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HomeMy WebLinkAboutBPMC Meeting October 26, 1993 210. 11. 12. 13 14. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING AGENDA October 26, 1993 Chugach Electric Association, Inc. Training Room 10:00 a.m. CALL TO ORDER ROLL CALL PUBLIC COMMENT AGENDA COMMENTS APPROVAL OF MEETING MINUTES - September 21, 1993 TECHNICAL COORDINATING SUBCOMMITTEE REPORT BUDGET SUBCOMMITTEE REPORT AGREEMENTS SUBCOMMITTEE REPORT OPERATION AND DISPATCH SUBCOMMITTEE REPORT REVIEW OF PROJECT STATUS OLD BUSINESS A. Spinning Reserves Update B. Bradley Scheduling vs. Spin Requirement Update c. Master Operating Agreement Update (sent out previously by Ron Saxton) D. HEA O&M Agreement -- Terms and Conditions E. Homer Electric Association/Alaska Energy Authority/Project Management Committee Duties NEW BUSINESS A. Approval of Legal Expenses and Other Payments COMMITTEE COMMENTS A. Next Meeting Date ADJOURNMENT DOCBIF253 Highers Burlingame Ritchey Sieczkowski Wolf Eberle Lovas Saxton Saxton McCrohan McCrohan Ritchey Highers CHUGACH ELECTRIC ASSOCIATION, INC. Anchorage, Alaska October 26, 1993 TO} Bradley Lake PMC FROM: David W. Burlingame, TCS wn f SUBJECT: TCS Meeting Summary SVC Project Status - Project is essentially completed, problems with the design and quality control of the capacitors requires the majority of the capacitors to be replaced. Upon replacement, it was found the capacitors were slightly out of specification. This will require some of the capacitors to be replaced a second time. Originally, an additional 200 or so capacitors were also scheduled to be replaced, however these will remain with a five year warranty. Should these capacitors exhibit a failure rate higher than the other capacitors they will be replaced. Bradley Lake Outages 10/2 - 10/20 - Both units out for the first 4-6 days, one unit out for the remainder of the time. New governor cards scheduled to be installed in November. (This has since been modified to have a plant outage December 4-18, 1993 due to high water inflow in September/ October) DECNET Status - Closed out as far as the project. GVEA and AML&P may still need to complete some work. Governor Status - New governor was installed in May. Testing has indicated the ramp rate was doubled from SCADA. Power swings through needle transitions and deflector mode changes were reduced or eliminated. Capacitor Fusing - SWEC believes the unfused capacitors were installed due to the absence of short circuit current. Original claim was due to the high reliability expected due to the low volts/mill stress on these units. SWEC recommended the capacitors remain unfused. Bradley Lake protection changes - Bradley Lake will install a new synchronizing scheme on the 115 kV line breakers to allow them to be synchronized onto a rotating system. Soldotna SVC protection changes - The protection changes for the SVC stations proposed by Chugach were reviewed by SWEC and recommended for implementation. SVC Control studies - AEA presented the scope of studies for the new SVC control systems. The scope was to determine if the existing SVCs would perform adequately with the addition of a new line, or would control changes be required. AEA desires to have any control changes studied and implemented, if required, by the original ABB design team. SSO Study - SWEC recommends no further study on possible SSO problems at Soldotna. Operating Study - The final operating studies for the Bradley Lake/ Kenai were completed. The TCS requested a few additional cases to be included, but accepted the study. The study basically showed that for faults on the Bradley - Soldotna line when Bradley is above 89 MW, one Bradley unit needs to be tripped. The project’s final operating capabilities are very close to the design specifications. Operating Summary - SWEC will provide a diskette to the O&D committee to keep updated. ABB SVC Study - ABB presented the results of their SVC control study. In developing the control study, ABB determined the stability limit of the Southern system to be between 130-150 MW flow north. The study found a minor change will be required to the SVC’s to prevent a oscillation between the Bernice and Anchorage units. The system will require a Bradley Lake unit to be tripped for most faults south of Anchorage. The new line introduces an oscillation between the Kenai, Anchorage and Fairbanks systems which cannot be damped by the Kenai SVC’s. The new northern intertie should investigate power system stabilizers on its SVC’s to mitigate these oscillations. The southern line’s routing/terminal locations has little if any impact on the SVC controls or the apparent stability. Agenda Item No. CITY OF SEWARD MATANUSKA ELEC ASSOC CHUGACH ELEC ASSOC HOMER ELEC ASSOC GOLDEN VAL ELEC ASSOC MUNI LIGHT & POWER ALASKA ENERGY AUTHORITY A=4+ OVER 51% BRADLEY PMC VOTING We DATE: 1O- Dlo-43 DA Rol) call Dones Sige ga feooases yes NO ABS yes NO ABS ma Wo As 01% [v 7 ft 14% [0 7] 4 30% [ ¥ 14] < 12% [7 ee z 17% [Z] ATT] az | 26% [Z 7 A 2007 AL B= AEA CONCUR With A C = UNANIMOUS D= MAJORITY VOTING METHOD A: Requiring four yeas with 51% of utilities, with no AEA vote: 1) Procedures for scheduling, production and dispatch of project power. 2) Establishment of procedures for use of each purchaser's water allocation (AEA assent required for license requirements). 3) Selection among alternative methods that do not involve AEA for funding required project work. VOTING METHOD B: Requiring 4 yeas with 51% of utilities and AEA concurrence: 1) Arranging operation and maintenance of project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) 3) Establishment of FY estimated annual payment obligation and schedule of each purchaser. 