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HomeMy WebLinkAboutBPMC Meeting November 20, 1992 1RECORD UOPY FILE NO PRO Boh Mi, Njaclfa BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE Y APPROVED MEETING MINUTES November 20, 1992 ihe CALL TO ORDER Chairman Highers called the Bradley Lake Hydroelectric Project Management Committee to order at 10:15 a.m. in the Training Room at Chugach Electric Association in Anchorage, Alaska to conduct the business of the Committee per the agenda and the public notice. 2. ROLL CALL Alaska Energy Authority Brent Petrie, Designated Representative Chugach Electric Association David L. Highers, Designated Representative and Chairman Golden Valley Electric Association Bradley Evans, Alternate Representative City of Seward Paul Diener, Designated Representative Homer Electric Association Norm Story, Designated Representative Matanuska Electric Association Ken Ritchey, Designated Representative Municipal Light & Power Hank Nikkels, Alternate Representative Tom Stahr, Designated Representative (11:45 a.m. arrival) Others Present: Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt David Burlingame, Chugach Electric Association John Cooley, Chugach Electric Association e:\dburger\word\minutes\pme\ 11-92 * BPMC Meeting Minutes November 20, 1992 Page 2 of 10 Gene Bjornstad, Chugach Electric Association Bob Hufman, AEG&T Dave Fair, Homer Electric Association Tim McConnell, Municipal Light & Power Bob Price, Municipal Light & Power Ronald A. Garzini, Alaska Energy Authority David R. Eberle, Alaska Energy Authority Stanley E. Sieczkowski, Alaska Energy Authority Larry Wolf, Alaska Energy Authority Denise Burger, Alaska Energy Authority 3. PUBLIC COMMENT There being no public comment, the meeting continued to the next agenda item. 4. AGENDA COMMENTS Items 12 B, APPROVAL OF UTILITY AGREEMENTS, and 12 C, APPROVAL OF AMENDED ALLOCATION AND SCHEDULING PROCEDURES, were removed from the agenda. Item 12 E, BUDGET SUBCOMMITTEE AUTHORIZATION TO RETAIN AUDITOR, was added to the agenda. Item 12 F, CONSTRUCTION AUDIT, was added to the agenda later in the meeting. 5. APPROVAL OF MINUTES - October 9, 1992 Mr. Burlingame noted that the Kenai oscillation problem discussed under Item 6, TECHNICAL SUBCOMMITTEE REPORT, referred to the unstable Kenai oscillation problem (differentiating it from other oscillations in the system.) With the understanding that a footnote further defining the specific. problem will be added by Mr. Burlingame, the minutes of the October 9, 1992 Bradley PMC were approved. 6. TECHNICAL COORDINATING SUBCOMMITTEE REPORT A summary of the November 19, 1992, TCS meeting was distributed to the PMC (Attachment 1). Mr. Burlingame reported that SVC testing was scheduled to begin December 3, 1992 at the Daves Creek Substation site and on January 14, 1993 at the Soldotna Substation site. The initial testing will involve basic energization and a general investigation of the system components. e:\dburger\word\minutes\pmce\1 1-92 * BPMC Meeting Minutes November 20, 1992 Page 3 of 10 The other major issue being addressed by the TCS is the unstable Kenai oscillation problem. Mr. Burlingame noted inconsistencies in the way Bradley Lake reacted to certain modes of governor changes and that a problem with the Woodward governor was identified during tests performed earlier this week. The problem is covered under the Woodward Governor warranty and is expected to be fixed before completion of the annual maintenance when Bradley returns on line November 28, 1992. Additional tests will be done at that time to verify that the problem has been resolved. Mr. Burlingame informed the Committee that CEA had developed a suitable short term solution to the unstable Kenai oscillation problem. The solution does not prevent load shedding, however, it does prevent the unstable oscillation problem. Mr. Burlingame stated that the solution was acceptable for the short term, but it was not the recommended long term solution. Referring to the TCS meeting summary, Mr. Ritchey asked for clarification on the $70,000 cost to modify the Woodward governor. Mr. Burlingame explained that the $70,000 was for the development of a long term solution to the unstable Kenai oscillation problem. Mr. Burlingame further explained that this was not a warranty issue, rather an enhancement to the capabilities of the governor. It was confirmed that the governor met all specifications to which it was designed and that SWEC's design of the system met or exceeded I.E.E.E. and industry standards. Mr. Burlingame stated that Bradley Lake was the