces Place of MeetingS......cceccerccccvccccece Teleconferencing... cece ccccccceccs Minutes of MeetingS.....ccccccccccccccccce QUOFUM. cccccccccccccccccscccsccccceseccoes O Manner Of Acting.....cccccccccsecccccsevcs 1 Open Meetings... .cccccccccccccececccccccs WWWWWWWWWWWw oe © © © © © we ew oe rPrRoODIHDMN&WNH IV. COMMITTEES... cece ccc ccccccccccnccrsccsecscsces 4.2 Designation... .ccccccccccccccccccccccccees 4.2 POWOTS cece cc cc ccccccccccccccccccccccceens 4.3 TELM. cc cccccccccccccccccccccccsccseceecees www wo Noe beh bh WWWW V. OFFICERS... ccc ccc cccc creer ccccsccccersccsscccsecs w °o v oO NUMbDEr oc ccc ccc ccccccccccccccccescceccceees Election and Term of Office........seeeeeee REMOVAL... cc ccccccvcccccccccccccccccccccccs VaCancies...ccccccccccccccccccccccccccvccce Separation of the Office of Treasurer From that of Permanent Secretary....... Chairman... .ccccccccccccccccccccccsscescece Vice Chairman.....cccccccccccccccccccccece Secretary/Treasurer.sceecccccccsescscecncs VuWN NNMUMHUH eee eee ee OYH NSLWNHE PRP PRR HOO ooo we we VI. INDEMNIFICATION... ..cccccccccccsccscccsescccececs we N VII. ANNUAL BUDGETS AND DETERMINATION OF RATES....... ew w 7.1 Budget Process Prior to Project Completion....cccccceccccccseccscsscece 13 7.2 Budget Process Following Project Completion...ceccccccccccccseccsssscece 13 DRAFT es Budget Standards and Procedures........... 14 4 Auditing Standards and Procedures......... 14 os Standards for Capital Asset Acquisition @NG-ACCOUNEUNG. oor: oie) 10/0 «/01010.0)s1e1c]e c1e1eie el 15 VIII. COMMITTEE FUNDS.....cccccccccccccccccccccccccces 16 Cleat Required (Funds c:ceic-c seclc «| cclciclonc|(cielorciclerclo.clorcls 16 8.2 Allocation of Nonpower Sales Revenues..... 16 IX. PROJECT INSURANCE... .ccccccccccccccccccccccscces L7, 9.1 Coverage Limits....cccccccccccccccccccscce LT 9.2 S@LE PINSULANCE o oi61 016 oierelo ole c/erels chereleyeis} crc siclclele L7 9.3 Insurance Claim Proceeds.......ccccccceees 17 9.4 ANNUAl REVIEW sc <cicic 010 010 ole wie «cie/c1 ec i0lc/ ciel ele oie) 6 U7 X. PROCEDURES FOR DISPUTE RESOLUTION.......ccceeees 18 VO. 1) (Procedural RULOB sco cic ocleicicicioielciele olcleleleie viele 18 10.2 Authority... .cccccccccccccccccccccccccccce 18 LOs3s (SUGLCLAl REV 1 OW de ccicxcr0) cc 1010 lele'e/ cle/cieieleic|s.cie1clo 18 10.4) Arbitration ecco o ciciccieiclciclec clcicicie clecisicicic 6 18 10.5 Costs of Arbitration. ..ccccccccccccccccces 18 XI. REIMBURSEMENT OF TRAVEL AND PER DIEM EXPENSES... 19 11.1 Committee MeetingsS......ccccccccsccccccces 19 11.2 Special Purpose Committee Meetings........ 19 XII. OTHER POLICIES... cccccceccccccccccccecccccececs 20 XIII. DEFINITIONS PURSUANT TO THE AGREEMENT........... 21 ii DRAFT BYLAWS OF BRADLEY PROJECT MANAGEMENT COMMITTEE ARTICLE 1 OFFICES The Committee shall have no physical office but shall have a mailing address at the Alaska Power Authority whose representative is the permanent Secretary of the Committee. 1 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT ARTICLE 2 REPRESENTATIVES The Committee shall consist of the Authority and the Purchasers, including as Purchasers for this purpose both Homer Electric Association, Inc. and Matanuska Electric Association, Inc., for themselves and for AEG&T as a Purchaser represented by and through these utilities. No Committee member shall obtain an additional vote through merger with, acquisition of, or assignment from any other Committee member, and AEG&T shall have no direct vote, but shall be represented by and through Homer Electric Association, Inc., and Matanuska Electric Association, Inc., each of which shall be entitled to vote as a Purchaser member for purposes of Committee procedure. Each Committee member entitled to vote shall designate one representative and one alternate representative to the Committee. Each member shall notify all other members in writing of the names, addresses and telephone numbers of its representatives and designated alternative. Any member may change its designated representative or alternate representative at any time and shall promptly provide written notice of such change to the members. The alternate representative shall serve as the designated representative in the absence of the designated representative. 2 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT ARTICLE 3 COMMITTEE MEETINGS 3.1 Annual Meeting. The annual meeting of the Bradley Project Management Committee shall be the first regular meeting of the Fiscal Year (July 1 through June 30), for the purpose of electing officers and transacting such other business as may come before the meeting. 3.2 Regular Meetings. After the Bradley Project Management Committee is established, regular meetings shall be held at least quarterly, with the specific date and time to be determined by the Committee from time to time. [Power Sales Agreement Section 13(a)] 3.3 Special Meetings. Special meetings of the Bradley Project Management Committee may be called by the Chairman or by three members of the Committee at any time by so advising the Secretary of the Committee. Business at a special meeting of the Committee shall be limited to the purpose stated in the notice of such special meeting. 3.4 Notice of Meetings. Public notice shall be given by the Secretary of the Committee for all meetings of the Committee. Notice of regular meetings shall be given by: (a) mailing notice to all persons or organizations who have filed with the Committee a written request to receive notice, and (b) publishing notice once in the designated newspaper of the Committee. Notice of a regular meeting shall be mailed and published at least five (5) days before the date of the meeting. 3.4.1 A notice of a meeting shall include the date, time and place of the meeting, and if the meeting is by teleconferencing, the location of a teleconferencing facility that is equipped with a speaker-telephone or similar listening device. 3.4.2 Written notice of special meetings shall be given, as reasonable, before the time specified for such meeting. Such notice of special meetings shall state the purpose or purposes for which the meeting is called. Business at a special meeting shall be limited to the purposes stated in the notice of such special meeting. 3.4.3 It is the intent of the Committee to give the best notice possible to the public of all its transactions, but 3 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT the inadvertent failure to accomplish any one of the notice requirements shall not invalidate any action of the Committee. 3.4.4 The designated newspaper of the Committee is The Anchorage Times or the Anchorage Daily News. 3.5 Waiver of Notice. Whenever any notice is required to be given to any member a waiver of the notice in writing, signed by the person or persons entitled to such notice, whether before or after the time stated in the notice, shall be deemed equivalent to the giving of such notice. 3.6 Place of Meetings. The Chairman of the Committee may designate any place as the place of meeting for any annual, regular or special meeting of the Committee. 3.7 Teleconferencing. Attendance and participation by any or all representatives of the members at any meeting of the Committee may be by teleconference. The votes at a meeting held by teleconference shall be taken by roll call. Materials that are to be considered at a meeting that is by teleconference shall be made available at the teleconference locations. Participation by such means shall constitute presence in person at a meeting. 3.8 Minutes of Meetings. Written minutes shall be kept for all regular and special meetings of the Committee. Minutes of Committee meetings shall be mailed to each member following each meeting. The official copy of each minutes shall be signed by the Chairman and the Secretary. 3.9 Quorum. At all meetings of the Committee, the presence of the representatives of any four member shall constitute a quorum for the transaction of business, except as otherwise provided in the Power Sales Agreement. 3.10 Manner of Acting. 3.10.1 Committee actions may be taken by any reasonable voting method, provided that any member may successfully request a public roll call vote. 3.10.2 The act of a majority of votes, weighted or unweighted, with or without APA concurrence, as is appropriate for the subject matter, as detailed in 3.10.4 and 3.10.5, or concurrence of all members if required by 3.10.5(3), taken during a meeting at any time when a quorum is present, shall be an act of the Committee, and binding on the members. 3.10.3 A representative who is present at a meeting of the Committee at which action on a Committee matter is taken shall be presumed to have assented to such action unless the representative's dissent shall be entered in the minutes of the 4 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT meeting, or unless the representative shall file a written dissent from such action with the person acting as the Secretary of the meeting, before the adjournment of the meeting, or shall forward such dissent by registered mail to the Secretary of the Committee immediately after the adjournment of the meeting. Such right to dissent shall not apply to a representative who voted in favor of such action. 3.10.4 Certain matters shall require a majority of Purchaser Committee member votes only with no Authority vote. 1. The following items shall be determined by voting weighted according to percentage share of Project Capacity, with the Authority receiving no vote: fay Adopti of procedures for scheduling, /production and dispatch of ’ project/ power. / / jf. \, \ oe / (»)\_Establishtent £ procetures/cor the use of each Pur er's Water-Allocation. (c) Selection among alternative methods that do not involve the Authority for funding Required Project Work. 2. Each Purchaser will have one equal vote in the following matter, with the Authority receiving no vote: [Items for this category have not been identified.) 3.10.5 Certain matters shall require concurrence by the Authority with the decision of Purchasers. 1. In the following matters, votes of the Purchaser members shall be weighted according to percentage share of Project Capacity, and the Authority must concur with Purchasers whose percentage share of Project Capacity is greater than 51% for an action to be taken: fia) Arranging the operation and maintenance of the Project. (b) Adoption of budget of Annual Project Costs. (c) Evaluation of necessity for and scheduling of Required Project Work. (d) Determination of appropriate amount of sa gad yy insurance beyond that required by the Bond PRA AN Y | 5 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 meeting, or unless the representative shall file a written dissent from such action with the person acting as the Secretary of the meeting, before the adjournment of the meeting, or shall forward such dissent by registered mail to the Secretary of the Committee immedi- ately after the adjournment of the meeting. Such right to dissent shall not apply to a representative who voted in favor of such action. 3.10.4 Certain matters shall require a majority of Pur- chaser Committee member votes only with no Authority vote. ls The following items shall be determined by voting weighted according to percentage share of Project Capacity, with the Authority receiving no vote: Selection among alternative methods that do not in- volve the Authority for funding Required Project Work. as Each Purchaser will have one equal vote in the follow- ing matter, with the Authority receiving no vote: {Items for this category have not been identified.] 3.10.5 Certain matters shall require concurrence by the Authority with the decision of the Purchasers. ls In the following matters, votes of the Purchaser members shall be weighted according to percentage share of Project Capacity, and the Authority must concur with Purchasers whose percentage share of Project Capacity is greater than 51% for an action to be taken. /la) Adopting of procedures for scheduling, production _ {Cana dispatch of project power. Lyte S . ue (b) Establishment of procedures for the use of each ( Purchaser's Water Allocation. (c) Arranging the operation and maintenance of the Project. (ad) Adoption of budget of Annual Project Costs. (e) Evaluation of necessity for and scheduling of Required Project Work. (£) Determination of appropriate amount of insurance beyond that required by the Bond Resolution and obtention of that insurance amount. 