4) Determination of annual project costs after each FY. 5) Evaluation of necessity for and scheduling of required project work. 6) Determination of appropriate amount of insurance. 7) Adoption of additional minimum funding amounts for renewal and contingency reserve fund above that required by bond resolution. 8) Selection among alternate methods that involve AEA for funding required project work. 9) Adoption or amendment of procedural committee rules (except dispute resolution). 10) Adoption of project maintenance schedules. 11) Determination of rules, procedures and accounts necessary to manage project when no bonds outstanding. 12) Evaluation and approval of optional project work and compensation for such work. 13) Application of insurance claims proceeds not governed by bond resolution. 14) Approval of procedures and any individual utility agreements relating to electric power reserves for project. 15) Approval of consultants. VOTING METHOD C: Unanimous vote by all (including AEA) VOTING METHOD D: Majority vote (including AEA) Election of Officers Bradley Lake PROJECT MANAGEMENT COMMITTEE MEETING Oct 26, \ATS (Date) Chugach Euclwic Kssoc:enthny (Location) PLEASE SIGN IN No. NAME REPRESENTING A DEA/AEA 1 ohn) Seco Kowsk 2 at Sharte: AE 3 wu Mc Colom il +— 6 SAKNIV 1 | Bree MeHEres OAL 4 Geve Borns tt 5 | Daal hea ~ _ CAcrecdh K CAugacts Ae chesjin, ' VAM Rey ck a 8 LM i Ke ai | O.u 9 ones V 10 | _/ ul Mot AScAm mee P 92Q2\IT9884 Third Draft OPERATION & MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT BETWEEN: HOMER ELECTRIC ASSOCIATION, INC. AND ALASKA ENERGY AUTHORITY October 22, 1993 TABLE OF CONTENTS Page Secuion; Vi — Detinicdons i acne ter et ettes Po tot esto cutu ster ctiioninS 2 See 2 Se See 6 Bere as a ae ee ae ee 5 Section; os = Vee lied, UCLLd CW SCAEUS cite ostiort oenieriiennertatiiaties 6 Section 4 - Operator's General Responsibilities ....... 6 Section 5 — Accounting: and RecOLrdS! 24443 ey ee O Section'6:— Bucge tinea saie cerea usu rrerirero ce ccumase cree mion mits ein stieanareceen dy Section i/ — TExureagrainary, COSte (ota eee enter sient eel D Section 0-7 emergency, EXDENGLtLULGS! 6 cs 6) te eee oe Section9)— Disbursement or Bunds cris omes rece s Section 10 — Access to Operator's Facilities. 2)... 4 - - 23 Section i1-- Use of Progect living QUALTERS 2H. 6 seis io te es Le Section) 12) s-sInsuranCe yaar ctr tioi tc iie tai uiraiairotil aja urouen uous tae ead a Section 154-7 Dilepuce Resolution: esses pentane Section 14 - Notices, Time and Holidays Computation, Designated Representatives uae Hehigytiigsiieerii citar ag HEeatiHveyiitat Radi gO) Section: 15) -sRemedtiessCumulative sd ioqic sien cise eect a eo Section 167—Availeuility. of sinformatt Oni coe iio LO Section) 17, —. Terminations ee neat reo ntete © Section 181 - Force Mad Cure cr ie sacre mire ratie tr aie onte tsar ror LT Saction 192—" third Party BeneriClanies me ci acne nmcmsieire Hon LO Section 207-7 Assignment of Contract 3605s ee aL Seceion silt xh i Sts ae ere race ieee enon ian rads) ar LG Section 22): — Multiple! Copies oie ete entre ee oe rota) Motte Section 23 - Entire Agreement; Priority of Power Sales RG Ce emer Cee gee Reece se etc eee et eee er He PE eau SEO) OPERATION & MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT THIS AGREEMENT dated this day of , 1993,1s entered into by the HOMER ELECTRIC ASSOCIATION, INC. (HEA) ("Operator") and the ALASKA ENERGY AUTHORITY ("Authority"). WITNESSETH WHEREAS, the Authority is a public corporation of the State of Alaska duly created, organized, and existing pursuant to AS 44.83, and authorized by law to sell electric power generated by the Bradley Lake Project ("Project"); WHEREAS, the Authority is authorized under AS 44.83.396 to enter into agreements for the operation and maintenance of power projects owned by the Authority with a "qualified utility"; WHEREAS, the BPMC is authorized under its Bylaws adopted pursuant to the terms of the Bradley Lake Project Power Sales Agreement, to approve agreements for the operation and maintenance of Project facilities; WHEREAS, the Operator has been identified in the "Bradley Lake Hydroelectric Project Agreement for the Wheeling of Electric Power and Related Services" (Services Agreement) dated June 29, 1989 by the participating utilities as one of the two appropriate entities to operate and maintain the Project (the other being the Alaska Electric Generation and Transmission Cooperative, Inc.); 1 - OPERATION & MAINTENANCE AGREEMENT WHEREAS, the Operator is both a qualified utility within the meaning of AS 44.83.425(5) and is authorized to operate and maintain a power project acquired or constructed by the Authority; and WHEREAS, the Operator has agreed to operate and maintain the Project in accordance with the terms and conditions of this Agreement; NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: Section 1 - Definitions. For purposes of this Agreement, the following definitions apply: (a) “Act" or references to AS 44.83, means Title 44, Chapter 83 of the Alaska Statutes (1989), as amended. (b) "Agreement" means this Agreement. (c) "Authority" means the Alaska Energy Authority as established by the Act, and any successor agency thereto and, unless the context otherwise requires, such officers and agents of the Authority that may be delegated responsibilities and duties under this Agreement. (d) "“BPMC" means the Bradley Lake Project Management Committee as established under the December 8, 1987 Power Sales Agreement and operating under the Bylaws adopted on October 19, 1988. 