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HomeMy WebLinkAboutBPMC Meeting July 22, 1993 1RECORD UOPY FILE NO —— TRE So Min 7/arl43 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE APPROVED MEETING MINUTES July 22, 1993 1. 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 Dennis McCrohan, Designated Representative Chugach Electric Association David L. Highers, Designated Representative and Chairman Golden Valley Electric Association Mike Kelly, Designated Representative City of Seward Dave Calvert, Designated Representative Homer Electric Association Norm Story, Designated Representative Matanuska Electric Association Ken Ritchey, Designated Representative Municipal Light & Power Tom Stahr, Designated Representative Others Present: Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Bob Hufman, Alaska Electric Generation & Transmission Cooperative Dave Hutchens, Alaska Rural Electric Cooperative Association David Burlingame, Chugach Electric Association John Cooley, Chugach Electric Association dburger\word\minutes\pmc\07-93 BPMC Meeting Minutv. July 22, 1993 Page 2 of 10 Gene Bjornstad, Chugach Electric Association Bradley Evans, Golden Valley Electric Association Jim Hall, Matanuska Electric Association Moe Aslam, Municipal Light & Power Tim McConnell, Municipal Light & Power Bob Price, Municipal Light & Power Dave Fair, Homer Electric Association Myles Yerkes, Homer Electric Association Brent Petrie, Alaska Energy Authority David R. Eberle, Alaska Energy Authority Stanley E. Sieczkowski, Alaska Energy Authority Denise Burger, Alaska Energy Authority Chairman Highers welcomed Dennis McCrohan, Deputy Director of Energy, Alaska Industrial Development and Export Authority (AIDEA). Mr. McCrohan will represent Alaska Energy Authority on the Bradley Lake and Four Dam Pool Project Management Committees. 3. PUBLIC COMMENT There being no public comment, the meeting continued to the next agenda item. 4. AGENDA COMMENTS The following items were added to the agenda: 12.C. Acceptance of HEA's Application for the Operation and Maintenance of Bradley Lake 12.D. Approval of SVC Testing Power Costs 12.E. Interim SVC Maintenance Agreement 12.F. Legal Opinion on O&D Subcommittee Authority 5; APPROVAL OF MEETING MINUTES Minutes of the June 17, 1993 meetings were approved as submitted. 6. TECHNICAL COORDINATING SUBCOMMITTEE REPORT Mr. Burlingame stated the Technical Coordinating Subcommittee had not met. It is anticipated that PTI will complete the final Bradley Lake operating study by the end of July 1993. Mr. Burlingame expects the TCS to hold its final meeting in August to review and accept the study recommendations. dburger\word\minutes\pmc\07-93 BPMC Meeting Minut.. July 22, 1993 Page 3 of 10 7. BUDGET SUBCOMMITTEE REPORT Mr. Ritchey reported the Budget Subcommittee held a teleconference on July 1, 1993. The Subcommittee is reviewing the costs for maintenance of Homer Electric's Bradley Junction and Soldotna line with HEA. Mr. Ritchey reported the FY94 wheeling rate, under the Transmission Services Agreement was expected to be slightly lower than the FY93 rate of $.023. The Budget Subcommittee is awaiting the final wheeling information from Chugach Electric Association. The Subcommittee approved modifications to the FY94 budget to accommodate the cost of the FY94 Stream Gage Program ($110,000). The cost of the FY94 Stream Gage Program was included in the budget narrative, but was overlooked in the line items. Mr. Ritchey noted several budget line items were reduced by a total of $110,000, however the adopted FY94 budget total remained unchanged. A. Construction Cost Audit Update The Subcommittee has received the final draft of the Construction Cost Audit. Mr. Ritchey noted that efforts were being made to arrange a presentation of the audit to the BPMC by Mr. Brian Walshe of Metzler and Associates. B. O&M Audit Update Parisena Stromberg & Associates has completed the 1992 O&M cost audit. Mr. Ritchey stated clarification of a few items was still needed. 8. AGREEMENTS SUBCOMMITTEE REPORT Mr. Sieczkowski reported the Agreement Subcommittee had not met. Mr. Sieczkowski stated that he and Mr. Saxton had met, however, and discussed the master operating agreement. Further comments were deferred to Mr. Saxton under agenda item 11. C. 9. O&D SUBCOMMITTEE REPORT Mr. Eberle stated the O&D Subcommittee met on July 8, 1993. Merits of changing the water year were discussed by the Subcommittee, but were judged insufficient to justify a change at the present time. dburger\word\minutes\pmc\07-93 BPMC Meeting Minut__ July 22, 1993 Page 4 of 10 10. Mr. Eberle reported the Subcommittee discussed concerns over the lack of a maintenance agreement for the Daves Creek and Soldotna substations. It was believed that completion of the maintenance agreement had been interrupted by consideration of the master operating agreement. Mr. Eberle stated that Chugach Electric Association had been