Loading...
HomeMy WebLinkAboutBPMC Meeting - June 17, 1993 1Revised Action Nos. - September 7, 1993 RECORD wOPY FILE NO Ro 3-t1 mint “tienen 2 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE = & 1174/93 APPROVED MEETING MINUTES June 17, 1993 1. CALL TO ORDER Chairman Highers called the Bradley Lake Hydroelectric Project Management Committee to order at 10:10 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 N. Petrie, 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 Hank Nikkels, Alternate Representative Others Present: Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Bob Hufman, Alaska Electric Generation & Transmission Cooperative David Burlingame, Chugach Electric Association John Cooley, Chugach Electric Association dburger\word\minutes\pmc\06-93a BPMC Meeting Minutes June 17, 1993 Page 2 of 9 Jim Borden, Chugach Electric Association Tom Lovas, Chugach Electric Association Dan Bloomer, Chugach Electric Association Jim Hall, Matanuska Electric Association Mary Ann Pease, Municipal Light & Power Tim McConnell, Municipal Light & Power Bob Price, Municipal Light & Power Dave Fair, Homer Electric Association Ron Garzini, Alaska Energy Authority David R. Eberle, Alaska Energy Authority Eric Marchegiani, Alaska Energy Authority Stanley E. Sieczkowski, Alaska Energy Authority Denise Burger, Alaska Energy Authority 33 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.B. Approval of FY94 Payment Obligation 12.C. Approval of Other Payments 5. APPROVAL OF MINUTES - May 13, 1993 The minutes of the May 13, 1993 Bradley Project Management Committee meeting were approved as submitted. 6. TECHNICAL COORDINATING SUBCOMMITTEE REPORT Mr. Burlingame reported that the TCS had not met. The TCS expects to meet in July to review the results of the SVC system tests and to define the long term operating guidelines of the Project. ie BUDGET SUBCOMMITTEE REPORT A. Bradley Lake Construction Cost Audit Update Mr. Ritchey expected the final report to be distributed in one week. The Budget Subcommittee will meet in two weeks to discuss the report. Plans dburger\word\minutes\pmc\06-93a BPMC Meeting Minutes June 17, 1993 Page 3 of 9 are being made for a representative of Metzler & Associates to present the report to the BPMC. Bradley Lake O&M Cost Audit Update The FY92 O&M cost audit is being reviewed and the Subcommittee is awaiting clarification of some questions. Other Budget Subcommittee Issues: Mr. Ritchey noted that an error had been discovered in the approved FY94 O&M budget. Cost for the USGS stream gage program was included in the narrative, however, did not appear as a line item. Other budget line items will be adjusted to provide for the cost of the program ($110,000). The changes will not effect the budget total. Mr. Ritchey informed the Committee that the Budget Subcommittee was preparing a resolution formalizing the authority of the Subcommittee to make certain changes to the O&M budget. The resolution will be ready for consideration at the next BPMC meeting. Other items being discussed by the Subcommittee are the HEA Fritz Creek line costs and the CEA wheeling issue. Chairman Highers asked what impact the recent legislation affecting AEA would have on the Bradley O&M budget. Mr. Petrie recommended that the Committee wait until December or January, when new operation arrangements were expected to be in place, before altering the budget or utility payment schedule. Mr. Petrie added AEA was incurring unexpected costs related to preparation for the transfer of operation responsibilities and the on-site labor negotiations. Referring to a memorandum issued by AEA, Mr. Petrie stated AEA was requesting guidance from the Committee on the selection of an operation and maintenance contractor for Bradley Lake (Attachment 1). Mr. Petrie informed the Committee that a meeting of Four-Dam Pool, Bradley Lake and other utilities was scheduled for July 7, 1993 at AEA to discuss the transfer of tasks handled by AEA to the utilities. Mr. Kelly expressed concern over the continuing availability of Energy Authority staff to oversee the transition and recommended that the BPMC assert its authority as the contracting power. Acknowledging there had been several previous discussions on the BPMC authority to contract, Mr. Petrie stated AEA was responsible for contracting Project operation and maintenance, however, dburger\word\minutes\pmc\06-93a BPMC Meeting Minutes June 17, 1993 Page 4 of 9 the Power Sales Agreement gave the BPMC the authority to approve the contract. 8. AGREEMENTS SUBCOMMITTEE REPORT 10. Mr. Sieczkowski reported the Agreements Subcommittee had not met since the last BPMC meeting. OPERATION & DISPATCH SUBCOMMITTEE REPORT Mr. Marchegiani reported the O&D Subcommittee met June 3, 1993. Under the direction of the Subcommittee, AEA has contracted SWEC to perform a two phase hydraulic transient stability analysis at a reservoir elevation below 1080". April and May reservoir inflows were reported to be higher than anticipated. It is speculated that the increased inflow is early snow melt due to the unusually warm Spring weather. If the increased flow continues, a water reallocation is expected about July 1. Removal of loose rock above the water line at the fish water bypass intake channel is complete. Mr. Marchegiani informed the Committee that material still remained below the water line. AEA is investigating methods and costs to remove the remaining material. Mr. Eberle stated that a recent sonar scan indicated debris around one of the trash racks installed during the winter, however