2 - OPERATION & MAINTENANCE AGREEMENT (e) (f) (g) (h) (3) "Contract Year" means, except for the first and last Contract Years, the twelve month period starting July 1 of a calendar year through and including June 30 of the next succeeding calendar year. The first Contract Year shall be the period commencing with the effective date of this Agreement and extending through and including the succeeding June 30. The last Contract Year shall be the period commencing after the last full (i.e., twelve - month) Contract Year and ending on the expiration of this Agreement. "Dispatch" means to schedule daily and remotely monitor and control the voltage, frequency, and real and reactive power flow through the Project. "Dispatch Agreement" means the Agreement for the Dispatch of Electric Power and for Related Services between Chugach Electric Association, Inc. and the Alaska Energy Authority dated February 19, 1992. "Division of Risk Management" means an office which is part of the State Department of Administration and which is established pursuant to AS 44.21.020. "FERC" means the Federal Energy Regulatory Commission, an agency of the United States Department of Energy, or its successor agency. "Master Operating Agreement" means the Master Operating Agreement between the Authority and the BPMC dated A 1993. 3 - OPERATION & MAINTENANCE AGREEMENT (k) (1) (m) (o) (Pp) (q) "O&M" means operation and maintenance of the Project and includes the duties set forth in Section 4 of this Agreement. "Operation and Maintenance Standards" means the Plant Operation and Maintenance Manual, and equipment installation, operation, and maintenance manuals. "Operator" means Homer Electric Association, Inc. (HEA) or its assignee. "Party" or "Parties" means the signatories to this Agreement. "Power" or “Electric Power" means electric energy or electric capacity, or both, except where the context requires a distinction, in which case electric energy is expressed in kilowatt hours, and electric capacity is expressed in kilowatts. "Power Sales Agreement" means the Bradley Lake Power Sales Agreement, dated December 8, 1987, among the Authority; the Municipality of Anchorage (dba Municipal Light and Power (ML&P)); the City of Seward (dba Seward Electric System (SES)); the Chugach Electric Association, Inc. (Chugach); the Golden Valley Electric Association, Inc. (GVEA); the Alaska Electric Generation and Transmission Cooperative, Inc. (AEG&T), the Matanuska Electric Association, Inc. (MEA); and the Homer Electric Association, Inc. (HEA). "Project" means the Bradley Lake power generation facility and the associated transmission and substation facilities described in Exhibit A. 4 - OPERATION & MAINTENANCE AGREEMENT (cr) “Project O&M Budget" means the budget for the operation and maintenance of the Project as adopted and amended pursuant to this Agreement. (s) "Purchaser" means any of the parties to the Power Sales Agreement as listed in Section 1(p), above. Section 2 - Term of Agreement. (a) This Agreement shall take effect upon execution by the authorized representatives of all Parties. (b) The term of this Agreement shall be five (5) years from the date on which it takes effect and shall continue from year to year thereafter, except upon written notice to terminate. Notice of termination shall be given one (1) year in advance, effective on July 1 of the next Contract Year; provided, however, if the Authority reasonably determines termination is necessary to avoid substantial damage to the Project or endanger public health or safety, this Agreement may be terminated in accordance with subsection (c). (c) In the event the Authority reasonably determines that the Operator's performance of its obligations under this Agreement, without immediate remedial actions, could cause substantial damage to the Project or endanger public health or safety, the Authority shall promptly notify the Operator and shall identify the areas where performance must be remedied. The Operator shall submit to the Authority a plan for remedial action to correct its performance within twenty-four (24) hours of such notice. The Authority or its designee shall have the right to temporarily take over the duties of the Operator until a remedial action plan 5 - OPERATION & MAINTENANCE AGREEMENT reasonably satisfactory to the Authority is agreed to by the Operator. If the Parties fail to agree to a remedial action plan within thirty (30) days, the Authority may terminate this Agreement. Section 3 - Qualified Utility Status. The Authority has determined that the Operator is a qualified utility within the meaning of AS 44.83.425(5) and has met all the requirements thereof. Section 4 - Operator's General Responsibilities. (a) (b) The Operator shall be responsible for: (1) monitoring and providing all operations except as performed by the Project Dispatcher, as generally required by the Dispatch Agreement; (2) performing or providing for all maintenance and repair of the Project, to the extent such operations, maintenance and repair are authorized by the Project O&M Budget, or as otherwise funded in accordance with this Agreement. The operation, maintenance, and repair of the Project shall be consistent with the project schedules as provided by the project dispatcher and shall be conducted in a manner to minimize, or correct any failures of facilities or equipment. Schedule changes to accommodate maintenance activities shall be coordinated and scheduled with the Project dispatcher in cooperation with the Purchasers. 