5 - BRADLEY. E..MANAGEMENT COMMITTE BYLAWS 3586/DD39/1% Version 3.10.4 and@-3.10.5) / DRAFT Resolution and obtention of that insurance amount. (e) Adoption of additional minimum funding amounts for the Renewal and Contingency Reserve Fund above that required by the Bond Resolution. (£) Selection among alternative methods that involve the Authority for funding Required Project Work. 2. In the following matters, each Committee member shall have one equal vote and the Authority must concur with a simple majority of the rest of the members for an action to be taken. (a) Adoption or amendment of procedural rules of the Committee. (b) Adoption of maintenance schedules for the Project. (c) I£ and when no Bonds are outstanding, determination of rules, procedures and accounts necessary to manage the Project. (d) Evaluation and approval of Optional Project Work and the compensation for such work. 3. In the following matters, the unanimous concurrence of all Committee members shall be necessary for an action to be taken: (a) Adoption of procedures for dispute resolution. 3.10.6 Certain matters shall require a majority of Committee votes, with each Member receiving an equal vote (including the Authority): (a) Election of officers. 3.10.7 The adoption and implementation of procedures relating to electric power reserves for the Project in accordance with Section 5 of the Power Sales Agreement shall be done by the Authority in negotiations with individual purchasers. 3.10.8 Conduct of Meetings. Robert Rules of Order shall govern the conduct of Committee meetings except where in conflict with specific procedural rules adopted by the Committee. is 6 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS \w (8-5-88) je JLFbbs109 \ ( \,) 3 “SN (g) Adoption of additional minimum funding amounts > for the Renewal and Contingency Reserve Fund above that required by the Bond Resolution. (h) Selection amount alternative methods that involve the Authority for funding Required Project Work. Ze In the following matters, each Committee member shall have one equal vote and the Authority must concur with a simple majority of the rest of the members for an action to be taken. (a) Adoption or amendment of procedural rules of the Committee. (b) Adoption of maintenance schedules for the Pro- ject. (c) If and when no Bonds are outstanding, determina- tion of rules, procedures and accounts necessary to manage the Project. (d) Evaluation and approval of Optional Project Work and the compensation for such work. 35 In the following matters, the unanimous concurrence of all Committee members shall be necessary for an action to be taken: . (a) Adoption of procedures for dispute resolution. 3.10.6 Certain matters shall require a majority of Commit- tee votes, with each Member receiving an equal vote (including the Authority): (a) Election of Officers. 3.10.7 The adoption and implementation of procedures relating to electric power reserves for the Project in accordance with Section 5 of the Power Sales Agreement shall be done by the Authority in negotiations with individual purchasers. 3.10.8 Conduct of Meetings. Robert Rules of Order shall govern the conduct of Committee meetings except where in conflict with specific procedural rules adopted by the Committee. 6 - BRADLEY LAKE MANAGEMENT COMMITTE BYLAWS 3586/DD39/2 (BNP Version 3.10.4 and 3.10.5) ! DRAFT 3.11 Open Meetings. The Committee has determined that Alaska public policy favors openness and public access and the Committee desires to conduct its business in public in accordance with the following policies: 3.11.1 The committee recognizes that meetings between the Authority and public utilities concerning a wholesale agreement for the sale of power or other matter exempted from review under AS 42.05.431(c) (which are contracts for wheeling, storage, regeneration or wholesale repurchase of power between the Authority and public utilities entered into between October 31, 1987 and January 1, 1988), are required to be open to the public under AS 42.05.431(d) and 44.62.310. 3.11.2 All formal meetings of the Committee and its special purpose committees shall be open to the public except as otherwise provided in these Bylaws. Except when voice votes are authorized, all votes shall be conducted in such a manner that the public may know the vote of each person entitled to vote. 3.11.3 Meetings called to meet a public emergency affecting life, health, welfare or property may be called by the Chairman or by three members of the Committee at any time by so advising the Secretary of the Committee who shall forthwith give telephonic notice to the Parties and their designated representatives to the Committee of the time and, unless the meeting is by teleconference, the place of the meeting. 3.11.4 Executive Sessions. If any subjects to be discussed at a meeting are subjects that may potentially be discussed in an executive session, the meeting shall first be convened as a regular or special meeting and the question of holding an executive session to discuss matters that come within the exceptions contained in Section 3.11.4 of this rule shall be determined by a majority vote of the Committee. No subjects may be considered at the executive session except those mentioned in the motion calling for the executive session unless auxiliary to the main question. Formal action may not be taken during the executive session. Only members of the Committee and designated alternates, attorneys for members of the Committee and members of the Technical Standards Committee may attend an executive session, unless the motion calling for the executive session specifies other persons who are to present information to the Committee. 3.11.5 The following excepted subjects may be discussed in an executive session: l. Matters the immediate knowledge of which would clearly have an adverse effect upon the finances of the Authority or the Project. 7 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 2. 3. DRAFT Subjects that tend to prejudice the reputation and character of any person, provided the person May request a public discussion; Matters which by law, municipal charter or ordinance are required to be confidential. 3.11.6 Sections 3.11.2, 3.11.3, 3.11.4 and 3.11.5 shall not apply to: l. 2. 3. Meetings at which a quorum is not present; Informal discussions, by telephone or otherwise, among members of the Committee, at which votes are not taken and official business is not conducted; or Meetings and discussions, formal or informal, of Committee members in which all participants indicate they are acting individually as representatives of the Parties to the Agreement and not as the assembled Committee, and at which no Committee business is conducted and no votes are taken. 8 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT ARTICLE 4 COMMITTEES 4.1 Designation. The Committee may appoint special purpose committees from time to time, subject to such conditions as may be prescribed by the Committee and subject to the limitations imposed by the Power Sales Agreement. The designation of any such committee shall not relieve the Committee or any member of the Committee of any responsibility imposed by law or the Agreement. 4.2 Powers. The Committee may not delegate its decision- making duties to any special purpose committees. 4.3 Term. The members of each special purpose committee shall serve from the date of appointment until the date of the next annual meeting of the Committee. 9 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT ARTICLE 5 OFFICERS Sia. Number. The officers of the Committee shall initially consist of a Chairman, a Vice Chairman, a Secretary/Treasurer. Under subsection 5.5., below, the Committee may later decide to separate the offices of Secretary and Treasurer. The offices of Chairman and Secretary shall not be held by the same person. The Committee may elect such other officers and agents as it shall deem necessary, who shall hold office for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Committee. The Committee may, by separate resolution, provide for the indemnification of its officers, members and the members of any special purpose committees appointed by the Committee. 5.2 Election and Term of Office. Initially only the Chairman and Vice Chairman shall be elected by the Committee at its annual meeting. The Authority representative shall be the permanent Secretary/Treasurer. In the event that the office of Treasurer is separated from that of Secretary under the provisions of 5.5., below, the Treasurer will become an annually elected officer, while the Authority representative will retain the position of permanent Secretary. Only Committee members or alternates shall be eligible to serve as officers. Each officer shall hold office until a successor is elected and accepts office unless the officer earlier resigns or is removed by the Committee. 5.3 Removal. Any officer elected by the Committee may be removed upon the vote of five members of the Committee. 5.4 Vacancies. In the event any vacancy occurs in any elected office of the Committee, the remaining members of the Committee shall elect a successor to the office at the next regular meeting of the Committee. 5.5 Separation of the Office of Treasurer from that of Permanent Secretary. In the event the Committee determines that the office of Treasurer should be separate from that of Secretary, a vote of a simple majority of the Committee (unweighted for percentage share) shall be all that is necessary to complete such a separation. Upon separation of those offices, the Treasurer shall become an annually elected office, retaining only the “Treasurer duties" of 5.8.1. Upon separation of these officers, the representative of the Authority will remain the permanent Secretary, retaining only the "Secretary duties" of 5.8.2. 5.6 Chairman. The Chairman shall preside at all meetings of the Committee and shall perform such other duties and have 10 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT such other powers as the Committee may prescribe, subject to the limitations set forth in the Power Sales Agreement. 5.7 Vice Chairman. The Vice Chairman shall act under the direction of the Chairman, and in the absence or disability of the Chairman or if the office of the Chairman is vacant, shall perform the duties of the Chairman, and from time to time shall perform such other duties and have such other powers as the Chairman or Committee may prescribe, subject to the limitations set forth in the Agreement. 5.8 Secretary/Treasurer. The following duties will be assigned to the Secretary/Treasurer until such time that the Committee determines they should be separated under the provisions of 5.5., at which time the Secretary will retain only the Secretary Duties and the Treasurer shall retain only the Treasurer Duties. 5.8.1 Secretary Duties The Secretary/Treasurer shall act under the direction of the Chairman in regards to secretarial duties. Subject to the direction of the Chairman or the Committee, the Secretary/Treasurer shall attend all meetings of the Committee and keep a record of the proceedings. In the Secretary/Treasurer's absence, the Chairman shall designate another member of the Committee to keep a record of the proceedings. The Secretary/Treasurer shall perform like duties for committees when required. The Secretary/Treasurer shall give or cause to be given notice of all meetings of the Committee and special meetings of the Committee and shall perform such other duties as may be prescribed by the Chairman or the Committee. The Secretary/Treasurer may incur reasonable expenses associated with keeping a record of the proceedings, including the compensation and travel costs incurred to retain a person to keep such records. 5.8.2 Treasurer Duties. The Secretary/Treasurer shall act under the direction of the Committee in regards to Treasurer duties. Subject to the direction of the Committee, the Secretary/Treasurer shall have control of the Committee funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Committee, and shall immediately deposit all monies and other valuable effects in the name and to the credit of the Committee in such depositories as may be designated by the Committee. The Secretary/Treasurer shall disburse the funds of the Committee as may be ordered by the Committee, taking proper vouchers for such disbursements, and shall render to the Chairman and the Committee at its regular meetings or when the Committee so requires, an account of all the Secretary/Treasurer's transactions as Secretary/Treasurer and of the financial condition of the Committee. The Committee shall secure a bond in an adequate amount to cover the actions of the Secretary/Treasurer. 11 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT ARTICLE 6 INDEMNIFICATION The Committee shall indemnify and hold its Committee members and officers harmless against all claims and liabilities which they or any of them incur as a party defendant to any proceeding (other than a proceeding filed by or in the right of the Committee), based on any authorized action of any such person as a Committee member or as an officer of the Committee within the scope of the Committee member's office. For purposes of this provision, "Committee member" means a Committee representative, an alternate Committee representative, an authorized agent of the Committee who is otherwise employed by the Committee, the Purchasing Utilities or the operators, or an authorized employee of the Committee. 