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HomeMy WebLinkAboutBrad Pro 3-1.0 PMC General Correspondence 1991RECORD COPY== > = ==> FILE NO “3"> ial BS TRE 3-). 0 sores ime, Alaska Energy Authority Vv A >be Corporatior AEA/OTHR/1306 August 30, 1991 Mr. David L. Highers General Manager Chugach Electric Association, Inc. P.O. Box 196300 Anchorage, AK 99519-6300 Subject: Bradley Lake Hydroelectric Project Date of Commercial Operation Dear Mr. Highers: Attached are copies of letters dated August 26, 1991 and August 30, 1991 from our Design Engineer, Stone & Webster Engineering Corporation. Stone & Webster's first letter states that all project construction and testing required to support the commercial operation of the plant has been completed. Their second letter addresses the recent turbine bearing oil problem and the corrective action implemented. Both Stone and Webster, and Fuji Electric are of the opinion that the units can continue to be operated safely and that the plant is fully available for commercial operation. In accordance with Section 2 (b) of the Bradley Lake Hydroelectric Project - Agreement For The Sale And Purchase Of Electric Power (Power Sales Agreement), Commercial Operation of the Bradley Lake Project is hereby declared effective as of September 1, 1991. seth (i wth Que Charlie Bussell Ly DRE Executive Director DE:CB:jd Attachment as stated. = PO BoxAM Juneau, Alaska 99811 (907) 465-3575 % PO. Box 190869 701 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 91Q3\D1480(1) STONE & WEBSTER ENGINEERING CORPORATION. .. , 7677 EAST BERRY AVENUE A ENGLEWOOD, COLORADO 80111 - 2137 ADORESS ALL CORRESPONDENCE TO P.O. BOX 5406, DENVER, COLORADO 80217-5406 Varn WU TWX: 910 935-0105 TELEPHONE 303 741.7700 FAX. 303-741-7670 WU TELEX 45-4401 RCA TELEX 28925! 33-741-7671 BOSTON a NEW voRK NY CHATTANOOGA TN Dax moce TN Chenay mice PORTLAND me Enicago it PORTLAND On DaLias Tx RICHLAND wa DECATUR AL RICHMOND VA OeNver co PLEASANTON CA FT LAUDERDALE FL TAMPA FL noustow Tx WASHINGTON OC Mr. Charlie Bussell August 26, 1991 Executive Director Alaska Energy Authority J.O. No. 15800.55 701 East Tudor Rd. WP 25A Anchorage, AK 99503 SWEC/AEA/2768 COMMERCIAL OPERATION BRADLEY LAKE HYDROELECTRIC PROJECT ALA NERGY AUTHORITY Dear Mr. Bussell: As the Design Engiener retained by the Alaska Energy Authority for this purpose, we are pleased to advise that as of August 23, 1991, pertinent construction and system testing for the Bradley Lake Hydroelectric Project has been completed. The project has reached a major milestone whereby on September 1, 1991, it can be reasonably declared to be fully available, can be operated at not less than ninety megawatts (90 MW) and its output can be scheduled on a commercial basis. Stone & Webster is pleased to have been involved in the engineering, design and testing for commissioning of this important project. The Bradley Lake Hydroelectric Plant is a quality project of which the Alaska Energy Authority and everyone involved can be proud. Respectfully submitted, He eckene Cutelo Theodore Critikos Project Manager TC/sjw ce: D. R. Eberle (AEA) 000474.wpf/BLOO2 1889 > STONE & WEBSTER: STONE & WEBSTER ENGINEERING CORPORATION 7677 EAST BERRY AVENUE A ENGLEWOOD, COLORADO 8011) - 2137 ADORESS ALL CORRESPONDENCE TO P.O. BOX $406, DENVER, COLORADO 60217-5406 WU. TWX 910 9350105 TELEPHONE: 303 741.7700 FAX. 303-741.7670 mete, id WU. TELEX 484401 RCA TELEX: 28925! 303-741.767) a cmrcnee, ie ticmama wa oenven co” Prensantow ca PT LAUOEROALE PL TAMPA PE Mr. Charlie Bussell August 30, 1991 Executive Director Alaska Energy Authority J.0. No. 15800.56 701 East Tudor Rd. WP 25A Anchorage, AK 99503 SWEC/AEA/2773 PLANT COMMERCIAL OPERATION EQUIPMENT DESIGN IMPROVEMENTS BRADLEY LAKE HYDROELECTRIC PROJECT ALASKA ENERGY AUTHORITY Please reference our letter of August 26, 1991 (SWEC/AEA/2768) by which we advised that the Bradley Lake Plant can be scheduled on a commercial basis effective as of September 1, 1991. Further to the above letter and for your information, we wish to advise you of a situation that has occurred within the last three days which will require minor equipment improvements, but will not impact commercial operation of the plant. On August 28, 1991 at about 2:30 pm, a visual inspection was done on Unit 2 bearing. The inspection revealed a “cloudy” mix of oil and evidence of “pieces of paint" in the bearing sump. It was concluded that the cloudy oil was due to intrusion of water in the oil. Further inspection showed that the oil level was about 1 inch higher than normal, indicating the potential of about 15 gallons of water mixed with the oil. As a precautionary measure, the unit was shutdown. A similar inspection on Unit 1 bearing showed only slight cloudiness of oil, indicating some minor water. intrusion, but no evidence of loose paint. Unit shut down was not deemed necessary. 000467 .wpt/BL002 TO ‘ we sans + STONE & WEBSTER + sony = ee zan none Mr. C. Bussell 2 August 30, 1991 A review and assessment of the situation by representatives of Fuji. Stone & Webster and others, revealed the following as the causes. Unit 2 Assessment: The source of the water was traced to an alignment dowel pin on the deflector servomotor which had become loose and allowed water from the runner cavity to enter the turbine pit area. The water migrated along a trench which continued into the bearing sump ventilation system, then into the bearing reservoir and eventually into the oil. An inspection of other dowel pins showed slight water leakage from three additional pins. The paint which was in large pieces is apparently from the inner surface of the top 100 mm of the bearing ring. Unit 1 Assessment: The source of water into the Unit 1 bearing also appears to have been from “tear drop” leakage observed from two deflector pins. This leakage entered the bearing oil system similarly to Unit 2. No signs of loose paint or paint chips were noted. Given the above findings and assessment, Fuji, Stone & Webster and the Authority’s plant operating personnel commenced with the implementation of the following solutions. Solution for Unit 