6 - OPERATION & MAINTENANCE AGREEMENT (c) (d) (e) The Operator shall operate, maintain, and repair the Project in accordance with the Operation and Maintenance Standards. In addition the Operator shall use and update by mutual agreement the Automatic Maintenance Management System. The Operation and Maintenance Standards shall be maintained at the Project site. Any revisions to the Operation and Maintenance Standards shall be effective within a period of time after notice having due regard to the nature of the revisions requested and necessary project budget revisions. The Operator shall provide all material, labor, engineering and other technical support, subcontract management, and training to operate, maintain, and repair the Project, and all tools, equipment, spare parts, materials, and supplies needed to perform work under this Agreement in accordance with the Operation and Maintenance Standards and written directives by the Authority. In addition to the preceding responsibilities, and those set forth in the Operation and Maintenance Standards, the Operator's duties shall include, but are not limited to, the following specific responsibilities unless directed otherwise: (1) comply with all federal and state agency requirements relating to the Project, except for those requirements which the Operator can in good faith contest. In case of a contest, the operator shall promptly notify the Authority; (2) provide security and access in accordance with a mutually agreed plan; 7 - OPERATION & MAINTENANCE AGREEMENT (3) read, maintain, and operate all Project metering devices, record such readings, and maintain or forward data, forms, relevant graphs, and/or magnetic tapes as required by the Authority; (4) make annual recommendations to the Authority for: @) operation, maintenance, repair, replacement, and modification of Project facilities; Gs) installation additional protective relaying, instrumentation, control systems, or other apparatus as necessary to maintain or improve the Project and interconnected system reliability, integrity, efficiency, and safety; (iii) a five (5) year schedule of estimated equipment modifications, replacements, additions, and disposals; (5) prepare monthly and year-end operating and financial statements, in a form acceptable to the Authority relating to the performance of this Agreement; (6) provide qualified personnel with the ability to perform the duties assigned to the Operator hereunder, including but not limited to the Operator's obligations under this Section 4; (7) annually prepare and conduct a training program approved by the Authority; 8 - OPERATION & MAINTENANCE AGREEMENT (8) following a protective relay or alarm action, and upon observation or notification, interpret the cause, identify corrective measures, and take corrective action as the situation warrants. The Operator shall document any such actions within ten (10) days of their accomplishment; (9) take reasonable measures to protect equipment, personnel, and the general public from hazards arising from equipment failure such as electrical faults, vandalism, and mechanical failure and repair and report damaged facilities to the Authority, to the BPMC on behalf of the Authority and any appropriate law enforcement authority, as soon as possible following each occurrence; (10) record the operating characteristics of the power plant equipment and machinery as required; (11) maintain the Project living quarters, including expenses for utility services, as a cost of operation and maintenance. (12) update, keep and make available to the Authority the required Project documents, as-built drawings, and other records, including records to meet FERC license requirements and records required by any project related insurance agreements; (13) perform water and power operation studies as required to integrate power from the Project into the Purchasers' systems with due regard for the capability 9 - OPERATION & MAINTENANCE AGREEMENT limits of the Project, planned water reserves, and Purchasers' power needs; [OPEN] (14) arrange for and administer project related subcontracts or agency agreements; (15) conduct all technical, operation, and maintenance inspections of the Project in accordance with the FERC license for the Project, and other permits or agency requirements, and submit inspection and other reports to the appropriate entities; fand RE Coren | (16) support the Project by coordinating related technical and operating activities with the Purchasers. —-@REN+} Section 5 - Accounting and Records. In keeping any books of account required by Section 4, the Operator shall, to the extent that different rules are not prescribed by this Agreement or federal and state laws, follow the system of accounts prescribed for public utilities and licensees by FERC. Upon reasonable notice, the Operator and its contractors or subcontractors shall allow the Authority, BPMC, or their authorized representatives to audit books of account for the Project O&M and the supporting documents of the Operator and its contractors or subcontractors related to the Project O&M for a period of three (3) years following the close of a Contract Year. The audit shall be performed in such a manner that will not unreasonably interfere with the Operator's duties under this Agreement. 