first hydroelectric project with a digital control scheme to use deflectors and that the "anticipatory control" system logic now being developed by Woodward Governor would also be a first. It was noted that Woodward Governor was absorbing approximately one half of the development cost of the new control system logic. Mr. Burlingame stated that none of the tests or studies done to date have accurately predicted the stable power oscillations experienced at Bradley Lake (because of the governor characteristics.) In tests done this past week, the deflectors were shown to be much more effective at frequency control than previously indicated. SWEC and PTI will be using the new test data to further refine the Bradley Lake model. ue: BUDGET SUBCOMMITTEE REPORT A. Bradley Lake Construction Cost Review (and Bradley Lake Annual Operations & Maintenance Audit) Annual Operations and Maintenance Cost Audit e:\dburger\word\minutes\pme\I 1-92 ‘ BPMC Meeting Minutes November 20, 1992 Page 4 of 10 Mr. Ritchey reported that the Budget Subcommittee had retained a firm (Parisena & Stromberg) to perform an audit of Bradley Lake Project operation and maintenance (O&M) costs. Mr. Ritchey noted today's request by AEA for approval of the audit by the PMC and recognized AEA's concern over not being notified in advance of the audit. Mr. Ritchey stated that funds for the audit had been included in the Bradley O&M budget. Therefore, the Budget Subcommittee assumed it already had the authority to proceed with the O&M audit. Mr. Saxton also pointed out the provision for an independent annual audit of Bradley O&M costs (to be completed by December 1) contained in the Committee bylaws approved in 1988. Construction Cost Audit Mr. Ritchey informed the PMC that the Budget Subcommittee had received only four proposals to do the Bradley Lake construction cost audit, however, none of the proposals within the previously approved $15,000 amount were adequate.! Mr. Ritchey stated that an additional $20,000 was required in order to obtain sufficient audit information. Mr. Ritchey recommended that the PMC consider amending the previously approved $15,000 for the construction cost audit to $35,000. This item was added to the agenda under NEW BUSINESS, 12F, Construction Audit. Mr. Petrie questioned whether the expenditure of these funds by the Bradley PMC was subject to State procurement regulations. It was Mr. Saxton's understanding that the funds held by the Trustee were not considered State funds, rather they belonged to the Committee and were not subject to State procurement code. Mr. Saxton will confirm whether the expenditure of these funds by the PMC is, or is not, subject to the State procurement code. FY94 Operation and Maintenance Budget Mr. Ritchey proposed the following schedule for the development and approval of the FY94 Operations and Maintenance Budget: ! The previously approved funds to which Mr. Ritchey referred are actually $20,000 (as contained in the BPMC meeting minutes of July 23, 1992.) Therefore, the increase to the $35,000 total amount requested is actually $15,000. It should also be noted that these funds were approved as a construction cost item (not an FY93 O&M Budget item.) e:\dburger\word\minutes\pme\1 1-92 ‘ BPMC Meeting Minutes November 20, 1992 Page 5 of 10 December 15, 1992 AEA, CEA, HEA and legal counsel budget items submitted to the Subcommittee January 1993 Subcommittee approval of budget February 1993 Submittal of Subcommittee budget recommendation to PMC March 1993 Approval of budget by PMC FY92 O&M Budget Surplus Mr. Ritchey stated that the PMC had received notification, in the form of a letter from AEA dated November 20, 1992, of an FY92 O&M budget surplus of $910,411 (Attachment 2). Mr. Ritchey relayed that the Budget Subcommittee needed some time to consider the options regarding use of these funds (i.e. carry forward to FY94 or return to purchasing utilities.) The Budget Subcommittee will make its recommendation to the PMC at the January meeting. B. FY93 Budget, AEA Administrative Costs - Update Mr. Saxton reported to the Committee that, since the last PMC meeting, Bob LeResche has given his deposition to the Alaska Energy Authority and the utilities have served AEA with requests for admissions and interrogatories. Mr. Saxton noted that a letter from the Energy Authority, addressed to Ken Ritchey, dated November 20, 1992, regarding this issue had been distributed to the utilities prior to the meeting (Attachment 3). Mr. Petrie requested that the letter be included as part of the permanent record. Regarding the AEA