HomeMy WebLinkAboutBrad Pro 3-1.0 PMC General Correspondence 1993November 30, 1993 D R [\ F I
Bradley Lake Project Management Committee
At your request, we have applied the procedures listed below with
respect to the accounting records of the Alaska Energy Authority
(AEA) for the annual project costs of the Bradley Lake
Hydroelectric Project (Bradley) for the fiscal year ended June 30,
1993. It is understood that this report is solely to assist you in
evaluating the reasonableness of costs reported by AEA and is not
intended to be used for any other purpose.
Our procedures and the results thereof are as follows:
a. We traced the Utilities' contributions into the accounting
records and to the Revenue Fund trust account statements to
determine that all contributions were deposited into the
appropriate fund. We also confirmed these amounts with the
Utilities. Individual utility contributions were recalculated as
a percentage of total contributions in order to confirm compliance
with the allocation schedule set forth in the Power Sales
Agreement.
b. We reviewed the transfers from the Revenue Fund to the
Bradley Operating Fund to determine that the required monthly
transfers of 1/12th of the approved annual budget were made. We
also agreed the transfers into the Debt Service Fund to the
transfers from the applicable fund to determine the propriety of
the source of the Debt Service funding.
. In order to determine the completeness of the expenses
recorded in the financial records, we agreed the disbursements
detailed in the Bradley Operating Fund and the Debt Service Fund
trust account statements to the accounting records. We also
selected disbursements per the Bond Proceeds Construction Fund
statements and traced them to the supporting documentation in order
to determine the validity of their classification as construction
rather than operating and maintenance costs.
Page 2
Bradley Lake Project Management Committee
ORAL Y
da: We tested the validity of expenses reported in the accounting
records by selecting certain items and tracing them to the
supporting documentation in order to determine that:
Le It was an appropriate charge to the Bradley annual
project costs for the fiscal year ended June 30, 1993; and
Ze The expense was budgeted for Bradley annual project costs
by the Project Management Committee.
e. In order to familiarize ourselves with the nature and terms of
appropriate expenses, we reviewed the Power Sales Agreement and
other Bradley operation and maintenance agreements. To gain a
further understanding of issues and events affecting Bradley
throughout the period, we read the minutes of the PMC meetings.
Es We agreed the debt service requirements to the audited
financial statements of the Alaska Energy Authority for the year
ended June 30, 1993 to determine that the interest and principal
payments funded by Bradley's fiscal year 1993 budget were properly
calculated and paid.
g. Due to the ongoing litigation regarding the overhead costs
charged Bradley by AEA, we were unable to perform any procedures
with respect to the allocation methodology employed by AEA. Nor
were we able to test the validity of overhead expenses charged by
tracing individual items to supporting documentation.
ne We reconciled the ending surplus balance to the cash account
balances at June 30, 1993.
Because the procedures noted above do not constitute an audit made
in accordance with generally accepted auditing standards, we do not
express an opinion on any of the accounts or items referred to
above.
Page 3
Bradley Lake Project Management Committee
OWA T
During the course of performing the procedures previously
described, we noted the following items which are included as
adjustments to arrive at total Operating and Maintenance costs:
Adjustments
Salaries expense relating to the workers
injured in the commuter airline accident
includes amount which will be reimbursed
through Workers' Compensation Insurance.
Aircraft Accident Recovery expenses were
decreased by the amount due from Workers'
Compensation Insurance at June 30, 1993 $ 22,900
The Metzler construction audit charges
included in the O&M expenses were removed
and charged to Construction as approved by
the PMC. This was reimbursed on November 15,
1993, per AEA. 30,620
To correct a coding error on payroll costs,
amounts incorrectly charged to Construction
were charged to O&M. This will be adjusted,
per AEA. ( 355)
oA chuae ke cxcer Gout Wurened
AEA charged overhead on direct aircraft accident expenses of
$66,242. These charges totalled $32,639. Since the direct costs
are partially reimbursed by workers' compensation insurance in
addition to being potentially recoverable through insurance and/or
litigation, it appears that overhead charges on these direct
expenses are not warranted. Also, as salaries expense increased
due to other employees assuming duties of the injured workers
during their convalescence, and since overhead was applied to the
increase in salaries expense, it would appear as if Bradley was in
effect paying overhead twice on the same direct labor base.
a
Page 4
Bradley Lake Project Management Committee
a. DRART
Remodelling costs of $4,534 for the Operations Assistant's office 5
were charged directly to Bradley O & M as AEA administration costs. ,
It does not appear to have been provided for in the approved
budget.
In August, 1992, AEA inadvertently billed Bradley $55,803 for
overhead charges relating to fiscal year 1992. These charges had
already been paid previously; consequently the August billing
resulted in a double-payment of this amount. During fiscal year
1993, reimbursements to AEA for overhead and direct charges paid on
behalf of Bradley exceeded actual costs incurred by AEA. The
probable explanation offered for the excess reimbursements is that
one or more reports generated by the AKSAS system detailing the
charges to be reimbursed to AEA overlapped dates with other
reports. The overlapping probably allowed certain expenses to be
charged twice. The total amount due Bradley as of June 30, 1993 is
as follows:
FY92 charges billed twice $ 55,803
FY93 overlapping charges 96,446 -D.iP % tue
Total due Bradley for
excess reimbursements $152,249
AEA repaid the full amount on September 3, 1993.
Monies held in the Operating Fund earn interest at a rate of
7.38%. Bradley may wish to consider charging interest at this
rate for the funds advanced to AEA. Because the details of the
fiscal year 1993 overcharges have not been investigated, interest
could be estimated as follows:
Page 5
Bradley Lake Project Management Committee
ORAET
Advance outstanding from
8/14/92 through 9/03/93 $55,803
Simple interest for 12.5
months x 7.28%
$4,290
Advances on FY93 amounts 96,446
pe M/Z
Assumed average advances
outstanding 48,223
Simple interest, annual x 7.38%
SOS:
Estimate of interest on
AEA advance $7,849 Sy drnad
Charge
Had we performed additional procedures or had we made an audit of
the financial statements in accordance with generally accepted
auditing standards, matters might have come to our attention that
would have been reported to you. This report relates only to the
accounts and items specified above and does not extend to any
financial statements of the Bradley Lake Hydroelectric Project,
Project Management Committee, taken as a whole.
aRAtY
Parisena, Stromberg & Company, APC
November 30, 1993
BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE
Combined Statement of Accrued Cash Receipts
and Operating and Maintenance and Debt
Service Disbursements
Year Ended June 30, 1993
Receipts:
Utilities contributions
Interest received
Total receipts
Disbursements:
Operations and maintenance
Interest paid
Principal due July, 1993
Interest due July, 1993
Total disbursements and
debt service payments
Excess of disbursements
over receipts in
current year
Surplus for the period
September 1, 1991 to
June 30, 1992
Interest earned prior
to September 1, 1991
Surplus, July 1, 1992
Surplus, June 30, 1993
Budget
$13,882,980
— 1.680, 821
15,563,801
2,747,328
5,458,932
2,470,000
—2.458,932
16,135,192
S__(571, 391)
NRA ET
Actual Variance
$13,882,980 $ 0
—1. 872,117 191,296
2,387,332 359,996
5,458,932 0
2,470,000 0
— 5,458,932 —
—15.775,.196 289,996
—_(20, 099) $551,292
1,019,109
eth DS,
—1.034,868
BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE
Statement of Accrued Cash Receipts and Disbursements - 0 & M
Year Ended June 30, 1993
Budget
Hydraulic power generation expense:
Operation supervision and engineering $ 257,926
Hydraulic operation 123,860
Electric operation 82,000
Hydraulic power generation operation 20,000
Transportation 266,900
Structure maintenance 60,000
Electric plant maintenance 45,000
Miscellaneous hydraulic plant maintenance 45,000
Hydraulic plant maintenance 392,000
Fuel stock 40,000
System control and load dispatching 174,000
Transmission expense:
Bradley Junction substation 2,000
Overhead line maintenance 39,000
Administrative, general and regulatory expense:
Project Management Committee costs 81,000
Administration 421,011
Contractual services 25,000
Insurance 245,824
Regulatory commission 401,807
Total operation and
maintenance expense $2 747,328
OR AFT
Actual
$ 263,914 69,534 26,660 12,777
159,280 16,344 33,258 33,258 409,115 8,181 138,000 ° 23,677
520,937
201,545
203,174
—331.345*
$2,440,497
* Includes $15,000 funding of reserve for five-year inspection.
® S52 |,000
mT
i none il
ae ||| eee ee
aU el
ZS, OCvu
Adjustments
Based Upon
Procedures Adjusted
Performed Total
$ 263,914 69,534 26,660 12,777
159,280 16,344 33,258 33,258 409,115
8,181 138,000 oo 23,677
$ (22,545) 498,392
(30,620) 170,925 203,174
—33L.345
$(53,165) $2,387,332
Variance
$ (5,988) 54,326
55,340 7,223
107,620 43,656 11,742 11,742
(17,215) 31,819 36,000
2,000
39,000
57,323
(77,381)
(145,925) 42,650
—64.462
$389,998
The Bradley Lake Project Management Committee
ane DRAFT Palmer, Alaska 99645
In performing the agreed-upon procedures for the Bradley Lake
Hydroelectric Project Management Committee for the year ended
June 30, 1993, we became aware of several matters that may be
opportunities for strengthening controls over expenditures and
enhancing efficiency in the reporting of the results of operations
and maintenance activities. This letter summarizes our comments
and suggestions regarding those matters. This letter does not affect
our report dated November 30 1993, regarding the procedures we
performed and the results thereof.
Maintenan: f neral
An entity's accounting system includes the methods and records
established in order to identify, assemble, analyze, classify, record
and report transactions. As an aid to maintaining accountability, the
accounting system functions as a control over assets and liabilities.
A typical accounting system requires that for each transaction,
two-part entries be recorded in a general ledger comprised of asset,
liability, cash receipt and disbursement types of accounts.
The PMC has not been treated as a discrete accounting entity in the
past. The accounting records have been maintained in bits and
pieces either as part of AEA's entity-wide transactions, or as
operating requisitions made on- Project funds held by the trustee.
The lack of a general ledger and double-entry bookkeeping means
that there was no contemporaneous system for tracking the
disbursements and reimbursements to AEA, for monitoring the
status of cash reserves against future cash needs, or for providing
other timely financial data which management may have found
useful in making decisions.
The Bradley Lake Project Management Committee
November 30, 1993
Page 2 DRAET
We recommend that a double-entry bookkeeping system be
implemented and a general ledger be maintained on an ongoing basis
in order to provide management with timely financial information.
Financial Statement Preparation
We recommend that timely financial information be provided by
issuing monthly financial statements, including a balance sheet and
a statement of receipts and disbursements - budgeted to actual.
Financial statement preparation will be facilitated by the
maintenance of a general ledger, and can provide valuable
information on the nature and amounts of assets, liabilities and
surplus from operations. Also, management's ability to review
budgeted versus actual expenditures on a timely, ongoing basis may
enhance controls over disbursements.
Detailed Budgeti
When prepared in detail, a budget enhances internal controls over
disbursements by specifically defining allowable types of expenses.
The PMC might improve controls and reduce interpretive account
coding by expanding the level of detail in its current budget. This
may help to ensure that only allowable types of invoices would be
paid by accounting personnel.
We would be pleased to discuss these comments and suggestions in
further detail at your convenience, to perform any additional study
of these matters, or to assist you in implementing the
recommendations.
DRALY
Parisena, Stromberg & Company, APC
November 30, 1993
RECORD vury
FILE NO
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BPMC ACTION SUMMARY LOG
DATE
6/30/88
6/30/88
6/30/88
6/30/88
8/29/88
8/29/88
8/29/88
8/29/88
9/27/88
10/21/88
10/21/88
11/30/88
PAGE
2
8/16/93 8:36:05 AM
ITEM
5.B
ACTION
88 -
88 -
88 -
88 -
88 -
88 -
88 -
88 -
88 -
88 -
88 -
88 -
10
11
12
13
TYPE
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
RESOLUTION
88
STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
DESCRIPTION
PROCEED WITH LONG TERM FINANCING
ESTABLISH FINANCE SUBCOMMITTEE
RETAIN RON SAXTON, LEGAL COUNSEL, TO DRAFT BYLAWS; COST DIVIDED BY
PARTICIPANT SHARE
ESTABLISH TCC SUBCOMMITTEE TO RESEARCH AND DEFINE RESPONSIBILITIES
OF OPERATOR, OWNER AND DISPATCHER
AUTHORIZE REPRESENTATIVE OF EACH UTILITY TO ATTEND NEW YORK FINANCE
MEETING SEPTEMBER 1988, REIMBURSEMENT OF TRAVEL EXPENSES, EXCLUDING
LABOR, FROM CONSTRUCTION FUNDS
AUTHORIZE RON SAXTON TO ATTEND NEW YORK FINANCE MEETING,
SEPTEMBER 1988, COST REIMBURSEMENT FROM CONSTRUCTION FUNDS
ASSIGN TCC SUBCOMMITTEE TO OVERSEE CONSTRUCTION AND MAINTAIN COST
CONTROL
TCC SUBCOMMITTEE DIRECTED TO APPOINT MEMBER TO AEA CONFIGURATION
CONTROL BOARD (WITHOUT LABOR COST REIMBURSEMENT)
ADOPTION OF O&M DEFINITIONS
AUTHORIZE DRAFT PRESS RELEASE - SOUTHERN INTERTIE
ADOPTION OF BYLAWS
ELECTION OF OFFICERS: KELLY, HIGHERS, LERESCHE
Page
BPMC ACTION SUMMARY LOG
DATE
11/30/88
11/30/88
1/20/89
3/3/89
3/3/89
4/6/89
4/6/89
4/6/89
4/6/89
4/6/89
4/6/89
5/4/89
5/4/89
8/16/93 8:36:11 AM
PAGE
2
ITEM
6B
7B
10
10
ll
12
88 -
88 -
89 -
89 -
89 -
89 -
89 -
89 -
89 -
89 -
89 -
89 -
89 -
ACTION
14
15
16
17
18
19
20
21
22
23
24
25
26
TYPE
MOTION
MOTION
MOTION
MOTION
DIRECTIVE
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
RESOLUTION
88
89
89
STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
DESCRIPTION
APPOINTMENT OF FINANCE TEAM: PALIN, KELLY, HIGHERS
CAPITALIZATION OF SEI STABILITY STUDY COST; N.T.E. $60,000
REQUIRE SUBMITTAL OF ALL NECESSARY DOCUMENTS TO REA BY 2/20/89
PMC DECLARATION OF SUPPORT FOR EXECUTIVE ORDER NO. 75, CHANGE APA TC
AEA, TRANSFER PDRLF TO AEA, ESTABLISH BULK FUEL LOAN FUND
ORGANIZATION AND ASSIGNMENT OF SUBCOMMITTEES: INSURANCE, BUDGET,
O&D, AND POSSIBLY TAX AND FERC LICENSE
ADOPT TCC SUBCOMMITTEE REPORT AND RECOMMENDATION AGAINST PTI 115
KV ADDITIONS AS SOLUTION TO STABILITY PROBLEM
ADOPT INSURANCE SUBCOMMITTEE REPORT
ADOPT BUDGET SUBCOMMITTEE REPORT
ADOPT TAX SUBCOMMITTEE REPORT
ADOPT FERC SUBCOMMITTEE REPORT
ADOPT O&D SUBCOMMITTEE REPORT
ADOPT FINANCE TEAM REPORT
ADOPT TCC SUBCOMMITTEE REPORT
Page 2
BPMC ACTION SUMMARY LOG
DATE
5/4/89
5/4/89
5/4/89
6/8/89
6/8/89
6/8/89
6/8/89
6/8/89
6/8/89
7/28/89
7/28/89
8/21/89
PAGE
2
8/16/93 8:36:15 AM
ITEM
10
13 A
13 B
12 B
13 D
12C
13 B
89 -
89 -
89 -
89 -
89-
89 -
89 -
89 -
89 -
89 -
89 -
89 -
ACTION
27
28
29
30
31
32
33
34
35
36
37
38
TYPE
DIRECTIVE
MOTION
MOTION
MOTION
CONSENSUS
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
CONSENSUS
RESOLUTION
89 - 5
STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
DESCRIPTION
SUBCOMMITTEES INSTRUCTED TO CLARIFY REPORTING
ADOPT O&D SUBCOMMITTEE REPORT
ENGINEER'S RISK ASSESSMENT REPORT; PROJECT COST
AUTHORIZE $20,000 TO COMPLETE ALLOCATION AND SCHEDULING AGREEMENT
DETERMINATION THAT MR. SAXTON WOULD REPRESENT COLLECTIVE INTEREST
OF PURCHASING UTILITIES, AS RELATED TO THE BRADLEY BOND ISSUE (NOT
PMC, WHICH WOULD INCLUDE AEA)
BPMC SUPPORT FOR UTILITY OPERATION OF THE PROJECT AFTER 2 YEAR
WARRANTY PERIOD EXPIRES
REQUEST PROJECT ENGINEER TO BRIEF TCS SUBCOMMITTEE ON GOVERNOR
STABILITY AND DIRECT APA NOT TO RELAX CONTRACTUAL REQUIREMENTS
BEFORE SURGE TANK ASSESSMENT
APPOINT KENT WICK TO FINANCE TEAM
APPOINT KEN RITCHEY TO INSURANCE SUBCOMMITTEE
RETAIN LINDSEY, HART, NEIL & WEIGLER FOR LEGAL OPINION REQUESTED BY
UNDERWRITERS ON BOND REFUNDING
TCS SUBCOMMITTEE DIRECTED TO SELECT REPRESENTATIVE TO REVIEW FDP
DRAFT TECHNICAL STANDARDS
REDIRECT RESPONSIBILITY TO REVIEW FDP DRAFT TECHNICAL STANDARDS TO
O&D SUBCOMMITTEE
Page 3
BPMC ACTION SUMMARY LOG
DATE PAGE
8/21/89 3
8/21/89 2)
8/21/89 5
8/21/89 5
8/21/89 6
10/19/89 2
10/19/89 7
10/19/89 8
10/19/89 8
11/30/89 3
11/30/89 4
8/16/93 8:36:18 AM
ITEM
6B
6B
6B
12
12
12
10
ACTION
89 -
89 -
89 -
89 -
89 -
89 -
89 -
89 -
89 -
89 -
89 -
39
40
41
42
43
44
45
46
47
48
49
TYPE
MOTION
MOTION
MOTION
CONSENSUS
AGREEMENT
MOTION
MOTION
MOTION
MOTION .