10 - OPERATION & MAINTENANCE AGREEMENT Section 6 - Budget. (a) (b) (c) After the effective date of this Agreement, and in accordance with schedules provided by the Authority, the Operator shall prepare and submit each year to the Authority a draft O&M budget for the Project for the following Contract Year. The draft O&M budget shall be based upon prudent estimates and anticipated O&M requirements and expenditures, and reflect appropriate accounting and budgetary principles for utilities. The draft budget shall be prepared in a format and schedule directed by the Authority. The Operator shall perform its duties in a manner consistent with the Project O&M Budget except as provided in Sections 7 and 8 below. If the Operator makes a determination during any Contract Year that it cannot operate within its Project O&M Budget, the Operator shall report such finding to the Authority and shall submit a revised budget for the Authority's review and approval. In the event a revised budget is not approved and the Operator determines that it cannot perform its obligations under this Agreement, the Operator may terminate this Agreement upon 90 days notice to the Authority. Section 7 - Extraordinary Costs. (a) Extraordinary costs are costs for operations, maintenance, repair or equipment replacement which were not anticipated to materialize in the Contract Year, and not provided for in the Project O&M Budget. 11 - OPERATION & MAINTENANCE AGREEMENT Exhibit Ai’ Project Facility Description; Exhibit BY = Project Specific Federal and State Agency Requirements; Exhibit C - Insurance and Indemnification; and Exhibit D - Section 7 of the Master Operating Agreement Section 22 - 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 23 - Entire Agreement; Priority of Power Sales Agreement. This Agreement in its entirety including the Exhibits and the Power Sales Agreement represent the entire Agreement of the Operator and the Authority. Nothing in this Agreement is intended to alter the rights and obligations of the Authority and the Purchaser(s) under the Power Sales Agreement. In the event the terms of this Agreement and the Power Sales Agreement are found to be in conflict, the terms of the Power Sales Agreement shall govern. Any amendments to this Agreement shall be in writing. 19 - OPERATION & MAINTENANCE AGREEMENT IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the day and year first above written. HOMER ELECTRIC ASSOCIATION, INC. By Title Date (SEAL) ATTEST: ALASKA ENERGY AUTHORITY By Title Date (SEAL) ATTEST: APPROVED: Assistant Attorney General 20 - OPERATION & MAINTENANCE AGREEMENT EXHIBIT "A" - BRADLEY LAKE PROJECT FACILITY DESCRIPTION EXHIBIT "B" - BRADLEY LAKE PROJECT SPECIFIC FEDERAL AND STATE AGENCY REQUIREMENTS EXHIBIT *“¢" INSURANCE Ls Contractor to purchase/maintain insurance for duration of agreement, plus one year following final payment. a4 Specified limits are minimum levels. If the policy contains higher limits, contracting agency is entitled to coverage of higher limits. cls Certificate of insurance must be furnished to contracting agency. e Must provide for 30-day prior notice to the contracting agency of cancellation, reduction in liability. ® Failure to furnish constitutes material breach and grounds for termination. Types of Insurance Worker's Compensation: Contractor responsible for subcontractors. Coverage must include statutory coverage for states where employees are engaging in work and employer's liability protection not less than $100,000 per person, $100,000 per occurrence. Where applicable, coverage for all federal acts must also be included. Comprehensive of Commercial General Liability Insurance: Covers all operations of contractor providing insurance for bodily injury and property damage liability including coverage for: Premises and Operations Products and Completed Operations Broad Form Damage; and Personal Liability Comprehensive Policy: Minimum combined single limit of liability is $300,000 per occurrence, $300,000 aggregate for bodily injury, property damage and personal injury. Commercial Policy: Minimum limits of liability are $300,000 per occupance (combined single limit) for bodily injury and property damage, $300,000 per occurrence for personal injury, $300,000 aggregate for products-completed operations, and $300,000 general aggregate. Comprehensive Automobile Liability Insurance: Covers all owned, hired, and non-owned vehicles with coverage limits not less than $100,000 per occurrence bodily injury and $50,000 property damage. Professional Liability Insurance: Covers all negligent errors, omissions which the contractor, subcontractor or their employees make in the performance of the agreement which results in financial loss to the contracting agency. Minimum Limits: Combined Single Limit Contract Amount Occurrent and Annual Aggregate Under $100,000 $100,000 $100,000 to $499,999 $250,000 $500,000 to $999,999 $500,000 $1,000,000 and up NEGOTIABLE Contracting agency reserves right to implement an Owner Controlled Insurance Program with option of obtaining Professional Liability Insurance, contractor isn't required to carry Professional Liability Insurance. EXHIBIT C Page 2 of 2 (b) (c) If the Operator learns of an event or other contingency which involves an extraordinary cost, the Operator shall promptly notify the Authority of the circumstances and request authorization to make such expenditures. If required by the Authority, the Operator shall develop a scope, schedule, budget and proposed plan of work as soon as practicable. The Authority shall respond in writing to the Operator's request as soon as practicable after the receipt of the plan. Upon approval by the Authority, the Operator shall perform such work consistent with the plan. The Operator shall not incur any extraordinary costs without the written approval of the Authority except as provided in Section 8 below. Section 8 - Emergency Expenditures. (a) (b) An emergency is an unforeseen combination of circumstances or the resulting state that requires immediate action to protect or preserve the Project, Project personnel, or public health and safety. The Operator shall take such actions as it reasonably believes are necessary in an emergency. If, in the reasonable judgment of the Operator, the emergency requires the Operator to incur costs prior to obtaining written approval from the Authority, the Operator shall notify the Authority of the emergency as promptly as practicable with due regard to the emergency. 