2: The solution implemented for this unit included: a. Pumping out the water from known collection areas. b. Drained the oil from the bearing reservoir and removed loose paint. It has been determined that about 99 percent of the "painted area” loose paint has been removed. Cc: Visually inspected 360° of the top of the bearing - no distressed conditions were noted. d. Removed thick oil-water mixture by suction from the low bearing areas to extent possible. e. Refilled bearing sump with clean oil and began unit operation at speed-no-load. fs Ran unit on August 30, 1991 at 65 MW, inspected bearing area and found no additional loose paint or evidence of water. Unit 2 was available for full power production by the 11:00 am on August 30, 1991. Solution for Unit 1: The oil-water situation in Unit 1 was considered to be well within acceptable operating parameters. No immediate remedial action was necessary, the unit remained on fine throughout the period and was fully available for dispatch control. 000407.wpi/BL002 can anes Mr. C. Bussell ‘3 August 30, 1991 iti R In addition to the above immediate resolvemeant measures, we have been advised by Fuji that they are considering the following design improvements to alleviate the potential recurrence of this problem. a. Immediate removal and replacement of the loose dowel! pin from Unit 2 deflector servomotor. A “temporary” new pin is now being fabricated in Homer and will be inserted in-place August 30, 1991. A “permanent® pin is being fabricated in Japan and will be installed by mid-September. b. All deflector servomotor dowel pins for both units will be removed, inspected, repaired and/or replaced if necessary. They will be fastened to adjacent structures to preclude “backing-out" thus preventing leakage. This effort will begin on August 30, 1991 and will be scheduled to coincide with unit availability from operating utilities. c. Fabricate and install a raised "lip" around each unit’s bearing trench to prelude any surface water from entering the oil system. d. Install a sump pump with its suction tube reaching the area just above the labyrinth seal through the bearing air vent system. e. Review the current water detection and alarm device and establish new alarm "set-points", if necessary. f. Review need of a painted surface around upper bearing ring area. In addition, we have requested that Fuji provide a centrifuge to clean out the remaining contaminated oil or to replace the oil in kind. It is important to note that the above immediate and contemplated design improvements will and can be implemented without the need for plant outage. All work can be scheduled at times designated by the utilities. In consulting with Fuji, we were advised that the water amounts found in the bearing of Unit 2 did not impose a dangerous short term operating condition for the unit. This is also true for Unit 1. Also, Fuji has advised that following the replenishment of bearing oil with fresh oil and by making the immediate repairs on known leaking dowel pins, the units can be operated at full output without any restriction. (000467 .wpf/BLOo2 yaa b?A ‘NN awe we na nn Mr. C. Bussell 4 August 30, 1991 The immediate cause of the turbine oil problem has been addressed and resolved. However, in the interest of caution and until additional preventive measures have been implemented, we recommend that periodic visual inspections for water in the bearings and for leakage at dowel pins be made to avert any similar recurrence. Based on the above, commercial operation of the units on September 1, 1991 should not be affected. Stone and Webster maintains its opinion that the project can be reasonable declared to be fully available for generation at not less than ninety megawatts (90 MW) and its output can be scheduled on a commercial basis. Respectfully submitted, Vkesdine Ceiteho Theodore Critikos Project Manager TC/swg ce: D. R. Eberle 000487. wopt/BLOO2 Distribution List BLHP Date of Commercial Operation August 28, 1991 Mr. N.L. Story General Manager Homer Electric Association, Inc. 3977 Lake Street Homer AK 99603 Mr. David L. Highers General Manager a Electric Association, Inc. P.O. Box 196300 Anchorage AK 99519-6300 Mr. Paul Diener a of Seward P.O. Box 167 Seward AK 99664 MOVID1 R01 11 Mr. Ken Ritchey General Manager Matanuska Electric Association, Inc. P.O. Box 1148 Palmer AK 99645 Mr. Thomas Stahr General Manager Anchorage Municipal Light & Power 1200 E. First Avenue Anchorage AK 99501 Mr. Mike Kelly General Manager Golden Valley Electric Association P.O. Box 124 Fairbanks AK 99707 ote bis be NICE CURFURHT LON Oo-<c5-S1 89: 06RM 9077 7=7662> 907? S61 6584 #4 RECORD COPY FILE NO PRO 2-10 1230 Ocean Drive Homer, Alaska 99603 BEC-L~AEA-1190 (R) Malling address: P.O. Box 1869 Contract No. 0860268 Homer, Alaska 99603 August 28, 1991 Alaska Energy Authority Post Office Box 190869 701 East Tudor Road Anchorage, Alaska 99519-0869 Attention: Mr. David R. Bbherle Project Manager Subject: Bradley Lake Hydroelectric Project Contract No, 2890060 GENERAL CIVIL CONSTRUCTION SUBSTANTIAL COMPLETION Dear Mr. Eberle: In accordance with the provisions of Articles GC-48 and GC-49 of the subject contract, whenever, as determined by the Owner, any portion of the Work performed by the contractor is in a condition geuitable for utilization, it shall constitute substantial completion, and the Owner may take possession of or use such portion. Under its use the Owner assumes responsibility for maintenance and operation of that portion of the project as mutually agreed upon; however, the Contractor shall continue to be responsible for completion of its Contract work until final acceptance. In as much as final inspections, testing, and acceptance/turnover forms for all work performed by Enserch Constructors, J.V. under the General Civil Construction contract has been essentially completed with the exception of a couple of minor punchlist items, we hereby recommend that the work under the subject contract be deemed substantially complete by the Alaska Energy Authority and that the Authority take possession and assume responsibility for opération and maintenance of all completed work constructed under the subject contract. We will also be processing and recommending Final Acceptance of the Work by the Alaska Energy Authority in the near future after final inspection of several remaining punchlist items, and after the Contractor completes and submits to the Owner ail guarantees and warranties; final drawings and microfilms of drawings; release of claims form; affidavits of payment of taxes, license fees, debte, and release of liens; and consent of surety to final payment. _-—— iy Bechtel Corporation SENT Br: BECHTEL CORPURATION 06-26-91 09:07AM 98°? 