MOTION
MOTION
RESOLUTION
89
89
STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
FAILED
FAILED
FAILED
APPROVED
DESCRIPTION
RATIFICATION OF COMMITTEE ACTIONS PRIOR TO AUGUST 8, 1989
SECTION 31 COST AND PROJECT COST IDENTIFICATION
REVISED EXHIBIT A OF POWER BOND RESOLUTION AND SUPPLEMENTAL
RESOLUTION, EXHIBIT E, TO PSA
TCS SUBCOMMITTEE CHARGED TO STUDY WAYS TO IMPROVE SYSTEM
PERFORMANCE, INCLUDING SURGE TANK
LETTER AGREEMENT TO AVOID CONFLICTS OF INTEREST; BETWEEN BPMC
UTILITIES (EXCLUDES AEA) AND LINDSEY, HART, NEIL & WEIGLER (SIGNED
DURING MEETING)
LETTER OF COMMENDATION TO AEA ON SUCCESSFUL BOND SALE
SMITH BARNEY BOND FINANCING REPORT AS SECTION 31 COST
DFI SURGE TANK ANALYSIS AS PROJECT COST, UNDER AEA OBJECTION - AEA TO
RECONSIDER
DFIINTERTIE STUDY AS PROJECT COST, UNDER AEA OBJECTION - AEA TO
RECONSIDER
PURCHASE OF E&O INSURANCE
$25,000 FMAA CONTRACT CONSULTANT TO O&D SUBCOMMITTEE TO ASSIST WITH
O&M AGREEMENTS AS PROJECT COST
Page 4
BPMC ACTION SUMMARY LOG
DATE PAGE
11/30/89 6
11/30/89 6
11/30/89 7
11/30/89 7,
1/8/90 4
1/18/90 7
1/18/90 7
1/18/90 7
1/18/90 7
1/18/90 8
1/18/90 8
1/18/90 9
8/16/93 8:36:22 AM
ITEM
2C
12.C
12.C
12D
12
12
12
12
13 B
13 C
13 D
89 -
89-
89 -
89 -
89 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
ACTION
50
51
52
53
54
55
56
37
58
59
60
61
TYPE
MOTION
MOTION
MOTION
MOTION
CONSENSUS
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
RESOLUTION STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
DESCRIPTION
RELEASE OF UTILITY COST FIGURES FOR REIMBURSEMENT AS COMPILED BY
LEGAL COUNSEL
UTILITY BOND ISSUE COSTS (INCLUDING TCS COSTS) AS PROJECT COST
UTILITY SECTION 31 COSTS
DFI SURGE TANK ANALYSIS AS PROJECT COST
RENAME BUDGET/FINANCE SUBCOMMITTEE TO BUDGET SUBCOMMITTEE AND
APPOINTMENT OF MEMBERS
SEPARATE SWEC'S THREE SURGE TANK RECOMMENDATIONS FOR INDIVIDUAL
CONSIDERATION
SWEC SURGE TANK ANALYSIS RECOMMENDATION NO. 1: MAINTAIN CURRENT
LOAD ACCEPTANCE RATE AND CURRENT HYDRAULIC AND EQUIPMENT DESIGN
SWEC SURGE TANK ANALYSIS RECOMMENDATION NO. 2: IMPLEMENTATION OF
ADDITIONAL NEEDLE OPERATING MODE
SWEC SURGE TANK ANALYSIS RECOMMENDATION NO. 3: DISCONTINUE FURTHEI
INVESTIGATIONS OF SURGE TANKS
SHARE COST OF GENERATOR PERFORMANCE TESTING 50/50 WITH IOC
LETTER SUPPORTING DELETION OF AMEDNMENTS TO PDRLF LEGISLATION (TO
AVOID RETURNING PROJECT FUNDS TO STATE GENERAL FUND)
FUNDING OF CEA MICROWAVE LINK AS PROJECT COST (UP TO $50,000)
Page
BPMC ACTION SUMMARY LOG
DATE
2/27/90
2/27/90
2/27/90
2/27/90
4/6/90
4/1/690
4/6/90
5/17/90
5/17/90
7/17/90
7/7/90
7/17/90
7/17/90
8/16/93 8:36:25 AM
PAGE
9
ITEM
13
13
10
12
13
13
13
ACTION
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
62
63
64
65
66
67
68
69
70
7
72
73
74
TYPE
MOTION
MOTION
MOTION
MOTION
DIERECTIVE
MOTION
MOTION
MOTION
CONSENSUS
MOTION
MOTION
CONSENSUS
MOTION
RESOLUTION STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
DESCRIPTION
CAPITALIZE PSA SECTION 13A COSTS THROUGH ISSUE OF ADDITIONAL BONDS
FRONT END O&M COSTS, WHERE FEASIBLE, TO REDUCE INTITAL RATE IMPACT
FUND DECNET AS PROJECT COST AT $117,000
ADDITIONAL $30,000 FUNDING FOR GENERATOR TESTING
APPOINTMENT OF O&D SUBCOMMITTEE WORK GROUP TO COMPLETE
ALLOCATION & SCHEDULING AGREEMENT
TABLE TEST PERIOD POWER SALES AGREEMENT
SUPPORT AEA REQUEST FOR IMMEDIATE DISMISSAL OF IBEW/HEA LAWSUIT AND
OFFER RON SAXTON'S LEGAL COUNSEL
AUTHORIZE CEA PURCHASE OF MICROWAVE EQUIPMENT UP TO $90,000
CEA WILL ASSIST HEA TO DETERMINE HEA LINE LOSSES; HEA WILL ASSUME
SALARY COST
AUTHORIZE ACTUAL SECTION 31 COSTS; NOVEMBER 1989 - JUNE 1990; $86,532.09
RESERVE $300,000 FOR ADDITIONAL UTILITY SECTION 31 COST FROM JULY 1990 -
DATE OF COMMERCIAL OPERATION
ELECTION OF OFFICERS: KELLY, HIGHERS
SUPPLEMENTAL BOND RESOLUTION, AS CORRECTED
BPMC ACTION SUMMARY LOG
DATE PAGE
9/21/90 4
9/21/90 5
9/21/90 6
9/21/90 7
9/21/90 8
11/28/90 3
11/28/90 3
11/28/90 5
11/28/90 5
11/28/90 6
11/28/90 6
3/5/91 2
8/16/93 8:36:29 AM
ITEM
10
13 B
13 B
12 B
12 B
12.C
12D
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
90 -
91-
ACTION
75
76
77
78
79
80
81
82
83
84
85
86
TYPE
CONSENSUS
DIRECTIVE
CONSENSUS
MOTION
MOTION
CONSENSUS
CONSENSUS
MOTION
MOTION
MOTION
MOTION
MOTION
RESOLUTION STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
DESCRIPTION
NO COST TEST POWER, WORK GROUP APPOINTED TO REVIEW
BUDGET SUBCOMMITTEE DIRECTED TO WORK WITH AEA TO DETERMINE
ACCEPTABLE PERCENT OF OVERHEAD - TASKED TO PREPARE RESOLUTION
ESTABLISH $5.00/MWH RATE FOR USE OF ANOTHER PURCHASING UTILITY'S
SHARE; ANNUAL ACCOUNTING
$30,974.00 FOR HEA DIAMOND RIDGE RTU DUAL PORTING AS PROJECT COST
REIMBURSE CEA $95,441.09 FOR HOMER AND SOLDOTNA SUBSTATION RELAY
ADDITIONS
FY92 O&M BUDGET AEA OVERHEAD COST SET AT $250,000 AND WILL BE
REVIEWED ANNUALLY BY THE BUDGET SUBCOMMITTEE
STAN SIECZKOWSKI APPOINTED CHAIRMAN OF O&D SUBCOMMITTEE
PMC EXPENSES OF $19,352.47 AS PROJECT COST
UTILITY AND LEGAL EXPENSES OF $26,274.42 AS SECTION 31 COST
REIMBURSEMENT TO HEA FOR COST OF DEAD END SWITCHING AT BRADLEY
JUNCTION AS PROJECT COST
DELETE BRAKING RESISTORS (WITH RESERVATION TO RECONSIDER PRIOR TO
CLOSE-OUT)
CEA TO INSTALL OVER FREQUENCY TRIPPING AT QUARTZ CREEK; N.T.E $13,500
Page 7
BPMC ACTION SUMMARY LOG
DATE PAGE
3/5/91 3
3/5/91 3
3/5/91 3
3/5/91 5
3/5/91 5
3/5/91 6
3/5/91 7
6/6/91 6
6/6/91 7
6/6/91 9
6/6/91 9
6/6/91 9
8/16/93 8:36:32 AM
ITEM
11
12
11
11
11
ll
11
ACTION
91-
91-
91-
91-
91-
91-
91-
91-
91-
91-
91-
91-
87
88
89
90
91
92
93
94
95
96
97
98
TYPE
MOTION
CONSENSUS
DIRECTIVE
MOTION
DIRECTIVE
DIRECTIVE
MOTION
DIRECTIVE
DIRECTIVE
MOTION
MOTION
MOTION
RESOLUTION STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
TABLED
DESCRIPTION
TCS SUBCOMMITTEE TASKED TO DETERMINE MAXIMUM KENAI
IMPORT/MINIMUM BRADLEY LAKE OPERATING LIMIT
SPINNING RESERVE AND LOAD SHEDDING ISSUES WILL BE DECIDED BY PMC (NOT
SUBCOMMITTEES)
INSURANCE SUBCOMMITTEE TO INVESTIGATE BUSINESS INTERUPTION
INSURANCE
FY92 O&M BUDGET FOR $2,207,000
O&D SUBCOMMITTEE TASKED TO REVIEW SPINNING RESERVE ISSUE
O&D SUBCOMMITTEE TASKED TO DETERMINE ALLOCATION METHOD FOR
PERIOD PRIOR TO START OF COMMERCIAL OPERATION
SECTION 31 COSTS OF $21,982.23
APPOINTMENT OF AGREEMENTS SUBCOMMITTEE; TASKED TO MEET AND
CONSOLIDATE O&M AGREEMENTS AS SOON AS POSSIBLE
TCS SUBCOMMITTTEE TASKED TO DEVELOP OPERATING SCENARIOS WITH 80
AND 90 MW CAPS
REIMBURSEMENT OF PMC EXPENSES
AUTHORIZE CEA INSTALLATION OF TRANSFER TRIPPING OF SOLDOTNA AND
DAVES CREEK CAPACITOR BANKS; $30,000
AUTHORIZE CEA TO INSTALL TRANSFER TRIPPING ON BERNICE LAKE - SOLDOTNA
AND SOLDOTNA - QUARTZ CREEK 69 KV CIRCUITS; N.T.E. $100,000 AND $30,000
Page 8
BPMC ACTION SUMMARY LOG
DATE PAGE
7/2/91 3
7/2/91 3
72/91 4
7/2/91 5
7/2/91 5
7/2/91 6
8/23/91 4
8/23/91 5
8/23/91 6
8/23/91 6
8/23/91 a
10/25/91 4
8/16/93 8:36:36 AM
ITEM
13, A
13 B
13 D
11
12 B™
12C
12D
12 A
ACTION
91-
91-
91-
91-
91-
91-
91-
91-
91-
91-
91-
91-
99
100
101
102
103
104
105
106
107
108
109
110
TYPE
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
RESOLUTION
91- 9
STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
DESCRIPTION
TCS SUBCOMMITEE TASKED TO SET INTERIM OPERATING CRITERIA SUBJECTING
HEA AND SES TO NO MORE THAN STAGE TWO LOAD SHEDDING
O&D SUBCOMMITTEE TASKED TO DEVELOP PROCEDURE TO RECORD CEA
SERVICE REQUIREMENTS FOR COMBUSTION TURBINE SUPPORT OF BRADLEY
LAKE
HIGHER PAYMENT TO TRUSTEE FOR FIRST FOUR MONTHS OF FY92 (TO ELIMINAT
CASH FLOW PROBLEM) - PAYMENT DUE ON FIRST OF EACH MONTH
ELECTION OF OFFICERS; CURRENT OFFICERS RETAINED: KELLY, HIGHERS,
BUSSELL
STATEMENT OF AEA OBLIGATION TO COMPLETE THE PROJECT - COST SHARED
WITH UTILITIES
AS AMENDED, ALLOCATION AND SCHEDULING PROCEDURES, SUBJECT TO
COMPLETION OF EXHIBITS A AND B
INTERIM APPROVAL CEA/AEA DISPATCH AGREEMENT
INSTALL TRANSFER TRIPPING; $35,000 - CEA; $62,000 - HEA
COMMITTEE EXPENSES OF $17, 480,33 FOR LEGAL FEES AS PROJECT COST
ALLOCATION OF SECTION 31 BALANCE TO ONGOING PMC COSTS OR TO DEFRAY
BUDGET COSTS
AEA ISSUE OF SVC CONTRACT AWARD AND NOTICE TO PROCEED
COMMITTEE EXPENSES OF $22,499.82
Page
BPMC ACTION SUMMARY LOG
DATE PAGE
11/19/91 2
11/19/91 5
11/19/91 5
1/13/92 92
1/13/92 4
2/28/92 S
2/28/93 5
3/26/92 6
3/26/92 6
3/26/92 6
3/26/92 7
3/26/92 7
8/16/93 8:36:39 AM
ITEM
11
ll
12
12
12
12
13
13
13
13
13 92-
ACTION
91- 111
91- 112
91- 113
92- 114
92- 115
92- 116
92- 117
92- 118
92- 119
92- 120
92- 121
122
TYPE
CONSENSUS
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
91
RESOLUTION
10
STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
FAILED
APPROVED
APPROVED
DESCRIPTION
IMPLEMENTATION OF INTERIM OPERATING GUIDELINES AS ADOPTED BY THE TCS
SUBCOMMITTEE
CEA/AEA DISPATCH AGREEMENT
REVISED ALLOCATION AND SCHEDULING PROCEDURES
COMMITTEE EXPENSES OF $19,538.54
RAILBELT SPINNING RESERVE AND LOAD SHEDDING ISSUES FORWARDED TO
ASCC - RCC
COMMITTEE EXPENSES, AS CORRECTED
INTERIM PROJECT OUTPUT LEVEL OF 90 MW AS DEFINED BY TCS SUBCOMMITTEE
COMMITTEE EXPENSES OF $39,695.19
LETTER TO LB&A IN SUPPORT OF MICROWAVE UPGRADE
APPROVAL OF BUDGET SUBCOMMITTEE FY93 BUDGET RECOMMENDATION
(WHICH EXCLUDED AEA OVERHEAD)
ALLOCATION AND SCHEDULING PROCEDURES, EXHIBIT A
TCS SUBCOMMITTEE DIRECTED TO APPOINT REPRESENTATIVE TO PARTICPATE IN
TUNNEL INSPECTION
Page 10
BPMC ACTION SUMMARY LOG
DATE PAGE
3/26/92 7
4/28/92 3
4/28/92 5
4/28/92 6
4/28/92 6
6/16/92 7
6/16/92 7
7/23/92 9
7/23/92 9
7/23/92 1
7/23/92 ll
7/23/92 12
7/23/92 13
8/16/93 8:36:43 AM
ITEM
13
12
12
13
13
13
12
12
12
13
13
13
F
ACTION
92- 123
92- 124
92- 125
92- 126
92- 127
92- 128
92- 129
92- 130
92- 131
92- 132
92- 133
92- 134
92- 135
TYPE
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
DIRECTIVE
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
RESOLUTION STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
DESCRIPTION
REIMBURSEMENT OF SUBMITTED UTILITY STARTUP TESTING COSTS
INSURANCE SUBCOMMITTEE TASKED TO REVIEW PROJECT INSURANCE OPTIONS
DISPATCH OPERATIONS SUMMARY
REMOVAL OF TCS SUBCOMMITTEE OPERATING RESTRICTIONS (DOES NOT AFFEC’
O&D ESTABLISHED MINIMUM OPERATING LEVEL OF 10 MW)
COMMITTEE EXPENSES OF $9,735.79 (SECTION 31 COSTS)
COMMITTEE EXPENSES OF $39, 695.19 (SECTION 31 COSTS) AND $430.16 (PROJECT COSTS)
APPOINTMENT OF NOMINATING COMMITTEE
RING-DOWN CIRCUIT FOR $30,000 (PROJECT COST)
CONSTRUCTION COST AUDIT AS PROJECT COST; $20,000
SEPARATION OF OFFICE OF SECRETARY/TREASURER
ELECTION OF OFFICERS: HIGHERS, STORY, GARZINI, RITCHEY
COMMITTEE EXPENSES OF $23,537.01 (SECTION 31 COSTS)
TCS SUBCOMMITTEE AND O&D SUBCOMMITTEE TASKED TO INVESTIGATE
PROJECT FREQUENCY OSCILLAITON PROBLEM AND IDENTIFY SHORT TERM
SOLUTION
Page 11
BPMC ACTION SUMMARY LOG
DATE PAGE
7/23/92 13
8/24/92 3
8/24/92 3
10/9/92 3
10/9/92 7
10/9/92 7
10/9/92 9
10/9/92 10
11/20/92 8
11/20/92 9
11/20/92 10
8/16/93 8:36:46 AM
ITEM
13. C
13 A
13 C
11 B
12D
12 E
ACTION
92-
92-
92-
92 -
92-
92-
92 -
92 -
92-
92 -
92-
136
137
138
139
140
141
142
143
144
145
146
TYPE
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