12 - OPERATION & MAINTENANCE AGREEMENT Section 9 - Disbursement of Funds. (a) The ordinary costs of performing under this Agreement shall be initially paid by the Operator. (b) The Operator shall prepare an invoice identifying the actual costs incurred in a format mutually agreeable to the Authority and Operator. The invoice shall be furnished to the Authority by the fifteenth (15) of the month following the month in which the costs are incurred. All such invoices shall be subject to audit and approval by the Authority, such approval shall not be unreasonably be withheld. (c) Subject to the availability of funds, the Authority shall reimburse the Operator for all costs under this Agreement. (d) Any amounts owed by the Authority to the Operator shall be paid by the Authority within thirty (30) days of receipt of a bill from the Operator. Any amounts not paid within thirty (30) days shall accrue simple interest at the legal rate of interest at the time payment was due, and shall continue until paid by the Authority. Section 10 - Access to Operator's Facilities. Authority and BPMC personnel or agents shall be granted reasonable access to the Project and the Project owned equipment and facilities on the Operator's premises upon reasonable notice and subject to security measures, for the purpose of inspection and testing. 13 - OPERATION & MAINTENANCE AGREEMENT Section 11 - Use of Project Living Quarters. (a) The Operator may house its employees (and their immediate families) who are required to live on-site in performance of the Operator's duties under this Agreement in living quarters at the Project at no cost. No additional living quarters other than those approved by the Authority will be made available at the Project. (b) The Operator shall schedule occupation of the Project living quarters in an efficient manner. The Operator shall include in such scheduling, quarters for visiting employees of the Operator, subcontractors, the Authority, and the BPMC as needed and available. (c) On-site operations and maintenance personnel shall have priority in the use of permanent residences at the Project. Section 12 - Insurance. The insurance as required by the Master Operating Agreement Provision 7, shall be as set forth in Exhibit C. Section 13 - Dispute Resolution. Pending resolution of a disputed matter, the Parties will continue performance of their respective obligations pursuant to this Agreement. If the Parties cannot reach timely mutual agreement on any matter in the administration of this Agreement, the Operator shall, to the extent necessary for its continued performance, make a determination of such matter without prejudice to the rights of the other Parties. Such determination 14 - OPERATION & MAINTENANCE AGREEMENT shall not constitute a waiver of any other remedy belonging to either party. Section 14 - Notices, Time and Holidays Computation, Designated Representatives. (a) (b) (c) Any notice required to be given to any Party by this Agreement shall be effective when it is received by such Party. In computing any period of time from such notice, the period shall commence at 12:01 p.m. on the date of receipt of such notice. Notice to Operator required by this Agreement shall be in writing directed to the General Manager of Homer Electric Association, Inc., 3977 Lake Street, Homer, Alaska 99603. 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. Each Party shall designate a representative to act for it in matters not requiring formal action by its governing bodies. Either Party may at any time change its designated representative by giving written notice to the other Party. Section 15 - Remedies Cumulative. No remedy conferred upon or reserved to the Parties under this Agreement is intended to be exclusive of any other remedy or remedies existing at law or equity. 15 - OPERATION & MAINTENANCE AGREEMENT Section 16 - Availability of Information. The Parties 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 under this Agreement. Section 17 - Termination. (a) (b) Not less than 75 days prior to the date of any scheduled termination of this Agreement the parties shall meet for the purpose of discussing arrangements necessary for the orderly takeover of the duties of the Operator by the Authority. At of before the meeting the Operator shall submit to the Authority a takeover plan which sets forth the actions which in the opinion of the Operator are reasonably required to accomplish the takeover, and any budget amendments necessary to accomplish the plan. The Authority shall review and either approve or modify the plan and budget. The Operator shall perform in accordance with the approved plan, subject to any budgetary constraints. The Authority shall secure funding for and pay any extraordinary costs reasonably incurred by the Operator in performing its duties hereunder, including close-out and demobilization costs. Following termination of this Agreement for any cause, the Authority shall have the right and a reasonable amount of time, not to exceed six (6) months, to arrange disposition of Project-owned equipment on the Operator's premises. 