unless a low reservoir level and high winds occur, the remaining debris is not expected to shift or cause additional problems. At a reservoir level low enough to potentially cause a problem, equipment can be brought in to remove the debris and remedy the problem. Maintenance will probably be delayed until next year or when a low enough reservoir occurs to facilitate the use of heavy equipment. Mr. Marchegiani reported that the Woodward governor modification and testing had been completed. Mr. Burlingame added the governor modification performed well, doubling the governor response rate. REVIEW OF PROJECT STATUS Mr. Eberle informed the Committee that the new breaker for Soldotna was expected to be delivered by mid-August. ABB has delayed the capacitor replacement to September or October and has proposed a reduced number of capacitors for replacement. AEA will either require an extended warranty or insist upon full replacement of the capacitors. In response to concerns raised by CEA, AEA is reviewing SVC protection controls with ABB, which may result in some modifications. AEA has requested information from ABB on the cost of additional dburger\word\minutes\pmc\06-93a BPMC Meeting Minutes June 17, 1993 Page 5 of 9 11. system studies. Mr. Eberle noted the AEA Board of Directors approved the final Project budget of $314,500,000 at its May meeting. Documents are being prepared to release the surplus appropriation ($12.1 million) back to the State. OLD BUSINESS A. Spinning Reserve / Under Frequency Load Shedding Update Mr. Lovas reported institution of the under frequency load shedding schedule was delayed until the end of June. Revisions proposed by GVEA are currently under review. The relays are in place and ready to set. The Alaska Systems Coordinating Council Reliability Criteria Committee (ASCC - RCC) is reviewing final comments on the spinning reserve proposals. The Committee expects to finalize a recommendation in the near future. Bradley Scheduling vs. Spin Requirement Update Mr. Saxton distributed a summary chart of the spinning reserve issue comments submitted from the utilities (Attachment 2). Noting the summary included several issues other than Bradley spin, Mr. Kelly recommended that the focus be narrowed to Bradley spin. Mr. Kelly pointed out that several of the issues were presently being addressed by the ASCC. Mr. Lovas stated the ASCC-RCC could handle the system response and technical questions, however, not the related legal issues (i.e., responsibility for spinning reserve). Mr. Saxton will work with the RCC (specifically, Chairman Tom Lovas) to delineate the technical and legal issues. Mr. Lovas and Mr. Saxton will report back to the BPMC (Action 93-164). BPMC Control Over O&M Decisions and Agreements - Master Agreement Mr. Saxton reported that no further activity had occurred on the master operating agreement due to questions created by the legislated changes at AEA, however, the State Attorney General's office is currently reviewing the draft master operating agreement. Mr. Saxton stated that he and Mr. Sieczkowski were in accord on the basic substance of the agreement and the BPMC contractual relationship in the agreement. Mr. Sieczkowski informed the Committee that he would be meeting with the Assistant Attorney General this afternoon to discuss final comments on the draft agreement. Mr. Kelly expressed concern over the handling dburger\word\minutes\pmc\06-93a BPMC Meeting Minutes June 17, 1993 Page 6 of 9 of contracting an operator for Bradley Lake - specifically, if the master operating agreement provided contracting authority to the BPMC. Mr. Saxton responded that the issue was taken care of by the proposed master operating agreement. Mr. Saxton requested direction from the BPMC on proceeding with the development of the master operating agreement, recognizing that the Committee may prefer to wait until other issues related to the transition of AEA are resolved. Referring to AEA's letter requesting direction from the BPMC on the selection of an operator for Bradley Lake, Mr. Garzini stated AEA would, most likely, be responsive to the BPMC's choice. Expressing the need to provide Alaska Industrial Development and Export Authority (AIDEA) information and a schedule on the transfer of project O&M responsibilities to the utilities, Mr. Garzini asked the utilities to submit suggestions. Mr. Garzini added that, more than ever, it was necessary for the utilities to work together in order to accomplish all that needed to be done. Mr. Garzini reiterated that AEA would be responsive to the BPMC. Mr. Saxton advocated completion of the master operating agreement, stating that completion of the remaining agreements had been put on hold while the master operating agreement concept was developed. Mr. Saxton explained that completing the master operating agreement would enable completion of the remaining agreements. Additionally, only minor changes to the already completed agreements were needed in order to fit into the framework of the master operating agreement. Mr. Garzini recommended that the BPMC select an operator. Mr. Garzini stated that approval was expected by the Attorney General's office for a sole source contract, adding that prompt action was needed by the utilities. Mr. Saxton stated that remaining agreement issues, including the master operating agreement could be resolved in a one or two day meeting of the Agreements Subcommittee. Mr. Story stated HEA would have an O&M proposal ready to submit to AEA and the Bradley PMC within two weeks. Noting that the introduction of the proposed master operating agreement had delayed the completion of the three remaining HEA agreements, and recognizing the need to expedite the agreements process, Mr. Story moved that the PMC authorize Ron Saxton and Stan Sieczkowski to complete the master operating agreement. The motion, seconded by Mr. Ritchey, was approved by unanimous roll call vote (Action 93-165). dburger\word\minutes\pmc\06-93a BPMC Meeting Minutes June 17, 1993 Page 7 of 9 Mr. Story moved that the BPMC direct AEA to work solely with Homer Electric Association mplete i for site ion and mainten: f the Bradle Hydroelectric Project, in accordance with existing project agreements.'