7576825 907 S61 85849 #5 ‘ BEC-L-AEA-1190 (R) GENERAL CIVIL CONSTRUCTION CONTRACT SUBSTANTIAL COMPLETION August 28, 1991 Page Two of Two Please indicate the Authority's concurrence of substantial completion and acceptance of possession and responsibility for the operation and maintenance of all work under the subject contract by signature below. Very truly yours, ZAe ee. E. K. Elwin ad, Project Manager ®-25-GI R. F. Krohn Concurrence: Date ERE: awl / VX 8/28/34 / ce: O. L. Johnson D. N. S84 } p. . Sinpenn G27 R. H. Tripp 8. M. Bpaeth Pe. ea loo - 8/22/91 C5.3.2.16.3 SO Dre DOU Ce CORP URHI UN Oo-<b-Fi OS: oH 90727876627 907 S61 Bechtel 1230 Ocean Drive ae BEC-L~AEA-1189 (R) jailing address: P.O. Contract No. 0860268 Homer, Alaska 99603 August 28, 1991 Alaska Energy Authority Post Office Box 190869 701 East Tudor Road Anchorage, Alaska 99519-0869 Attention: Mr. David R. Eberle Project Manager Subject: Bradley Lake Hydroelectric Project Contract No. 2890078 POWERHOUSE CONSTRUCTION SUBSTANTIAL COMPLETION Dear Mr. Bberle: In accordance with the provisions of Articles GC-48 and GC-49 of the subject contract, whenever, as détermined by the Owner, any portion of the Work performed by the contractor is in a condition suitable for utilization, it shall constitute substantial completion, and the Owner may take possession of or use such portion. Under its use the Owner agsupes responsibility for maintenance and operation of that portion of the project as mutually agreed upon; however, the Contractor shall continue to be responsible for completion of its Contract work until final acceptance. In as much as final inspections, testing, and acceptance/turnover forms for all work performed by H. C. Price under the Powerhouse contract has been essentially completed with the exception of a couple of minor punchlist items, we hereby recommend that the work under the subject contract be deemed substantially complete by the Alaska Energy Authority and that the Authority take possession and assume responsibility for operation and maintenance of all completed work constructed under the subject contract. We will also be processing and recommending Final Acceptance of the Work by the Alaska Energy Authority in the near future after final inspection of several remaining punchlist itens, and after the Contractor completes and submits to the Owner all guarantees and warranties; final drawings and microfilms of drawings; release of claims form; affidavits of payment of taxes, license fees, debts, and release of liens; and consent of surety to final payment. a Bechtel Corporation SENT bri beECHICL CORFORATION Q5-26-91 89:26AM 927° ~"76829 987 S61 6584 #3 BEC-L-AEA~1189 (R) POWERHOUE CONTRUCTION CONTRACT SUBSTANTIAL COMPLETION August 28, 1991 Page Two of Two Please indicate the Authority’s concurrence of substantial completion and acceptance of possession and responsibility for the operation and maintenance of all work under the subject contract by signature below. Very truly yours, Zea E. H. Elwin Project Manager G/20/9) 0. L. Joh ; eto, Siésnen Ge ay P. U. whee ag R. H. Tr / R. PF. Krohn eo. a a_- e/22/21 C7.3.2.21 Concurrence: 1001 FouRTH AVENUE PLAZA (SEartRsT Bipa.), Sure 3200 SEATTLE, WASHINGTON 98154 (208) 623-471 1225 10TH Street. N.W. Suite 200 WaSHINGTON, D.C. 20036 (202) 393-4460 TO: FROM: DATE: RE: Linpsay, HART, NEIL & WEIGLER LAWYERS SuITE 1800 222 S.W. CotumBIA PORTLAND, OREGON 97201-6618 TELEPHONE (503) 226-1191 TELECOPIER (503) 226-0079 TELEX 494-7032 MEMORANDUM BRADLEY PMC UTILITY MANAGERS RON SAXTON August 14, 1989 LEGAL REPRESENTATION RECORD VOPY REEDHD cur: FILENO PRO 3-1-0 PReo 2-4 Ie} JEFFERSON PLACE Ae 850 N. oTH, SurTE 400 Botsg, IpaHo 83702 (208) 336-6844 845 Catirornia STREET Suitz 2200 San FRANCISCO, CALIFORNIA 94104 (415) 084-5858 NECEIVED AUG 17 Iga ALASKA Energy AUTHORITY Enclosed is a copy of the letter we discussed at the last Bradley PMC meeting. appropriate place and return it to me. As I explained at the is for the sole purpose of conflicts of interest, and Committee to commit to any Encl. bec: “rare Petrie last Bradley PMC meeting, agreeing to matters relating to is not a contract requiring the given level of legal activity. Please sign the enclosed letter in the this letter RLS\der009. mem LinpsAy, HART, NEIL & WEIGLER LawYERS 1001 FourTH AVENUE PLAza SurrE 1800 JEFFERSON PLACE (Szarigst Bupa), Suite 3200 222 S.W. CoLumBIA 850 N. orm, SuITE 400 SEATTLE, WASHINOTON 98154 PORTLAND, OREGON 97201-6618 Botse, IDAHO 83702 (206) 623-470 TELEPHONE (503) 226-1191 (208) 396-8844 TELECOPIER (503) 226-0079 1225 10TH Street. N.W. TELEX 404-7032 845 Catirognia STREET Su1tz 200 Suite 2200 WasuincTon, D.C. 20086 San Francisco, CALIFORNIA 94104 (202, 393-4460 (415) 064-5858 August 14, 1989 Michael P. Kelly Golden Valley Electric Association, Inc. Box 1249 Fairbanks, Alaska 99707 Kent Wick, General Manager Homer Electric Association P.O. Box 429 3977 Lake Street Homer, Alaska 99603 Thomas R. Stahr, General Manager Anchorage Municipal Light & Power 1200 E. First Avenue Anchorage, Alaska 99501-1685 Kenneth E. Ritchie, Acting General Manager Matanuska Electric Association P.O. Box 2929 Palmer, Alaska 99645-2929 David L. Highers, General Manager Chugach Electric Assoc., Inc. 5601 Minnesota Drive P.O. 196300 Anchorage, Alaska 99518-6300 Paul Diener City of Seward P.O. Box 167 5th & Adams Seward, Alaska 99664 Re: Bradley PMC Representation Gentlemen: The utility members of the Bradley PMC have asked that I represent them collectively on matters