16 - OPERATION & MAINTENANCE AGREEMENT Section 18 - Force Majeure. (a) No parties to the Agreement shall be liable to other Parties for, or be considered to be in breach of or default under this Agreement on account of, any delay in performance or any delay or failure to deliver, receive or accept delivery of energy due to any of the following events: (1) Any cause or condition beyond such Party's reasonable control which such Party is unable to overcome by the exercise of reasonable diligence (including but not limited to: fire, flood, earthquake, volcanic activity, wind, drought and other acts of the elements; court order and act of civil, military or governmental authority; strike, lockout and other labor dispute excluding those disputes wrongfully caused by the Operator; riot, insurrection, sabotage and war; breakdown of or damage to facilities or equipment; electrical disturbance originating in or transmitted through such Party's electric system or any electric system with which such Party's system is inter- connected; and, act or omission of any person or entity other than such Party, or Party's contractors or suppliers of any tier or anyone acting on behalf of such Party); or (2) Any action taken by such Party which is, in the sole judgment of such Party, necessary or prudent to protect the operation, performance, integrity, reliability or stability of the Project or of such Party's electric system or any electric system with which such Party's electric system is interconnected, whether such actions occur automatically or manually. 17 - OPERATION & MAINTENANCE AGREEMENT (b) In the event of any delay excused under this section, the time for performance thereby delayed shall be extended by a period of time reasonably necessary to compensate for such delay. No cost adjustment will be allowed, only time extensions as appropriate. Nothing contained in this paragraph shall require any Party to settle any strike, lockout or other labor dispute. Each party shall give the other Parties prompt written notice of any delay which the Party giving notice considers to be an excusable delay of its performance. Section 19 - Third Party Beneficiaries. This Agreement gives no rights or benefits to anyone other than the Operator and the Authority and has no third party beneficiaries. Section 20 - Assignment of Contract HEA assignment of its rights and responsibilities under this agreement shall be subject to the approval of the Authority and BPMC. HEA expects to request approval to assign its rights and responsibilities under this Agreement to AEG&T. Approval of such assignment request is subject to a finding by the Authority that AEG&T is a qualified operator. Section 21 - Exhibits. The following exhibits attached hereto are incorporated by reference herein: 18 - OPERATION & MAINTENANCE AGREEMENT EXHIBIT "Dp" DRAFT 10/19/93 1:00pm Section 7. re ac ovi All Contracts shall include the following general provisions, together with specific provisions applicable to that Contract, and shall follow substantially the form set forth in this section. (a) Independent Contractor. Unless otherwise agreed to by the Parties, each Contractor entering into a Contract shall perform solely as an independent contractor. (b) Annual Planning and Budget. The Authority shall prepare, or cause the Contractor to prepare, the initial plans and budgets to be submitted to the BPMC for the operation or maintenance service in the Annual Project Budget. (c) Subcontracting. A Contractor may subcontract work on the operation or maintenance of the Project or Project Related Facilities, with the written approval of the Authority and the BPMC, which shall not be unreasonably withheld. (ad) Invoices. A Contractor shall submit complete written invoices to the Authority for payment. Invoices shall include supporting documentation as required by Exhibit A. (e) Payment and Dispute Resolution. The Authority shall expeditiously arrange for payment of all invoices, and shall work with the Contractor to promptly resolve any disputed billings. (f) Accounts, Records, and Audits. In keeping records for work performed under a Contract, the Contractor shall utilize the accounting system required of public utilities and licensees by the Federal Energy Regulatory Commission for electric plants. Contractors shall make their records available as required. The Contractor shall retain copies of all invoices, payroll records, and other supporting documents sufficient for an audit of all expenditures, for three (3) years following the close of eath Fiscal Year. A Contractor will furnish the Authority with operating and financial statements related to work performed under a Contract as may be reasonably requested by the Authority. If receipt of those statements is unreasonably delayed, the Authority may, with its own staff or agents, perform all work necessary to collect the data reasonably necessary, but only at such times and in such a manner as will not unreasonably interfere with Contractor's operations under a Contract. 5S - MASTER MAINTENANCE AND OPERATING AGREEMENT DRAFT 10/19/93 1:00pm (gq) Insurance. During the term of the Contract, the Contractor shall purchase and maintain insurance covering injury to persons or property suffered by the Authority or a third party, as a result of errors or omissions or operations by a Contractor or by its subcontractor which arise both out of and during the course of the Contract. The Contractor shall require all subcontractors providing services directly or indirectly under a Contract to provide the same insurance as required of the Contractor. Coverage shall also provide protection against injuries to all employees of the Contractor and the employees of any subcontractor engaged in work under a Contract. Copies of all required insurance policies shall be furnished to the Authority prior to beginning work under a Contract. These policies will show evidence of coverage and provide for ninety (90) days notice of written cancellation, non-renewal