DIRECTIVE
MOTION
MOTION
RESOLUTION STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
TABLED
APPROVED
APPROVED
APPROVED
DESCRIPTION
TCS SUBCOMMITTEE AND O&D SUBCOMMITTEE TASKED TO INVESTIGATE
PROJECT FREQUENCY OSCILLATION PROBLEM AND IDENTIFY LONG TERM
SOLUTION
BUDGET AMENDMENT OF $30, 000 TO CONTINUE UAF SEISMIC MONITORING
PROGRAM FOR ONE YEAR
MR. SAXTON AND MR. SIECZKOWSKI TASKED TO PROVIDE SUMMARY LIST OF PM'
DIRECTIVES TO THE SUBCOMMITTEES
AUGUST 24, 1992 PMC MEETING MINUTES NOTING UTILITY MANAGERS'
DISAPPROVAL OF ATTACHED AUGUST 18, 1993 O&D SUBCOMMITTEE MEETING
SUMMARY CONTENT
STATEMENT OF NO CHANGE TO SUBCOMMITTEE VOTING RIGHTS OR
MEMBERSHIPS
MR. SAXTON TASKED TO INVESTIGATE SPINNING RESERVE ISSUES
COMMITTEE EXPENSES OF $24,533.71
CONSIDERATION OF REVISED ALLOCATION AND SCHEDULING PROCEDURE,
SECTION 5, HOURLY SCHEDULES
UTILITIES TASKED TO PROVIDE WRITTEN COMMENTS ON SPINNING RESERVE
ISSUES TO RON SAXTON
ALLOCATION AND SCHEDULING PROCEDURES, EXHIBIT E
BUDGET SUBCOMMITTEE PLACEMENT OF CONTRACT FOR ANNUAL O&M COST
AUDIT
Page 12
BPMC ACTION SUMMARY LOG
DATE
1/14/93
1/14/93
1/14/93
3/3/93
3/3/93
3/3/93
3/3/93
3/3/93
3/3/93
3/3/93
3/30/93
3/30/93
8/16/93 8:36:49 AM
PAGE
ll
13
10
12
12
13
13
ITEM
12 A
12D
12 E
11 B
11 F
12 A
12.C
12C
13 A
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
ACTION
147
148
149
150
151
152
153
154
155
156
157
158
TYPE
MOTION
DIRECTIVE
MOTION
DIRECTIVE
DIRECTIVE
MOTION
MOTION
MOTION
MOTION
MOTION
CONSENSUS
MOTION
RESOLUTION STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
FAILED
DESCRIPTION
COMMITTEE EXPENSES (LEGAL FEES), AUGUST 1992 - JANUARY 1993
COMMITTEE MEMBERS TASKED TO REVIEW AGREEMENTS LIST AND SUBMIT
CORRECTIONS TO TOM LOVAS
BUDGET SUBCOMMITTEE AUTHORITY TO AMEND BUDGET LINE ITEMS UP TO 10%
OF OVERALL O&M BUDGET
COMMITTEE MEMBERS DIRECTED TO SUBMIT WRITTEN COMMENTS ON SPINNING
RESERVE ISSUES TO RON SAXTON BY MARCH 30, 1993
MR. SAXTON TASKED TO DRAFT A CLAUSE FOR INCLUSION IN PENDING
AGREEMENTS SUBJECTING THE PENDING AGREEMENT TO A FUTURE MASTER
OPERATING AGREEMENT
REVISED ALLOCATION AND SCHEDULING PROCEDURES
AEA DIRECTED TO GIVE NOTICE TO THE LEGISLATURE OF INTENT TO ISSUE
BONDS
PMC REIMBURSEMENT OF INITIAL BOND REFUNDING COSTS N.T.E. $25,000
AUTHORIZE O&D SUBCOMMITTEEE TO INCREASE PROJECT OUTPUT UP TO 120 MW
ONLY BY CONSENSUS OF THE SUBCOMMITTEE
COMMITTEE EXPENSES (LEGAL FEES) FOR JANUARY 1993
MINIMUM SAVINGS OF $130,000 REQUIRED FOR REFUNDING
APPROVAL OF BUDGET SUBCOMMITTEE FY94 BUDGET RECOMMENDATION
(WHICH EXCLUDED AEA OVERHEAD)
Page 13
BPMC ACTION SUMMARY LOG
DATE PAGE
4/16/93 2
5/13/93 6
5/13/93 8
5/13/93 8
6/17/93 5
6/17/93 6
6/17/93 8
6/17/93 8
6/17/93 8
7/22/93 5
7/22/93 6
7/22/93 7
8/16/93 8:36:53 AM
ITEM
11 Cc
12 B
12.C
11 B
1c
12 B
12.C
11D
11D
122A
ACTION
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
93 -
159
160
161
162
163
164
165
166
167
168
169
170
TYPE
DIRECTIVE
MOTION
MOTION
MOTION
DIRECTIVE
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
RESOLUTION
93 ll
STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
TABLED
APPROVED
DESCRIPTION
BRADLEY BOND REFUNDING DECLARED A CLOSED ISSUE DUE TO LACK OF
UTILITY SUPPORT
$600,000 FOR HEA FRITZ CREEK TRANSMISSION LINE ACCELERATION COST AS
SECTION 31 COST
$107,115.45 FOR DIAMOND RIDGE RELAYING COST AS CONSTRUCTION COST
COMMITTEE LEGAL EXPENSES FOR FEBRUARY - APRIL 1993; $45,803.76
MR. SAXTON AND MR. LOVAS TO WORK TOGETHER TO DELINEATE SPINNING
RESERVE TECHNICAL AND LEGAL ISSUES
RON SAXTON AND STAN SIECZKOWSKI AUTHORIZED TO COMPLETE MASTER
OPERATING AGREEMENT
AEA DIRECTED TO ASSIST HEA WITH PREPARATION OF A PROPOSAL FOR THE
OPERATION AND MAINTENANCE OF BRADLEY LAKE
FY 94 UTILITY PAYMENT SCHEDULE
COMMITTEE LEGAL EXPENSES; BILL BENNETT - $3,600 FOR LABOR
NEGOTIATIONS AND RON SAXTON - $6,215.90
BUDGET SUBCOMMITTEE AUTHORITY TO AMEND O&M BUDGET
UNTIL NEXT MEETING, AMENDMENT OF BYLAWS TO CLARIFY DELEGATION OF
POWER TO SUBCOMMITTEES
ELECTION OF OFFICERS; CURRENT OFFICERS RETAINED: HIGHERS, STORY,
MCCROHAN, RITCHEY
Page 14
BPMC ACTION SUMMARY LOG
DATE PAGE
7/22/93 7
7/22/93 7
7/22/93 9
7/22/93 9
7/22/93 10
8/29/88 5
8/16/93 8:36:56 AM
ITEM
12 B
12.C
12D
12E
12 E
93 -
93 -
93 -
93 -
93 -
88 -
ACTION
171
172
173
174
175
TYPE
MOTION
MOTION
MOTION
MOTION
MOTION
MOTION
RESOLUTION STATUS
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
APPROVED
DESCRIPTION
COMMITTEE LEGAL EXPENSES FOR MAY AND JUNE 1993; $17,602.62 AND 23,345.03
ACCEPT HEA APPLICATION FOR THE OPERATION AND MAINTENANCE OF
BRADLEY LAKE
REIMBURSMENT OF UTILITY SVC TESTING COSTS
INTERIM LETTER AGREEMENT (CEA AND AEA) FOR SVC MAINTENANCE
SOUTHERN INTERTIE STUDIES TO BE PERFORMED BY ABB; N.T.E. $100,000 AS
PROJECT COST
TABLE CONSIDERATION OF O&M DEFINITIONS UNTIL NEXT MEETING
Page 15
RECORD TOPY
FLE NO |
RO 3-1'0 A Fax From The Tee os! 4
Alaska Ener; Authori:
a ubne nenaa of ths State of Alanka
Ronaid A. a
ata oy eT ete ay Anchorage Tk 99512 086 ree Tiree i tes
| Matin Telephone Number (907) 361-7877
Fax Number: (907) $61-8584
Deliver Fax to: reve Dowee
Company Name:
Company Address:
Fax Phone #: 22 2l2 7
Sender: Rt BOR LELE
Sender's Phone # Stal ee ee
# < ee of Pages Sent. oe =s
Date Fax Sent: pa
ven don’: reste 2 Sb Spiess spigane cau:
SPECIAL INSTRUCTIONS TO FAX RECIPIENT:
TRANSMISSION REPORT
THIS DOCUMENT (REDUCED SAMPLE ABOVE)
WAS SENT
**k COUNT **
# 6
eK SEND
[No REMOTE STATION I. D. START TIME DURATION #PAGES | COMMENT
1 907 562 0027 | 17- 6-93 11:63 3'03" | 6 |
TOTAL 0:03'03" 6 XEROX TELECOPIER 7020
A Fax From The
Alaska Energy Authori
A Public Corporation of the State of Alaska Walter J. Hickel, Governor Ronald A. Garzini, Executive Director
Mailing ee Physical eens
Alaska Energy Authority Alaska Energy Authority
P.O. Box 190869 701 East Tudor Road, 2nd Floor
Anchorage, AK 99519-0869 Anchorage, AK 99503
Main Telephone Number (907) 561-7877
Fax Number: (907) 561-8584
Deliver Fax to: STEVE _ DONER
Company Name: CER.
Company Address: ANCHORAGE
Fax Phone #: 5eP- 0027
Sender: WISE U,
Sender's Phone # Shel -7277
# of Pages Sent: b a eee (Including this cover sheet) Date Fax Sent: Ze 1¢3
If you don't receive all of this lease call: iy Anchorage: (07) SOF 63
SPECIAL INSTRUCTIONS TO FAX RECIPIENT:
ZvE. _£ 18_f5 NO Ht WERE Je Jn) C—
LE; CHLL <.
Alaska Energy Authority
A Public Corporation
AEA/UTIL/0010
June 30, 1993
Mr. David L. Highers, General Manager
Chugach Electric Association, Inc.
P.O. Box 196300
Anchorage, AK 99519-6300
Subject: Bradley Lake Hydroelectric Project
FY94 Payments
Dear Mr. Highers:
Attached is a copy of the FY94 Bradley Lake Utility Payment Schedule approved at the
June 17, 1993 Bradley Lake PMC meeting. Your payment reminder based on the
approved FY94 payment schedule is also attached. If you would like to receive monthly
payment reminders, please contact Mary Judd of our accounting department at 561-7877.
Please do not hesitate to call if there are any questions.
Sincerely,
Brad MVE Bet
fe “S Ronald A. Garzini
r Executive Director
DB:RAGzit
Attachment as stated
ce: Stanley E. Sieczkowski, Alaska Energy Authority
Brent N. Petrie, Alaska Energy Authority
Tom Lovas, Chugach Electric Association, Inc.
PO. Box 190869 701 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584
93Q2\ITS055(3)
COLLECTION | GS STATE OF ALASKA eB ae 7 \ “ae 2 te? es A - AGENCY CONTACT OATE OF
F Alaska Energy Authority Mary Judd June 29, 1993 R P.O. Box 190869 PHONE — a
Oo Anchorage, AK 99519-0869 (907) 561-7877
M MAKE CHECK PAYABLE TO.
Alaska Energy Authority
Chugach Electric Association IMPORTANT
T P.0. Box 196300 1. Please reference bill number on your check. Oo Anchorage, AK 99519-6300
2. Submit part two of this form with your payment.
DATE DESCRIPTION QUANTITY UNIT PRICE
| cost PER L AMOUNT
6/29/93
FY94_ REMINDER:
BRADLEY LAKE UTILITY REMINDER
Per your Percentage share, your monthly amount due is:
Please use the following WIRE TRANSFER information:
SEATTLE FIRST NATIONAL BANK
Seattle, Washington
ABA# 125000024
Dept: Sequor Corporate Trust
Account: RC85282
Further credit to: Alaska Energy
Bradley Lake
Revenue Fund for: (Chugach Electric Association)
PAYMENTS ARE DUE ON THE FIRST BUSINESS DAY OF
EACH MONTH. hank ou |
$352,637.00
ts
TO SEATTLE FIRST NATIONAL BANK, Seattle, WA AMOUNT DUE THIS BILL $ 352,637.00 REF | TYPE NUMBER AMOUNT DATE COMMENTS
VEN
1
2
3
4 FIN AMOUNT sy cc tc
1 2 z
7: _ tf TLING AUTHORITY'S NAME
Mary Judd,
472 (Rev. 6/85)
Accounting Technician
RECIPIENT
907 ) 561-7877 (™ )
TELEPHONE NUMBER a
a FY Toul
1,159,991 1,159,991 1,159,991 1,159,991 1,159,991 1,159,991 1,159,991 1,159,991 | 13,919,891
219,335, 225,601 154,002 215,437 154,002 216,835 225,601 2,624,846 934,390 1,005,989 944,554 1,005,989 943,156 934,390 1,000,156 11,791,045
1,312,500 | —__ 2,625,000 5,381,621 10,763,241 75,404 0 0 0 0 0
0 0 0 0 0 6,769,524 0 0 0 0 0 6,700,623 13,470,147
431,993 219,335 241,271 171,002 a 154,002 215,437 154,002 216,835 232,104 159,835
0 0 0 0 0 0 0 0 0 0 0
Tt 16,098 456
670,811 0 0 0 0 0 670,811 0 0 0 o| Of 341,621
22,7119 0 0 0 0 0 22,384 0 0 o| ol} o| 45,102
105,726 0 0 0 0 0 107,376 0 0 0 _ o| oO 213,102
40,526 0 0 0 0 0 40,527 0 0 oO ol 0 81,053
289,608 (283,342) (21,936) 54,599 (114,333) 71,599 (61,435) 61,435 (62,833)
0 283,342 6,266 0 34,599 0 61,435 0 62,833 0 0 15,670 0 59,734 0 0 0 0
[Balance Operating | - — 519,330 519,330 459,597 535,000 535,000 535,000 535,000 |
Balance Operating Fund - o| 54,599 a) 11,599 10,164 71,599 8,766
Balance in oa ae oe ae al ann Revenue Fund 1,774,171 ~~ 3,938,826 | 4,873,215 27,070 | __1,766,780 | __2,818,710 3,824,699
NOTE:
FY-94 cash flow cell B-9 ($496,000) is the $910,000 excess of operating funds FY-92 less
$494,000 utilized on the FY-93 cash flow plus $80,000 estimated excess from FY-93
operating funds.
BUTILPAY.XLS
ALASKA ENERGY AUTHORITY
BRADLEY LAKE UTILITY PAYMENTS
FY-94
Percent _ =
Power purchasers Share July August | September | October _| November | December | January | February | March April May June FY Total
|Chugach Electric Association 30.40% | $352,637 | $352,637 | $352,637 | $352,637 | $352,637 | $352,637 | $352,637 | $352,637 | $352,637 | $352,637 | $352,637 | $352,637 | $4,231,647
Municipality of Anchorage 25.90% | $300,438 | $300,438 | $300,438 | $300,438 | $300,438 | $300,438 | $300,438 | $300,438 | $300,438 | $300,438 | $300,438 | $300,438 | $3,605,252
Alaska Electric Generation & _
‘Transmission Cooperative, Inc. (acting on
behalf of Homer Electric Association,
Inc.-12.0% and Matanuska Electric
Association, Inc.-13, 8%) 25.80% | $299,278 | $299,278 | $299,278 | $299,278 | $299,278 | $299,278 | $299,278 | $299,278 | $299,278 | $299,278 | $299,278 | $299,278 | $3,591,332
Golden Valley Electric association, Inc. | 16.90% | $196,038 | $196,038 | $196,038 | $196,038 | $196,038 | $196,038 | $196,038 | $196,038 | _ $196,038 $196,038 | $196,038 | $196,038 | $2,352,462.