relating to the activities of the BPMC. Because of my past and ongoing representation of Linpsay, Hart, Nei. & WEIGLER Bradley Lake Utility Managers August 14, 1989 Page 2 Golden Valley Electric Association on a variety of related and unrelated matters, it is necessary to carefully outline the structure and terms of such representation. In order to avoid conflicts of interest that would result in the inability of one or more BPMC utilities to utilize legal counsel of their choosing, it is necessary to avoid any relationship that would result in my being deemed to represent any of the utilities individually as a result solely of this collective representation. In order to avoid an individual attorney-client relationship with each BPMC utility, I propose that I represent only an entity consisting of the BPMC utilities. Since the utilities have decided that the BPMC itself is not the appropriate entity for this purpose (at least for some initial period), it is necessary to forma "utilities only" entity for this purpose. Creation of such an entity should have no consequences for the utilities other than as it relates to the collective legal representation. In order to commence the desired representation, I propose that each utility manager sign this letter agreement indicating acceptance of the following terms: ds The undersigned establish by this Agreement the Bradley Lake Project Management Committee Utilities Group ("the Group") for the purposes of advancing their common interests as members of the BPMC, and of securing legal services to advise and represent them on those matters of common interest. 2. The Group retains Ron Saxton and Lindsay, Hart, Neil & Weigler (Ron Saxton) only as to matters within the authority of the BPMC as that authority is defined in Section 13(c) of the Power Sales Agreement. In his representation of the Group, Ron Saxton shall advise and represent the Group members only with respect to their duties as members of the BPMC, as those duties are defined in Section 13(c) of the Power Sales Agreement. 3. No communications to Ron Saxton by any utility member of the Group, as a result of Ron Saxton's representation of the Group, shall be confidential from other members of the Group. The Parties will not disclose to Ron Saxton any information that they are not willing to have used in this manner. Linpsay, Hart, NEIL & WEIGLER Bradley Lake Utility Managers August 14, 1989 Page 3 4. For purposes of determining conflicts of interest and any resulting limitations on Ron Saxton's ability to represent any individual member of the Group, Ron Saxton is counsel to the Group and will undertake no representation of any other party that is in conflict with such representation. 5. Ron Saxton's representation of the Group does not constitute representation of any individual member of the Group and shall not preclude Ron Saxton from any representation adverse to an individual Group member, so long as such representation is not adverse to the interests of the Group as a whole. 6. The Group will designate a Chairman of the Group for the purposes of assigning work to Ron Saxton and of giving direction as to how their assigned work should be carried out. 7. Billings for legal services will be sent to such entity or entities as the Chairman may from time to time direct. 8. This letter may be signed in more than one counterpart, and all signed counterparts shall together be considered as one Bae eee Very pee yours, Gal | My i Ys L. sacar Lindsay, Hart, Neil & Weigler ALASKA ELECTRIC GENERATION & TRANSMISSION COOPERATIVE, INC. By: Dated: , 1989 CHUGACH ELECTRIC ASSOCIATION, INC. By: Dated: , 1989 GOLDEN VALLEY ELECTRIC ASSOCIATION, INC. By: Dated: , 1989 Linpsay, HarT, NEIL & WEIGLER Bradley Lake Utility Managers August 14, 1989 Page 4 HOMER ELECTRIC ASSOCIATION, INC. By: Dated: , 1989 MATANUSKA ELECTRIC ASSOCIATION, INC. By: Dated: , 1989 THE MUNICIPALITY OF ANCHORAGE d/b/a MUNICIPAL LIGHT AND POWER By: Dated: , 1989 THE CITY OF SEWARD d/b/a SEWARD ELECTRIC SYSTEM By: Dated: , 1989 RLSder992 cc: Brent Petrie, Alaska Energy Authority "B88 @6709 15°°~ B 3503 226 e079 LHNGW a ! . WUNES LAW PUBLISHING €O., PORTLAND, OR, SPIE - LAF-TYR w | v w w ww w w ~~ = — “ sd = ww w w | t oe — YY Oo —lil fia Linpsay, Hart, Nein & WEIGLER woe ee Lawyres Surra 1800 Jorranson Pract 232 6.W. Conusaia $30 N. Orn, [legs ve PORTLAND, ORNGON 97201-6618 pone, ee ‘Tarapnowa (508) 224-1191 Pen se nett Tarscormar (203) 226-0079 Tarex 404 5082 343 Cactroant Brame Saw PRANCHCD, CALIFORNIA M4104 (43) pae-3898 1001 Avani Piaes —— (tsarmur ) dure 5200 200) Rx Seager, H.W. Ssarrus, INGTON 90154 Wasnmvoton, D.C. 20036 QO) 655-47 4209) Ibe pO6d pars___une 9 908 es OS Drany jo__Beeneypstete Alaska Power Authority fr ondstate,__AnChorage, Alaska _ AX NUMBER, 2077561-6584 price Numper, 207/561-7877 | | A Ron Saxton E OF DOCUMENT; Memo to Bradley PMC Members Re: Thoughts on _ Organization of Committee AGES INCLUDING COVER: ...________ USAGE TIME: LIENT NUMBER: ___ 52273-0000) 00 | NE Ee ieee as oer eal) tow perma ey PLEASE REVIEW AND GIVE ME YOUR COMMENTS WITHIN }——._ SEBBSE BEVIEN AND GIVE BB YOUR COMME on eenneeee ev THE NEXT COUPLE DAYS. THANK YOU. 0 ——— Boe sei Keon tSoehieoear cuir eemeyan RaaONnes/fermremmeons! (emma tue HIS] (6) siislesots| Faewah at seen es -_— CE ee a PLEASE NOTIFY US IMMEDIATELY IF ALL PAGES ARE NOT RECEIVED AT (503) 226-1191, EXT. 319, (QUE FAX MACHINE IS A CANON 520. Blade GC. Monee "88 @6709 17° -~ B 303 226 vers LHNGu ee LINDSAY, ART, NBLL & WEIGLER MEMORANDUM DRAFT mor BRADLEY PMC MEMBERS bees! + | cles Wicecen bare: JUNE 9, 1988 RE: THOUGHTS ON ORGANIZATION OF COMMITTEE AESNAGEEREATTELANLAETTRSERAAANAMANRARSIERLAADAAMISRLRRADMAEENETR As many of you are aware, I have been involved with the — Dam Pool Project Management Committee (4DP PMC) from its inception and have represented the collective Purchasing utili=~ a Since shortly after the PMC's creation. Based on that xperience, Mike Kelly has asked me to pass on some of the "lessons" From that group and to offer my thoughts on an organi- ational scheme for the Bradley PMC (BPMC). In outlining