performing minor maintenance of the facilities. To ensure that necessary maintenance continued, the Subcommittee recommended the BPMC approve an interim letter agreement (between AEA and CEA). Additionally, the Subcommittee proposed to review the substation maintenance expenses, prior to payment, until the full agreement was in place. The Subcommittee also approved forwarding the following SVC testing costs to the BPMC for payment: Chugach Electric Association $352,798.77 Municipal Light & Power 16,323.33 Mr. Eberle noted that CEA submitted only the cost of additional power generation and no labor, and that AML&P included $1,603 labor costs in its billing. HEA initially submitted costs which included labor, but subsequently withdrew them. The City of Seward had not yet requested reimbursement for SVC testing costs, however, apparently was planning to submit a request. Mr. Bberle stated that the O&D Subcommittee approved a motion to formally advise the BPMC of the differences in the submitted testing costs. Mr. Eberle informed the Committee that the O&D Subcommittee was discussing both station service and equipment SVC losses. The BPMC was advised that provisions for these losses would need to be addressed in the O&M budget. The Subcommittee will be revising and updating the Allocation & Scheduling Procedures. Current interim procedures will be revised to final operating procedures and then brought to the BPMC for approval. Mr. Eberle stated the Project's yearly maintenance is scheduled the first two weeks of October, pending approval by the utilities. During the maintenance outage, ABB will be installing the replacement capacitors and the new Soldotna breaker. REVIEW OF PROJECT STATUS Mr. Eberle recommended that $100,000 of Project construction funds be reserved for future clean-up of the remaining underwater debris in the fish water bypass intake channel. Explaining there was no urgency to complete the clean- up, Mr. Eberle stated that it could be done for approximately $50,000 at a reservoir level low enough to permit use of heavy equipment. Utilizing divers dburger\word\minutes\pmc\07-93 BPMC Meeting Minut-. July 22, 1993 Page 5 of 10 11. to do the work now would cost an estimated $160,000 - $180,000 and was not necessary. In response to inquiry by Mr. Saxton, Mr. Eberle explained the funds would be held by the trustee bank. It was noted that, to date, approximately $200,000 had been spent on the previous diving operation to clear the fish water bypass intake area. OLD BUSINESS A. B. Spinning Reserve / Under Frequency Load Shedding Update Bradley Scheduling vs. Spin Requirement Update Mr. Cooley reported on behalf of Mr. Lovas that Mr. Lovas and Mr. Saxton had been working on categorizing spinning reserve policy and technical issues. It was expected that the various issues would be defined by the next Committee meeting. The Alaska Systems Coordinating Council (ASCC) is also waiting on the review being done by Mr. Lovas and Mr. Saxton. Mr. Burlingame added that approval of the new load shedding schedule was expected at a meeting later in the day. BPMC Control Over O&M Decisions and Agreements - Master Operating Agreement Mr. Saxton reported that he, Stan Sieczkowski, and Jim Klasen, assistant Attorney General, agreed that the concept of the master operating agreement was workable. A meeting was scheduled later in the day to discuss specific details of the agreement. Mr. Saxton expected some delay on the agreement progress until AIDEA became more familiar with the operation and maintenance of the Bradley Lake Project. Budget Subcommittee Authority - Resolution 93-11 Mr. Petrie explained that the purpose of the resolution was to give the Budget Subcommittee authority to adjust line items within the budget and authority to adjust the budget up to ten percent of the total. Mr. Petrie revised the phrase approved budget, where it appeared, to read adopted budget. It was noted that the phrase adopted budget did not necessarily mean the budget was approved by the Committee. Mr. Petrie moved to dopt Resolution 93-11, as modi nded by Mr. Kelly, the motion was approved by unanimous roll call vote (Action 93-169). Prior to the vote, Mr. Petrie explained that AEA was currently dburger\word\minutes\pmc\07-93 BPMC Meeting Minutv. July 22, 1993 Page 6 of 10 represented on the Budget Subcommittee and the assumption was made that the Energy Authority will continue to be represented on the Subcommittee. Mr. Saxton addressed the issue of subcommittee authority, stating that, though somewhat confusing, the bylaws clearly intended that specific authority could be delegated to subcommittees. Mr. Saxton recommended that the Committee clarify the bylaws, replacing the section which states "The BPMC may not delegate its decision making duties to any special purpose committees" with "Special purpose committees shall exercise only such powers as are expressly delegated by the Committee." Mr. Saxton