12 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 ARTI 7 DRAFT ANNUAL BUDGETS AND DETERMINATION OF RATES 7.1 Budget Process Prior to Project Completion. 7.1.1 The only BPMC expenses during this period will be those related to Committee activity or costs incurred by individual purchasers and agreed to be shared by other Committee members. No APA costs will be eligible for utility payment during this period, nor will APA have any obligation to share in the payment of BPMC expenses. 7.1.2 Prior to project completion, the Power Sales Agreement (PSA) does not require any “budget process." The purchasers determine what expenses to incur and how to fund them (APA is not a party to these decisions or payment obligations). The PSA allows complete discretion for what costs can be included, and indicates that such expenses "shall be borne by the capital Purchasers in accordance with the Percentage Shares of each." This suggests that the weighted voting for approval of such expenses may be appropriate. Approval of such expenses can be on an ad hoc basis, or through some simple budget process, but again the PSA does not require any budget process until the project reaches commercial operation. 7.2 Budget Process Following Project Completion. (NOTE: The following sets out a Seta process, but it will require more effort before it will provide a meaningful guideline for operations. ] 7.2.1 The PSA and Bond Resolution provide for a formal budget process following completion of the projects. 7.2.2 The BPMC shall prepare an annual budget including: 1. Amounts required for debt service on any outstanding bonds; 2. Amounts required for reserve funds created by bond resolution; 3. Costs of producing and delivering power including: (a) O&M, (b) insurance, (c) APA's project specific administrative and general costs; 13 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT (e) Any individual utility cost to be reimbursed by BPMC, and (d) Costs of BPMC, (£) Any other cost approved by PMC. 4. The budget may, in the future, include amounts for non-bond funding of additional project work, as well as Excess Payments following final payment of all bonds. 7.2.3 Determining Annual and Monthly Payment Obligations of Each Purchaser. Each utilities' monthly payment Obligation will be determined by the formula: Annual Project Costs x Monthly Payment Obligation = % Share of Capacity 12 7.3 Budget Standards and Procedures. 7.3.1 The standards and procedures developed generally consist of the following: 1. The APA shall provide annual budget detail listing personnel requirements by work function, their gross payroll, payroll burdens and the estimated percentage of each work function to be required for operation and maintenance. The estimated costs for materials, supplies, engineering and other costs shall be provided in sufficient detail to allow the Committee a reasonable basis to analyze the budget in the approval process and to provide a basis for the annual audit of actual costs. 2. The APA shall provide annual budgets detailing the estimated costs relating to FERC license require- ments and property insurance and the project specific administrative and general costs and to be paid to the APA. 7.4 Auditing Standards and Procedures. The primary purpose of the audit is to verify expenses. 7.4.1 An annual audit shall be performed by qualified independent auditors selected by the Committee, to be completed on or before the first day of December of each year. 7.4.2 The scope of the audit shall be limited to the operating and maintenance costs relating to the Facilities, the 14 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 m5 UNA I annual Project-specific costs of the APA, and the APA and Committee assets, liabilities and costs including all funds administered by the APA and the Committee, necessary to establish a true-up of the annual project cost. 7.4.3 The annual financial statements shall disclose the comparison of actual operating results to the annual budget. 7.4.4 The APA costs for performing operation and Maintenance of the Project and for performing continuing studies as required will be audited by the Committee's auditors. 7.4.5 The members shall make available to the auditors such records and schedules required in their examination of the financial statements in a timely manner. 7.5 Standards for Capital Asset Acquisition and Accounting. To provide for a canranent Ta. consistent policy of ownership and control, the Committee has designated the APA as owner of all capital assets which benefit the Project while retaining the right to control all capital assets associated with the Project. 7.5.1 Capital assets includes an asset acquired for the benefit of the Project that has a value of $500 or more, and a useful life of at least one year, and substantially comprises a Retirement Unit as listed in the Federal Energy Regulatory Commission List of Retirement Units, as amended from time to time. 7.5.2 The Committee shall transfer ownership of current and future assets held in trust for the Project to the APA. 7.5.3 The Committee will have control and management of all capital assets purchased with the state or utility funds, and to manage all proceeds derived from sales upon retirement of these capital assets and to purchase additional capital assets for the benefit of the Project. 7.5.4 To the extent that purchase costs can be minimized through the State of Alaska's purchasing power, the APA May make purchases on behalf of the BPMC as the "Purchasing Agent". To the extent other purchasing alternatives are preferable, the Committee may use those procedures. The Committee is under no obligation to follow the State Procurement Code for acquisitions with any of the funds. 15 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT ARTICLE 8 COMMITTEE FUNDS AND ASSETS (NOTE: The PMC must make many policy decisions before a budget process and the accompanying requirements for funds and assets may be finalized. } 8.1 establishe 8.2 Required Funds. The following funds are required to be y the Bond Resolution: Construction Fund Debt Service Fund, consisting of an Interest Account and a Principal Account Capital Reserve Fund Renewal and Contingency Reserve Fund Excess Investment Earnings Fund Revenue Fund Operating Fund Revolving Construction Fund Allocation of Nonpower Sales Revenues. 8.2.1 The Committee has established a policy regarding, and procedure for, the allocation of revenues received by the APA or individual Purchasing Utility Members of the BPMC from the sale of surplus property associated with the operation and maintenance of Project facilities as follows: All revenues resulting from the sales of property purchased for the operation and maintenance of the Project facilities must be deposited in the Project Revenue Fund and used for the benefit of purchasing utilities. 16 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 DRAFT ARTICLE 9 PROJECT INSURANCE 9.1 Coverage Limits. The Authority shall secure and maintain insurance of types and amounts as are "customary" for facilities of similar types and sizes as the Project. The initial determination of customary shall be made by the Committee. This estimate shall be evaluated by an insurance consultant employed by the Authority. At a minimum, the following insurance shall be maintained. SoleL Insurance for buildings, works, plants and facilities comprising the Project for physical loss in amounts sufficient to pay and retire and redeem all Outstanding Bonds; 9.1.2 General public liability insurance (other than as set forth in subsection (3) of this Section) in minimum amounts, for annual aggregate claims, and with a deductible amount as is customary in comparable facilities. 9.1.3 Comprehensive automobile liability insurance. 9.1.4 Workers' compensation or self-insurance as required by the laws of Alaska [Bond Resolution Section 714, Power Sales Agreement §13]. 9.2 Self-Insurance. The amounts and types of insurance determined “customary,” including the minimum amounts required in the Bond Resolution, may be maintained through self-funded insurance methods. 9.3 Insurance Claim Proceeds. Disposition of insurance claim proceeds for damage or destruction of the physical facilities is governed by Section 715 of the Bond Resolution. Any other insurance proceeds accruing to the project may be applied by the Committee as they see fit. [Bond Resolution §715]. 9.4 Annual Review. The Authority and the Committee together shall review annually the insurance types and amounts carried with respect to the project. [Bond Resolution §714]. 17 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) ; JLFbbs109 DRAF7 ARTICLE 10 PROCEDURES FOR DISPUTE RESOLUTION 10.1 Procedural Rules. The Project Management Committee shall perform its decision-making responsibilities consistent with the Power Sales Agreement and the procedural rules set forth in this Handbook. 10.2 Authority. In the event the authority of the Committee to act is at issue, the Committee shall first make a finding as to its authority. If the Committee determines that it has authority to consider the matter, it shall decide the issue on its merits. If the Committee determines that it does not have authority to consider the matter, the matter will be subject to immediate judicial resolution. If the court determines that the Committee in fact had authority to consider the matter, the matter shall be remanded for Committee action. 10.3 Judicial Review. Any action, or failure to act, of the Committee shall be subject to judicial review. The reviewing court shall (a) set aside any Committee action found to be arbitrary, capricious or otherwise not in accordance with law or with the terms of the Agreement, and (b) order the Committee to take action if such action has been unreasonably withheld or delayed. Failure of any party to appeal any Committee decision shall not constitute a waiver of the right to appeal any future decision. 10.4 Arbitration. Upon agreement of the Committee representatives of the Authority and any three utilities, the Committee may refer any matter within the Committee's authority to arbitration. Unless otherwise unanimously agreed to by the members of the Committee, arbitration shall be conducted before an arbitrator selected under the guidelines of the American Arbitration Association and the arbitration shall be conducted in accordance with the commercial arbitration rules of the American Arbitration Association then in effect. In addition, the arbitrator must have education and experience in the particular matter being arbitrated. The arbitrator shall have no authority, power or jurisdiction to alter, amend, change, modify, add to or delete any of the provisions of the Agreement and shall be subject to judicial review as a Committee decision, in accordance with Section 10.2, above. 10.5 Costs of Arbitration. The costs incurred in connection with the arbitration shall be apportioned by the arbitrator as she or he deems appropriate. 