these deas,; I have consulted with Brent Petrie, who is the APA's tepresentative in the 4DP PMC. Brent's insights are excellent nd he should be a major player in developing the BPMC procedures. I have also consulted with Eric Redman, who was very ctive in the organizing of the 4DP PMc. Eric is a principal uthor of both the Four Dam Pool and Bradley Power Sales greements, | | My comments in this memo are in the nature of broad aS that should guide committee structuring. These are eally the first order of business, after we have agreement on the structure and purpose of the BPMC, the next step will be reparation of actual rules of governance (rules of procedure, ispute resolution, open meeting guidelines, ete). Rather than feinventing these various documents, I suggest that we try to wtilize the work of the 4DP PMC and modify those documents to reflect the Bradley circumstances. First, it is important to note some differences between the two situations, Many of you are aware that the 4DP PMC has had a high level of activity since its creation three years go. The most important advantage you have is that Bradley Lake Snot yet built. The «DP PMC was created afler Lhele projects ere completed and the history of contract Negotiation and xecution is one of treugnéons tension and mistrust. Because hat committee played no role in the construction phase, ubsequent consideration of issues related to the level of ieek ect completion costs, maintenance standards, risk of poor i are performance, etc., have been controversial and time BG 86769 1f°+4 ZB 583 226 ea75 LHNG&U es Linpsay, Hawt, NRIL & WKIGiER BRADLEY PMC MEMBERS DRAFT RON SAXTON . 1988 age 2 | | ee for the 4DP PMC. The fact is that the 4DP PMC had no lead time to prepare for project operation and had to start deal- ing with budgets, insurance, O&M standards, etc., from its very first meeting and APA and the utilities had widely different xpectations. The BPMC has an important opportunity to gear up rior to operation and avoid the backlog of issues that the 4DP MC has faced. The authors of the Bradley Lake Agreements (both utility and APA negotiators) benefited from the 4DP PMC xperience and narrowed potential areas of conflict. | A second advantage you have is that the BPpMc is managing pnly one dam, on which no utility is dependent. The 4DP PMC eals with four separate hydroelectric projects wnich produce ssentially all of the power required by the purchasers. dditionally, the Alaska Intertie Agreement has allowed the Bradley Lake parties to gain experience working together in a constructive mode. | Having said that, I have a numher nf ideas to make the BPMC work seticigacis and at a reasonable cost (both of people's time and money). i. Develop a Positive Working Relationship Between Purchasing es an . | | Bradley Lake, just like the four projects which the ape PMC oversees, is owned by the APA. It is crucial to under- tanding the role of the respective PMCs to understand that these Are state-owned projects and that the utility rights to partici- ate in management derive exclusively from the Power Sales forecnents, Simply put, in exchange for the utilities i tt © purchase power from Bradley Lake, the APA has relinquished to the BPMC a number of areas of control which would othervise helong to APA. The parties have agreed to cooperatively manage Bradley Lake for the benefit of all participants. Both the tilities and the APA must remember that the responsibility for pradiey Management is shared. i A positive working relationship between parties is peesaee because the interests of the APA and the purchasers will inconsistent on occasion. The parties must be prepared to @bate and disagree on various issues while still maintaining a Ge h degree of mutual trust and respect. This will take some ffort. | The history of the Four Dam Pool negotiations is one of wxlremely long, protracted and oftan very adversarial negotia- tions. The 4DP PMC has worked to “heal the wounds," and has made "eS G6-09 18 — B 583 226 aero LHN&Y 4 Linpsay, art, Neri & WaioLer TO: BRADLEY PMC MEMBERS DRAFT ROM: RON SAXTON une 9, 1988 age 3 ae progress. However, that committee has had to deal ith the legacy of mistrust, etc. | Tho BPMC hac no cuch history. Tho actual negotiatione eading to the final Power Sales Agreement were quite amanth (at east in comparison to the Four Dam Pools experience) and had a inimum of controversy, The BPMC atarts its existence with generally cordial relationships between all parties. The smooth operations of the BPMC depend on working hard to maintain a positive relationship. While APA and the purchasing utilities will frequently have different perspectives r issues, a good faith approach by all parties should allow issues to be resolved amicably in most instances. | 2. Separate Policy and Technical Responsibilities. | During the committee's start-up, and at times hereafter, the BPMC will need to consider “policy” issues, hese will include adoption of procedural rules, determination of frequired” project work as opposed to “optional” actions, final pproval of annual budgets, ete. Consideration of an "early" ssuance of the long-term bonds is one issue we know will need to e addressed. I suggest that these issues be addressed by manager level representatives of the parties. After committee start-up, the majority of issues requir- ing attention will probably be "technical." These issues are of tremendous importance and are best dealt with by utility staff with appropriate expertise. One lessan of the 4DP PMC is that no Bingle ulilily repreasenlalLive (or pair of ulilily representa- tives) can adequately deal with the inoredible range of issues hat arise during the course of project operations. The 4DP PMC as found itself involved in technical detaila relating to neurance standards, maintenance schedules, accounting issues, te. The BPMC can add a number of other technical issues such as ter allocation and scheduling. After attempts to deal with hese through the committee as a whole, it has become evident to he 4DP PMC that such issues should be dealt with in subcommit- ees. The 4DP PMC has