City of Seward 1.00% $11,600 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600 $139,199,
Total 100,00%| $1,159,991 | $1,159,991 |$1,159,991 |$1,159,991 | $1,159,991 |$1,159,991 |$1,159,991 |$1,159,991 | $1,159,991 |$1,159,991 |$1,159,991 |$1,159,991 |$13,919,891
—__
> eer,
Page 1
RECORD VOPY
FILE NO Bradley Lake ; Total Project Budget Summary +) | TRE, A>") &_ 6
/ ($000)
s/29 ' Original Revised Incurred Current —
Budget Budget Costs Estimate at
L_ Project Construction Cost Amount (July 90) To Date (a) Completion (a)
Admin/Design:
AEA Costs $16,220 $17,039 $17,584 $17,839
Design $35,500 $39,500 $39,394 $39,868
Construction Mngmt. $15,612 $20,000 $19,908 $20,000
Construction Contracts:
Site Preparation $33,333 $25,543 $25,543 $25,543
T/L Survey $503 $453 $453 $453
T/L Geotech $430 $319 $319 $319
T/L Clearing $2,166 $2,667 $2,705 $2,705
T/L Construction $7,682 $20,542 $19,530 $19,530
General Civil Const. $139,721 $89,941 $89,463 $89,463
Powerhouse $32,382 $34,944 $33,949 $33,949
Diversion Structures $6,159 $2,062 $1,729 $1,729
Catering $0 $16,060 $15,978 $16,126
Site Rehabilitation $0 $4,400 $5,636 $5,636
Air Transportation $0 $1,100 $1,372 $1,372
Procurement Contracts:
Turbines/Generations $14,538 $14,536 $14,161 $14,161
SCADA $351 $641 $606 $606
Communications $950 $1,529 $1,385 $1,839
Perm. Operating Equip. $1,635 $1,635 $1,149 $1,735
Stability Protection Equipment $0 $9,310 $15,251 $15,350
Other:
Boundary Surveys $0 $750 $240 $240
Misc. Powerhouse Mods $0 $225 $0 $125
Tunnel Dewatering & Inspection $0 $0 $241 $241
Utility Support & Modifications $0 $0 $834 $1,500
Contaminated Soil Clean-Up $0 $0 $100 $750
Diversion Tunnel Drainage Mods $0 $0 $0 $75
Fishwater Bypass Clean-Up $0 $0 $199 $400
PSA Sec. 31 $0 $1,655 $1,655 $2,255
Project Contingency $48,718 $7,649 $0 $691
TOTAL CONSTRUCTION: $355,900 $312,500 $309,384 $314,500
IL. Project Financing Cost
Interest Expense $34,298 $90,384 N/A $84,225
Interest Revenue ($12,688) ($104,684) N/A ($109,101)
Issuance Costs $5,709 $6,868 N/A $15,945
Reserve Funds $25,107 $19,018 N/A $19,018
Bond Discount $0 $3,663 N/A $3,663
TOTAL FINANCING: $52,426 $15,249 (b) $13,750
TOTAL PROJECT COST: $408,326 $327,749 $328,250
Footnotes:
(a) Cost Estimate as of May 14, 1993
(b) Estimate as of January 1991
93Q2\MA4808.XLS(1)
State of Alaska
Alaska Fnergy Authority A Public Corporation
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FILE NO
Excerpt from BPMC DRAF'T meeting minutes - May 13, 1993: PRo 3-h D on a
Ss Fritz Creek Segment Funding yt
Mr. Eberle reported that AEA had been advised by Eric Wohlforth, AEA
bond counsel, that the Fritz Creek costs could be funded as a Section 31 cost, upon approval of the purchasers (Attachment __}). Approval of the
increased Project budget by the AEA Board of Directors was also needed
Referring to Mr. Wohlforth's April 13, 1993 letter, Mr. Story clarified that
HEA intended to share the cost with the other purchasers and did not
expect to be exermpted. Mr. Kelly moved that the $600,000 Fritz Creek
subject to ABA Board approval of the increased project cormstruction : i Snat iit ii
shares, including Homer Electric Association. The motion. seconded by
Mx._Stahr was approved by unanimous role call vote.
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Excerpt from BPMC DRAFT meeting minutes - May 13, 1993:
iG: Fritz Creek Segment Funding
Mr. Eberle reported that AEA had been advised by Eric Wohlforth, AEA
bond counsel, that the Fritz Creek costs could be funded as a Section 31
cost, upon approval of the purchasers (Attachment __). Approval of the
increased Project budget by the AEA Board of Directors was also needed.
Referring to Mr. Wohlforth's April 13, 1993 letter, Mr. Story clarified that
HEA intended to share the cost with the other purchasers and did not
expect to be exempted. Mr. Kelly moved that the $600,000 Fritz Creek
transmission line segment acceleration cost be treated as a Section 31 cost,
subject to AEA Board approval of the increased project construction
budget, to be paid by all purchasing utilities according to percentage
shares, including Homer Electric Association. The motion, seconded by
Mr. Stahr was approved by unanimous role call vote.
Post-It™ brand fax transmittal memo 7671 | # of pages > ’
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ATTACHMENT 3
ALASKA POWER ADMINISTRATION (APA)
Eklutna Purchase Agreement dated August 2, 1989, with Chugach, MEA and ML&P sets out
the terms and conditions to implemented if Congress authorizes the sale. The utilities would get
undivided interests in the project equal to their current power purchases.
Interconnection and Wheeling Agreement dated April 25, 1974, with Chugach. Term of 35
years. Allows Chugach to wheel over APA facilities to MEA.
Interconnection and Wheeling Agreement dated xxx, with ML&P. Term xx. Allows ML&P
to interconnect its system with APA facilities.
Power Sales Contract 85-79AP 10004, dated October 13, 1979, with Chugach expires
December 31, 1993. Take-or-pay contract for 9 MW and 45,900,000 kWh of firm power.
Similar contracts have been in existence since 1954.
Power Sales Contract 85-79AP 10005, dated October 13, 1979, with ML&P expires December
31, 1993. Take-or-pay contract for 16 MW and 81,600,000 kWh of firm power. Similar
contracts have been in existence since 1954.
Power Sales Contract 85-79AP 10006, dated October 13, 1979, with MEA expires December
31, 1993. Take-or-pay contract for 5 MW and 25,500,000 kWh of firm power. Similar
contracts have been in existence since 1954.
Dispatch Agreement dated September 1992 with ML&P, expires in 1997. Provides for ML&P
to dispatch the Eklutna Power plant.
Transmission ROW Agreement dated xx with Chugach grants Chugach the right to build a
double circuit 230 KV line on Eklutna right of way. In return APA gets to use one of the
circuits for Eklutna power deliveries into Anchorage.
Transmission Maintenance Agreement dated xx, 1987?, with ML&P for maintenance of 115
KV circuit along Northern Light Blvd to Anchorage Substation.
Transmission Maintenance Agreement dated xx, 1987?, with MEA for maintenance of 115
KV circuit from Palmer to Fossil Creek.
ALASKA ENERGY AUTHORITY (AEA)
Alaska Intertie Agreement with Chugach, FMUS, AEG&T, ML&P and GVEA dated
December 23, 1985. May be terminated at any time upon mutual consent of all participants,
participants may terminate participation after 4 years advance written notice. Agreement
provides for interconnected operation among the participants including obligations and
' Draft only, not yet signed 3878.JSC
Agreements Among Railbelt Utilities January 11, 1993
2
responsibilities. Also provides for the operation and maintenance of the intertie facilities
between Douglas and Goldhill with GVEA operating the northern half and ML&P operating the
southern half. Establishes an Operating Committee which currently has the following
subcommittees: Machine/Ratings; SCADA/Metering/Communications; Dispatch; and,
Reliability/Protection. Addendum No. 1 to which all participants must be signatories establishes
reserve capacity and operating reserve responsibility.
Transmission Lease Agreement dated xx, 1985? with MEA for lease of the 115 KV line
between Teeland and Douglas for use as part of the intertie.
Transmission Maintenance Agreement dated xx, 1985? with MEA for maintenance of the
southern half of the Alaska Intertie transmission line and substation facilities at Douglas.
Transmission Maintenance Agreement dated xx, 1985? with GVEA for maintenance of the
northern half of the Alaska Intertie transmission line and substation facilities at Healy and
Goldhill.
Substation Maintenance Agreement dated xx, 1985? with Chugach for maintenance of Alaska
Intertie substation facilities at Teeland.
SCADA Agreement dated xx, 1985? with ML&P for reimbursement for capital facilities
required to support being the southern operator for the Alaska Intertie.
SCADA Agreement dated xx, 1985? with GVEA for reimbursement for capital facilities
required to support being the northern operator for the Alaska Intertie.
Bradley Lake Power Sales Agreement with Chugach, AEG&T, GVEA, ML&P and SES dated
December 8, 1987 with a term of 50 years. Take-or-pay contract for the output of the Bradley
Lake project. Establishes a Project Management Committee to oversee operation of the project.
The PMC currently has the following subcommittees: Budget; Insurance; Agreements;
Operations & Dispatch; and, Technical Coordination.
Bradley Lake Dispatch Agreement dated February 19, 1992, with Chugach. Provides for
Chugach to dispatch the Bradley Lake Project.
‘Transmission Maintenance Agreement dated xx, 1993 with HEA for maintenance of the
Bradley Lake transmission facilities between the project and Bradley Junction.
‘Substation Maintenance Agreement dated xx, 1993 with Chugach for the maintenance of the
SVC equipment at Daves Creek substation.
' Draft only, not yet signed 3878.JSC
Agreements Among Railbelt Utilities January 11, 1993
3
‘Substation Maintenance Agreement dated xx, 1993 with Chugach for the maintenance of the
SVC equipment at Soldotna substation.
Substation Facilities Agreement dated xx, 1992 with Chugach for installation of SVC
equipment at Daves Creek Substation.
‘Substation Facilities Agreement dated xx, 1993 with Chugach and HEA for installation of
SVC equipment at the Soldotna substation.
‘Transmission Interconnection Agreement dated xx, 1993 with HEA to allow Bradley Lake
transmission lines to interconnect with the HEA system. Provides for operation of HEA
facilities at Fritz Creek and Diamond Ridge substations.
ALASKA ELECTRIC GENERATION & TRANSMISSION COOPERATIVE, INC.
(AEG&T)
Power Sales Agreement dated xx with HEA, expires xx. Provides that HEA purchase all of
its electric capacity and energy requirements from AEG&T.
Power Sales Agreement dated xx with MEA, expires xx. Provides that MEA purchase all of
its electric capacity and energy requirements from AEG&T.
HOMER ELECTRIC ASSOCIATION, INC. (HEA)
Agreement for Sale of Transmission Capacity dated March 7, 1989, with AEG&T, Chugach,
GVEA and ML&P with a term of 50 years. HEA agrees to sell the other Bradley Lake
participants capacity on the transmission line between Bradley Junction and Soldotna to carry
their Bradley Lake share.
CHUGACH ELECTRIC ASSOCIATION, INC. (Chugach)
Services Agreement dated December 8, 1987, with HEA, MEA, ML&P, GVEA, SES and
AEG&T with a term of 50 years. Chugach agrees to deliver to the participant, its Bradley Lake
energy which has been delivered to the Soldotna substation.
Agreement for the Sale of Electric Power and Energy dated September 1985 with HEA and
AEG&T, expires on January 1, 2014. Provides for the sale of 73 MW of capacity with
appropriate reserves and at least 350,000 MWh of energy annually to AEG&T for HEA.
Requires semi-annual planning meetings among the parties.
' Draft only, not yet signed 3878.JSC
Agreements Among Railbelt Utilities January 11, 1993 4
Homer Lease Agreement dated September 1985 with HEA, expires on January 1, 2014.
Provides for the lease to Chugach of 69 KV and 115 KV transmission lines between Bernice
Lake and Soldotna, of 115 KV transmission line between Quartz Creek and Soldotna, and the
majority of the 115 KV portion of the Soldotna substation. Chugach will operate and maintain
(minor repairs only) the leased facilities.
Bradley Lake Scheduling Agreement dated September 29, 1992, with HEA and AEG&T with
a term of three years, renewable. Chugach pays HEA/AEG&T $112,000 annually for the right
to schedule when HEA receives its share of the Bradley Lake project. For scheduling purposes
HEA/AEG&T’s Bradley Lake energy is commingled with Chugach’s Bradley Lake energy.
Soldotna 1 System Use & Dispatch Agreement dated December 1991 with HEA and AEG&T
with a term of 10 years. Chugach provides dispatch service to HEA for Soldotna 1 when HEA
decides that the unit is needed for HEA. Chugach provides an economical source of fuel for the
unit and in return can use the unit for any system use that Chugach has. Variable O&M plus
a margin is paid for actual use of the unit. Chugach agrees to generate 322,000 MWh on the
unit during the term of the agreement. The term is extended by three years if Chugach uses the
unit extensively during the last three years of the agreement.
Interconnection Agreement dated December 3, 1983 with ML&P, expires December 31, 2014.
Provides for interconnected operation with ML&P, sharing of operating reserves, sale and
purchase of emergency, maintenance, and economy energy. Is generally superseded by the
Alaska Intertie Agreement except when the line to Fairbanks is open. Established an
Administrative Committee which has not been functional.
Net Billing Agreement dated December 16, 1987, with MEA and AEG&T. Provides that
MEA/AEG&T’s share of the output of the Eklutna and Bradley Lake projects will be
commingled with Chugach’s other energy resources for scheduling and rate making.
MEA/AEG&T will make the Eklutna and Bradley Lake payments but Chugach will credit
MEA/AEG&T the equivalent amount on the power invoice from Chugach.
Modified Tripartite Power Sales Agreement dated April, 1989 with MEA/AEG&T, expires
on December 31, 2014. Provides for the sale of MEA’s full requirements of electric capacity
and energy to AEG&T. MEA/AEG&T may transition to a net requirements status after a five
year notice period. Semi-annual planning meetings among the parties is required.
Non-Firm Power Sales Agreement dated May 18, 1988, with GVEA, expires on the 20th
anniversary. Provides that Chugach will sell and GVEA will purchase all of GVEA’s non-firm
energy needs from Chugach when available. Non-firm energy is defined as all of GVEA’s load
in excess of that produced by GVEA units. Established an Operating Committee to meet
' Draft only, not yet signed 3878.JSC
Agreements Among Railbelt Utilities January 11, 1993
5
quarterly that has not been functional.
Joint Use Agreement dated September 1984 with Seward with a term of 25 years. Provides
for joint use of ROW between Daves Creek substation and Lawing.
Net Billing Agreement dated June 7, 1991, with Seward. Provides that SES’s share of the
output of the Bradley Lake project will be commingled with Chugach’s other energy resources
for scheduling and rate making. SES will make the Bradley Lake payments but Chugach will
credit SES the equivalent amount on the power invoice from Chugach.
Wholesale Power Agreement dated September 1984 with Seward, automatically renewed
annually upon completion of the initial term of ten years. Chugach agrees to sell and Seward
agrees to purchase electric power up to the maximum demand listed in the contract.
' Draft only, not yet signed 3878.JSC
RECORD VOPv FILE NO
MEMORANDUM — tro 3-1.)
DATE: March 30, 1993 _
TO: Stanley E. Sieczkowski
FROM: — Afzal H. Khan (Yin
SUBJECT: ML&P's Memo, Railbelt Reserve Allocation
You requested my comments on ML&P's concerns on the subject matter. There is not
much we can do at this time. This is something the railbelt utilities need to resolve among
themselves. ASCC Reliability Criteria Committee is looking into operating reserve
procedures. I will keep you informed of any developments. The topics under discussion
are load limiting, location of spin, spin requirements, selling of required spin, quality of
spin, SILOS Time Response, and compliance in meeting operating reserve obligations.
Attachment: ML&P memo to Railbelt Utility Managers
cc: Ronald A. Garzini )
Brent N. Petrie i
— _.
RAILBELT UTILITY MANAGERS:
At the last Railbelt Utility Managers’ meeting following discussion of Ron Saxton's memo on the Alaska Intertie Agreement, it was suggcsted that each Manager inform the others as to their concerns regarding the Railbelt Reserve allocation. ;
CONCERNS
ML&P's concerns revolve around practices which reduce railbelt spinning reserves below contractually required levels. This practice has resulted in deterioration of railbelt reliability and inequities in the burden of supplying spinning reserves. Current efforts to redefine spinning reserve contributions have so far ignored the principal deficiencies in present practices,
DISCUSSION
Addendum #1 to the Alaska Intertie Agreement delineatcs how the -utility participants will establish and meet the reserve and operating reserve requirements of the intertie. Paragraph B- 2.4.1 defines spinning reserve for the purposes of the addendum. This definition can not be changed or abrogated by the Operating Committee. The definition is “B-2.4.1 System speuns Reserve shall be calculated at any given instant as the difference between the 'sum of net capability of all generating units on line in the respective system and the integrated Systems Done of the system involved." Opcration of B-2.2.3 might possibly lower the amount of spinning reserve available but in no case can it increase it.
Paragraph B-2.4.2 describes under what situation load shed may be used to satisfy a participants spinning reserve obligation. Based upon recent P.T.I. studies, it is extremely doubtful that present load shed in lieu of spin schemes meet the criteria of not causing objectionable system conditions or preventing cascading effects. The fact that the operating committee may have approved of these schemes is irrclevant unless the load shed in lieu of spin program satisfies the basic contractual requirements which are based on results,
Of major concern is the practice of “selling spin". This simply is a euphemism for not having adequate spin and abrogating the contract. The arrangement for others to supply a utility participants operating reserve under B-2.4.5 docs not apply because when spin is "sold" it is non existent. Any agreements the operating committces may have made regarding the “return” or spin can only mean load shed of the entire amount of spin removed by virtue of an energy sale. To be effective this must take place before regular load shed is triggered. Return of the spin in X seconds does not make this practice permitted under the contract. The simple fact is that the “selling” of spin is not permitted by the intertic operating agreement.