administrative cost issue, Mr. Garzini reiterated his desire to work with the PMC to resolve the issue, suggesting a meeting between the utility managers and AEA. Mr. Garzini noted that he had not been a part of the initial discussions of the subject, or the conflict that developed early on between the Bradley PMC and AEA (while under Mr. Bussell.) Mr. Garzini stated that the lawsuit and concurrent audits of AEA caused a conflict for the Energy Authority. Mr. Garzini explained that it was the Energy Authority's policy to be open in the exchange of information, but that, because of the lawsuit, AEA felt it necessary to have its lawyers present when the PMC lawyers and auditors are investigating the Energy Authority. In response to Mr. Garzini's comments, Mr. Saxton e:\dburger\word\minutes\pmc\1 1-92 BPMC Meeting Minutes November 20, 1992 Page 6 of 10 stated that he hoped there was never any time that AEA (Mr. Garzini) did not feel welcome to have its own attorney present. 8. AGREEMENTS SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the Soldotna Substation Agreement with HEA had again been revised. Mr. Sieczkowski informed the PMC that both the Soldotna Substation Agreement and Transmission Line Maintenance Agreement were now ready for signature and consideration by the Agreements Subcommittee. A meeting is anticipated the week of December 7, 1992. Mr. Story apologized for HEA's contribution to the slow process in developing these agreements. Mr. Story explained that HEA had concerns over the expensive equipment being transferred to its responsibility for operations and maintenance. While no major equipment problems were anticipated, Mr. Story stated that, should a major equipment failure occur, HEA would like to bring the matter back to the PMC. Mr. Sieczkowski further explained that the new SVC equipment located within the existing HEA substation would be transferred to HEA ownership and the remainder of the new construction (outside the substation) will remain under AEA ownership. OPERATION & DISPATCH SUBCOMMITTEE REPORT A summary of the Operation & Dispatch Subcommittee meeting of November 6, 1992 was distributed to the PMC (Attachment 4). Mr. Sieczkowski noted that the Subcommittee had approved recommendation of an amendment to Section 5 (b), Hourly Schedules of the Allocation and Scheduling Procedures. Amendments to Sections 5 (g), (i), and (j) and Section 7 (c) of the Allocation and Scheduling Procedures were also approved, however further minor clarification was needed prior to forwarding to the PMC. Mr. Sieczkowski stated that the proposed amendments would be distributed to the PMC in the next meeting packet for review and consideration at the next meeting. It was noted that HEA had presented documentation to the O&D Subcommittee regarding line losses and that discussion of HEA's losses would continue at the next Subcommittee meeting. In response to inquiry by Mr. Ritchey, Mr. Sieczkowski explained that the original energy allocations were based on certain expectations of inflow. The inflow expectations were based on historical data developed by the USGS. The inflow for the month of September was a new historical low, 21% of average. Likewise, the October inflow was only 40% of average, necessitating a reallocation of project energy resulting in an 87,000 megawatt hour reduction. Mr. Wolf noted that other hydroelectric projects around the state were also experiencing low water years. e:\dburger\word\minutes\pme\I 1-92 " BPMC Meeting Minutes November 20, 1992 Page 7 of 10 10. REVIEW OF PROJECT STATUS Mr. Eberle reported that the SVC contract is expected to be completed by mid- March (including testing.) Mr. Eberle informed the PMC that the Bradley Lake Hydroelectric Project was currently 97% complete and that once SVC testing was done, the project would meet or exceed 98% completion. Mr. Eberle explained that when 98% project completion was attained, the bond trustee must be notified, which in turn would make any surplus construction funds available to the State. Mr. Eberle reported that the Contaminated Soil Clean-up Contract pre-bid meeting had been held at the project site in October. Proposals for the soil clean-up are due in January. It was noted that contract requirements have been expanded to require a usable end product - crushed aggregate, for runway and road maintenance. Mr. Story asked if financial responsibility for the soil clean-up had been determined. Mr. Eberle informed the Committee that AEA was proceeding with the clean-up while investigating responsibility. Mr. Eberle stated that determining