! Mr. Kelly asked if the issue of sole source procurement of the Bradley Lake operation and maintenance contract had been resolved. Mr. Garzini stated, because it was not a typical procurement situation (i.e. the BPMC would actually be paying for the contract), AEA could likely participate in a contract selected by the BPMC. Mr. Garzini added that a formal legal opinion on the procurement issue was requested by AEA. Related to the contracting issue, Mr. Saxton stated that, according to the Power Sales Agreement, the BPMC has the authority to chose the project operator and AEA has the authority to veto the choice. Continuing, Mr. Saxton stated it was his opinion that both AEA and the BPMC had authority to contract and to veto the other's selection. Mr. Saxton added that the language of the proposed master operating agreement allows the State to contract with the operator and requires the approval of the BPMC. Mr. Kelly recommended that the BPMC consider HEA's forthcoming proposal while ABA obtained a legal opinion on State procurement requirements. Mr. Garzini stated that, because of the State's responsibility to the FERC license and bond requirements, AEA should be the contracting authority and that the contract be subject to the approval of the BPMC. Mr. Garzini requested that, if the BPMC develops a contract with an operator, the FERC license, the bond holders and State's interests be protected. Mr. Kelly strongly preferred the BPMC as the contractor, acknowledging the need to maintain AEA's interest. Mr. Garzini later offered an additional alternative, stating that AEA could contract with the BPMC, which in turn, would contract with the project operator. Mr. Story recognized AEA's obligations and its right to veto a contract as well as its technical ability to assist with the development of an operation and maintenance contract proposal. It is HEA's intent to work with ABA to bring a two part proposal to the BPMC which would identify the required services (Part 1) and the technical contract and budget (Part 2). Mr. Story explained that HEA was in the process of working with AEA and had not set up a structure to negotiate a contract with the BPMC. The issue of which entity, the BPMC or ABA, would ultimately be the contractor did not affect the development of the operation and maintenance proposal. Mr. Story clarified the intent of ! Mr. Story's original motion did not contain the word solely. Mr. Story later added the word to clarify the intent of the motion. dburger\word\minutes\pmc\06-93a BPMC Meeting Minutes June 17, 1993 Page 8 of 9 his motion was for the BPMC to direct AEA to work solely with HEA to complete HEA's contract proposal for the operation and maintenance of Bradley Lake. The propriety of HEA's request for exclusive assistance from AEA was questioned. In an effort to expedite the process of completing HEA's operation and maintenance proposal, Mr. Kelly mmen he motion be amen follows: The BPMC requ AEA assist HEA with the ion of ion maintenan proposal for presentation at the next Bradley PMC meeting. Both Mr. Story and Mr. Ritchey accepted the amended motion. Prior to the vote, Chairman Highers clarified that the motion was not intended to be interpreted as exclusive. Mr. Garzini stated that AEA was available to any BPMC member who requested help. The amended motion was approved by unanimous roll call vote (Action 93-166). 12. NEW BUSINESS A. Operations Budget Contingency Fund Resolution Mr. Petrie reported that the Budget Subcommittee was working on a resolution delegating authority to the Budget Subcommittee and expected to have it ready by the next BPMC meeting. Approval of FY94 Payment Obligation The FY94 utility payment schedule and cash flow was distributed to the Committee. Mr. Ritchey noted that the BPMC had previously acted upon the FY94 budget, however had not approved the FY94 utility payment schedule (Attachment 3). Mr. Ritchey advised the Committee that the fund balance (Cash Flow, line 8) may actually be higher than shown, in which case the utility payment amount could be reduced in the future. AEA is reviewing the figures. Mr. Ritchey moved to approve the FY94 utility payment schedule. Seconded by Mr. Kelly, the motion was approved by unanimous roll call vote ( Action 93-167). Approval of Other Payments Mr. Kelly m rove payments of approximately $3,600 to Bill Bennett for legal assistance associated with the Bradley Lake labor negotiations and $6,215.90 to Ron Saxton for legal counsel. Seconded Mr. Ritchey, the motion w: Vv. unanimous roll call vote (Action 93-168). dburger\word\minutes\pmc\06-93a BPMC Meeting if 8 June 17, 1993 Page 9 of 9 13. COMMUNICATIONS A. Schedule Next Meeting Thursday, July 22, 1993 10:00 a.m. Chugach Electric Association 14. ADJOURNMENT The meeting adjourned at 12:30 p.m. David L. Highe: y — nme Ges VCE tt — Brent N. Petrie, Secretary dburger\word\minutes\pmc\06-93