Paragraph B-2.2.3 was added to the agreement because at the time of drafting we were not sure as to the proper amount of operating and spinning reserve that would be requircd and it was anticipated that future review would be desirable. Certainly now is the time to do so and worth-while studies are underway; however we have not yet studied several very important aspects of this problem, such as the optimum distribution of spin between units or optimized the best mixes of inertia response, fast governor response, slow machine response and AGC response. I suggest none of this will substantially improve reliability until we restore
contractually required spin to the system.
at
CONCLUSION
The first order of business is to restore thc contractual spin requirements to the system before we attempt to change the rules. No load shed in lieu of spin should be arg until d ic system studies have show it will perform as well as actual spin. The loading of spin (sale of spin) must be immediately discontinued. All economy energy sales should be covered by real spin at one end or the other or by both. The Alaska Intertie Agreement is the only contract between the intertie participants and is the only area for the solution of spin/loadshed concerns, I urge a straight forward approach to our mutual concems in order to reach a necessary concensus resolution,
Very truly yours,
13e@ee
Tom Stahr, ML&P
xe: Ron Saxton
Tim McConnell
Ts
RECORD VTOPY
FILE NO
Alaska Energy Authority
MEMORANDUM
DATE: March 18, 1993
TO: Bradley Lake Hydroelectric Project-Utility Managers
FROM: Ronald A. Garzini
Executive Director
SUBJECT: Presence of Legal Counsel at Bradley Budget Subcommittee Meetings
It appears that discussions during these meetings may amount to ex parte
communications. Therefore, as long as litigation continues, I have directed my
staff not to attend any Budget Subcommittee meetings where representatives of
Ater, Wynne et al are present unless AEA has legal counsel present as well. If
AEA's legal counsel must attend subcommittee meetings due to the presence of
an Ater, Wynne et al representative, this cost will be presented to the PMC for
payment as a direct cost to the Bradley project. Frankly, I see no need or
advantage in having any legal counsel present at budget meetings.
With these conditions, we will continue to meet and confer with any utility
representatives on the subcommittee in the course of finalizing the FY94 budget.
Hopefully, we can accomplish further budget deliberations in a less litigious
context.
Distribution: Bradley Utility Managers
Carolyn Jones, Department of Law
Stan Sieczkowski, Alaska Energy Authority
Brent Petrie, Alaska Energy Authority
Gloria Manni, Alaska Energy Authority
Bruce Holmes, Alaska Energy Authority
93QI\IT4514(1) att)
4 Fax Fror: The
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RECORD UOPY || la FILE NO
ATER WYNNE peo S—-/:2 suite 1800 enna 2DSW Columbia _
Portland, -6618 HEWITT vw sree or 03) 226-191 DODSON Fax (503) 226-0079
& SKERRITT
ATTORNEYS AT LAW RECEIVED
MAR 1 1993
ALASKA ENERGY AUTHORITY
VIA_ FACSIMILE
MEMORANDUM
TO: Bradley Project Management Committee
FROM: Ron Saxton
DATE: March 12, 1993
RE: Railbelt Reserve Issues
At the March 3rd BPMC meeting, it was agreed that utilities
would provide comments to me by March 30th on reserves and spin
requirements and related matters. To facilitate in this process,
I will circulate (by mail) a copy of my memo from November 18,
1992, on this subject.
At the same time that you provide your comments to me,
please circulate copies to the other BPMC members.
Distribution:
Representatives:
Paul Diener, Seward
Ken Ritchey, MEA
Dave Highers, CEA
Norm Story, HEA
Mike Kelly, GVEA
Tom Stahr, ML&P
Brent Petrie, Stan Sieczkowski, AEA
ces Ror
he At RLS\677der.mem
Seattle, Washington. ‘Washington, D.C. San Francisco, California Affiliated offices in
(206) 623-4711 (202) 785-0303 (415) 421-4143 Anchorage, Fairbanks
Fax (206) 467-8406 Fax (202) 785-8676 Fax (415) 989-1263 and Juneau, Alaska
ATER WYNNE sae 222 SW. Columbia HEWITT Portland, Oregon 97201-6618 (503) 226-1191
DODSON Fax (503) 226-0079
& SKERRITT
ATTORNEYS AT LAW
MEMORANDUM
VIA FAX
TO: Railbelt Utilities Group
FROM: Ron Saxton
DATE: November 18, 1992
8 Railbelt Reserve Issues
Over the past several months, a number of issues
relating to the operating reserve requirements of the Alaska
Intertie Agreement ("AIA") have been debated by the Intertie
Operating Committee ("IOC") and the Bradley Lake Project
Management Committee ("BPMC") and its subcommittees. This
memorandum is an attempt to sort out the issues in order to
clarify the differences and seek a non-adversarial resolution.
Because there are so many possible variations of the questions
discussed, I am presenting my summary of what I believe must be
the starting point of the analysis.
I understand that I am not addressing all the issues
being debated and I am seeking clearer direction from you about
what issues remain after you read the following discussion. I
also want to be clear that I have not reviewed all related
documents and the conclusions in this memo should be considered
preliminary until we are able to discuss them.
In preparing this analysis, I have reviewed the AIA,
selected minutes and related documents of the IOC, the Bradley
Lake Power Sales Agreement ("Bradley PSA"), the CEA-AEG&T/HEA
Agreement for Bradley Lake Resource Scheduling and the CEA-
AEG&T/MEA Net Billing Agreement. I have not examined any
individual utility’s compliance with reserve requirements imposed
by the Alaska Public Utilities Commission (3 AAC 52.470(c)) or by
any other contractual relationships.
Seattle, Washington Washington, D.C San Francisco, California Affiliated offices in
(206) 623-4711 (202) 785-0303 (415) 421-4143 Anchorage, Fairbanks
Fax (206) 467-8406 Fax (202) 785-8676 Fax (415) 989-1263 and Juneau, Alaska
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 2
Questions Examined
As a first effort, I have examined the following
questions:
1. What does the AIA say about the operations of the IOC?
2. What does the AIA say about utility reserve
obligations?
3. What is the role of the IOC relative to reserve
requirements?
4. What is the relationship of the AIA to other utility
agreements?
5. What impact does the Bradley PSA, and its related
agreements, have on reserve requirements?
6. Who must maintain reserves under the AIA?
Discussion
1. What does the AIA say about the operations of the IOC?
The IOC is composed of representatives of each
Participant (e.g., AEA, ML&P, CEA, FMUS, GVEA and AEG&T are
participants -- MEA, HEA and SES are not Participants).
The IOC has no authority to modify any of the
provisions of the AIA. The IOC may make decisions within its responsibility (further identified in Section 2) with the
agreement of at least 75% of all Participants (not just those in
attendance). As currently configured, the 75% requirement leaves
room for no more than one dissenting vote.
NOTE: Section 4.1.1 says AEA automatically becomes a
Utility Participant "at such times as it sells Power to a party that is not a Participant and is connected to the Participants’ interconnected system." A literal reading of this would mean that the AEA became a Utility Participant when it signed the Bradley PSA with Seward, HEA, and MEA, and would now have reserve obligations and payment responsibility.
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 3
2. What does the AIA say about utility reserve
obligations?
Sections 3.2.1 and 3.2.2 of the AIA states that each
Utility Participant is responsible for its own Reserve Capacity
Obligation ("RCO") -- "The capacity which a Participant is
obligated to reserve and use for the purpose of maintaining
continuity of service" -- and for a portion of the interconnected
system’s Operating Reserves (OR) -- "the sum of Spinning and Non-
Spinning Reserves." The amount of OR for which each respective
utility is responsible is its Operating Reserve Obligation (ORO).
RCO
AIA Section A-1.1 requires each Participant to
"maintain or otherwise provide for" Accredited Capability
sufficient to meet its respective RCO (in addition to meeting its
System Demand). The IOC has the responsibility and authority to
determine whether each utility has sufficient Accredited
Capability (see below).
This same section establishes an initial RCO of 30% of
each Utility Participant’s Annual System Demand, but permits the
RCO to be adjusted by the IOC (i.e., a change to RCO can be made
by the IOC without amendment of the AIA).
ORO
The provisions of the AIA relating to each utility’s
ORO are less straightforward than those relating to RCO.
Section B-2.2 establishes the "total" ORO and Section B-2.3
provides a formula for allocation of the total ORO to individual
Utility Participants. The confusion relates to the latitude the
IOC has to change these terms.
The AIA expressly refers to the "initial" RCO and the
"initial" total ORO. Section B-2.3 does not use the word
"initial" in reference to the formula for allocation of the ORO
to individual utilities.
Although Section B-2.3 does not use the word "initial"
when setting out the ORO allocation formula, Section B-2.1.2
states that the IOC may modify or adjust the ORO and "Utility
Participant’s Allocation." I believe this is confusing because
it is ambiguous as to whether the IOC can change the allocation
formula, or can only make whatever mathematical changes to each
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 4
Utility Participant’s ORO result from applying the existing
allocation formula to a revised total ORO.
Therefore, I conclude initially that the IOC has broad
discretion -- so long as its actions are consistent with Prudent
Utility Practices -- in determining RCO and ORO, as well as Accredited Capability. Without further discussion and research,
I am unable to determine whether the IOC’s discretion includes revising the formula for allocation of ORO.
36 What is the role of the IOC relative to reserve
requirements?
The AIA delegates broadly to the IOC on the issues of establishing reserve requirements. Along with a variety of other operational matters reserved to the IOC, the IOC can (by a 75% vote):
v "Establish" criteria for automatic load shedding
(S$ 3.2.3).
v "Adjust" RCO (§ A-1.1.2).
v "Determine" annual Accredited Capability for each Utility Participant (§ A-1.1.3).
v "Modify or adjust" ORO and Utility Participants’ Allocation (§ B-2.1.2).
v "Modify or change" total ORO, proportions of Spinning and Non-Spinning Reserves, and criteria for generating unit capability for OR (§ B-2.2.3).
v "Determine" ORO of each Utility (§ B-2.3.1).
v "Review and approve" each Utility’s load shedding program (§ B-2.4.2).
v "Establish procedures" to assure that the OR is available on the systems of the Utilities at all times (§ B-2.4.3).
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 5
4. What is the relationship of the AIA to other utility
agreements?
AIA Section 3.4 prohibits the parties from entering
into any subsequent agreements that are "in conflict" with any
terms of the AIA.
I have not specifically reviewed any other utility
agreements relating to reserve obligations, but AIA Section 3.4
casts serious doubt on the effectiveness of any other utility
agreements that attempt to modify any reserve obligation governed
by the AIA, unless such agreements included all the AIA parties.
NOTE: Notwithstanding AIA Section 3.4, all Utility
Participants except AEA and FMUS (and with the addition of HEA,
MEA, and SES) entered into the "Services Agreement for Bradley
Lake Energy," Section 12(m) of which states that the provisions
of the Services Agreement relating to transmission "supersedes"
the transmission provisions of the AIA.
5. What impact does the Bradley PSA, and its related
agreements, have on reserve requirements?
Bradley PSA Section 5(c)(i) states that nothing in the
Bradley PSA changes any duties of the participants under the AIA.
Under the Bradley PSA, each Utility purchased a share
of Project Capacity (the amount of electric capacity capable of
being produced by the Bradley Project at any time), together with
associated energy. The Bradley PSA does not create any
additional reserve obligation. The presence of the Bradley
resource may impact a utility’s reserve obligations.
Bradley PSA Section 5 provides that the BPMC shall
adopt procedures regarding reserves for "Project power." The
BPMC has taken no action on this to date.
In November of 1991, the BPMC adopted the "Bradley Lake
Allocation and Scheduling Procedures," Section 9 of which
addresses Spinning Reserve. That provision states that the
Bradley Operation and Dispatch Committee shall recommend to the
BPMC (for BPMC approval) "a method for allocation of Spinning Reserves in each hour under various system operating conditions." This provision continues by stating that once the BPMC has
approved the Allocation and Scheduling Committee recommendation,
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 6
"such Spinning Reserves shall be made available in accordance
with such method as follows:
(a) Spinning Reserves shall be allocated to
each Purchaser on a pro rata basis based
on its Percentage Share of Project
Capability net of any Project Generation
scheduled by the Purchaser.
(b) Any additional Spinning Reserves that
can be made and are available at the
Project in addition to Spinning Reserves
normally available in any hour as a
result of operating other resources
shall be allocated on a pro rata basis
to each Purchaser in proportion to that
Purchaser’s contribution of such other
resources."
The terms Spinning Reserve, Project, Capability, and
Project Generation are all defined terms in the Allocation and
Scheduling Procedures. Spinning Reserve is defined as "the
amount of on-line capacity available from the Project from time
to time which is available to meet Purchasers’ loads, minus
actual Project output, in accordance with Section 9 of the
Procedures."
To the extent problems arise about scheduling or
allocating Bradley Spinning Reserve, the Bradley PSA leaves that
as a decision to be made by the BPMC, subject to whatever
recommendation a BPMC subcommittee makes. Other than specifying
each utility’s percentage entitlement to Project Capacity, there
is no answer to these issues dictated by the PSA.
6. Who must maintain reserves under the AIA?
Only Utility Participants (CEA, GVEA, AEG&T, ML&P, FMUS
and AEA??) have reserve requirements under the intertie
agreement. MEA, HEA, and SES have no direct responsibility under
that agreement.
In addition, only Participating Utilities with "on-line
generation unit capability" have any actual obligations unless
and until the ORO formula is revised. As discussed above, it is
unclear whether the formula can be changed by the IOC or would
require an amendment of the AIA.
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 7
The key question relative to each utility’s obligation
is whether the phrase "on-line generation unit capability" refers
to ownership, control, or some combination. Under the respective
agreements with CEA, it is clear that AEG&T continues to own the
HEA and MEA shares of Bradley Lake power but has transferred
various degrees of control over that power to CEA.
When the AIA was executed, each of the parties owned
and operated (or planned to operate) generation solely owned by
that party. With the conclusion of the Bradley PSA and the
agreements executed by CEA, HEA, and MEA, the original conditions
have changed materially.
Typically, "control" would be the deciding factor
rather than "ownership," but I’m not sure whether that was the
parties’ intent with the AIA. The question of ownership versus
control is not within the authority of the IOC and is a matter of contract interpretation. Because it is ambiguous, a court would likely try to determine the "intent" of the parties at the time the AIA was executed.
Section VII of the September 29, 1992 Agreement for
Bradley Lake Resource Scheduling ("CEA-AEG&T/HEA Agreement")
states that AEG&T/HEA retained "all rights and responsibilities of participation in the Bradley Lake project" except the scheduling rights transferred to CEA.
The Net Billing Agreement between CEA and AEG&T/MEA states that for the duration of the agreement, CEA is entitled to "schedule the generation," and "receive . . . any power which is produced by the . . . Bradley Lake project and which AEG&T/MEA are entitled to receive . .. ." With both the HEA and MEA shares of Bradley, there is a transfer of "control" but not of
ownership.
If "ownership" is the key, then AEG&T would have an ORO based on ownership of the Bradley shares. If "control" is the key, then AEG&T would not. Because HEA, MEA, and SES are not "Utility Participants" under the AIA, none of them have an ORO under that agreement. As discussed above, the Bradley PSA does not itself impose any reserve obligation on any of the Purchasing
Utilities. Therefore, these three utilities have no reserve obligation established by the AIA, or the Bradley PSA. This memo does not explore what reserve obligations they may have from other legal obligations. A literal reading of the AIA would leave AEA potentially with a spinning reserve obligation
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 8
(depending on whether ownership or control is the test for "on-
line generation unit capability").
Conclusion
The Bradley PSA and various other agreements between
the utilities create a situation more complex than anticipated by
the AIA. The reality is that many of the current questions are
not squarely addressed by the AIA.
Before I proceed to apply the AIA and the Bradley PSA
to additional factual situations, I would like to discuss the
implications of these first conclusions.
Distribution:
Paul Diener, Seward
Kenneth E. Ritchey, MEA
David L. Highers, CEA
Norm Story, HEA
Michael P. Kelly, GVEA
Thomas R. Stahr, ML&P
Robert Hufman, AEG&T
RLS\466der.mem
-. ATER WYNNE a 222 SW. Columbia
HEWITT Portland, Oregon 97201-6618 (503) 226-1191 DODSON Fax (503) 226-0079
& SKERRITT
ATTORNEYS AT LAW RECEIVED
MAR 15 1993 neu
Aisa Grergy Authority __ PRo_3:!, O
VIA_ FACSIMILE
MEM RANDUM
TO: Bradley Project Management Committee
FROM: Ron Saxton
DATE: March 12, 1993
3 Railbelt Reserve Issues
ee
At the March 3rd BPMC meeting, it was agreed that utilities
would provide comments to me by March 30th on reserves and spin
requirements and related matters. To facilitate in this process,
I will circulate (by mail) a copy of my memo from November 18,
1992, on this subject. ’
At the same time that you provide your comments to me,
please circulate copies to the other BPMC members.
Distribution:
Representatives:
Paul Diener, Seward
Ken Ritchey, MEA
Dave Highers, CEA
Norm Story, HEA
Mike Kelly, GVEA
Tom Stahr, ML&P
Brent Petrie,Stan Sieczkowski, AEA
RLS\677der.mem
Seattle, Washington Washington, D.C. San Francisco, California Affiliated offices in
(206) 623-4711 (202) 785-0303 (415) 421-4143 Anchorage, Fairbanks
Fax (206) 467-8406 Fax (202) 785-8676 Fax (415) 989-1263 and Juneau, Alaska
ATER WYNNE see 100 222 SW. Columbia HEWITT Portland, Oregon 97201-6618
(503) 226-1191 DODSON Fax (503) 226-0079
& SKERRITT
ATTORNEYS AT LAW
MEM RAND M
VIA_FAX
TO: Railbelt Utilities Group
FROM: Ron Saxton
DATE: November 18, 1992
8 Railbelt Reserve Issues
Over the past several months, a number of issues
relating to the operating reserve requirements of the Alaska
Intertie Agreement ("AIA") have been debated by the Intertie
Operating Committee ("IOC") and the Bradley Lake Project
Management Committee ("BPMC") and its subcommittees. This
memorandum is an attempt to sort out the issues in order to
clarify the differences and seek a non-adversarial resolution.