18 - BRADLEY PROJECT MANAGEMENT COMMITTEE BYLAWS (8-5-88) JLFbbs109 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE INITIAL MEETING MINUTES THURSDAY, JUNE 30, 1988 The meeting was held in the training room at Chugach Electric. The meeting began at approximately 10:00 a.m. The following people were in attendance: Kent Wick - HEA Sam Matthews - HEA/AEG&T Myles Yerkes - MEA John Cooley - ML&P Paul Diener - City of Seward Jim Palin - MEA Don Grimes - First Southwest Dave Eberle - APA Bob LeResche - APA Brent Petrie - APA Don Shira - APA Dave Highers - CEA Tom Lovas - CEA Ron Saxton - GVEA Mike Kelly - GVEA Kurt Dzinich - Senate Advisory Council Marnie Isaacs - APA Carol Johnson - CEA The attendees began by stating their names and affiliation (a sign-in sheet is attached). I. II. Approval/Modification of Agenda Mr. LeResche stated that Dave Highers had distributed an agenda for the meeting (copy attached). Mr. LeResche added an item II. Finance. The agenda was approved as amended. Finance Mr. LeResche prepared an analysis that was sent to everyone, and which he said he tried to keep as neutral as possible. The underwriters feel it is highly important to understand the finance issues as early as possible. A discussion ensued regarding the percentage points that will be charged on the Bradley Lake project. Mr. LeResche stated he needs an affirmative commitment from all participants to get the financing in progress and talk to rating agencies and insurance companies, then this committee or a subcommittee thereof should formally review rates, tax PMC Minutes -2- June 30, 1988 laws, etc. every quarter and be ready to make a decision by December, 1990. Mr. LeResche introduced Mr. Don Grimes from First Southwest as APA's Financial Advisor. Mr. Grimes reported that he reviewed the memo and thinks it was well written. It also gives an indication of what the risks are on waiting on the financing. The risks involved are: Ls Rates will generally be increasing; te Uncertainties of the tax laws, and x5 Technical amendments to the 1986 Budget Act. Mr. Grimes feels that the PMC should poise themselves to get ready to go in the market, talk to rating agencies and insurance companies and get documents in as final form as they can be. "No decision needs to be made today, however, if you don't get yourselves to that point you'll always be a few months or several months away from making a decision." It will take several months to get all of the work done. Mr. Grimes' recommendation is to get ready to go and then the decision can be made as to whether or not it is the best idea to move forward. A question was raised regarding the cost of getting ready. Mr. LeResche stated each participant would pay out-of-pocket expenses. There would not be any payments to anyone. Mr. Wick stated that he feels it is prudent to move ahead. Mr. Wick made a motion for the PMC to move ahead and begin the process of talking to the rating agencies and insurance companies to prepare the financial paperwork. Mr. Highers asked if the subject could be discussed prior to approval of the motion. Mr. Highers suggested that each utility choose a representative and then finance the representative for the necessary expenses. Mr. Grimes feels it is important for as many utilities as possible be represented, especially the three largest utilities. Mr. Palin asked if all of the APA financing team was embedded, or if the utilities have any participation in the decision (i.e. Financial Advisor, Underwriters, etc.). Mr. LeResche reported that First Southwest will remain the Financial Advisor to the Power Authority, their fee is $1.95 per $1,000 plus actual out-of-pocket expenses. The Underwriters are at a fixed fee to be negotiated at the time of the sale, but an amount will have to be approved by all of the participants. Mr. Grimes expects it will be PMC Minutes -3- June 30, 1988 IIt. somewhere between 1.5 to 2%, but will be subject to the current market conditions. Mr. LeResche stated he also expects there ‘to be approximately three additional co-managers hired. There is an RFP being put together for that hiring. A discussion ensued regarding the fees for the Financial Advisor and the Underwriters. Mr. Palin stated that he foresees a potential political problem. Mr. LeResche agreed, but feels there is no way to lock in their fee due to the changing market. Mr. Palin went on to request the current rating. Mr. Grimes feels that the issue will be rated A or A-. Mr. Wick moved to proceed in setting up long-term financing up to the point of being ready to sell the bonds, also to set up a subcommittee with a representative from each Participant and from the Power Authority. The motion was approved unanimously. Four Dam Pool PMC Experience Mr. Saxton reported that he sent out a memo to all participants on June 14. Mr. Saxton gave a report on the Four Dam Pool. Mr. Saxton's recommendations were: Le Take advantage of the opportunity to organize before plant operation and before things become a crisis situation. 26 There are rules of the organization and conditions of the agreements, and it is very important that everyone know and understand those rules. 3. There is a broad range of tasks involved in the project. Take advantage of people who specialize in different areas of the operation such that individual tasks go beyond the focal point person. The legislature imposed open meeting requirement rules on the PMC. Mr. Saxton feels this is a high priority to avoid getting into any trouble. The public can and probably will attend meetings. Mr. Petrie stated he agrees with Mr. Saxton's assessment, however, he also feels that the participants have a greater depth of staff to deal with the complicated and wide range of issues in house. ; With the Intertie Operating Committee there is a history of working together where you use the specialty people from each utility and use consultants where you have to. Mr. PMC Minutes -4- June 30, 1988 Iv. Saxton said he would use the Four Dam Pool as a lesson on things not to do and the Intertie Operating Committee as a lesson on a way things can be done and work well together. Mr. Lovas asked if there were provisions in the Four Dam Pool Agreement laying out requirements for bylaws and procedures. Mr. Saxton reported there was a policy agreement rather than rules. Three years after the Four Dam Pool project began the policy/procedure manual came out. Discussion of Responsibilities of the Committee Mr. Saxton feels the Bylaws for the Bradley Lake project should be devised as soon as possible. Mr. Wick asked Mr. Saxton to come up with objectives for the Bylaws, Policy and Procedures requirements. Mr. LeResche volunteered Mr. Petrie and Mr. Grimes to assist Mr. Saxton in the preparation of the documents. Mr. Highers moved to retain Mr. Saxton to draft the Bylaws for the Bradley Lake project and to share the cost according to the allocation of participation. The motion passed unanimously. Mr. LeResche would like to have a draft of the Bylaws by the next PMC meeting. Project Status Report Mr. LeResche asked Mr. Eberle to give a status report. Mr. Eberle reported that the formal groundbreaking ceremonies were held on Wednesday, June 29. There are four contracts that are active right now, they are: Camp Catering - Brown & Root General Civil Construction - Ensearch Transmission Line Clearing - Zubeck Turbine Generators - Fuji Electric Three additional contracts will be issued this summer, they are: 1. Powerhouse bid will be put out for bid on Friday, July 1, 1988, Mr. Eberle expects to open bids by mid September. 2. Transmission Line Construction RFP will be out by mid September and awarded by the end of the year. 3. SCADA RFP will go out by the first of August and awarded by the end of the year also. PMC Minutes -5- June 30, 1988 VI. VII. Mr. Eberle gave a commercial operation date of September 1, 1991. Some of the major milestones are that the transmission line construction needs to be completed by the fall of 1990, including Homer Electric's line so the capability to backfeed power to the project is there. The dam itself will be completed in October of 1990 with water up to the tunnel in the Spring of 1991. The first unit will be available for testing in the Spring of 1991 and ultimately be ready for commercial operation September 1, 1991. The original construction estimate was figured at $355.9 million. The power sales estimate was $350 million including the cost of financing. The current construction cost projection is less than $300 million; however, until they get into the tunnel, they don't know what the total cost will be. Mr. Kelly asked what Bechtel's relationship is to Enserch. Mr. Eberle reported that Bechtel is the construction manager for Ensearch. The designers for the project are Stone and Webster. Mr. Kelly moved to have the TCC become a subcommittee of the PMC to research and identify the overall responsibilities of the owner, operator and dispatcher including the responsibilities or duties associated with operations and maintenance. The TCC is to report back to the PMC at the next meeting. The TCC will meet on July 14, 1988. A discussion ensued regarding Operations, Maintenance and Dispatch. Mr. LeResche asked Mr. Wick if he had heard from REA regarding their approval. Mr. Wick feels that an agreement from REA will be made by late summer or early fall. Mr. LeResche will submit a letter from APA on September 1 supporting a review completion date. Establishment of Meeting Schedule Mr. LeResche suggested that the next PMC meeting be held around the first of September. All participants agreed to meet on August 24, 1988. Mr. Palin requested monthly status reports or a general status report on the project. Election of Interim Officers Mr. LeResche suggested that during the interim period and until the Bylaws are established and agreed on, he act as Chairman of the PMC for the Power Authority. The Power Authority would call the meetings and take, transcribe and distribute the minutes for all participants. PMC Minutes -6- June 30, 1988 VIII.Assignments for Preparation of Draft Rules of Procedure IX. /sb This item was previously discussed under item Iv. Discussion of Responsibilities of the Committee. No further action was taken. Other Agenda Items as Proposed None Adjournment Mr. Kelly moved to adjourn. The motion passed unanimously. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE June 30, 1988 Attendees Ko b4if —~ ye doy Wii HAAEST _ Mites Cae’ le _ TohnS Geter NLP E. Pad “Drener Ob Secetaer ol. Jim fArin — meh ‘Don Grimes — Fase SouttwasT— - Dae Ebeace —- APA - Boe LeKescpé — APA 10.Breut Rte - APA 11. Dow Shira —APA 12.Dave pleries CEA 13.7Q CoUAS —CEA 14. Row Sax te= GED o oO NY On YY FP Ww DH I. Ir. IIt. Iv. VI. vit. VIII. rx. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE INITIAL MEETING AGENDA THURSDAY, JUNE 30, 1988 BEGIN AT 9:45 A.M. Approval/Modification of Agenda Four Dam Pool PMC Experience - Ron Saxton Discussion of Responsibilities of the Committee A. Duties During Construction B. Duties Following Commercial Operation Project Status Report - David Eberle, Project Manager A. Construction Timetable, Contracts Status B. Technical Coordination Committee Establishment of Meeting Schedule Election of Interim Officers Assignments for Preparation _of Draft Rules of Procedure Other Agenda Items as Proposed Adjournment Meeting location: Chugach Electric Association, Inc. Training Room 5601 Minnesota Drive Anchorage, Alaska 99519 (907) 563-7494 Alaska Power Authority State of Alaska MEMORANDUM August 29, 1988 TO: Bradley Lake Project Management Committee Bradley ! ote: Subcommittee A € a FROM: 2 Tobe tenbeshe Chairman RE: August 29, 1988 "Due Diligence" Meeting Enclosed is a list of questions for discussion at the August 29, 1988 "Due Diligence" Meeting. REL: momk Enclosure PO. Box AM = Juneau, Alaska 99814 (907) 465-3575 Ta PO. Box 190869 704 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 NUVEEN Bradley Lake Hydroelectric Project Discussion Points for Due Diligence Meetings L The Project A. Cost and Schedule 10. What is latest cost estimate? How much assurance of meeting it? How much contingency? Is is enough? What kinds of things could cause costs to increase? How would each affect the cost estimate? How reasonable is the schedule? Is there sufficient cushion built in? What things could cause delays? What is the risk of not generating 90 MW and therefore not triggering Commercial Operation as defined in the PSA? What are the seismic risks related to the Project? B. Transmission Line TIL. The Bonds Is the Fritz Creek line part of the Project? Is it part of the definition under Federal tax law? What is the cost estimate for the line? Who is responsible for its construction? How will construction costs be funded? Who is responsible for maintenance and operation of the line? Can APA build the line if necessary? If so, what are the financing consequences? A. Bond Sizing How should excess proceeds be dealt with? Should a completion issue be planned for? Should the R&C Fund be funded from bond proceeds or revenues? Can the R&C Fund amount be reduced? What is the estimate for the size of the Operating Reserve Fund? Should the Bond Reserve Fund be sized at the maximum of annual debt service or 10%? Should the BRF be reduced in size? B. Other Issues 1. 2. 3. What structuring options should be considered other than 25 year level debt service? What call provisions are needed to deal with the excess proceeds problem? What will trigger the decision to proceed with the bond issue? NUVEEN TI. 1382A The Utilities A. Current Status 1. What is the financial condition of each of the utilities? 2. Is the Project considered a benefit to each utility's resource mix? 3. What is the cost of comparable generation sources? The cost of the generation being displaced by the Project? 4. Have there been any public, board or ratepayer objections voiced about the Project? 5. What other generating resources are planned in the near future? 6. What is the impact on utility rate? 7. Discussion of the load growth of each utility and how this fits into it? B. Power Sales Agreements 1. Are all internal approvals complete? 2. What is the role of APUC with respect to the Project? With respect to rates in general? 3. Are any changes in the PSA contemplated? 