had subcommittees responsible for insur- ance, technical standards, supervision of trustee banking rrangements, emergency repair financing, and other matters. Membership on the subcommittees is not limited to PMC members or alternates, and typieally is intended to take advantage of the expertise of utility staff people other than the committee members. The procedural rules of the 4DP PMC provide that Subcommittee activities terminate at the end of each Fiscal year unless such committees are reappointed by the 4DP PMC chairman. "88 6789 15 B 503 226 8079 LHN&W es Junngay, Hart, NEIL & WKHIGLER TO: BRADLEY PMC MEMBERS DRAFT FROM: RON SAXTON ties 9, 1988 age 4 The point is that putting technical issues in the hands of those who will have to make the system work will avoid a great deal of misunderstanding later on. | 3. Utilize Existing Utility Staffs -~ | in re a het | The 4DP PMC is composed of predominantly emall utilities which are physically remote from each other. For these tTeasons, and a variety of others relating to the complexity of the issues associated with those particular projects, the group has utilized a number of outwide experts. I am retained te rovide legal services to the group and Ernst & Whinney provides he accounting and financial services on an ongoing basis. The gare has from time to time retained engineering firms to advise m technical standards and insurance consultants to deal with isk management. The 4DP PMC is currently debating whether to hire some type of staff administrator to assist with coordination i meetings, retention of records, etc. The situation facing the BPMC is quite different and ffords opportunities for greater efficiency. I strongly urge he BPMC to utilize the staffs of the respective participants as uch aS possible. Within this group there is tremendous expert-— se, and each participant should be willing to lend its people to the committee as necessary. This will be much more efficient than bringing in outsiders or hiring permanent staff. As an xample, I do not think the BPMC needs a group attorney. Each of the participants has a competent attorney who is familiar with he contractual documents and the relevant legal and political gonstraints. As the group believes it has need for legal input. the committee can éetermine which attorney or attorneys is best guited to a particular task. Individual utilities will continue to call on theis vampective atterncys as issues arise and all ttiea should have attorneys generally familiar with the ommittee's activities. The committee can decide to relmburse he cost to the relevant utility if the magnitude of legal costs borne by any individual utility becomes disproportionate. Other issues should be dewalt wilh by spreading the work ut among qualified utility staff. For example, an insurance ittee could be made up of two or three or four of the people ho handle ineurance questions for the participants, as I believe s done by the Interim Committee. Oispatchers could compose a committee dealing with scheduling, atc. j i { "88 66/89 1 BZ 503 226 Bars LANEY 86 Linwesay, Harr, Nett & Wrist TO: BRADLEY PMC MEMBERS DRAPT fume RON SAXTON une 9, 1988 Page 5 4. Know the Power Sales Agreement. A large part of my role for the 4DP PMC ig to xplain the Power Sales Agreement and its history and the intent" of the drafts. It is important that the active partici- ants in the RPMC know and understand the Rradley lake contract. One issue the 4DP PMC has had to grapple with is insuf- ficient guidance in the Power Sales Agreement on how to implement various contract provisions, The 4DP PMC Power Sales Agreement assigns rights and duties with broad general statements. The ituation with the BPMC is quite different. The Power Sales greement has much more detail about the respective rignts of the tties and is augmented by the detail in the Bond Resolution. he Services Agreement also provides considerable detail on the inancial operations of the committee and limits much of the committee's discretion. Because the Four Dam Pool projects have - bond financing, that group is free to consider many issues and deas that are simply not available to a bond financed project like Bradley. | Le The Structure - A Hub and Spokes. The BPNC should be a manager-level, policy-oriented ody akin to a board of directors. It should meet quarterly. he committee would have the usual officers, each of whom would Fely on their own staff for administrative support. After committee start-up activities, the tasks for the BPMC should actually become pretty limited. The BPMC should be responsible for appointing appro~ priate committees, charging them with their tasks, and acting on Fecommendations of those committees as appropriate. The majority £ work would then be carried on by individuals or subcommittees, fist would report to the PMC at each of the quarterly meetings, £ appropriate. 6. Remember the Open Meeting Act. The BPMC is subject to the requirements of AS44.62.310 which requires all meetings to be open to the public. All votes ust be in public, ete, The statute provides for limited subjects which can be discussed in executive session. | This obligation was imposed on the Bradley Lake ikea by the last Legislature in S5C8 CSHB 356 (res). While the language of the legislation is arguably vague and susceptible to yarying readings, I understand the intent of the legislation to "88 G6/69 1! ZB 583 226 0879 LHN&W a? LINDSAY, Hand, Neh & Wiig Pre BRADLEY PMC MEMBERS DRArT ROM: RON SAXTON une 9, 1988 Pr 6 e that the BPMC should be required to give public notice and old all meetings in public. The committee should adopt rules of rocedure that assure compliance. (The 4DP PMC devoted a lot of time to this issue). Te Closing Comments. | The BPMC must undertake to develop rules of rocedure, elect officers and assign initial tasks {such as onstruction oversight, etc.). The committee has duties which nelude: a. arranging for O&M: ispatch of power; c. establishing procedures for water allocation; 1 Lye arranging for the scheduling, production and | | a. budgeting; | e. determining annual payment obligation of each