Because there are so many possible variations of the questions
discussed, I am presenting my summary of what I believe must be
the starting point of the analysis.
I understand that I am not addressing all the issues
being debated and I am seeking clearer direction from you about
what issues remain after you read the following discussion. I
also want to be clear that I have not reviewed all related
documents and the conclusions in this memo should be considered
preliminary until we are able to discuss them.
In preparing this analysis, I have reviewed the AIA,
selected minutes and related documents of the IOC, the Bradley
Lake Power Sales Agreement ("Bradley PSA"), the CEA-AEG&T/HEA
Agreement for Bradley Lake Resource Scheduling and the CEA-
AEG&T/MEA Net Billing Agreement. I have not examined any
individual utility’s compliance with reserve requirements imposed
by the Alaska Public Utilities Commission (3 AAC 52.470(c)) or by
any other contractual relationships.
Seattle, Washington Washington, D.C. San Francisco, California Affiliated offices in
(206) 623-4711 (202) 785-0303 (415) 421-4143 Anchorage, Fairbanks
Fax (206) 467-8406 Fax (202) 785-8676 Fax (415) 989-1263 and Juneau, Alaska
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 2
Questions Examined
As a first effort, I have examined the following
questions:
aS What does the AIA say about the operations of the IOC?
2. What does the AIA say about utility reserve
obligations?
3. What is the role of the IOC relative to reserve
requirements?
4. What is the relationship of the AIA to other utility
agreements?
5. What impact does the Bradley PSA, and its relatéd
agreements, have on reserve requirements?
6. Who must maintain reserves under the AIA?
Discussion '
1. What does the AIA say about the operations of the IOC?
The IOC is composed of representatives of each
Participant (e.g., AEA, ML&P, CEA, FMUS, GVEA and AEG&T are
participants -- MEA, HEA and SES are not Participants).
The IOC has no authority to modify any of the
provisions of the AIA. The IOC may make decisions within its
responsibility (further identified in Section 2) with the
agreement of at least 75% of all Participants (not just those in
attendance). As currently configured, the 75% requirement leaves
room for no more than one dissenting vote.
NOTE: Section 4.1.1 says AEA automatically becomes a
Utility Participant "at such times as it sells Power to a party
that is not a Participant and is connected to the Participants’
interconnected system." A literal reading of this would mean
that the AEA became a Utility Participant when it signed the
Bradley PSA with Seward, HEA, and MEA, and would now have reserve
obligations and payment responsibility.
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 3
2. What does the AIA say about utility reserve
obligations?
Sections 3.2.1 and 3.2.2 of the AIA states that each
Utility Participant is responsible for its own Reserve Capacity
Obligation ("RCO") -- "The capacity which a Participant is
obligated to reserve and use for the purpose of maintaining
continuity of service" -- and for a portion of the interconnected
system’s Operating Reserves (OR) -- "the sum of Spinning and Non-
Spinning Reserves." The amount of OR for which each respective
utility is responsible is its Operating Reserve Obligation (ORO).
RCO
AIA Section A-1.1 requires each Participant to
"maintain or otherwise provide for" Accredited Capability
sufficient to meet its respective RCO (in addition to meeting its
System Demand). The IOC has the responsibility and authority to
determine whether each utility has sufficient Accredited
Capability (see below).
This same section establishes an initial RCO of 30% of
each Utility Participant’s Annual System Demand, but permits the
RCO to be adjusted by the IOC (i.e., a change to RCO can be’ made
by the IOC without amendment of the AIA).
ORO
The provisions of the AIA relating to each utility's
ORO are less straightforward than those relating to RCO.
Section B-2.2 establishes the "total" ORO and Section B-2.3
provides a formula for allocation of the total ORO to individual
Utility Participants. The confusion relates to the latitude the
IOC has to change these terms.
The AIA expressly refers to the "initial" RCO and the
“initial” total ORO. Section B-2.3 does not use the word
"initial" in reference to the formula for allocation of the ORO
to individual utilities.
Although Section B-2.3 does not use the word "initial"
when setting out the ORO allocation formula, Section B-2.1.2
states that the IOC may modify or adjust the ORO and "Utility
Participant’s Allocation." I believe this is confusing because
it is ambiguous as to whether the IOC can change the allocation
formula, or can only make whatever mathematical changes to each
we ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 4
Utility Participant’s ORO result from applying the existing
allocation formula to a revised total ORO.
Therefore, I conclude initially that the IOC has broad
discretion -- so long as its actions are consistent with Prudent
Utility Practices -- in determining RCO and ORO, as well as
Accredited Capability. Without further discussion and research,
I am unable to determine whether the IOC’s discretion includes
revising the formula for allocation of ORO.
3. What is the role of the IOC relative to reserve
requirements?
The AIA delegates broadly to the IOC on the issues of
establishing reserve requirements. Along with a variety of other
operational matters reserved to the IOC, the IOC can (by a 75%
vote): .
v "Establish" criteria for automatic load shedding
(§ 3.2.3).
y "Adjust" RCO (§ A-1.1.2).
v "Determine" annual Accredited Capability for each
Utility Participant (§ A-1.1.3).
v "Modify or adjust" ORO and Utility Participants’ Allocation (§ B-2.1.2).
v "Modify or change" total ORO, proportions of
Spinning and Non-Spinning Reserves, and criteria
for generating unit capability for OR (§ B-2.2.3).
v "Determine" ORO of each Utility (§ B-2.3.1).
v “Review and approve" each Utility’s load shedding
program (§ B-2.4.2).
v "Establish procedures" to assure that the OR is
available on the systems of the Utilities at all
times (§ B-2.4.3).
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 5
4. What is the relationship of the AIA to other utility
agreements?
AIA Section 3.4 prohibits the parties from entering
into any subsequent agreements that are "in conflict" with any
terms of the AIA.
I have not specifically reviewed any other utility
agreements relating to reserve obligations, but AIA Section 3.4
casts serious doubt on the effectiveness of any other utility
agreements that attempt to modify any reserve obligation governed
by the AIA, unless such agreements included all the AIA parties.
NOTE: Notwithstanding AIA Section 3.4, all Utility
Participants except AEA and FMUS (and with the addition of HEA,
MEA, and SES) entered into the "Services Agreement for Bradley
Lake Energy," Section 12(m) of which states that the provisions
of the Services Agreement relating to transmission "supersedes"
the transmission provisions of the AIA. ‘
5. What impact does the Bradley PSA, and its related
agreements, have on reserve requirements?
Bradley PSA Section 5(c)(i) states that nothing in the
Bradley PSA changes any duties of the participants under the AIA.
Under the Bradley PSA, each Utility purchased a share
of Project Capacity (the amount of electric capacity capable of
being produced by the Bradley Project at any time), together with
associated energy. The Bradley PSA does not create any
additional reserve obligation. The presence of the Bradley
resource may impact a utility’s reserve obligations.
Bradley PSA Section 5 provides that the BPMC shall
adopt procedures regarding reserves for "Project power." The
BPMC has taken no action on this to date.
In November of 1991, the BPMC adopted the "Bradley Lake
Allocation and Scheduling Procedures," Section 9 of which
addresses Spinning Reserve. That provision states that the
Bradley Operation and Dispatch Committee shall recommend to the
BPMC (for BPMC approval) "a method for allocation of Spinning
Reserves in each hour under various system operating conditions."
This provision continues by stating that once the BPMC has
approved the Allocation and Scheduling Committee recommendation,
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 6
"such Spinning Reserves shall be made available in accordance
with such method as follows:
(a) Spinning Reserves shall be allocated to
each Purchaser on a pro rata basis based
on its Percentage Share of Project
Capability net of any Project Generation
scheduled by the Purchaser.
(b) Any additional Spinning Reserves that
can be made and are available at the
Project in addition to Spinning Reserves
normally available in any hour as a
result of operating other resources
shall be allocated on a pro rata basis
to each Purchaser in proportion to that
Purchaser’s contribution of such other }
resources."
The terms Spinning Reserve, Project, Capability, and
Project Generation are all defined terms in the Allocation and
Scheduling Procedures. Spinning Reserve is defined as "the
amount of on-line capacity available from the Project from time
to time which is available to meet Purchasers’ loads, minus actual Project output, in accordance with Section 9 of the Procedures."
To the extent problems arise about scheduling or
allocating Bradley Spinning Reserve, the Bradley PSA leaves that as a decision to be made by the BPMC, subject to whatever
recommendation a BPMC subcommittee makes. Other than specifying each utility’s percentage entitlement to Project Capacity, there is no answer to these issues dictated by the PSA.
6. Who must maintain reserves under the AIA?
Only Utility Participants (CEA, GVEA, AEG&T, ML&P, FMUS and AEA??) have reserve requirements under the intertie agreement. MEA, HEA, and SES have no direct responsibility under
that agreement.
In addition, only Participating Utilities with "on-line generation unit capability" have any actual obligations unless and until the ORO formula is revised. As discussed above, it is unclear whether the formula can be changed by the IOC or would require an amendment of the AIA.
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 7
The key question relative to each utility’s obligation
is whether the phrase "on-line generation unit capability" refers
to ownership, control, or some combination. Under the respective
agreements with CEA, it is clear that AEG&T continues to own the
HEA and MEA shares of Bradley Lake power but has transferred
various degrees of control over that power to CEA.
When the AIA was executed, each of the parties owned
and operated (or planned to operate) generation solely owned by
that party. With the conclusion of the Bradley PSA and the
agreements executed by CEA, HEA, and MEA, the original conditions
have changed materially.
Typically, "control" would be the deciding factor
rather than “ownership,” but I’m not sure whether that was the
parties’ intent with the AIA. The question of ownership versus
control is not within the authority of the IOC and is a matter of
contract interpretation. Because it is ambiguous, a court would
likely try to determine the "intent" of the parties at the time
the AIA was executed.
Section VII of the September 29, 1992 Agreement for
Bradley Lake Resource Scheduling ("CEA-AEG&T/HEA Agreement")
states that AEG&T/HEA retained "all rights and responsibilities
of participation in the Bradley Lake project" except the
scheduling rights transferred to CEA.
The Net Billing Agreement between CEA and AEG&T/MEA
states that for the duration of the agreement, CEA is entitled to
"schedule the generation," and "receive . . . any power which is
produced by the . . . Bradley Lake project and which AEG&T/MEA
are entitled to receive ... ." With both the HEA and MEA
shares of Bradley, there is a transfer of "control" but not of
ownership.
If "ownership" is the key, then AEG&T would have an ORO
based on ownership of the Bradley shares. If "control" is the
key, then AEG&T would not. Because HEA, MEA, and SES are not
"Utility Participants" under the AIA, none of them have an ORO
under that agreement. As discussed above, the Bradley PSA does
not itself impose any reserve obligation on any of the Purchasing
Utilities. Therefore, these three utilities have no reserve
obligation established by the AIA, or the Bradley PSA. This memo
does not explore what reserve obligations they may have from
other legal obligations. A literal reading of the AIA would
leave AEA potentially with a spinning reserve obligation
ATER WYNNE
Railbelt Utilities Group
November 18, 1992
Page 8
(depending on whether ownership or control is the test for "“on-
line generation unit capability").
Conclusion
The Bradley PSA and various other agreements between
the utilities create a situation more complex than anticipated by
the AIA. The reality is that many of the current questions are
not squarely addressed by the AIA.
Before I proceed to apply the AIA and the Bradley PSA
to additional factual situations, I would like to discuss the
implications of these first conclusions.
Distribution:
Paul Diener, Seward
Kenneth E. Ritchey, MEA
David L. Highers, CEA Norm Story, HEA
Michael P. Kelly, GVEA
Thomas R. Stahr, ML&P
Robert Hufman, AEG&T
RLS\ 466der.mem
a 03/10/93 15:35 503 226 0079 ATER WYNNE @oo1/003
ATER WYNNE Sue 222 SW. Columbia HEWITT Portland, Oregon 97201-6618
(303) 226-1191 DODSON Fax (503) 226.0079
& SKERRITT RECORL UOPY
ATTORNEYS AT LAW FILE NO
__7koO 3- La RS rit S
FACSIMILE TRANSMITTAL
NOTICE: This facsimile contains confidential informat 5 Being
transmitted to and is intended only for the use of the recipient named below.
Reading, disclosure, discussion, dissemination, distribution, or copying of
this information by anyone other than the named recipient or his or her
employees or agents is strictly prohibited. If you have received this
facsimile in error, please immediately destroy it and notify us by telephone,
(503) 226-1191.
DATE: March 10, 1993 00
TO: Stan Sieczkowski
sk rr th
CITY/STATE: Anchorage, Alaska __ _— — —
FAX NUMBER: _907/561-8584
OFFICE NUMBER: _ 907/561-7877 __ ——————
FROM: eR ee
DOCUMENT: ter ; B e
PAGES (INCL. COVER) 3 USAGE TIME
CLIENT NUMBER: _53844-0000
(NN 7/00
03/10/93 15:35 503 226 0079 ATER WYNNE 002/003
ATER WYNNE oe 222 S.W. Columbia HEWITT Portland, Oregon 97201-6618
(503) 226-1191
DODSON Fax (503) 226-0079
& SKERRITT
ATTORNEYS AT LAW March 10, 1993
VIA_FACSIMILE
Stan Sieczkowski Alaska Energy Authority
P.O. Box 190869
Anchorage, Alaska 99519-0869
Dear Stan:
I propose that you include the following paragraph in each of the Bradley related agreements:
Notwithstanding any other provisions of this Agreement, the parties agree that upon approval of
a Bradley Lake Master Operating Agreement by the
BPMC, this Agreement shall become subject to the
terms of such Master Operating Agreement, and the
parties agree to such modifications of this
Agreement as may be necessary for that purpose.
In addition to this, we should probably have a Letter Agreement between AEA, Chugach and HEA as to any already executed
agreements. I would suggest the letter come from you, to be signed by both Chugach and HEA. (I am assuming there is something HEA has already signed ~- if not true, we do not need HEA on the letter.) The letter should be as follows:
Pursuant to the directions of the Bradley Lake PMC at its March 1993 meeting, the undersigned parties agreed that any previously executed Bradley Lake operations agreements will become subject to a Bradley Master Operating Agreement, upon approval of such a Master Operating Agreement by the BPMC, and that already executed agreements will be modified to the extent necessary to accommodate
such Master Operating Agreement.
Scacrle, Washington ‘Washington. D.C San Francisca, California Affiliated offices tn
(206) 623-4711 (202) 785-0303 (413) 421-4143 Anchorage, Fairbanks
Fax (206) 467-8406 Fax (202) 785-8676 Fax (415) 989-1263 and Juneau, Alaska
03/10/93 15:36 503 226 0079 ATER WYNNE 003/003
ATER WYNNE
Stan Sieczkowski
March 10, 1993
Page 2
I think this accomplishes what the Committee wanted. I will
try to move quickly to actually develop the Master Operating Agreement.
Sincerely,
Ronald L. Saxton / due
RLS\660der.1tr
@002/006 03/02/93 11:31 ‘fr* 226 0079 ATER WYNNE — — ee
ATER WYNNE
HEWITT DODSON & SKERRITT
Suite 1800 222 SW. Cobsmbia Portland, Oregon 97201-6618
(303) 226-1191 Fax (503) 226-0079
ATTORNEYS AT LAW
VIA _ FACSIMILE
MEMORANDUM
TO: BPMC
FROM: Ron Saxton and Tom Lovas
DATE: March 2, 1993
RE: Bradley Lake Project Management Committee Master
Operating Agreement Outline - Alternatives For Bradley
Lake BPMC Involvement In Project Management Consistent
with the Project Power Sales Agreement
For Discussion at Wednesday BPMC Meeting.
At the last BPMC meeting, Ron was given the assignment to
develop a proposal for clarifying the role of the BPMC in the various Bradley operating agreements. The assignment was to
draft these agreements in a way that recognized the BPMC's role
in decisions about operating matters. Tom Lovas assisted Ron in
the development of the following proposal.
In summary, our proposal is to keep the individual
agreements between the AEA and each contractor, but to make all
such agreements subject to terms in a Master Operating Agreement
to which the BPMC is a party. This approach provides protection
of the BPMC concerns, while still allowing individual
arrangements between AEA and individual contractors.
BACKGROUND
The Bradley Project Management Committee was established in
the Bradley Lake Project Power Sales Agreement to provide the
Seattle, Washington
(206) 623-4711 Fax (206) 467-8405
RLM ide mem
Washington, DC. San Francisca, California Affiliated offices tn
(202) 785-0303 (415) 421-4143 Anchorage, Fairbanks
Fax (202) 785-8676 Fae (415) 989-1263 and Juneau, Alaska
o03/006 03/02/93 = 11:32 503 226 0079 ATER WYNNE Fetal 006
{
ATER WYNNE
BPMC
March 2, 1993
Page 2
purchasers of Bradley Lake power a direct participatory role in
the management of the Project. The BPMC is “responsible for the
management, operation, maintenance, and improvement of the
Project" to the extent such responsibilities are consistent with
AEA's ownership of the Project. That responsibility can be
handled through direct BPMC participation in contract
administration, or by making the BPMC the contracting entity for
Bradley Lake activities. In either case, the AEA, as ea State
agency, owner and holder of the FERC license, must retain control
of matters affecting its obligations under State law and the FERC
license.