responsibility was complicated by the one year shut down of the project. It was explained that AEA assumed responsibility for the project at that time, including the POL facility owned by the site preparation contractor. By doing so, AEA unknowingly assumed responsibility for any spills that might have occurred. Also unknown at the time, the POL facility liner was not adequate for the life of the project. Mr. Eberle stated AEA would most likely be responsible for the clean-up (estimated at $750,000). Mr. Eberle noted that the material was only lightly contaminated and that the Department of Environmental Conservation was currently reassessing contaminated sites around the State. AEA is investigating the possibility that remedial action may not be required at the Bradley Project site. Bradley Lake Project Annual Maintenance: Mr. Wolf reported that the project was shut down for annual maintenance on November 18, 1992. Inspection revealed a small amount of tunnel patch grout. Slight additional scoring of the needles was noted with minor leakage on Unit 2 and no leakage on Unit 1. If the sloughing of loose grout continues, at some point in the distant future, the needle cones and seats may need to be replaced. Mr. Wolf stated that a few loose bolts were discovered in the runner chamber, but that no major problems were expected. It was noted that maintenance work will continue through the Thanksgiving holiday with the project scheduled to go back on line Saturday, November 28, 1992. e:\dburger\word\minutes\pme\1 1-92 BPMC Meeting Minutes November 20, 1992 ~ Page 8 of 10 115 Mr. Wolf noted that Bradley was experiencing loss of pressure in the fish water bypass system, indicating a potential blockage in one of the intakes. A dive team will be inspecting the intakes on Monday, November 23, 1992. Mr. Sieczkowski informed the PMC that the Bradley Lake operators were now represented by the IBEW. The IBEW submitted a contract containing 29 proposals for AEA consideration. A meeting to discuss the proposals with the IBEW has been scheduled December 7 and 8, 1992. Mr. Sieczkowski noted that HEA had previously offered Bob Hufman's assistance with contract negotiations, which AEA has accepted. Mr. Garzini informed the Committee that Mr. Hufman would be providing his assistance as a representative of HEA, at HEA's expense, and not as an AEA board member. Mr. Hufman will not deliberate with the AEA board during involvement with these negotiations. Mr. Bjornstad expressed concern over potential repercussions that the AEA contract settlement might have on other utility contracts. Mr. Garzini assured the PMC that AEA was aware of the effects its settlement could have, further stating that it was AEA's goal not to affect other utility/union contracts. OLD BUSINESS A. Spinning Reserves/Under Frequency Load Shedding Update John Cooley reported that the Intertie Operating Committee (IOC) load shed study was very close to completion. The Reliability Criteria Subcommittee postponed some meetings due to outage problems, but expected to meet November 25, 1992. Bradley Scheduling vs. Spin Requirements Mr. Saxton noted that, at the last Bradley PMC meeting, he had been asked to look into the spinning reserve requirement issue. Referring to a memorandum he prepared on the subject and previously distributed to the utilities, Mr. Saxton stated it was his conclusion that the spinning reserve requirement issue was ultimately governed by the Alaska Intertie Operating Agreement. Chairman Highers, citing the indefinable maze of issues related to the Intertie Operating Agreement, suggested that the utilities consider rewriting the agreement. Chairman Highers recommended that, to begin the process, the utilities provide written comments to Mr. Saxton. Additionally, Mr. Saxton recommended that the utilities meet to discuss the issue as early as possible. Mr. Saxton further stated that the utilities needed to clearly define and agree upon the questions before answers could be determined. Mr. Evans stated that Golden Valley would support a e:\dburger\word\minutes\pme\I 1-92 BPMC Meeting Minutes November 20, 1992 Page 9 of 10 special meeting to deal with this issue. Mr. Burlingame brought attention to the fact that the system is currently operating under a number of interpretive agreements that expire at the end of December 1992. Chairman Highers noted that the procedures affected by these agreements may have to continue until the issue of spinning reserve requirement can be resolved. General agreement was expressed by the utilities to meet and discuss the issue as soon as possible. 