added the proposed revision would help clear up pending questions on O&D Subcommittee authority. Mr. Ritchey moved that the Committee bylaws be amended as recommended by Mr. Saxton. Mr. Kelly seconded the motion, commenting that, in order to avoid potential confusion, authority should legat h mmittees b lution. Mr. r_moved thi he motion be tabled to w_study of the bylaws an ntial impacts created he proposed change. Mr. Kelly secon he motion to table Mr. Ritchey's motion. Hearing no objection, Chairman Highers tabled the motion until the next scheduled Committee meeting (Action 93-170). With the approval of Chairman Highers, Mr. Eberle introduced discussion of New Business, Item 12. F., Legal Opinion on O&D Subcommittee Authority. Mr. Eberle reported that the O&D Subcommittee approved a motion stating that the following questions be brought to the Bradley Lake Project Management Committee for clarification: 1. What, if any, items has the BPMC delegated to the O&D Subcommittee to take independent action on. 2. What voting procedures should the Subcommittee use. 3. | Under the BPMC bylaws, does the BPMC have the authority to delegate powers to subcommittees. It was suggested by Mr. Eberle that these issues be considered during Mr. Saxton's review of the BPMC bylaws. Mr. Saxton will distribute a copy of the current BPMC bylaws to the Committee members along with a list of actions taken by the Committee. dburger\word\minutes\pmc\07-93 BPMC Meeting Minutvs July 22, 1993 Page 7 of 10 Mr. Kelly recommended that any past delegations to the subcommittees, which are not out of date, be drafted into resolutions for consideration at the next scheduled BPMC meeting. Mr. Yerkes raised the question of subcommittee voting procedures. Mr. Saxton responded that the issue was not specifically addressed in the Power Sales Agreement (PSA) or Committee bylaws, adding that decisions in the Budget Subcommittee were generally made by consensus of the majority. Mr. Saxton suggested that the same weighted voting procedures developed for the BPMC be observed by the subcommittees. Mr. Kelly recommended that past actions taken by the subcommittees be affirmed and that it be made clear that the proposed change does not alter past subcommittee actions. Additionally, Mr. Kelly proposed subcommittee voting procedures by majority consensus and that voting be limited to the designated, authorized subcommittee representative. The issue will be discussed further at the next Committee meeting. 12. NEW BUSINESS A. Nomination and Election of Officers Mr. Kelly, Mr. Calvert and Mr. Story were previously asked to serve as the nominating committee by Chairman Highers. Mr. Kelly reported that the nominating committee had met and recommends that the current officers continue to serve the Committee, noting that Mr. McCrohan, as the designated representative for the Energy Authority, would serve as Secretary. Mr. Kelly invited nominations from the floor, however, no further nominations were heard. Mr. Kelly moved the Committee unanimously accept the proposed nominations. Seconded by Mr. Story, the motion was approved by unanimous roll call vote (Action 93-171). Approval of Legal Expenses and Other Payments Mr. Ritchey moved the Committee a Vi ments of $17,602.62 and $23,345.03 to Ater Wynne Hewitt Dodson & Skerritt for Mr. Saxton's le nsel to th mimi during the months of May and June 1993. Seconded by Mr. Story, the motion was approved nani s roll call vote Action 93-172). Acceptance of HEA's Application for the Operation and Maintenance of Bradley Lake Mr. moved that the BPMC ac he Homer Electric Association lication, dated July 22, 1993, for th ion and maintenance of dburger\word\minutes\pmc\07-93 BPMC Meeting Minutv. July 22, 1993 Page 8 of 10 1 the Bradley Lake Hydroelectric Project for submission to Alaska Energy Authority to be used as a basis to negotiate with the Energy Authority and the Project Management Committee to develop a final budget and contract. The motion, seconded by Mr. Ritchey was approved by unanimous roll call vote (Action 93-173).1 Mr. Story requested that the Chairman appoint a team to assist with contract and budget negotiations. Mr. Kelly recommended that each utility general manager, or appointed designee, be represented on the team. Mr. Story already anticipated involving the utilities in the interim development process of the operation and maintenance proposal prior to negotiation with the Energy Authority and presentation to the BPMC. Mr. Story expected planned work sessions among the utilities to take place in Anchorage. Mr. Ritchey recommended that the budget issues be separated from the other issues and dealt with by the Budget Subcommittee, adding that non-subcommittee members could participate in the discussions as well. Mr. McCrohan stated that the Energy Authority preferred to negotiate directly with Homer Electric Association before bringing the contract to the Committee, or a