The existing contracts between AEA and its O&M contractors
place the BPMC only in a budget review mode, after AEA and the
contractor have reviewed and agreed to the essentials for the
following year. The issues that count most to BPMC members are
schedule and cost. If the BPMC is involved after the fact, the
matters most important to them have already been decided.
PROPOSAL
The easiest way to remedy the lack of BPMC involvement is to
revise the format of the contracts to make the BPMC's role
central in the planning and budgeting process. The AEA would
continue its role as contractor, but would use the BPMC (or a subcommittee) to review the schedules, plans and budgets
submitted by the contractor. For all matters excepting those
where AEA's legal responsibilities are paramount, the BPMC's
decision would control. The advantage of this type of revision
is that it would require the least change in BPMC/AEA
relationships.
The following is an outline of the key terms of such an
Operating Master Agreement:
thi a Li P: ement.
1. Parties. AEA, BPMC (acting on behalf of the Bradley Lake
Power Sales Agreement Parties) and Contractors for O&M of the
Bradley Lake Project and related transmission and communication
facilities.
ae Nature of Agreement. All Bradley Lake subcontracting would
be subject to the same planning and budgetary provisions és
provided in the basic agreement. Specific responsibilities would
ASMMbdenes
03/02/93 11:00 ‘fsx 226 0079 ATER WYNNE o0s/007
ATER WYNNE
BPMC
March 2, 1993
Page 3
be included in separate exhibits to the agreement and executed by
the AEA and the individual contractor.
3. Term. The term of the Master Operating Agreement would
extend until the Bradley Lake Power Sales Agreement terminates.
Each of the exhibits signed by AEA and a Contractor would state
the term of the exhibit based upon the particular circumstances.
4. Righ Obli 3
a. Exhibit Approval. BPMC approval would be required
before any exhibit (or amendment thereto) detailing the
duties of a contractor is executed by the AEA.
b. Budget Approval. All plans and budgets would be
submitted to the AEA and the BPMC for approval. The AEA and
the individual contractor would be responsible for the
preparation of the initial submission of plans and budgets.
c. AEA Rights. The relationships of the BPMC and the AEA
would continue as provided in the Power Sales Agreement.
(The limitations on BPMC actions consistent with AEZEA's legal
responsibilities and obligations as a State agency and FERC
licensee would be preserved.) Specific procedural
requirements (time for approval, payment of obligations,
contractor performance) would be included in the Master
Operating Agreement with the right of the AEA to proceed in
the event of disagreement.
d. Dispute Resolution. All disputes would be subject to
mediation for a limited period prior to invoking arbitration
or litigation. The BPMC would be responsible for setting up
mediation and would be a stated party to any mediation or
arbitration.
e. BPMC Status. The BPMC would sign the Agreement acting
on behalf of all the Parties to the Power Sales Agreement.
It would continue to act ag a non-incorporated body without
any separate legal status.
Si. tri iong.
a. Independent Contractor. Unless otherwise agreed, each of the contractors signing an exhibit will act as an
independent contractor.
03/02/93 11:00 TBsc~ *26 0079 ATER WYNNE (006/007
ATER WYNNE
BPMC
March 2, 1993
Page 4
b. Budget Preparation. Unless otherwise agreed, all
contractors will be subject to the same requirements regarding budget submission and subsequent approval process
by the BPMC (and ABA).
Cc. Invoice and Payment. Standard procedures for invoices
and payments of contractor costs will be included in the
Master Operating Agreement.
d. Dispyte Resolution. Consistent with BPMC description
above.
e. Insurance. The base agreement would contain guidelines
but leave details to each contractor's exhibit.
£. In F eure. Same for all contractors.
6. Contractor Exhibit. Each Contractor for the Project would
execute a detailed exhibit with AEA and be obligated to the terms
and conditions affecting Contractors included in the Master Operating Agreement. The specific duties relating to the work
performed by the Contractor would be contained in the exhibit.
All exhibits would be subject to BPMC approval prior to execution
or amendment.
An Example (Outline) of the contents of an exhibit based
upon the current AEA-Chugach O&M Agreement for Daves Creek
follows:
1. Parties to Exhibit. AEA and Chugach.
2. Definitions. The exhibit would contain definitions
specifically related to the exhibit (Party, SVC, SVC
Facilities).
3. Term of Exhibit. Separate Term and Termination
provision.
4. Maintenance of Facilities. Similar to existing 0&
Agreement.
5. Maintenance Plan, Schedule and Budget. Section would only include provisions that are unique to the exhibit.
03/02/93 11:01 @scr* °26 0079 ATER WYNNE @ 007/007
ATER WYNNE
BPMC
March 2, 1993
Page 5
6. Payment, Accounts, Records and Audits, Extraordinary
Maintenance, Insurance, Indemnity, Uncontrollable Forces and other "boiler plate“ provisions would be
part of the Master Operating Agreement.
7. Ldeting of ABA Major Equipment (Exhibit B). The exhibit to the Master Operating Agreement would contain
a similar list of equipment.
f B O&M A ts.
The following is a list of agreements between AEA and
individual Bradley Lake participants which could be included in a
“Master Operating Agreement".
l. Dispatch Agreement between AEA and CEA.
as Maintenance Agreement between AEA and Maintenance
Contractor.
3. Transmission Facilities Maintenance Agreement between AEA and AEG&T.
4. Facilities Interconnected Dispatch Agreement between AEA and
HEA.
5s Communications Equipment Agreement between AEA and DIVCOM.
6. Static VAR Compensator Systems at Daves Creek and Soldotna
Maintenance Agreement between AEA and CEA.
7. Operating Agreement with Bradley Lake contract operator.
Distribution:
Paul Diener, Seward
Ken Ritchey, MEA
Dave Highers, CEA
Norm Story, HEA
Mike Kelly, GVEA
Tom Stahr, ML&P
Ron Garzini, AEA
Brent Petrie, AEA
Stan Sieczkowski, AEA
LCIRISMigh. doo
CHUGAHLH ELECT .ENGRG ID: MAR 23°93 9:08 No.006 P.O1
Sate ib 0 “Cte ‘ATER WYNNE isan 3
HEWITT (308) 236-1 11 DODSON ee
ATTORNEYS AT LAW . Corps ne ie peo ne p/@8necorv copy (Cee x Ce" ou FILE NO hurts DE afyr/a? o—_— poet yt A ESSA:
VIA FACSIMILE . -Tht0 PRO 3-12 AbrRM Jen
HEMORAND OM Gen” : . . \ fof? 3
TO: David Highers, Chaizmen UY Railbelt Utilities Group
FROM: Ron Saxton
DATE; December 22, 1992
RE: BPMC Agreements >
I have just completed participation in another meeting of
the Sredley Lake Agreements Committes. I em concerned thet
matters are becoming more complicoted, rather than less complicated. In addition to the issues I raised in my earlier memo about the role of the BPMC, vis-a-vis AEA, on Sradley
related decisions, I want to raise two more questions which we probably need to discuss with the other managers.
1. AEA is in the process of transferring ownership of certain Bradley Project assets to individuel utilities (at least
to HEA and CEA). These ore assets whioh were purchased with
Project funds (50% State money, 50% utility money). I paliave there is an issue about the process end authority of ABA to transfer ownership of these assets. Awsuming that the utilities
want to allow such transfer, there ore issues about the
application of the Power Sales Agreement, Services Agreement, “ etc., to assets which were purchased with Project funds, but are Not Ez no longer ouned by AEA. Fer axawple, do tha new owners of the a acgots undarstand that these assets may be enownbered in some woy by various agzeunents and/or the bonds?
2. ‘Y am inaraarningly concarned that few, if any, people undexsstané all of the various interreleting agreements between the Railbelt Utilities. (I know from Slan that AEA dows not). At least for Stan and my benefit, 1 think it would pe useful to compile a list of 411 agreements between Railbelt utilities
Seatshe, Vibalrbignas Wiad gure, DC jem Pemcuce Cations ARI Che fim abn 547) 282) 789-0903 (483) e2)-4149, Aachomgs, hirben! Ten OG) 487-8406, Pex 0a) PRS-BOTO han (419) POVL20) Bo ) nese, Abegten
R=90% . §03 226 0079 22-22-92 L1:12.M PO002 #30
e CHUGACH ELECT.ENGRG ID: MAR 23°93 9:09 No.006 P.02
. ATER WYNNE
R018
David Highars
December 22, 1992
Page 2
relating to power supply, trangmission, end releted fraotlitian. I em very concerned thet each now agreement is drafted without a ate understanding of existing agreements. I strongly believe we need 4 "clearing house* for these agreements. I fear that most people believe I serva thet role, but T cannot do an
without e more complete listing and understanding of the existing agreements.
3. ‘Tha Agreamants Comittee cannot proceed further without
guidance on the issue 1 raised previously about the BPMC role.
You and I need to discuss how to proceed with this.
In addition to my concern about conflicting legal Obligations and document inconsistency, I am concerned that AZA is making peyment commitments which AEA will then expect the DPMC
to honor.
At least as they relate to Bradley Lake, I would like the opportunity to raview these various ——— and determine how
serious this problem ig.
503 226 0079 12-22-92 11:12.M PO003 #30
DATE:
TO:
FROM:
SUBJECT:
Alaska Energy Authority = «cor. or”
FILE NO
i ae
MEMORANDUM -
February 23, 1993
Bradley Lake Project Management Committee
Denise Burger ps
Operations Assistant
Aircraft Accident at Bradley Lake
As you may already know, an airplane accident occurred at the Bradley
Lake Hydroelectric Project on Saturday morning, February 20, 1993.
Attached is the information being released to the press.
Initially, the press reported "minor injuries" and "no injuries", however
Larry Wolf, John Zidalis, Gail Zidalis, and the pilot are presently
hospitalized with multiple injuries. It is anticipated that John and Gail
Zidalis will be hospitalized for another five or six days. Gail sustained a
broken elbow and broken ribs and John a compression fracture of a
vertebrae and broken ribs. John will be in a body cast for the next several
weeks with an estimated recovery time of two months.
Larry sustained a broken ankle, leg, foot, hip, wrist, ribs, and nose, and
facial lacerations. Larry is undergoing surgery today on his ankle, hip, and
wrist. I do not have an estimate of recovery time for Larry. Larry's wife
has requested no visitors or calls until after Friday, February 26, 1993,
however, please feel free to send cards and greetings.
For your information, Larry, John, and Gail are all at Providence Hospital:
3200 Providence Drive
Anchorage, Alaska 99508
If you have any questions, or would like an update on Larry's and John's
recovery, please do not hesitate to call me at 561-7877.
State of Alaska
DN Walter J Hickel. Governor
Alaska Energy Authority
A Public Corporation
February 22, 1993
Bradley Lake Aircraft Accident
At approximately 7:30 a.m., February 20, a Southcentral Air Inc. single-engine
aircraft crashed in attempting to take off from the airstrip at the Bradley Lake
Hydroelectric Project on the Kenai Peninsula. Injured in the accident were Larry Wolf,
John and Gail Zidalis and the pilot, John Baldwin. Wolf is a senior operations engineer
for the Alaska Energy Authority, which owns the Bradley Lake project. Zidalis is the
Authority's general foreman for the Bradley Lake project.
Wolf and John and Gail Zidalis were evacuated to Providence Hospital in Anchorage.
Baldwin was taken to the Homer Hospital. All of the injured are expected to make a
complete recovery. Another passenger in the aircraft, the two-year-old grandson of
John and Gail Zidalis, was not injured in the accident.
The Federal Aviation Administration and the National Transportation Safety Board are
investigating the accident.
The accident is expected to have no effect on the operation of the Bradley Lake project,
according to Stanley Sieczkowski, Energy Authority director of facilities operation and
engineering. David Eberle, construction manager of the Bradley Lake project, has been
named to take over Wolf's responsibilities for the project, with the assistance of Eric
Marchegiani, an Energy Authority civil engineer. Remy Williams, an Energy Authority
senior operations engineer, will take over Wolf's responsibilities for the Terror Lake
Hydroelectric project on Kodiak Island. Richard Turner, Energy Authority
hydroelectric plant electrician, will assume responsibilities for Zidalis.
PO. Box 190869 701 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584
A Fax From The
Alaska Enrer, Authori.
4 Public Corporation af tha Stata of Alaska JZ
= P.O. Bax 190869 701 Bast Tiedor Road. and Ftoor Anchorage, AK 99319-0869 Anchorage, AK 99503
Main Telephone Number (907) S61-7877
Fax Nurnber: (907) $61-8584
Deliver Fax to: On Sew reo
Company Name:
Company Address: — er eee
Fax Phone #:
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# of Pages Sent: ee Unctuding this covar ahaat) Date Fax Sent: rll I vou dons resttes SH Sis i5 jelgaee ont
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XEROX TELECOPIER 7020
State of Alaska
DS Walter J. Hickel, Governor
Alaska Energy Authority
A Public Corporation RECORU VOPY
FILE NO
__ TRO 3:10). March 31, 1993 a
Mr. David L. Highers
Chairman, Bradley Project Management Committee
Chugach Electric Association
P.O. Box 196300
Anchorage, AK 99519-6300
AEA/UTIL/0004
Subject: Bradley Project FY94 Annual Operation and Maintenance Budget
Dear Mr. Highers:
The Bradley Project FY94 Annual O&M Budget was required to be adopted and filed
with the Seattle First National Bank by April 2 in compliance with Section 709 of the
Power Revenue Bond Resolution and in accordance with Section 13(e) of the Power
Sales Agreement.
The Alaska Energy Authority has complied with those requirements by filing on
March 31, the operations and maintenance budget and cash flow which incorporates all
the annual project costs. This was done after the Alaska Energy Authority could not
approve the Bradley Project Budget Subcommittee proposed budget presented at the
March 30, 1993 Bradley Lake Project Management Committee Meeting.
Sincerely, Ga
Ronald A.
Executive Director
BNP:RAG:it
cc: Bradley PMC Members
Bradley Budget Subcommittee
Stan Sieczkowski, Alaska Energy Authority
Larry Wolf, Alaska Energy Authority
PO. Box 190869 701 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584
92Q2\IT2719(2) Page 1 of 1
Ms. Mary Ann Pease
Municipal Light & Power
, 1200 E. 1st Avenue
Anchorage, Alaska 99501-1685
Mr. Tom Lovas
Chugach Electric Association
5601 Minnesota Drive
P.0. Box 196300
Anchorage, Alaska 99519-6300
Mr. Ron Saxton
Ater Wynne Hewitt Dodson & Skerritt
225 S.W. Columbia, Suite 1800
Portland, Oregon 97201-6618
Mr. Everett P. Diener
City of Seward
Sth & Adams
P.O. Box 167
Seward, AK 99664
Mr. David L. Highers Chugach Electric Association 5601 Minnesota Drive
P.O. Box 196300 Anchorage, AK 99519-6300
Mr. Michael P. Kelly
Golden Valley Electric Association
758 Illinois
P.O. Box 1249
Fairbanks, AK 99707
Mr. Ken Ritchey
Matanuska Electric Association
163 Industrial Way
P.O. Box 2929
Palmer, AK 99645-2929
Mr. N. L. Story
Homer Electric Association
3977 Lake Street
Homer, AK 99603
Mr. Thomas R. Stahr
Municipal Light and Power
1200 E. 1st Avenue
Anchorage, AK 99501-1685
4 | IBRADLEY LAKE PROJECT CASH FLOW
| 2 [Cash Flow From Operations L | 31-Mar-93 11:01 AM
| 3 | 4 | FY 1994
Ga July August | September | October | November | December | January | February | March April May June __|_ FY Total
6 | | 7 |Utility Payment 1,159,991 | 1,159,991 | 1,159,991 | 1,159,991 | 1,159,991 | 1,159,991 | 1,159,991 | 1,159,991 | 1,159,991 | 1,159,991 | 1,159,991 | 1,159,991 | 13,919,891
| 3 | Fund Balance |
| 9 [Moved to Operating Fund (4,007)| 219,335 | 225,601 | 171,002 | 225,601 | 154,002 | 215,437 | 154,002 | 216,835 | 225,601 | 159,835 | 2,624,846
| 10 [Remains Revenue Fund 934,390 | 1,223,998 | 940,656 | 934,390 | 988,989 | 934,390 | 1,005,989 | 944,554 | 1,005,989 | 943,156 | 934,390 | 1,000,156 | 11,791,045
11 | 1a | 12 [PAYMENTS FROM REVENUE FUND | | 13 [Principal 1,312,500 I 1,312,500 | 2,625,000
| 14 [Interest 5,381,621 5,381,621 | 10,763,?**
| 16 [Replenish Operating Reserve 0 0 0 0 0| 75,404 0 Oo} 0 0 0 6,503 81
| 16 | 17 | ‘| | 18 | Total paid-Revenue Fund 0 0 0 0 0 | 6,769,524 0 0 0 0 0 | 6,700,623 | 13,470,147
19 | | 20 [OPERATING FUND a
21 |O&M 431,993 | 219,335 | 241,271 | 171,002 | 285,335 | 154,002 | 215,437 | 154,002 | 216,835 | 232,104 | 159,835 ane 2,707,215
| 22 | | [ 23 [Contingency 0% 0 0 0 0 0| 0 0 0 0 0 0 0 0
| 24 | 2 = | | 26 [TOTAL REQUIREMENTS 16,095,456
| 27 |=== e | 28 [INCOME | 29 |Interest Be
[30 | on Capital Reserve & R&C Fund 670,811 0 0 0 0 0| 670,811 0 0 0 o| 0/ 1,341,621
| 31 [Interest on +
| 32 | Operating Fund & Reserve 22,719 0 0 0 0 0] 22,384 0 0 0 0 0 45,102
| 33 |Interest on | 34 | Revenue Fund 105,726 0 0 0 0 0 [107,376 0 oO} 0 0 o| 213,
| 36 [Interest on | 36 | Debt Service Fund 40,526 0 0 0 0 0| 40,527 o| 0 o| 0 0 81,053
a [ 39 |Annual surplus (deficit) Le
40] operating fund 289,608 | (283,342)| _(21,936)| 54,599 | (114,333)| 71,599 | (61,435)| 61,435 | (62,833) (15,269) 65,766 | (66,229)
41 : | 42 |Drawn on Operating Fund Balance 0 | 283,342 6,266 0| 54,599 0| 61,435 0| 62,833 8,766 0] 65,766
“y Drawn on Operating Reserve 0 0| 15,670 0| 59,734 0 0 0 0 6,503 | of 463 =
| 46 |Balance Operating Reserve 535,000 | 535,000 | 519,330 | 519,330 | 459,597 | 535,000 | 535,000 | 535,000 | 535,000 | 528,497 | 528,497 | 535,000 |
[ 46 |Balance Operating Fund 289,608 6,266 O| 54,599 o| 71,599 [10,164 [71,599 8,766 | 0| 65,766 0 a
Balance in =a
Ps Revenue Fund 1,774,171 | 2,998,169 | 3,938,826 | 4,873,215 | 5,862,204 | _ 27,070 | 1,766,780 | 2,818,710 | 3,824,699 | 4,767,855 | 5,702,244 1314 ail
| 49 |
BRADLEY LAKE FY94 OPERATIONS AND MAINTENANCE BUDGET
LEDGER ITEM ACCOUNT
ACCOUNT DESCRIPTION AMOUNT
General supervision and engineering of project maintenance &
For project features outside of the powerhouse (i.e. debris & ice
removal; inspection of dam, reservoir, diversions, duck ponds, tailrace,
Hydraulic Operation (Reservoir,
Dams & Waterwa Se ;
Personnel (Labor & Benefits)
Temporary Revegetation Specialist
Dam Settlement Surveys (2)
Environmental/Fish & Game Studies
For prime movers, generators, switchgear and other auxiliary equipment
within the powerhouse. Oil purification, relay & meter adjustments,
plant records, adjusting relays, controls & instruments.