12. NEW BUSINESS A. Approval of Committee Expenses No expenses were submitted. Approval of Utility Agreements Deleted from the agenda. Approval of Allocation & Scheduling Procedures, Section 5 Deleted from the agenda. Approval of Exhibit B, Allocation & Scheduling Procedures Mr. Sieczkowski stated that the Operations & Dispatch Subcommittee had recommended Exhibit B of the Allocation and Scheduling Procedures to the Bradley PMC for approval. It was noted that Exhibit B had been distributed to the Bradley PMC at the October 9, 1992 meeting for review. Mr. Story motioned, seconded by Mr. Evans that the Bradley PMC approve Exhibit B of the Allocation and Scheduling Procedures. The motion passed by unanimous roll call vote. Authorization of Budget Subcommittee to Retain Auditor (for Fiscal Year 1992 Bradley O&M Audit) Mr. Petrie motioned the Budget Subcommittee be authorized to retain audit services for an amount up to $15,000. Mr. Ritchey seconded the motion, however, suggested that the motion be worded to accommodate future fiscal year audits as well. After the need for such approval was questioned by Chairman Highers (citing Bradley PMC bylaw provision for an annual O&M cost audit), Mr. Petrie explained that, because AEA had not been notified of the O&M audit, unnecessary confusion over the audit had occurred. AEA assumed when auditors arrived November 5, 1992 e:\dburger\word\minutes\pmc\1 1-92 e BPMC Meeting Minutes November 20, 1992 Page 10 of 10 from Parisena & Stromberg they had been selected for, and were in fact there to perform, the Bradley Lake construction cost audit. Mr. Petrie hoped this type of confusion could be prevented in the future. Noting AEA's concern, Mr. Story stated that communication between the Budget Subcommittee and AEA was needed prior to the commencement of further audits, to which Mr. Ritchey agreed. Mr. Petrie requested that the Bradley PMC be informed of plans and communications regarding future audits undertaken by the Budget Subcommittee. With the approval of Mr. Petrie and Mr. Ritchey, the motion was revised as follows: On an annual basis, the Budget Subcommittee has the authority to hire an auditor to perform the Bradley O&M cost audit subject to budgetary constraints. The motion was approved by unanimous roll call vote. F. Construction Audit Mr. Ritchey motioned the Budget Subcommittee be authorized to hire a consultant to perform the Bradley Lake construction cost audit at an amount not to exceed $35,000.2 The motion, seconded by Norm Story was approved by unanimous roll call vote. 13. COMMUNICATIONS A. Schedule Next Meeting Thursday, January 14, 1993 10:00 a.m. CEA Training Room 14. ADJOURNMENT Attest: Brent N. Petrie, Secretary 2 The $35,000 request was noted to be an increase of $20,000 from the amount approved at the July 23, 1992 Bradley PMC meeting. However, the amount previously approved was $20,000, resulting in an actual increase of $15,000. e:\dburger\word\minutes\pme\1 1-92 10. Al. 12. 13. 14, BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING AGENDA November 20, 1992 Chugach Electric Association, Inc. Training Room 10:00 a.m. CALL TO ORDER 10:00 a.m. ROLL CALL PUBLIC COMMENT AGENDA COMMENTS APPROVAL OF MEETING MINUTES - October 9, 1992 TECHNICAL COORDINATING SUBCOMMITTEE REPORT BUDGET SUBCOMMITTEE REPORT A. Bradley Lake Construction Cost Review - Update B. FY93 Budget, AEA Administrative Costs - Update AGREEMENTS SUBCOMMITTEE REPORT OPERATION AND DISPATCH SUBCOMMITTEE REPORT REVIEW OF PROJECT STATUS OLD BUSINESS A. Spinning Reserves/Under Frequency Load Shedding Update B. Bradley Scheduling vs. Spin Requirement NEW BUSINESS A. Approval of Committee Expenses —B.———Approval-of- Utility Agreements —€-——Approval-of_Amended.Alloeation & Scheduling-Procedures, Section 5 D. Approval of Exhibit B, Allocation & Scheduling Procedures € BUPGET 5-C AUTHORITY JO RETIN AUDITOR. COMMUNICATIONS Fl Comsreveriow subdir” A. Schedule Next Meeting ADJOURNMENT RECORD VTOPY FILE NO Highers Burlingame Ritchey Sieczkowski Sieczkowski Eberle Lovas Saxton Petrie Sieczkowski Sieczkowski Sieczkowski ATTACHMENT 1 CHUGACH ELECTRIC ASSOCIATION, INC. Anchorage, Alaska November 18, 1992 TO: Bradley Lake PMC FROM: David W. Burlingame, TCS Secretary SUBJECT: TCS Meeting Summary - November 18,1992 Below is a meeting summary of the TCS meeting held November 18, 1992: Svc Status - Construction at both sites has been essentially completed. Checkout is being done prior to start-up. Initial energization of the Daves Creek SVC is scheduled for December 3, 1992 with testing performed through