4. Can any changes be made and, if so, what is the process? 5. What, if any, third party approvals are needed for the PSA's? 6. What is required and how long will it take to get the approvals? 7. Is the Fritz Creek line subject to APUC or other regulation? 8. Discussion of validity of contracts under Alaska law? Tax Law Issues A. State Volume Cap 1. What is the currently available amount? 2. Is this sufficient? For how long? 3. If not, when and how will more be obtained? B. Notice and Hearing Requirements 1. When will the 60 day and 10 day state bond issue notices be sent? 2. Are any other notices required? 3. Isa TEFRA hearing required? C. Funding Limitations 1. How will costs in excess of 2% issuance cost limit be funded if needed? 2. How will interest costs after commercial operation be funded? (Tax law prohibits funding from bond proceeds). wo nWwi wn ov vere ver vous wy yo evem Siw | Con © timettorw ON vee AY live WOHLFORTH, FLINT & GRUENING A PARTNERBHID OF PROTESSI ONAL PETER ARGETSINGER TO emer eewenes) conrenanors JUNEAU OFFICE . aneenr : ATTORNEYS AT LAW 417 BECONG STREST £80. EVANS JUNEAU, ALASKA @880) ar ES eS 9CO WEST STH AVENVE, SUITE BOO TELEPMONE (907) B86-6110 TROMAR F MONKNER ANGMORAGE, ALASKA B@BC! SEATTLE OFFICE Hise oSEN TeLapueNe 1w9n E70-ee8) vag Baa eetoe su ane OANIEL BATA. OX O'TIENNEY rv py 7) 27@-8093 GRATTLC, WAGr INGTON 88104 James a. SARAPN SESSOrY 7! e7e-029 TELEPHONE (206) 448-6133 Siete we stenoce oF counss Jam . Ni ie MENNETH ©. vagsaRn pe RARR'S, ORR & KINZER ERIC £. WOHLFORTH August 12, 1988 3210 mi Or INTERSTATE GENTER OF COUNSEL SEATTLE, WASRINGTON 98:00 ROGER &. CONNDS RICHARO w. GAMNET, *JUNtAL OFMICE “SEATTLE OFFICE Mr. Brent Fetri Alaska Power Authority P.O. Box 190869 Anchorage, Alaska 99519-0869 Re: Alaska Power Authority/Bradley Lake (Our File No. 3610/003) Dear Brent: We list the following additional questions and/or issues for the due diligence meeting scheduled for August 29th. As to the Utilities: 1. The latest financial reports. 2. Management updates. 3. Description of any restrictions on financing indebtedness or power to enter in power sales agreements or similar documents which arise from any loan agreement, mortgage, promissory note, indenture or similar agreement. Project Management Committee: Description of that progress towards adoption of procedural rules under Section 13(b) of the PSA. The above are additional questions or subject areas which have occurred to me at this time for the meeting; we will forward any further to you before the meeting takes place. Very truly yours, Ee ae Eric E. Wohlforth cc: Jim Seagraves A200779 TE-EPHONE (206) 62-818 FINANCE SUBCOMMITTEE July 27, 198 FINANCE SUBCOMMITTEE OF BRADLEY PROJECT MANAGEMENT COMMITTEE July 27, 1988 Robert E. LeResche called the Finance Subcommittee of the Bradley Lake Project Management Committee, meeting to order at 10:10 a.m., in the Training Room of Chugach Electric Association, for the purpose of reviewing the tasks and timeline for long-term financing, the roles of underwriters, financial advisor and bond counsel, the selection process for co- underwriters, the timing of the bond issue, the characteristics of the bond isssue, and meetings with rating agencies and in- surers. In attendance were the following: Participant/Affiliation Page 1 of 6 é Sterling Gallagher, John Nuveen and Company Jim Seagraves, John Nuveen and Company Terry McGuire, Dean Witter Eric Wohlforth, Wohlforth, Flint and Gruening Ken Johnson, Alaska Rural Electric Cooperative Association Tom Lovas, Chugach Electric Association Gloria Manni, Alaska Power Authority Brent Petrie, Alaska Power Authority Don Grimes, First Southwest, Dallas Robert LeResche, Alaska Power Authority Kathleen Jacobs, Municipal Light and Power T.H. Keffer, Homer Electric Association Bob Hansen, Golden Valley Electric Association Bob Peirson, City of Seward John Parker, Matanuska Electric Association Mike Yerkes, Matanuska Electric Association FINANCE SUBCOMMITTEE July 27, 198 Page 2 of 6 Mr. LeResche noted that the agenda for the meeting had been developed prior to receipt of the July 20, 1988 letters from Michael Kelly, General Manager, Golden Valley Electric Association, and James F. Palin, General Manager of Matanus- ka Electric Association, Inc. Mr. LeResche asked for clarification from the respective utilities of the concern expressed in these two letters. In reference to Mr. Palin’s letter, Mr. Yerkes asked if savings could be realized through use of CFC in some capacity. Mr. LeResche responded that the CFC will be contacted and considered like any other bond insurance company and that the Power Authority will weigh credit enhancements. Mr. LeResche also noted that it was not his intent to intentionally leave CFC off of today’s agenda, rather credit enhancement corporations which might be used were listed generically under agenda item V.E. rather than listed separately. In reference to the second letter from Golden Valley Electric Association, Mr. Hansen commented that the utilities will pay for the cost of the bond issuance and bear the con- sequences of decisions made relevant to the issuance; as such, the utilities need an appropriate level of review and input. Mr. LeResche noted that the bonds will be Power Authority bonds under the contractual obligation of the Power Authority and utiliti Mr. LeResche also noted that the use of the following participants is not open to change with regard to the Bradley Lake bond issuance: Mr. Grimes, representing First Southwest Company, Financial Advisor by contract; Mr. Seagraves repre- senting John Nuveen and Company, lead underwriter for this bond issuance, previously selected by Request for Proposal (RFP) process; and Mr. Eric Wohlforth of Wohlforth, Flint and Gruening, contracted bond counsel. It was noted that all of these individuals were present at this meeting. Mr. LeResche said that the Power Authority Board of Directors at their meeting the previous day (July 26, 1988), approved distribution of the RFPs to select the co-underwriters and a consulting engineer for the Bradley Lake bond issuance. Mr. LeResche also commented that he would like the involvement of a group of people from this Finance Subcommittee in the decision making process relative to the bond issuance. In regard to the timing of the bond issuance, Mr. LeResche noted from the previous Bradley Project Management Committee meeting (June 30, 1988) that the decision has not been made as to when to issue the bonds, rather the decision was made that necessary steps will be taken such that an earlier bond issuance is not precluded. Mr. Lovas asked for clarification of the co-manager (co- underwriter) function. Mr. LeResche responded that the Power Authority needs to penetrate various parts of the bond market due to the size of the issuance as no one underwriter would have access to all of the market. The co-underwriters will be selected through an RFP process and their function would be to underwrite or market a percentage of the bonds. Thus, their expertise is in marketing and technical matters. Their fees would be negotiated at the time of the issuance. Mr. Grimes noted that the Power Authority would be looking for 2-3 co- managers (co-underwriters); this team would essentially have coverage of the full market. Mr. Yerkes added that in es- sence, the underwriters syndicate the bonds so that the bonds are ready to be sold. Mr. LeResche said that the co-managers may not be fully involved in the bond structuring due to the added, nonessential expense and distance involved and that financial advisor and bond counsel provide this service. Mr. Grimes briefed the Finance Subcommittee on the following preconditions to the timeline outlined under agenda item E 1) Team Formation, particularly addition of a consulting engineer. The consultant’s role is to develop an opinion of the project’s engineering and construction and its market feasibility and verify that the project makes sense in the marketplace at a price which provides for retirement of the bonds. The consultant’s opinion will become part of the official statement in the bond issuance. It was noted that solicitation of proposals from consultants was approved by the Power Authority Board of Directors the previous day and that due to the new State procurement process, initiation of the scope of services by the consultant is not scheduled until October 1, 1988. 2) Award of the powerhouse contract, the last major Bradley Lake contract. 3) Receipt of final REA approval of all three agreements, targeted for a September 1, 1988 completion date. Mr. Grimes said that a meeting is proposed for September of 1988 with rating agencies and bond insurance companies to elicit any concerns they might have regarding sturcturing of the bond. It was noted that these agencies/companies have pre- viously received information on this issue in order to begin the familiarization process. FINANCE SUBCOMMITTEE July 27, 198 Page 3 of 6 Mr. LeResche added that although the RFP for co-managers for this Bradley bond issuance has been approved by the Power Authority Board of Directors, the co-managers input is not required during the proposed September, 1988 meet- ing. Mr. Grimes said that by early October of 1988, the finance team will have a feel for the market and what the rates at that time would look like. According to Mr. Grimes, with the preconditions and the September meetings completed, a decision point would be reached. Mr. Yerkes asked how CFC might be of benefit with the financing process proposed by the Power Authority. Mr. Grimes said that CFC would be treated like any other bond insurance company, to be reviewed in the context of credit enhance- ment. Mr. Grimes said that using only the State of Alaska’s moral obligation credit rating, the best that the PMC can hope for in regard to the Bradley Lake bonds is an A- rating. It was noted that at a higher rating (i.e., an A rating as opposed to an A- rating), it is less expensive to secure the bonds. To enhance credit ratings, bank letters of credit are sometimes pur- chased; however, their term of seven to ten years is not adequate for a long term hydroelectric project. Mr. LeResche com- mented that a bank letter of credit enhances your credit by placing the bank’s credit behind the bonds. Mr. Grimes said that the PMC may also obtain a higher (i.e., AAA) rating through the use of bond insurance. Major bond insurance com- panies noted included NBIA, FGIC, AMVAC, BIGI, Capital Guaranty, and FSA. The bond insurance companies all charge a fee for which they guarantee the bonds; the intent is for the fee to decrease the cost of the bonds due to the higher rating. Mr. Grimes noted that a AAA rated bond is not necessarily less expensive than a AA rated bond; you cannot look solely at the bond rating in your analysis. The interest rates on the insured bills must be compared and a present value analysis derived according to Mr. Grimes, to determine whether credit enhancements are cost effective. Mr. Yerkes asked if the intent is for the Power Authority to come back to the PMC after this analysis is completed. Mr. LeResche confirmed that the Power Authority would apprise the PMC of the results of the analysis. Mr. Yerkes asked if the CFC, as an alternative to the process described, could loan or sell the bonds. Mr. Grimes said that the PMC can get the same rating while keeping all of their options open in the scenario presented. Mr. Gallagher noted that the CFC is a taxable agency and that the PMC would lose its tax-exempt rating if a CFC loan is sought because CFC is a taxable entity. Mr. Seagraves said that the CFC averages a seven year turnover; the PMC could utilize a seven year rol- lover with CFC which would probably result in a higher rate than a tax exempt issuance, as would a longer, taxable rate with the CFC. Mr. Seagraves said that the question also remains as to whether the PMC could in fact use CFC in this capacity due to the involvement of the municipalities. It was also noted that the CFC mortgage requirements are restrictive. The consensus of the financial advisors present was that a CFC loan would not be the most economical choice; however, the CFC might be a good credit enhancer and the CFC will be reviewed in this capacity. Mr. Wohlforth was introduced by Mr. LeResche as the Power Authority's bond counsel since the inception of the Power Authority. Mr. Wohlforth noted that he has gone through several competitive selections during this retention. Mr. Wohlforth said that the bond resolution was adopted as Exhibit A to the Power Sales Agreement and the supplemental ex- hibit has been adopted in form. Mr. Wohlforth said that these documents will be under review by the investor rating agen- cies and bond insurance companies to be visited in September of 