for material change in the coverage. The Contractor shall purchase insurance adequate to cover its operations performed in connection with the work under the Contract. Specifically, each Contractor shall maintain Worker's Compensation Insurance and Comprehensive General Liability Insurance, including Comprehensive General Liability Broad Form Insurance, Automobile Liability Insurance, Owned Aircraft Insurance (where applicable), and Owned Watercraft (where applicable), in amounts acceptable to the Authority and consistent with the Power Sales Agreement. (h) Indemnity. The Authority, to the extent permitted by applicable law and subject to the availability of funds, and each Contractor (as "Indemnitor") agrees to and shall indemnify and defend the other, its officers, employees, and agents (as "Indemnitee") for tort liability for all claims for damages and injuries of any character or nature whatsoever arising from the sole negligence of the Indemnitor, including its office, employees or agents in relation to performance under this Agreement. Indemnitor agrees to assume the defense thereof and to pay all expenses (including attorney’s fees) connected therewith. For purposes of this section, "sole negligence" shall include acts or omissions of the Indemnitor, its officers, employees, or agents, or any combination thereof, and situations where such acts or omissions, in combination with the negligence of third parties combines to cause injury or damage to persons or property. It shall not include situations where the acts or omissions of the Indemnitor, its officers, employees, or agents combines with the negligence of Indemnitee to cause such injury, which situations shall be governed by the provisions of the subsection below relating to concurrent negligence. 6 - MASTER MAINTENANCE AND OPERATING AGREEMENT DRAFT 10/19/93 1:00pm Each party agrees that liability (including costs of defense and attorney's fees) for claims arising from the concurrent negligence of both Parties shall be apportioned according to the respective percentage of fault attributable to each Party as determined by agreement or by the trier of fact. (i) Amendments. Any amendment or modification to a Contract must be in writing and signed by the Contractor, the Authority and approved by the BPMC. (3) Conduct in Accord with Applicable Law. The Contractor and the Authority agree that at all times during the term of a Contract, they shall conduct themselves in accord with all applicable laws and permits, and they will undertake no action contrary to such laws or permits. The laws of the State of Alaska shall govern this interpretation and application of the Contract and the actions of the parties thereunder. (k) Prudent Utility Practices for the purposes of this Agreement, shall have the meaning provided in Section 1(x) of the Power Sales Agreement. (1) Contract Hours and Safety Standards. All Contracts are subjecl to all applicable provisions-of state and federal law concerning work hours and safety standards. (m) Equal Employment Opportunity. All Contracts are subject to all applicable provisions of state and federal law concerning Equal Employment Opportunity. (n) xclusivity of Contract. All terms and provisions agreed to between the Authority and any Contractor will be incorporated into a written Contract setting forth the:full intent of the parties. (o) Notice and Communication. Any notice or demand involving a claim of default, breach of a Contract, or notice of a dispute shall be sent to the appropriate party by registered or certified mail. Notice to the Authority shall be addressed to: the Executive Director, Alaska Energy Authority, 701 E. Tudor Road, Anchorage, Alaska 99503. (p) Section Headings. The section headings of a Contract 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, 7 - MASTER MAINTENANCE AND OPERATING AGREEMENT DRAFT 10/19/93 1:00pm (q) Severability. In the event that any provision of a Contract shall be finally adjudicated by a court of competent juriediction to be invalid or unenforceable, the remainder of the Contract shall be unaffected by such adjudication and all the remaining provisions of the Contract shall remain in full force and effect as if such provision so adjudicated to be invalid had not been included herein. (x) Successors and Assigns. A Contract shall be binding upon and inure to the benefit of the successors, legal representatives or assigns of the Contractor and the Authority. However, a Contractor may not assign a Contract or any party thereof without the written consent of the Authority and the BeEMC. If the Authority discontinues its current legal existence, its obligations under a Contract will automatically be assigned to the BPMC, without the need for consent by the Contractor, unless the rights, powers and duties of the Authority are transferred to a successor entity with substantially the same expertise within the meaning of Prudent Utility Practices, powers and duties as the Authority. (s) Waiver Not Continuing. Any waiver at any time by any arty to a Contract of its rights with respect to any default of he other party hereto, or with respect to any cther matter rising in connection with that Contract, shall not be considered waiver with respect to any subsequent default, right or matter. Bny delay short of the statutory period of limitations in sserting cr enforcing any right shall not be deemed a waiver of Vohra oht. fi oct "ey ce w a» (t) Third Party Beneficiaries. The BPMC, as representative ef the Purchasers, is a third party beneficiary of this Contract, with, the legal right to enforce the provisions hereof. & - MASTER MAINTENANCE AND OPERATING AGREEMENT