December 28, 1992. Initial energization at Soldotna is scheduled for January 14, 1992. Svc Testing - Utilities need to verify the scope of tests to be performed by December 4, 1992. Utilities need to determine the number of steps required in each test and if all of the initial tests still need to be completed. Bradley Lake Operation - The plant is currently down for scheduled maintenance. Completion of maintenance is tentatively scheduled for November 28, 1992. Repeater frequencies are being changed at the project site due to a conflict between AEA and HEA frequency use. DECNET - installation at the site is essentially completed. Clean- up and checklist items still need to be completed. Svc Simulator test/ PTI Study results - SWEC distributed a report detailing the various studies performed by PTI and their comparison to the ABB test results. Comments are due by December 4, 1992. Bradley Lake Oscillations/ Testing/ Governor - SWEC presented a summary of the tests performed at Bradley Lake on November 16,17, 1992. The tests identified an design oversight in the Bradley governor which sporadically would send a Bradley unit to full power output or no power output depending on the timing of the AGC pulses. This is believed to be the cause for the HEA outage October 16, 1992 and several other system disturbances. The Committee approved a motion to have SWEC, PTI and Woodward investigate a modification of the Bradley governor which will eliminate the Kenai oscillation problems. The following motion was unaminously passed: MOTION - Move to pursue development of governor modifications by PTI/SWEC and Woodward to eliminate the Kenai oscillation following islanding for a cost estimated at $70,000. This change will not prevent the normal oscillations of the Kenai due to changing of the Governor modes. During these mode changes, the generation swings on the Kenai have been measured at 18% of the total Kenai load. SWEC/PTI are going to investigate these swings and their effect on the system since none of the studies to date have predicted or shown them. The committee also agreed to eliminate the reverse power relays at the plant based on SWEC’s recommendation. ATTACHMENT 2 State of Alaska DN Waiter J. Hickel. Governor Alaska Energy Authority A Public Corporation November 20, 1992 Mr. Dave Highers Chairman Bradley Lake PMC c/o Chugach Electric Association P. O. Box 196300 Anchorage, Alaska 99519-6300 Subject: O&M Budget Carryover from FY Dear Dave: I am proud to inform you that upon review and close-out of our FY92 Accounts there is a $910,411 surplus in the Bradley Lake budget that is available for credit or carry forward into FY93. When the FY93 budget was adopted in early 1992 the carry forward was expected to be $494,000. Based on care in allocating AEA's direct labor charges between Bradley & O&M and Bradley construction an additional $400,000+ is now available for application toward the FY93 budget or for rebates to the purchasing utilities. If the BPMC wishes to simply carry forward this amount we have prepared a revised cash flow which is attached and which will be presented to the budget subcommittee prior to the November 20, 1992 BPMC meeting. Sincerely, Sux I = Executive Director cc: Budget Subcommittee Bradley Lake PMC members RAG:rms PO, Box 190869 704 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584 13,484,253, 2,617,561 14,777,104 2,470,000 10,917,066 1,907 13,469,773 BUTILPAY.XLS ALASKA ENERGY AUTHORITY Mi ii i iii BRADLEY LAKE UTILITY PAYMENTS. | Wn Percent | aj ct : | Share July | August September October November December January February March April ___May June FY Toul |Chugach Electric Association 30.40% $351,702 $351,702 $351,702 $351,702 $351,702 $351,702 $331,500 $331,500 $331,500 $331,500 $331,500 $331,500 | $4,099,212 i e 25.90% $299,641 $299,641 $299,641 $299,641 $299,641 $299,641 $282,429 $282,429 $282,429 $282,429 $282,429 | $282,429 | $3,492,421 Alaska Electric Generation & TT Transmission Cooperative, Inc. (acting on A behalf of Homer Electric Association, Inc.-12.0% and Matanuska Electric PrcatrAg ca |Association, Inc.