1988. Mr. Wohlforth added that while most of the terms have been negotiated through this instrument (Exhibit A), enhancements or changes as part of the deal to be defined may need to be addressed later. Mr. Wohlforth said that the moral obligation of the State has been a means of securing debt and that the Legislature has never sought to repeal the use of its moral obligation for this purpose; however, the Legislature must be notified in advance of its intended use. Mr. Wohlforth noted that the bond resolution is actually a trust indenture. Mr. LeResche said that the estimated bond issuance is $175 million; however, it is not anticipated at this time that the en- tire amount will be required to complete the project. Mr. LeResche asked Mr. Wohlforth to brief the Finance Subcom- mittee on the sizing issue. Mr. Wohlforth responded that it has been suggested that an increment be included in the bond issuance to accommodate an unanticipated increase in project costs. This would be structured such that the bonds could be called if the cost of completion does not exceed the estimate in advance of completion without incurring a significant penalty. FINANCE SUBCOMMITTEE Juty 27, 19 Page 4 of 6 Mr. Grimes said that the final pricing wire at the end of this process will show the details of the sale, the call features, etc., and will transpire after the mailing of the official statement. Mr. Grimes said that a pricing committee would be utilized and suggested that Mr. LeResche, a Finance Subcommittee representative, and himself comprise this pricing committee. The pricing committee remained to be determined at a later date. Mr. Lovas clarified that the financing process is actually an iterative process of negotiations and offerrings between the pricing committee, rating agencies and insurers to get the best possible rate. Mr. LeResche noted that small variations are important and provided the example that 1/8 point interest change translates into $200,000- $300,000 yearly variance for the rate payers. Mr. Wohlforth said that the current debt was issued before the tax act changed, which provides the advantage of unlimited arbitrage earnings. With a new issuance, arbitrage earnings must be rebated, so cost of interest during construction in- creases, Mr. Seagraves said that the table attached to the June 20, 1988 memorandum from Mr. LeResche to the Bradley Lake PMC shows a loss of earnings on the variable rate, loss of possible arbitrage, and shows that a 3/4% interest rate differential (i.c., if rates rise 3/4% between December of 1988 and December of 1989), results in a break-even impact to the project. Mr. Grimes said that the indicators are that inflation and rates are headed generally upward; however, the potential for new federal tax legislation must be considered. Mr. Grimes distributed copies of an excerpt regarding this tax issue from Public Power Weekly. Mr. LeResche cautioned that this is no more than a factor to be considered with the other factors and that if it becomes a close call as to whether or not to proceed with the bond issuance, they should proceed with the bond sale due to the potential for new tax legislation. Mr. LeResche said that in the final analysis, it will be a collective analysis as to where the rates are heading, rather than a rush to avoid any changes in the tax laws. Mr. Grimes proceeded to describe the meeting proposed with the rating agencies and insurers tentatively scheduled for September of 1988. Mr. Grimes said that meetings would be scheduled with the following: Moody’s and Standard and Poor’s in New York City; NBIA whose offices are in White Plains, NY, but the meeting will be scheduled at Wall Street. Mr. Grimes anticipated that all of the meetings could be conducted during three days in New York and one day in Washington, D.C. with CFC. Mr. Grimes suggested that Mr. LeResche, Mr. Wohlforth, Mr. Seagraves and himself should attend these meetings, as well as a representative from each of the three largest purchasers. Mr. Yerkes asked for clarifica- tion of the three largest purchasers. Mr. Grimes provided the following percentages; ML&P-26%, CEA-30%, GVEA-17% (also, HEA-12%, MEA- 13 to 14%, and Seward-1%). Mr. LeResche asked that a representative from the three smaller participants also attend these meetings. Mr. Grimes stated that during the September 1988 visits, it will be important for the participants to convey the following to the investor rating agencies and bond insurance companies: 1) to dispel any illusions regarding the State of Alaska’s financial condition at this time. 2) to show that the State’s moral obligation makes it at least an A- rating. 3) to show that the utilities are behind the Bradley Lake Project. 4) to show the validity of the Power Sales Agreement and that the buyers have authority to enter into it. 5) to reveal the practical feasibility of the project. 6) to document realistic load forecasts and rates, as well as how the Bradley Lake Project fits into the forecasts. 7) to show the general condition of the Railbelt economy. FINANCE SUBCOMMITTEE July 27, 1: Page S of 6 Mr. Grimes said that he will send everyone participating in these meetings an outline prior to a meeting rehearsal and the actual meetings. Mr. Grimes noted that a video of the Bradley Lake Project and the State of Alaska would be taken to show at these meetings. Mr. Grimes also noted that the five year earning statements by the utilities would need to be sent to the investor rating agencies and bond insurance companies prior to the meetings and that he would summarize them once received from the utilities and send them in one package to these entities. It was further noted that this set of meetings in September of 1988 would actually be preliminary or educational meetings to elicit from the credit enhancers and rating agencies any concerns they might have with the structure of the bill. Subsequent meetings will be required; however, these might transpire in Alaska or via conference call. Mr. Grimes said that the PMC would receive the rating fee with the sizing and that they could call to receive it; however, the fee is not critical to this sale (i.c., approximate fee, $20,000). This fee or premium would be paid up front at the time of the sale from the bond proceeds. Mr. Grimes also noted that this would be the Power Authority’s first long term rating and that the rating is issued between the ten day period between the time the sale is priced and the sale date. Mr. LeResche said that John Nuveen and Company provides a weekly listing of interest rates by rating, which the Power Authority receives. Mr. Seagraves said that some of the participants are also on the list to receive this listing and that he will add the members who are not already on this list to the distribution list. Mr. LeResche said that any requests for information from the credit enhancers and rating agencies of the utilities will come through the Alaska Power Authority. Mr. Grimes said that a list of information anticipated to be required by the credit en- hancers and rating agencies will be provided by the Power Authority to the utilities within the next week (by August 5, 1988); thereafter, there may be additional, sporadic information requests. Mr. Yerkes asked how expenses incurred with respect to the September 1988 meetings will be allocated. Mr. LeResche responded that this issue should be addressed before the Project Management Committee in their regular meeting scheduled for August 24, 1988; however, the cost should be part of the total project costs. It was noted that Mr. Saxton is looking at whether the expenses of the PMC, including those of the Finance Subcommittee, can be capitalized. Mr. Yerkes asked if the Power Authority’s recommendation with respect to the RFP’s for a consulting engineer and co- managers/underwriters will be brought before the PMC. Mr. LeResche answered that responses to the RFP may be reviewed by the members and any suggestions provided to himself; however, the Procurement Code does not provide for the utilities to vote. Ms. Manni was requested by Mr. LeResche to provide copies of the RFP to each member. Mr. Yerkes asked that he be provided with copies of any agreements with bond counsel, financial advisor and senior un- derwriter. It was determined that Ms. Manni would provide copies of any agreements, to include letters of understanding, with John Nuveen and Company, Wohlforth, Flint and Gruening and First Southwest Company. ; Mr. LeResche commented that underwriters are not compensated until the time of a sale and that there is no obligation to use them until the time of the bond issuance. Mr. LeResche added that John Nuveen and Company essentially works on this effort on speculation; however, he believes that they have a right to be compensated at the time of the sale, as opposed to cutting them out after all of the work is completed. Mr. LeResche added that John Nuveen and Company is being util- ized as the lead in this financing effort since they have been actively assisting with this bond issuance and did much of the work with regard to the PSA. Mr. LeResche said that the PMC will be able to review and provide input at the time of the bond sale, realizing the practi- cal time constraints (i.e., one to two days) which will be imposed at that time. Mr. Grimes suggested that a central person be designated to reflect the views of the utilities in the essence of time. Mr. LeResche added that the incentive for the Power Authority as well as the utilities is for the best bond deal for everyone. In response to the question as to how Mr. Wohlforth is compensated, Mr. LeResche responded that he has been compen- sated at an hourly rate for his work on the PSA to date and that he was reselected earlier this year on a competitive proposal. FINANCE SUBCOMMITTEE July 27, 19 Page 6 of 6 Mr. LeResche suggested that the Finance Subcommittee meet once every six to eight weeks unless a question arises which requires more frequent meetings. Mr. LeResche further suggested that the Finance Subcommittee meetings be scheduled to match the PMC meetings in the future. Mr. LeResche stated that the co-underwriter and consulting engineer RFP process will take at least 76 days according to the State Procurement Code and the State bureaucracy and that an October 1, 1988 response date is anticipated. Mr. LeResche said that he would like calls from each of the utility managers during the next week of August 5, 1988 to determine their availability for the credit enhancers and rating agencies meetings, tentatively scheduled for the week of September 19, 1988 or thereafter. Mr. Yerkes commented that Mr. Gill of CFC will be in Alaska around August 23, 1988, for the ARECA annual meeting if anyone wants to arrange to meet with him at that time. Mr. LeResche encouraged anyone to contact him if they have further questions regarding the Bradley Lake financing. It was noted that the next meeting of the PMC will be held August 24, 1988 beginning at 9:00 a.m. in the offices of Matanus- ka Electric Association. There being no further discussion, the Finance Subcommittee meeting adjourned at 12:30 p.m. Alaska Power Authority State of Alaska August 10, 1988 Mr. Everett Paul Diener City of Seward P.O. Box 167 Seward, Alaska 99664 Dear Mr. Diener: Enclosed for your review are the draft Bradley Lake Hydroelectric Project operation and maintenance definitions and responsibilities. The definitions and responsibilities were developed by the Technical Coordi- nating Subcommittee during their meeting on July 12, 1988, and will be reviewed during our meeting on August 24, 1988, as agenda item 7. erely Robert E. LeResche Executive Director JB: REL: tlj Enclosure as stated cc: Bob Peirson, City of Seward = PO. Box AM Juneau, Alaska 99811 (907) 465-3575 K PO. Box 190869 701 EastTudorRoad Anchorage, Alaska 99519-0869 (907) 561-7877 3521/896(1) evised: July 12, 1988 BRADLEY LAKE HYDROELECTRIC PROJECT OPERATION AND MAINTENANCE DEFINITIONS The following definitions describe the primary longterm functions and responsibilities of various entities pertaining to Operation and Mainte- nance of the Bradley Lake Hydroelectric Project: 1.0 2.0 3.0 Project Owner The Alaska Power Authority is the owner of the Bradley Lake Hydroelectric Project and is licensed by the Federal Energy Regulatory Commission (FERC) to construct, operate and maintain the Project. As an owner the Alaska Power Authority will be responsible for ensuring compliance with the terms of the FERC license and all communications with FERC. In addition the Power Authority will establish project O& standards, control project budgets, collect revenues and service bond requirements. As set forth in the Project Power Sales Agreements certain owner respon- sibilities and policy decisions have been delegated to the Project Management Committee (PMC). Project Maintenance and Emergency Operator This entity is responsible for plant maintenance, site mainte- nance, transmission line maintenance and repair, scheduled in- spections, maintaining on-site plant records and drawings, and on-site emergency operation of the power plant. Remote Operator/Dispatcher/Scheduler (Project Dispatcher) This entity is responsible for the remote operation of the power plant, dispatching project power, monitoring all alarm functions, monitoring and control of all 115 kV line breakers, wheeling of project power, coordinating maintenance with on-site maintenance personnel, coordinating and maintaining power production schedules, and maintaining production and dispatching records. The attached Exhibits 1 through 3 provide in detail the functions and responsibilities of various entities. In addition, Exhibit 4 lists additional interim/short term duties and responsibilities which will be undertaken by Alaska Power Authority. The definitions and responsibilities as outlined herein are subject to review and modification by the Project Management Committee. 