designated group of the Committee, for approval. Mr. Saxton pointed out that the negotiations would include three, separate parties: Homer Electric Association, Alaska Energy Authority and the Bradley Lake Project Management Committee. It was the consensus of the BPMC that the utilities should be involved in the informal development phase of the contract in order to allow opportunity for input and discussion of utility concerns. The initial development process will not include AEA. Mr. Stahr noted HEA's efforts to include the utilities in the process to date and expected that HEA will continue to include the utilities. Mr. Saxton clarified that HEA would be negotiating with AEA as its own representative and not as a representative of the BPMC. Mr. Story confirmed that it was HEA's intent to, first, work with the utilities during the development of the contract; second, negotiate the contract with AEA; and third, present the contract to the BPMC for approval. Mr. Story reiterated that all utility concerns would be resolved before the contract was brought to ABA for negotiation. No other applications were submitted to the Committee. dburger\word\minutes\pmc\07-93 BPMC Meeting Minutvs July 22, 1993 Page 9 of 10 Although the Budget Subcommittee will be reviewing HEA's proposed budget, Mr. Saxton advised the Committee that the budget would need to be approved separately and could not be agreed to in the contract. Approval of SVC Testing Power Costs Mr. Eberle reviewed the utility test power costs reported under agenda Item 9, O&D Subcommittee Report. Mr. Eberle informed the Committee that, initially, funds had not been budgeted for SVC test power costs. The Subcommittee agreed that the SVC testing costs should be capitalized, however did not specifically define which costs would be included. Mr. Eberle explained that AEA assumed the utility labor costs would be absorbed by the utilities, as had been the previous, established practice. Mr. Eberle recommended that the direct expenses and any personnel overtime costs directly attributable to the testing be capitalized. Mr. Stahr stated that was the procedure that AML&P used for billing its testing costs and proposed that all utility billings be reviewed for demonstration of actual cost. Mr. Eberle pointed out that CEA calculated the cost of test power and that it may be cumbersome to reconstruct actual costs. Mr. Eberle acknowledged that future utility cost reimbursements should be documented actual costs, but added that this had not been determined in advance of the SVC testing. Mr. Burlingame stated that CEA had documentation of its actual power generation costs for SVC testing and offered to share that information. Mr. moved that the SVC testin ts be reimbursed as submitted. nded by Mr. Kelly, the motion w ved by unanimous roll call vote (Action 93-174). It was clarified that any proposed labor costs submitted for reimbursement should be incremental overtime costs, and that billings expected from Homer Electric Association and the City of Seward were included in the motion. Interim SVC Maintenance Agreement Mr. Eberle reiterated the importance of maintaining the SVC system and recommended that, until the formal SVC maintenance agreements were executed, of a letter agreement with Chugach Electric Association be used to ensure continued maintenance. Additionally, Mr. Eberle proposed, during the interim, under the letter agreement, the maintenance costs be reviewed by the O&D Subcommittee for payment. Mr. Kelly moved that the Committee approve Mr. Eberle's recommendations. Seconded by Mr. Story, the motion was approved by unanimous roll call vote (Action 93-175). Mr. Sieczkowski commented that the SVC and Transmission Line Maintenance Contracts were dburger\word\minutes\pmc\07-93 BPMC Meeting Minutes July 22, 1993 Page 10 of 10 13. 14, Attest: presently ready for signature, except for inclusion of the reference to the master operating agreement, and that a budget amendment would be brought to the Budget Subcommittee to cover the maintenance costs. Other Items Mr. Eberle recalled the Committee had previously requested investigation of the cost of SVC system studies covering the effects of the new Kenai transmission line. ASEA Brown Boveri (ABB) estimated a cost of $88,000 to perform the studies. Mr. Eberle recommended the studies be done through AEA's existing contract. Mr. Kelly moved that nt not to exceed $100,000 be authorized for ABB to perform studies of the effect of the Southern Intertie on the SVC system. The motion, seconded by Mr. Stahr, was approved by unanimous roll call vote (Action 93-176). The cost of the studies will be capitalized as a Bradley Lake Project cost. COMMUNICATIONS A. Schedule Next Meeting Tuesday, August 17, 1993 10.00 a.m. Chugach Electric Association Training Room ADJOURNMENT The meeting adjourned at_11:50 a.m. David L. Highers, Douiea V Melo ~ Dennis McCrohan, Secretary dburger\word\minutes\pmc\07-93