-13.8%) 25.80% $298,484 $298,484 $298,484 $298,484 $298,484 $298,484 $281,339 $281,339 $281,339 $281,339 $281,339 | $281,339 | $3,478,937 |Golden Valley Electric association, Inc. 16.90% $195,519 $195,519 $195,519 $195,519 $195,519 $195,519 $184,288 $184,288 $184,288 $184,288 $184,288 | $184,288 | $2,278,838 City of Seward _ 1.00% $11,569 $11,569 $11,569 $11,569 $11,569 $11,569 $10,905 $10,905 $10,905 $10,905 | $10,905 | $10,905 $134,843 100.00% $1,156,915 | $1,156,915 | $1,156,915 | $1,156,915 | $1,156,915 | $1,156,915 | $1,090,460 | $1,090,460 | $1,090,460 | $1,090,460 | $1,090,460 | _ 460 | $13,484,250 ——— Po —L Page 1 ATTACHMENT 3 Q oO Alaska Energy Authority A Public Corporation November 20, 1992 Mr. Ken Ritchey General Manager Matanuska Electric Association P. O. Box 2929 Palmer, Alaska 99645 Subject: Bradley Lawsuit on Administrative Costs Dear Mr. Ritchey: As a follow-up to my meeting with you, Ron Saxton, and Carolyn Jones in my office on October 16, 1992, I have examined both the FY92 and FY93 Bradley Lake operation and maintenance budgets. I believe the methods used to develop the direct charges and indirect charges (administrative costs) for the FY93 budget, which was presented to the Bradley Lake Project Management Committee on March 26, 1992, are reasonable and in conformance with the provisions and intent of the Bradley Lake Power Sales Agreement. I reminded the committee that ever since I arrived at the AEA in early July 1992, I have attempted to resolve this dispute through negotiation based on business principles. Even after the committee filed the lawsuit on July 16, 1992, I took the initiative and offered settlement positions on August 7. Please remember that I was a negotiator and signatory to the Bradley Lake Power Sales Agreement on behalf of a Purchasing Utility and I never believed the Agreement intended for the State or Authority to subsidize the O&M costs of Bradley Lake as the present counsel for the utilities has argued. In fact I am proud to inform the committee that after recently completed review of the close-out of our FY92 books, there will be a budget surplus of $910,411, that will carryover and be available as a credit to the FY93 budget. This large carryover is due in large part to AEA's care in identifying and allocating the O&M and construction related expenses to the project in FY92. Frankly, I find it offensive that we are litigating a minor issue that should be solved with common sense and that may interfere with our professional relationships and ability to work on projects of mutual benefit. Although I had previously offered to give up "veto" rights over administrative costs in a previous settlement proposal, I fully intend for the Authority to retain such rights over frivolous budget items that the Committee may be persuaded to adopt. Even though this litigation has become “unfriendly", I remain open to any fair and reasonable settlement proposal. Sincerely, GaekV0 fh Wy Ronald A. Garzini Executive Director ce: Bradley Lake PMC Members Carolyn Jones, Assistant Attorney General, - Anchorage, Alaska Ronald Saxton, Ater, Wynne, Hewitt, Dodson and Skerritt, - Portland, Oregon RAG:rms PO. Box 190869 701 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584 ATTACHMENT 4 BRADLEY LAKE OPERATION AND DISPATCH SUBCOMMITTEE SUMMARY OF MEETING NOVEMBER 6, 1992 CORRESPONDENCE October 16, 1992 Outage Report - CEA October 17, 1992 Deflector Mode Operation - CEA October 24, 1992 Deflector Mode Operation - CEA Project Energy Reallocation - AEA Wholesale Power Losses - HEA Draft Test Procedure for Turbine Deflector Characteristics - SWEC Water Deficit 92-93 - AEA OPERATIONS Lake Level at 1138.8 feet and dropping. Inflows below normal for September at 21% of average and for October at 40% of average. Energy has been reallocated in accordance with procedures. Tests on the Bradley Unit to define the deflector characteristics and explain the response to commands are scheduled for November 11, 1992. (Note, this has been rescheduled to November 16, 1992 to accommodate utility generation schedules.) A complete record of maintenance and tests results will be maintained for reference. The communications network between the dispatcher and field personnel (HEA) has been resolved. CEA will install a radio at Bernice Lake to provide direct communications and Bradley will move to a different frequency. It was determined that AEA will provide a brief monthly executive summary report of Bradley operations. The report will include water use, inflow, generation numbers and related statistics; a brief highlight of major events; and a list of project problems. The Subcommittee will review the report format prior to its implementation. Bradley Lake O&D Suvcommittee November 6, 1992 Meeting Summary page 2 ACTION ITEMS Revisions to the Allocation and Scheduling Procedures: The Subcommittee revised Section 5 (b), Hourly Schedules of the Allocation and Scheduling Procedure to include the following statement: Daily schedule changes shall be allowed, subject to procedures implemented by the O&D