3027/861/1 RESPONSIBILITIES EXHIBIT 1 1.0 Project Owner Responsibilities Ld 1.2 1.3 1.4 1-5 1.6 1.7 1.8 129 3027/861/2 Consolidate project records and submit to the FERC all reporting requirements of FERC License Terms and Conditions, for example: Minimum Flows Maintain Records Pay Annual FERC charges, etc. Perform FERC five year inspections Coordinate and attend annual inspections Establish and update Technical Standards, O&M Manuals, and Maintenance Schedules. Provide on-going consultation services to plant personnel to establish and maintain system capabilities and standard voltage levels, and set and coordinate protective relay systems. Develop annual budgets sufficient to satisfy the Bradley Lake Hydroelectric Project costs incurred by the Project Dispatcher, Project Maintenance and Emergency Operator and the Owner. Collect project revenues from participating utilities in accordance with Power Sales Agreement. Reimburse Project Dispatcher and Project Maintenance and Emergency Operator for the costs of labor, materials, supplies, equipment, training and administration. Provide and maintain the specialized tools or equipment required to perform maintenance. Maintain official "As-Builts", Records and Documents. Develop and perform reservoir modeling functions to predict reservoir levels and energy availability. Monitor reservoir levels and hydrologic data. Regularly supply this information to the Project Management Committee (PMC) and Project Dispatcher. EXHIBIT 2 2.0 Maintenance and Emergency Operator Responsibilities Zo1 2.2 2.3 2.4 2.5 2.6 2ut 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 3027/861/3 Coordinate all maintenance activities involving Bradley Lake Facilities with the Project Dispatcher. Emergency operation of plant as requested by and coordinated through the project dispatcher. Provide transportation and logistical support for mainte- nance and site personnel. Prepare and submit proposed annual maintenance budgets. Provide project records to the Power Authority for submis- sion to FERC to meet license requirements. Implement maintenance schedules, maintenance procedures, maintenance training, and preventive maintenance programs. Conduct scheduled inspections. Update and maintain on-site records and drawings to show all alterations or replacements. Provide "“as-builts" to the Power Authority. Read and report all revenue metering devices. Monitor and record plant operations. Monitor plant alarms and normal operating limits and coordinate with dispatcher. Log and submit any action of protective relays or alarms. Install any additional protective relaying, instrumentation, control systems, or other apparatus as directed by the Power Authority. Provide site security and implement safety measures to protect equipment, personnel, and the general public from equipment failure and other potential hazards. Repair and report any damaged facilities. Respond to operational and maintenance requests or direc- tives from the Power Authority. 2.16 aly 2.18 2al9) 2.20 3027/861/4 Maintain the Bradley Lake Hydroelectric Project facilities in accordance with Power Authority/PMC O&M guidelines, prudent utility practice, National Electric Safety Code, and other applicable codes, federal and state laws, regulations, requirements, and standards. Perform site maintenance including intake trash and ice removal, snow removal of roads and runway. Perform Bradley Lake to Bradley Junction transmission line inspections, maintenance and repairs. Maintain a stock of available equipment, materials, tools and parts purchased for the project for maintaining the facilities. Comply with repair and replacement schedule. EXHIBIT 3 3.0 Project Dispatcher Responsibilities Sr 3.2 3.3 3.4 3.5 3.6 Sel, 3.8 3.9 3.10 S11 sale 3027/861/5 Provide 24 hour control of Bradley Lake MW output, including incorporation of Bradley into the existing CEA/AGC software. Provide 24 hour control of Bradley Lake MVAR conditions, including incorporating Bradley into the Automatic VAR Dispatching and Voltage Control program. Provide 24 hour control of station bus and unit bus voltage. Provide 24 hour monitoring of all alarm functions which could affect the ability of the project in meeting operating schedules or scheduled capacity and energy production. Establish, in conjunction with O&M personnel, the priority levels of each alarm. Contact plant operator immediately following each priority level alarm and within an agreed upon time frame for secondary alarms. Establish set points for the operation of the Project for conditions outside the limits of the Project. Establish, in conjunction with maintenance personnel, operating constraints or limits on the Project as a result of necessary maintenance activities. Control operation of the plant within those parameters. Coordinate the timing of those routine maintenance activities at the Project which affect the Project's ability to meet power production schedules. Monitor all activities and items necessary for compliance with FERC operating requirements. Dispatch the plant within the established parameters. Monitor reservoir levels, inflow rates, outflow rates, etc., to schedule the available energy at existing reservoir level and the anticipated energy at future dates. Coordinate with the Power Authority under PMC guidelines to manage the reservoir. Coordinate and schedule requests for wheeling of Bradley power allotments with participating utilities. Determine the need for storing energy at CEA's Cooper Lake facility. 3027/861/6 Displace wheeled Bradley energy with energy from Soldotna No. 1, pursuant to the terms of the Transmission Services Agreement. Monitor and control all plant 13.8 kV and 115 kV breakers and switches. Monitor and control both 115 kV line breakers terminating the Project boundaries at Diamond Ridge and Soldotna. Direct on-site plant personnel to perform atl manual switching associated with dispatching project power. Coordinate, with Homer Electric Association (HEA), al] manual switching requirements associated with the Project 115 kV line at Diamond Ridge Station. Issue all clearances on Project 115 kV transmission lines and unit breakers. Attempt to displace Bradley generation with Northern Kenai- Anchorage generation in the event the Anchorage tie line is unavailable. Operate the Southern Peninsula area as a separate control area in islanded situations. Provide, if studies verify a need, a signal indicating the loss of a synchronizing source to the Bradley Lake units. Provide, if studies verify a need, a signal indicating the loss of the Anchorage tie-line to take the units off-line. Develop and maintain records of: (1) all Project power production, (2) AEG&T/HEA wheeling, (3) CEA wheeling, and (4) utility power allotments. Provide information to the Power Authority data link for distribution to interested parties. Advise maintenance personnel of all line outages affecting the Project production, and place request for action if required. Advise maintenance personnel of operational problems requir- ing maintenance attention. Direct plant personnel to maintain a power production sched- ule-in the event of a communications failure or CEA on-site RTU failure. EXHIBIT 4 4.0 Additional Interim/Short Term Responsibilities of Owner. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 3027/861/7 In conjunction with Project Maintenance and Emergency Operator, hire and train all on-site plant personnel. Provide for plant start-up and testing. Perform initial on-site O&M functions. Develop Technical Standards, O&M Manuals, and Maintenance Schedule. Coordinate and enforce warranty provisions of Contracts. Negotiate Dispatch and O&M Agreements. Provide the initial training program on operating the specialized equipment such as the Compact Gas Insulated Substation, digital governor, etc. to be located at the Bradley Lake Project site. DISTRIBUTION LIST BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE Mr. Everett Paul Diener City of Seward P.O. Box 167 Seward, Alaska 99664 cc: Bob Peirson, City of Seward Mr. James F. Palin Matanuska Electric Association, Inc. 163 Industrial Way P.O. Box 2929 Palmer, Alaska 99645-2929 cc: Myles C. Yerkes, Matanuska Electric Association, Inc. Mr. David L. Highers Chugach Electric Association, Inc. 5601 Minnesota Drive P.0. Box 196300 Anchorage, Alaska 99519-6300 cc: Tom Lovas, Chugach Electric Association, Inc. Mr. B. Kent Wick Homer Electric Association, Inc. P.0. Box 429 Homer, Alaska 99603 cc: S.C. Matthews, Homer Electric Association, Inc. Mr. Michael P. Kelly Golden Valley Electric Association P.O. Box 1249 Fairbanks, Alaska 99707 cc: Bob Hansen, Golden Valley Electric Association Mr. Thomas R. Stahr Municipal Light and Power Municipality of Anchorage 1200 East 1st Avenue Anchorage, Alaska 99501-1685 cc: John Cooley, Municipal Light and Power 3521L/896(1) ae x her hick 4 MNS Am J24ageeR ZI Sabine ihe / EBA “Line 9:00 a.m. 10:00 a.m. 1:00 p.m. 2:30 p.m. 4:00 p.m. MEETING NOTICE "Due Diligence" Meeting Bradley Lake Finance Team Monday, August 29, 1988 Financing Team/APA Staff Financing Team/PMC Finance Committee Financing Team/PMC Financing Team/PMC/Project Engineers Bradley Lake PMC Meeting FILE COPY 6 s=T — —— APA Conference Room ® Chugach Training Room . ® RECORD COPY FILE NO PRO B-+).| min — le g/esle¢ ¥ BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) NOTICE OF MEETING CHANGE Due to schedule conflicts, the BPMC meeting scheduled for WEDNESDAY, AUGUST 24, 1988 at Matanuska Electric Association offices in Palmer is rescheduled to immediately follow discussions on Bradley Lake Financing: MONDAY AFTERNOON August 29, 1988 at Chugach Electric Association's Training Room 5601 Minnesota Drive Anchorage, Alaska An agenda is attached. If you have additional items you wish to discuss, please contact Brent Petrie or Margie O'Malley-Keyes at APA (261-7256). 8-83 EE. 5 +t =* RECORD UOPY FILE NO = PRO Berl mMIW Alaska Power Authority —— “One yl 24/¢e¢ MEMO TO: Bradley Lake DATE: August 4, 1988 Project Management Committe _ Bred be toe FROM: Robert E. LeResche SUBJECT: August 24, 1988 Acting Chairman Meeting The next meeting of the Bradley Lake Project Management Committee has been scheduled to begin at 9:00 a.m. on August 24, 1988 in the Board Room of Matanuska Electric Association. Enclosed is a draft agenda for this meeting; please provide any changes or additions to the agenda by August 15, 1988. The draft minutes of the June 30, 1988 Project Management Committee meeting, which were prepared by Chugach Electric Association, Inc., are enclosed for your review. Also enclosed is a list of representatives, alternates, other individuals to be included on the Bradley Project Management Committee mailing list, acting officers, and subcommittees to date. Please review this list and provide any corrections at your earliest convenience. Enclosures: as stated i. 12. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE DRAFT AGENDA August 24, 1988 Matanuska Electric Association Board Room 163 Industrial Way Palmer, Alaska CALL TO ORDER 9:00 a.m. ROLL CALL PUBLIC COMMENT MODIFICATION OF AGENDA APPROVAL OF MINUTES June 30, 1988 REVIEW OF PROJECT STATUS Eberle TECHNICAL COORDINATING COMMITTEE REPORT Review of Draft Definitions of O & M Responsibilities FINANCE COMMITTEE REPORT REVIEW OF DRAFT BY-LAWS AND OBJECTIVES Saxton OTHER BUSINESS Schedule Next Meeting I. Date II. Location III. Time COMMUNICATIONS ADJOURNMENT BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE INITIAL MEETING MINUTES THURSDAY, JUNE 30, 1988 The meeting was held in the training room at Chugach Electric. The meeting began at approximately 10:00 a.m. The following people were in attendance: Kent Wick - HEA Sam Matthews - HEA/AEG&T Myles Yerkes - MEA John Cooley - ML&P Paul Diener - City of Seward Jim Palin - MEA Don Grimes - First Southwest Dave Eberle - APA Bob LeResche - APA Brent Petrie - APA Don Shira - APA Dave Highers - CEA Tom Lovas - CEA Ron Saxton - GVEA Mike Kelly - GVEA Kurt Dzinich - Senate Advisory Council Marnie Isaacs - APA Carol Johnson - CEA The attendees began by stating their names and affiliation (a sign-in sheet is attached). Ln Dav Approval/Modification of Agenda Mr. LeResche stated that Dave Highers had distributed an agenda for the meeting (copy attached). Mr. LeResche added an item II. Finance. The agenda was approved as amended. Finance Mr. LeResche prepared an analysis that was sent to everyone, and which he said he tried to keep as neutral as possible. The underwriters feel it is highly important to understand the finance issues as early as possible. A discussion ensued regarding the percentage points that will be charged on the Bradley Lake project. Mr. LeResche stated he needs an affirmative commitment from all participants to get the financing in progress and talk to rating agencies and insurance companies, then this committee or a subcommittee thereof should formally review rates, tax PMC Minutes -2- June 30, 1988 laws, etc. every quarter and be ready to make a decision by December, 1990. Mr. LeResche introduced Mr. Don Grimes from First Southwest as APA's Financial Advisor. Mr. Grimes reported that he reviewed the memo and thinks it was well written. It also gives an indication of what the risks are on waiting on the financing. The risks involved are: an Rates will generally be increasing; Zs Uncertainties of the tax laws, and 2. Technical amendments to the 1986 Budget Act. Mr. Grimes feels that the PMC should poise themselves to get ready to go in the market, talk to rating agencies and insurance companies and get documents in as final form as they can be. "No decision needs to be made today, however, if you don't get yourselves to that point you'll always be a few months or several months away from making a decision." It will take several months to get all of the work done. Mr. Grimes' recommendation is to get ready to go and then the decision can be made as to whether or not it is the best idea to move forward. A question was raised regarding the cost of getting ready. Mr. LeResche stated each participant would pay out-of-pocket expenses. There would not be any payments to anyone. Mr. Wick stated that he feels it is prudent to move ahead. Mr. Wick made a motion for the PMC to move ahead and begin the process of talking to the rating agencies and insurance companies to prepare the financial paperwork. Mr. Highers asked if the subject could be discussed prior to approval of the motion. Mr. Highers suggested that each utility choose a representative and then finance the representative for the necessary expenses. Mr. Grimes feels it is important for as many utilities as possible be represented, especially the three largest utilities. Mr. Palin asked if all of the APA financing team was embedded, or if the utilities have any participation in the decision (i.e. Financial Advisor, Underwriters, etc.). Mr. LeResche reported that First Southwest will remain the Financial Advisor to the Power Authority, their fee is $1.95 per $1,000 plus actual out-of-pocket expenses. The Underwriters are at a fixed fee to be negotiated at the time of the sale, but an amount will have to be approved by all of the participants. Mr. Grimes expects it will be * PMC Minutes -3- June 30, 1988 IIiI. somewhere between 1.5 to 2%, but will be subject to the current market conditions. Mr. LeResche stated he also expects there ‘to be approximately three additional co-managers hired. There is an RFP being put together for that hiring. A discussion ensued regarding the fees for the Financial Advisor and the Underwriters. Mr. Palin stated that he foresees a potential political problem. Mr. LeResche agreed, but feels there is no way to lock in their fee due to the changing market. Mr. Palin went on to request the current rating. Mr. Grimes feels that the issue will be rated A or A-. Mr. Wick moved to proceed in setting up long-term financing up to the point of being ready to sell the bonds, also to set up a subcommittee with a representative from each participant and from the Power Authority. The motion was approved unanimously. Four Dam Pool PMC Experience Mr. Saxton reported that he sent out a memo to all participants on June 14. Mr. Saxton gave a report on the Four Dam Pool. Mr. Saxton's recommendations were: 1S Take advantage of the opportunity to organize before Plant operation and before things become a crisis situation. i There are rules of the organization and conditions of the agreements, and it is very important that everyone know and understand those rules. 3. There is a broad range of tasks involved in the project. Take advantage of people who specialize in different areas of the operation such that individual tasks go beyond the focal point person. The legislature imposed open meeting requirement rules on the PMC. Mr. Saxton feels this is a high priority to avoid getting into any trouble. The public can and probably will attend meetings. Mr. Petrie stated he agrees with Mr. Saxton's assessment, however, he also feels that the participants have a greater depth of staff to deal with the complicated and wide range of issues in house. With the Intertie Operating Committee there is a history of working together where you use the specialty people from each utility and use consultants where you have to. Mr. * PMC Minutes -4- June 30, 1988 Iv. Saxton said he would use the Four: Dam Pool as a lesson on things not to do and the Intertie Operating Committee as a lesson on a way things can be done and work well together. Mr. Lovas asked if there were provisions in the Four Dam Pool Agreement laying out requirements for bylaws and procedures. Mr. Saxton reported there was a policy agreement rather than rules. Three years after the Four Dam Pool project began the policy/procedure manual came out. Discussion of Responsibilities of the Committee Mr. Saxton feels the Bylaws for the Bradley Lake project should be devised as soon as possible. Mr. Wick asked Mr. Saxton to come up with objectives for the Bylaws, Policy and Procedures requirements. Mr. LeResche volunteered Mr. Petrie and Mr. Grimes to assist Mr. Saxton in the preparation of the documents. Mr. Highers moved to retain Mr. Saxton to draft the Bylaws for the Bradley Lake project and to share the cost according to the allocation of participation. The motion passed unanimously. Mr. LeResche would like to have a draft of the Bylaws by the next PMC meeting. Project Status Report Mr. LeResche asked Mr. Eberle to give a status report. Mr. Eberle reported that the formal groundbreaking ceremonies were held on Wednesday, June 29. There are four contracts that are active right now, they are: Camp Catering - Brown & Root General Civil Construction = Ensearch Transmission Line Clearing - Zubeck Turbine Generators - Fuji Electric Three additional contracts will be issued this summer, they are: ils Powerhouse bid will be put out for bid on Friday, July 1, 1988, Mr. Eberle expects to open bids by mid September. Ze Transmission Line Construction RFP will be out by mid September and awarded by the end of the year. 3. SCADA RFP will go out by the first of August and awarded by the end of the year also. * PMC Minutes -5- June 30, 1988 vI. VII. Mr. Eberle gave a commercial operation date of September 1, 1991. Some of the major milestones are that’ the transmission line construction needs to be completed by the fall of 1990, including Homer Electric's line so the capability to backfeed power to the project is there. The dam itself will be completed in October of 1990 with water up to the tunnel in the Spring of 1991. The first unit will be available for testing in the Spring of 1991 and ultimately be ready for commercial operation September 1, 1991. The original construction estimate was figured at $355.9 million. The power sales estimate was $350 million including the cost of financing. The current construction cost projection is less than $300 million; however, until they get into the tunnel, they don't know what the total cost will be. Mr. Kelly asked what Bechtel's relationship is to Enserch. Mr. Eberle reported that Bechtel is the construction manager for Ensearch. The designers for the project are Stone and Webster. Mr. Kelly moved to have the TCC become a subcommittee of the PMC to research and identify the overall responsibilities of the owner, operator and dispatcher including the responsibilities or duties associated with operations and maintenance. The TCC is to report back to the PMC at the next meeting. The TCC will meet on July 14, 1988. A discussion ensued regarding Operations, Maintenance and Dispatch. Mr. LeResche asked Mr. Wick if he had heard from REA regarding their approval. Mr. Wick feels that an agreement from REA will be made by late summer or early fall. Mr. LeResche will submit a letter from APA on September 1 supporting a review completion date. Establishment of Meeting Schedule Mr. LeResche suggested that the next PMC meeting be held around the first of September. All participants agreed to meet on August 24, 1988. Mr. Palin requested monthly status reports or a general status report on the project. Election of Interim Officers Mr. LeResche suggested that during the interim period and until the Bylaws are established and agreed on, he act as Chairman of the PMC for the Power Authority. The Power Authority would call the meetings and take, transcribe and distribute the minutes for all participants. . * PMC Minutes -6- June 30, 1988 VIII.Assignments for Preparation of Draft Rules of Procedure Ix. /sb This item was previously discussed under item IV. Discussion of Responsibilities of the Committee. No further action was taken. Other Agenda Items as Proposed None Adjournment Mr. Kelly moved to adjourn. The motion passed unanimously. is 2. x 4. Sa 6. Ue 8. 95 10 2BE 12 13 14 ph 16 17 18 19 20 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE June 30, 1988 Attendees fod btif ~ yen ony Wire Bi, HEAIKECT M08 ate$ la John S Geley 9CfP BE. Pad “Drenwer CL acetone zt. Sian FAcin — MEA Dow Grimex — Fast SoutHwesT_ Dene Eé6ernce ~ APA Log LeKescpée — APA -Breat O2tie - APA . Dor Shree — APA ‘Dave Heriees CEA TO COvUAS —CEA “es. fanb= Ov EA Mi Ke cs -GVER -Kuer os Da2inicts — Senate Povico By Gina - Naewe Exaes - APA eA ee CEA 7A a2 x 23. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE INITIAL MEETING AGENDA THURSDAY, JUNE 30, 1988 BEGIN AT 9:45 A.M. Is Approval/Modification of Agenda et. Four Dam Pool PMC Experience - Ron Saxton Eits Discussion of Responsibilities of the Committee A. Duties During Construction B. Duties Following Commercial Operation Iv. Project Status Report - David Eberle, Project Manager A. Construction Timetable, Contracts Status B. Technical Coordination Committee Vv. ee of Meeting Schedule VI. Election of Interim Officers vir. Assignments for Preparation_of Draft Rules of Procedure VIII. Other Agenda Items as Proposed rz. Adjournment Meeting location: Chugach Electric Association, Inc. Training Room 5601 Minnesota Drive Anchorage, Alaska 99519 (907) 563-7494 Bradley Lake Project Management Committee July 22, 1988 Draft DESIGNATED DESIGNATED REPRESENTATIVE ALTERNATE REPRESENTING Bverett Paul Diener Bob Peirson City of Seward P.O Bex 167 Seward, AK 99664 224-3331 Robert E LeResche Brent N Petrie Alaska Power Authority PO. Box 190869 Anchorage, AK 99519-0869 561-7871 James F. Palin MyksC Yerkes Matanuska Hectric Assoc, Inc. 163 Industrial Way PO. Bax 2929 Palmer, AK 99645-2929 7AS-3231 Devid L. Hghers BnLows Chugach Hectric Assoc, Inc. 5601 Minnesota Drive PO. Bax 196300 Anchorage, AK 99519-6300 563-744 B Kent Wick S.C Mathews, Homer Hectric Assoc, Inc. PO. Bax 429 3977 Lake Street Homer, AK 99603 235-8167 Michael P. Kelly Bob Hansen Golden Valley Bectric Assoc, Inc. PO. Box 1249 Fairbanks, AK 99707 452-1151 ‘Thomes R Stahr John Cooley Manicipal Light and Power Municipality of Anchorage 1200 Fist 1st Avenue Anchorage, AK 99501-1685 279-7671 Vigil M Gillespie Faisbanks Manca Uily Sysem ity of Fairbanks PO. Bax 2215 Fairbanks, AK 99707 Phone? OTHERS ON BRADLEY LAKE PMC MAILING LIST NAME July 27, 1988 Draft REPRESENTING ‘Senate Advisory Council Goldstein Building, Room 208 POBxKV Juneau, AK 99811 Golden Valley Bectric Assoc. Lindey, Hirt, Nal & Weigler 225 S.W. Columbia, Suite 1800 Portland, OR 97201-6618 OFFICERS Robert E LeResche SUBCOMMITTEES TECHNICAL COORDINATING COMMITTEE Myks C. Yerkes FINANCE ‘Tom Lowas, CEA Robert E. LeResche, Power Authority Kathleen Jacobs, ML&P ‘TH Keffer, HEA Bob Hansen, GVEA. Bob Person, Seward Mnke Yerkes, MEA