Personnel (Labor & Benefits)
General Foreman
Contractual
Training
Supplies & Materials
Equipment & Machinery : 158,100
e:\dburgerlexcellbudget\fy94 Page 1 of 6 3/31/93 8:06 AM
BRADLEY LAKE FY94 OPERATIONS AND MAINTENANCE BUDGET
FERC LEDGER ITEM ACCOUNT
CODE FERC TITLE CODE ACCOUNT DESCRIPTION AMOUNT TOTAL
Clerical & administrative support, patrolling & inspecting project,
janitorial services & supplies, grounds care, snow removal, road
grading, consumable products (light bulbs, paper products, office
supplies, first aid supplies and safety equipment.)
DIS communication services, phone bills, fuel, storage yard activities,
procurement, accounting.
Personnel (Labor & Benefits)
Travel
Contractual
First Aid & Safety Training
Helicopter
Fixed Wing
Barges & Docking
Shipping
Phone Service
AMMS
DIVCOM (DIS) Service Fees
Supplies & Materials
Fuel
Office, Safety & First Aid
Equipment & Machinery
[540 |Rents =—=— .:- |. 81072040 |FERC land use fees, Commercial Drive warehouse expense
Personnel (Labor & Benefits)
Travel
Contractual
Commercial Drive Warehouse
FERC Land Use Fee
Supplies & Materials :
Equipment & Machine:
e:\dburgerlexcellbudget\fy94 Page 2 of 6 3/31/93 8:06 AM
BRADLEY LAKE FY94 OPERATIONS AND MAINTENANCE BUDGET
FERC LEDGER ITEM ACCOUNT
CODE FERC TITLE CODE ACCOUNT DESCRIPTION AMOUNT TOTAL
Includes duplexes, crew quarters, maintenance building, cold storage,
incinerator building, fuel facility, airport & jetty building, miscellaneous
out buildings (excluding communications shacks.) includes gatehouse
and diversion works outlet (excluding operating mechanisms within the
Maintenance of Structures _ 81072042 |structures such as gates, hydraulics,
generators,
Personnel (Labor & Benefits)
Travel
Contractual
Supplies & Materials
Equipment & Machine
Activities related to repair and up-grade of dams, spillway, tailrace,
Maintenance of Reservoir, Dams & diversion channels and dikes (not to include inspection of these features
Waterways 81072043 jor cleaning of reservoir.
PL Se
810721
Travel
All activities related to maintenance and repair within the powerhouse.
Includes major equipment such as generator, turbines, valves, support
systems, crane, control panels, gates, heating and ventilation,
Maintenance of Electric Plant 044
Contractual
igovemors, compressors, fire systems,
diesel gen set, utility systems, but excludes the substation and
communications.
Personnel (Labor & Benefits)
Electrical Maintenance Worker (2)
Travel
Contractual
Training
Supplies & Materials
Equipment & Machinery
e:\dburger\excellbudget\fy94 Page 3 of 6 3/31/93 8:06 AM
BRADLEY LAKE FY94 OPERATIONS AND MAINTENANCE BUDGET
FERC LEDGER
CODE FERC TITLE CODE ACCOUNT DESCRIPTION
Activities related to tunnel, road rebuilding, culvert repair and
installation, dock & jetty repairs, airport repair including lighting and
wind socks, camp sites, duck ponds and related water control structure
repairs, bridge maintenance, rolling stock
and miscellaneous equipment maintenance , mechanical, electrical and
hydraulic operating mechanisms at gate houses and diversion works,
project utility repairs such as sewer & water and electric distribution for
project facilities.
Personnel (Labor & Benefits)
Mechanical Maintenance Worker
Temporary Laborers
ITEM ACCOUNT
AMOUNT TOTAL
Maintenance of Miscellaneous
Hydraulic Plant 81072045
Travel
Contractual
Training
Supplies & Materials
Equipment & Machine:
SCADA Operations & Communications, CEA Dispatching functions,
energy allocations, hydrologic data gathering and record keeping,
switching activities, establishing safety clearances, operating report
maintenance and comp
Personnel (Labor & Benefits)
SCADA Communications Tech/Programmer
System Control and Load
Dispe ¢
Travel
Contractual
Training
SCS Snow Measurement
UAF Seismic Monitoring
NOAA Weather Service
SCADA
CEA Dispatch (and CEA software dispatch program amortize)
Supplies & Materials
Equipment & Machine!
ecldburgerlexcellbudget\fy94 Page 4 of 6 3/31/93 8:06 AM
BRADLEY LAKE FY94 OPERATIONS AND MAINTENANCE BUDGET
FERC LEDGER ITEM CODE FERC TITLE CODE ACCOUNT DESCRIPTION AMOUNT
Activities involving both operation and maintenance of the Bradley SF6
Substation Operation &
Maintenance 81072062
ACCOUNT
TOTAL ‘substation and transformer yard and Bradley Junction, HEA
maintenance activities under agreement.
Personnel (Labor & Benefits)
Travel
Contractual
HEA Bradley Junction Maintenance
Supplies & Materials
Personnel (Labor & Benefits)
Travel
Contractual
HEA Maintenance Contract
Supplies & Materials
Equipment & Machine!
Administration and General
Expense 81072020
Personnel (Labor & Benefits)
PMC General Meeting Expenses (Recording)
AEA Administrative Expenses
Travel
PMC and Subcommittee Travel Cost
Contractual
Trustee Fees
Legal Fees (AEA & Utilities)
Professional Audit Service
20% of 5 Year inspection consultant required in 1996.
Supplies & Materials
Equipment & Machine
e:-\dburger\excellbudget\fy94 Page 5 of 6 3/31/93 8:06 AM
BRADLEY LAKE FY94 OPERATIONS AND MAINTENANCE BUDGET
FERC LEDGER ITEM ACCOUNT
CODE FERC TITLE CODE ACCOUNT DESCRIPTION AMOUNT TOTAL 81072024
Personnel (Labor & Benefits)
Travel
Contractual
Property
Boiler & Machinery
General Liability
Watercraft & Aviation
Directors and Officers Liability
‘Supplies & Materials
Equipment & Machinery
81072028
Personnel (Labor & Benefi e)
Travel
Contractual
FERC Administrative Fees A
‘Supplies & Materials
EE Quiipment & Machine
TOTAL FY94 BRADLEY LAKE O&M BUDGET $2,707,215
Note 1. FY92 budget total was $2,669,928.
Note 2. Due to construction activity and
warranty work, the actual FY93
O&M expenses resulted in a
$910,411 reduction to the O&M
budget that is proposed to be
carried over into FY94 to reduce
the utility payment.
e:ldburgerlexcellbudget\fy94 Page 6 of 6 3/31/93 8:06 AM
vurae/ve 40-69 BOVE £60 VULY ALBK WYNNE 001/004
ATER WYNNE mswitt oe
HEWITT Portland, Oregon 97201-6618 (303) 226-1191 DODSON Fax (503) 226-0079 & SKERRITT RECORL LOPV FILE NO ATTORNEYS AT LAW _ peo 321.0
FACSIMILE TRANSMITTAL L
NOTICE: This facsimile contains confidential information that is being transmitted to and is intended only for the use of the recipient named below.
Reading, disclosure, discussion, dissemination, distribution, or copying of
this information by anyone other than the named recipient or his or her employees or agents is strictly prohibited. If you have received this
facsimile in error, please immediately destroy it and notify us by telephone, (503) 226-1191.
DATE: March 15, 1993 00
TO: t: i OW’
CITY/STATE: Anchorage, Alaska _ — a
FAX NUMBER: 907/561-8584 00
OFFICE NUMBER: _907/561-7877
FROM: on §
DOCUMENT: 70 PM ity ure
PAGES (INCL. COVER) 6 USAGE TIME
CLIENT NUMBER: _53844-0000 ,
~~ awe ee vee eeveyvy wey vvige Asn Nae gmuuz/suua
ATER WYNNE is 222 SW. Columbia HEWITT Rien oe (503) 226-1191 DODSON Fax (503) 226-0079
& SKERRITT
ATTORNEYS AT LAW
VIA F. IMILE
MEMORANDUM
TO: Stan Sieczkowski
Alaska Energy Authority
FROM: Ron Saxton
DATE: March 15, 1993
: Subcommittee Procedures
Attached is a draft memo I prepared on the subcommittee
minutes issue. Please let me know what you think of it. I will
send it to Dave Highers and the other Committee members after you
give me your comments.
Attachment
RLS\682der.men
Seattle, Washington Washington, D.C. San Francisco, California Affiliated offices in
(206) 623-471. (202) 785-0303 (215) 421-4143 Anchorage, Fairbanks
Fax (206) 467-8406 Fax (202) 785-8676 Fax (415) 989-1263 and Juneau, Alaska
VI/LOs/9S —- LD ZS. US 226 0079 ATER WYNNE 003/004
DRAFT
03/15/93 10:13am
ILE
MEMORANDUM
TO: Bradley Project Management Committee
FROM: Ron Saxton
DATE: March 15, 1993
RE: Subcommittee Procedures
I have been asked by members of various BPMC subcommittees to clarify their record keeping requirements. In particular, I have been asked what kind of minutes should be kept.
The Bradley Power Sales Agreement and the BPMC Bylaws make clear that the purpose of subcommittees is to formulate
recommendations for the BPMC, which has final say on all matters. Although certain types of "minor" decisions are routinely
delegated to subcommittees, final responsibility for all
decisions rests with the BPMC itself.
It is my recommendation that subcommittees should be responsible for preparing written records of each meeting, and that these records should be limited to recording committee actions -- whether they be recommendations to the BPMC, or decisions on matters which were delegated to the subcommittees. I do not believe it is necessary or appropriate for subcommittee minutes to reflect the content of discussions or to be a format for "building a record" of dissenting opinions.
To the extent Committee members feel a need to communicate the content of subcommittee debate, I would suggest this be
vos lave
Bradley
10:69 BFIVY £40 VU
March 15, 1993
Page 2
Project Management Committee
AIBK WYNNE gj004/004
DRAFT
03/15/93 10:13am
handled through reports to the BPMC (whether written or oral) and
that subcommittees not create elaborate and lengthy minutes.
ce:
Representatives:
Paul Diener, Seward
Ken Ritchey, MEA
Dave Highers, CEA
Norm Story, HEA
Mike Kelly, GVEA
Tom Stahr, ML&P
Brent Petrie, AEA
Stan Sieczkowski, AEA
RLS\67 6der.mem
ATER WYNNE Site 100 222 SW. Columbia HEWITT Portland, Oregon 97201-6618
(503) 226-1191
DODSON Fax (503) 226-0079
& SKERRITT
RECORL LOPY ATTORNEYS AT LAW RECEIVED ea”
TRO (3-10 _. MAR 15 1993 ns a
Alaska nergy Auinority
VIA_ FACSIMILE
MEMORANDUM
TO: Bradley Project Management Committee
FROM: Ron Saxton
DATE: March 12, 1993
RE: Railbelt Reserve Issues
At the March 3rd BPMC meeting, it was agreed that utilities
would provide comments to me by March 30th on reserves and spin
requirements and related matters. To facilitate in this process,
I will circulate (by mail) a copy of my memo from November 18,
1992, on this subject.
At the same time that you provide your comments to me,
please circulate copies to the other BPMC members.
Distribution:
Representatives:
Paul Diener, Seward
Ken Ritchey, MEA
Dave Highers, CEA
Norm Story, HEA
Mike Kelly, GVEA
Tom Stahr, ML&P
Brent Petrie,’Stan Sieczkowski, AEA
RLS\677der.mem
Seattle, Washington Washington, D.C. San Francisco, California Affiliated offices in
(206) 623-4711 (202) 785-0303 (415) 421-4143 Anchorage, Fairbanks
Fax (206) 467-8406 Fax (202) 785-8676 Fax (415) 989-1263 and Juneau, Alaska
03/23/93 16:20 503 226 0079 ATER WYNNE @oo02/002
ATER WYNNE sex 22 SW. Columbia HEWITT RECORD UOPVY Portland, Oregon 97201-6618 FILE NO (503) 226-1191 DODSON Fax (503) 226.0079 & SKERRITT alee
ATTORNEYS AT LAW a
VIA _ FACSIMILE
MEMORANDUUS
TO: Stan Sieczkowski
Alaska Energy Authority
FROM: Ron Saxton
DATE: March 23, 1993
RE: Subcommittee Procedures
This memo responds to your question about any legal
requirements for detailed minutes of Bradley PMC subcommittees.
The Bradley Power Sales Agreement and the BPMC Bylaws make clear that the purpose of subcommittees is to formulate
recommendations for the BPMC, which has final say on all matters.
Although certain types of "minor" decisions are routinely delegated to subcommittees, final responsibility for all
decisions rests with the BPMC itself.
It is my recommendation that subcommittees should be responsible for preparing written records of each meeting, and
that these records should be limited to recording committee
actions -- whether they be recommendations to the BPMC, or decisions on matters which were delegated to the subcommittees. I do not believe it is necessary or appropriate for subcommittee minutes to reflect the content of discussions or to be a format
for “building a record" of dissenting opinions.
To the extent Committee members feel a need to communicate
the content of subcommittee debate, I would suggest this be handled through reports to the BPMC (whether written or oral) or letters a subcommittee member may wish to write to other subcommittee members, and that subcommittees themselves not create elaborate and lengthy minutes.
ce: (via facsimile)
Ken Ritchey, MEA, Budget Committee Chairman
David Highers, BPMC Chairman
Seattle, Washington Washington, D.C San Francisco, Califormia . Affiliated offices in
(206) 623-4711 (202) 785-0303 (415) 422-4143 Anchorage, Fairhanks
Fax (206) 467-8406 Fax (202) 785-8676 Fax (415) 989-1263 and Juneau, Alaska
7 RECORD UOPY FILE NO
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Alaska Fner. Authori. i
A Public Corporation of the State af Alaska
Reweid A
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XEROX TELECOPIER 7020
Bradley PMC Discussion of Qualified Section 31 Costs
(As Related to the Fritz Creek Transmission Line)
June 1989
Chairman Kelly charged Budget & Finance Subcommittee to:
il Develop draft definitions of construction versus utility costs versus
costs to be shared equally.
Ds Establish uniform accounting procedures.
Mr. Saxton to contact utilities by phone regarding cost back-up
information that would be required. Noted that figures could be revised
later because actual reimbursement would come from second bond issue.
August 1989
Three main cost categories presented to PMC.
"A" List Project Costs (eligible for 50% grant funds)
"B" List Purchasing utility expenses related to operation of
the project (paid from bond proceeds but not eligible
for 50% grant funds.)
"C" List Managers' salaries and Smith-Barney costs (either
Project costs or Section 31 cost)
Approval of "C" List was deferred. PMC approved $2.5 million for
Section 31 costs and agreed to consider other categories of costs.
Wolforth, Saxton and Rawitscher to continue working on categories.
November 1989
Rawitscher requested clarification on compensation to HEA for $600,000 Fritz
Creek line cost. Kelly recommended review of past PMC minutes for direction.
February 1990
Rawitscher reported to the PMC that no mechanism had been established to
finance the Fritz Creek line. Kelly requested Saxton & Rawitscher to work
something out.
April 1990
Saxton discussed utility prepayment option to repay HEA for transmission line
construction expenses. ML&P had already stated their intent to prepay. Saxton
recommended the other utilities make a determination within the next 90 days.