Subcommittee. The Subcommittee approved recommendation of the revised amendment to the BPMC for adoption. The Subcommittee revised Section 5 (j), Project Scheduling Limitations of the Allocation and Scheduling Procedure to include the following statement: After November 1, each utility may take 100% of its proportionate share of the project (remaining balance as reallocated November 1.) The Subcommittee approved recommendation of the revised amendment to the BPMC for adoption together with Section 5(g), Schedules Above Participants’ Share, Section 5(i), End of Water Year Procedures, and Section 7 (c), Project Spill in the form presented at the October 2, 1992 O&D meeting. All revisions will be presented to the BPMC in a manner which clearly defines the differences between the original procedures and the proposed changes. Note: Further clarification of these action items is required by the O&D Subcommittee prior to presentation to the Bradley PMC. HEA Line Losses: A discussion was held regarding HEA line losses. The discussion will continue at the next O&D meeting with the presentation of additional information by HEA. NEXT MEETING Thursday, December 3, 1992 10:00 a.m. Alaska Energy Authority Main Conference Room RECORU VOPY Bradley Lake FILE NO PROJECT MANAGEMENT COMMITTEE MEETING fro 3-'e | ee MOVEMBER 20/992. hlaols> Date ; (Date) / CE TRAINING oom (Location) PLEASE SIGN IN No. NAME REPRESENTING I Lakhy LelS- AEA 2 Pave EGe&ce Be 3 Jo hn Cope CG hcgachn 4 | Geve wrens Tae. Auge 5 Chae tie pe. Asn lh lhe, 7 7 8 | “Bsadle ot Gen lava SEU 9 Mud 10 TX Mcinne |] Miu u}| Zop2 Priie Mily? 12 hKEA 13 ten (2: —. —baw! l lSeNER_ | “Se wert 14 15 ae (Wt _HEA Aéehk 16 AEA 17 18 19 ii ee al AEGET | Hora izeky | AEE | DZ ZEA eee 92Q2\IT9884 _20_| Drewiree Aanpeh > ae a. |_21 (Tem stare Muy am) Mee? 22 Alaska Energy Authority oa BRADLEY PMC VOTING Ja D. 12E laF- YES NO ABS YES NO ABS YES NO ABS YES NO ABs axupiyT B, / CITY OF SEWARD 01% Mo Vo oo / MATANUSKA ELEC ASSOC 14% [V | Vv | VLE] | / CHUGACH ELECASSOC 30% [AT] Vv | LTT] / HOMER ELEC ASSOC 12% MI] Pe_idVv | | “ GOLDENVALELECASSOC 17% [7] ] [41] [TT] / MUNILIGHT& POWER om «60Wd ML) WL LITT] A= 4+ OVER 51% A stasis ENERGY AUTH °7Aguanws [7A] moo O = MAJORITY VOTING METHOO A: REQUIRING 4 YEAS W/ 51% OF UTILITIES, WITH NO APA VOTE; 1) PROCEDURES FOR SCHEDUUNG, PRODUCTION ANO- DISPATCH OF PROJECT POWER. 2) ESTABUSHMENT OF PROCEDURES FOR USE OF EACH PURCHASER'S WATER ALLOCATION (APA ASSENT REQUIRED FOR FERC UCENSE REQUIREMENTS). 3) SELECTION AMONG ALTERNATIVE METHOOS THAT (00 NOT INVOLVE APA FOR FUNDING REQUIRED PROJECT WORK. YOTING METHOO C: UNANIMOUS VOTE BY ALL (INCLUDING APA): ADOPTION OF PROCEDURES FOR DISPUTE RESOLU- TION. VOTING METHOO p- MAJORITY VOTE (INCLUDING APA). ELECTION OF OFFICERS. WOTING METHOD 8: REQUIRING 4 YEAS W/ 51% OF UTILITIES, AND APA (CONCURRENCE; 1) ARRANGING OPERATION ANO MAINTENANCE OF PROJECT. 2) ADOPTION OF BUOGET OF ANNUAL PROJECT costs. 3) ESTABUSHMENT OF FY ESTIMATED ANNUAL PAY- MENT OBLIGATION AND SCHEDULE OF EACH PUR- CHASER. 4) DETERMINATION OF ANNUAL PROJECT COSTS: AFTER EACH FY. 5) EVALUATION OF NECESSITY FOR AND SCHEDUUNG OF REQUIRED PROJECT WORK. 6) DETERMINATION OF APPROPRIATE AMT. OF IN- SURANCE. 7) ADOPTION OF ADO’L MIN. FUNDING AMTS. FOR RENEWAL AND CONTINGENCY RESERVE FUND ABOVE THAT REQ. BY BOND RES. 8) SELECTION AMONG ALT. METHOOS THAT INVOLVE APA FOR FUNDING REQ. PROJECT WORK 9} ADOPTION_OR AMENOMENT OF PROCE- DURAL COMMITTEE RULES (EXCEPT Dis- PUTE RES) 10) ADOPTION, OF PROJECT MAINTENANCE SCHEDULES. 11) DETERMINATION OF RULES, PROCE- DURES ANO ACCOUNTS NECESSARY TO MANAGE PROJECT WHEN NO BONDS OUT- STANDING. 12) EVALUATION ANO APPROVAL OF OPTION- AL PROJECT WORK AND COMPENSATION FOR SUCH WORK. 13) APPUCATION OF INSURANCE CLAIMS PROCEEDS NOT GOVERNED BY BOND RESOLUTION. 14) APPROVAL OF PROCEDURES ANO ANY WNOMOUAL UTIUTY AGREEMENTS RELATING TO ELECTRIC POWER RESERVES FOR PROJECT. 15) APPROVAL OF CONSULTANTS. a> apo ae au se ver sweilivicinbl 9% Ade? 451-5633 ag2 = GOLDEN VALLEY ELECTRIC ASSOCIATION INC. Hox 71249, Fairbanks, Alaske 89707-1249, Phone 907-4b2-1161 November 19, 1992 Mr. Dave Highers Chairman, Bradley Project Management Committee Chugach Electric Association P.O. Box 196300 Anchorage, Alaska 99519-6300 RE: Appointment to Bradley PMC Dear Dave: I have appointed Brad Evans as GVEA's alternate representative to the Bradley Lake Hydroelectric Project Management Committee. I will be in Juneau and unable to attend the BPMC meeting on November 20, 1992. Michael P. Kelly General Manager cc: Brent Petrie, Secretary Brad Evans, GVEA