urchaser and any true ups necessary after the completion of a udgat year; £. consideration of Required and Optional Project rk and option of dispute resolution rules; g. determination of insurance coverage; h. determination of maintenance schedules; ‘ i. consideration of whether to have any reserve arrangements; aT consideration of sufficiency of reserve funds. | The 4DP PMC has procedures for dealing with many of these tasks and Brent and I will be happy to provide those and help “customize” them to reflect the will of the Bradley group. | An early question to be resolved is the scope of the APA's “veto" over BPMC activities. stated differently, which PMC tasks rceguire the affirmative vote of APA's representative n order to be approved. Brent Petrie and I are working on eveloping a proposal on this issue and are progressing smoothly. "eae a@6/ae i”**? @ 583 2as6 ea7s LHNE Linpeay, Haw, Nista & Wrenn TO: BRADLEY PMC MEMBERS DRAFT ROM; RON SAXTON une 9, 1988 age 7 I look forward to discussing the organizational issues bn June 30 and would be happy te talk with any of you who have dditional questions before that time. Lsder290 MEMORANDUM OF UNDERSTANDING RECORD UOPY Between FILE NO the Alaska aeense Authority 225 63-10 an ee the Bradley Lake Project Management Committee This Memorandum of Understanding entered into by the Alaska Energy Authority and the Bradley Lake Project Management Committee establishes the terms and conditions for the provision of certain services related to the Bradley Lake project by the Alaska Energy Authority. WITNESSETH WHEREAS, the Alaska Energy Authority ("AEA") is the owner and licensee of the Bradley Lake Hydroelectric Project known as the "Project"; and WHEREAS, on December 8, 1987, the Chugach Electric Association, Inc., the Golden Valley Electric Association, Inc., the Municipality of Anchorage d/b/a Municipal Light and Power, the City of Seward d/b/a Seward Electric System, and the Alaska Electric Generation & Transmission Cooperative, Inc. (acting for Homer Electric Association, Inc. and the Matanuska Electric Association, Inc.) ("Purchasing Utilities") entered into a long- term Power Sales Agreement ("Power Sales Agreement"); and WHEREAS, the Power Sales Agreement establishes (1) the Bradley Lake Project Management Committee ("BPMC") which has the duty and authority to adopt a budget sufficient to pay Annual Project Costs and to establish the Annual Payment Obligation of each Purchasing Utility, and (2) the Revenue Fund in which project revenues are deposited; and WHEREAS, the Power Sales Agreement entitles the AEA to reimbursement for project specific administrative and general costs which relate to the production and delivery of Project power; NOW THEREFORE, the parties do agree and understand as follows: 1. Duties of AEA Yo to 4 The AEA will take all actions required to maintain all a federal and state licenses, permits or certificates necessary for the operation of the Project. The AEA will also perform any other acts essential to ensure that the operation and maintenance of the Project complies with all applicable state and federal Page 1 - MEMORANDUM OF UNDERSTANDING requirements. Th (EA shall provide such ot services related to the Project as agreed between the AEA and BPMC. Nothing herein is intended to modify in any way the AEA’s duties and obligations set forth in the Power Sales Agreement. 2. Compensation of AEA a. Amount. The annual compensation to AEA shall be determined by the BPMC, following review and recommendation by the BPMC budget subcommittee, and shall be based on a reasonable estimation of actual expected AEA costs. The BPMC shall pay the AEA from the Revenue Fund a pro rata share from the Date of Commercial Operation of seer” for the provision of services specified in Section 1 abéve in fiscal year 1991, as such fiscal year is defined in the Power Sales Agreement. In each succeeding year compensation shall be set as part of the annual budget process. Although compensation to AEA shall be determined annually, based on estimated actual costs, at no time shall payments by the BPMC to the AEA for such services exceed 10% of the Project operating and maintenance costs for the fiscal year. The AEA shall be reimbursed on a mutually agreed basis for services or tasks in addition to those specified in Section 1 that are approved by the BPMC. b. Payment Reduction If Change in Duties. In the event that any change in the AEA’s duties, as set out in Section 1 above, substantially reduces the burdens on the AEA of complying with those responsibilities, the AEA shall report to the BPMC on the extent of the reduction in effort, and the BPMC shall be entitled to a reduction in the payments required under this Memorandum of Understanding. C. Payment. The BPMC shall pay the AEA from the Revenue Fund the budgeted amount in 12 equal monthly payments to be delivered to the AEA by the 10th day of each month. d. Reports. For purposes of monitoring the level of AEA activity, the AEA shall submit to the BPMC monthly statements identifying the tasks and time spent on Project specific services. The AEA shall report any reductions pursuant to Section 2(b) above in such monthly statements. as Term. This Memorandum of Understanding shall become effective on the Date of Commercial Operation and shall remain in effect for 50 years after the Date of Commercial Operation; provided either party may terminate this agreement by giving the other party at least six months’ prior written notice of such termination. Page 2 - MEMORANDUM OF UNDERSTANDING 4. Assignment. This agreement shall inure to the benefit of and shall be binding upon the respective successors and assigns of the parties to this agreement; provided, however, that neither this agreement nor any interest therein shall be transferred by either party to any party other than a party authorized and able to perform such party’s obligations under this agreement and the Power Sales Agreement. IN WITNESS WHEREOF, the parties have caused this Memorandum of Understanding to be executed on the date written below. DATED , 1990. ALASKA ENERGY AUTHORITY BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE By: By: Title: Title: Page 3 - MEMORANDUM OF UNDERSTANDING SBM\1rm204.doc aa Adop@): September 27, 1988 FILE COPY BRADLEY LAKE HYDROELECTRIC PROJECT OPERATION AND MAINTENANCE DEFINITIONS The following definitions describe the primary longterm functions and responsibilities of various entities pertaining to Operation and Mainte- nance of the Bradley Lake Hydroelectric Project: 1.0 Project Owner The Alaska Power Authority is the owner of the Bradley Lake Hydroelectric Project and jis licensed by the Federal Eneray Regulatory Commission (FERC) to construct, operate and maintain the Project. As an owner the Alaska Power Authority will be responsible for ensuring compliance with the terms of the FERC license and all communications with FERC. In addition the Power Authority will establish project O&M standards, control project budgets, collect revenues and service bond requirements. As set forth in the Project Power Sales Agreements certain owner respon- sibilities and policy decisions have been delegated to the Project Management Committee (PMC). 2.0 Project Maintenance and Emergency Operator This entity is responsible for plant maintenance, site mainte- nance, transmission line maintenance and repair, scheduled in- spections, maintaining on-site plant records and drawings, and on-site emergency operation of the power plant. 3.0 Remote Operator/Dispatcher/Scheduler (Project Dispatcher) This entity is responsible for the remote operation of the power plant, dispatching project power, monitoring all alarm functions, monitoring and control of all 115 kV line breakers, wheeling of project power, coordinating maintenance with on-site maintenance personnel, coordinating and maintaining power production schedules, and maintaining production and dispatching records. The attached Exhibits 1 through 3 provide in detail the functions and responsibilities of various entities. In addition, Exhibit 4 lists additional interim/short term duties and responsibilities which will be undertaken by Alaska Power Authority. The definitions and responsibilities as outlined herein are subject to review and modification by the Project Management Committee. 3027/861/1 Bradley 0&M De tions As Adopted September 27, 1988 Page 2 of 7 RESPONSIBILITIES EXHIBIT 1 1.0 Project Owner Responsibilities 1.1 3027/861/2 Consolidate project records and submit to the FERC all reporting requirements of FERC License Terms and Conditions, for example: Minimum Flows Maintain Records Pay Annual FERC charges, etc. Perform FERC five year inspections Coordinate and attend annual inspections Establish and update Technical Standards, 0&M Manuals, and Maintenance Schedules. Provide on-going consultation services to plant personnel to establish and maintain system capabilities and standard voltage levels, and set and coordinate protective relay systems. Develop annual budgets sufficient to satisfy the Bradley Lake Hydroelectric Project costs incurred by the Project Dispatcher, Project Maintenance and Emergency Operator and the Owner. Collect project revenues from participating utilities in accordance with Power Sales Agreement. Reimburse Project Dispatcher and Project Maintenance and Emergency Operator for the costs of labor, materials, supplies, equipment, training and administration. Provide and maintain the specialized tools or equipment required to perform maintenance. Maintain official "As-Builts", Records and Documents. Develop and perform reservoir modeling functions to predict reservoir levels and energy availability. Monitor reservoir levels and hydrologic data. Regularly supply this information to the Project Management Committee (PMC) and Project Dispatcher. Bradley O&M De itions As Adopted September 27, 1988 Page 3 of 7 EXHIBIT 2 2.0 Maintenance and Emergency Operator Responsibilities 201, 2.2 2.3 2.4 2.5 2.6 Seal 2.8 2.9 2.10 2511 2.12 213 2.14 2.15 3027/861/3 Coordinate all maintenance activities involving Bradley Lake Facilities with the Project Dispatcher. Emergency operation of plant as requested by and coordinated through the project dispatcher. Provide transportation and logistical support for mainte- nance and site personnel. Prepare and submit proposed annual maintenance budgets. Provide project records to the Power Authority for submis- sion to FERC to meet license requirements. Implement maintenance schedules, maintenance procedures, maintenance training, and preventive maintenance programs. Conduct scheduled inspections. Update and maintain on-site records and drawings to show all alterations or replacements. Provide “as-builts" to the Power Authority. Read and report all revenue metering devices. Monitor and record plant operations. Monitor plant alarms and normal operating limits and coordinate with dispatcher. Log and submit any action of protective relays or alarms. Install any additional protective relaying, instrumentation, control systems, or other apparatus as directed by the Power Authority. Provide site security and implement safety measures to protect equipment, personnel, and the general public from equipment failure and other potential hazards. Repair and report any damaged facilities. Respond to operational and maintenance requests or direc- tives from the Power Authority. Bradley 0&M De itions ‘ As Adopted September 27, 1988 Page 4 of 7 2.16 Qe, 2.18 2.19 2.20 3027/861/4 Maintain the Bradley Lake Hydroelectric Project facilities in accordance with Power Authority/PMC O&M guidelines, prudent utility practice, National Electric Safety Code, and other applicable codes, federal and state laws, regulations, requirements, and standards. Perform site maintenance including intake trash and ice removal, snow removal of roads and runway. Perform Bradley Lake to Bradley Junction transmission line inspections, maintenance and repairs. Maintain a stock of available equipment, materials, tools and parts purchased for the project for maintaining the facilities. Comply with repair and replacement schedule. Bradley 0&M De itions As Adopted September 27, 1988 Page 5 of 7 EXHIBIT 3 3.0 Project Dispatcher Responsibilities 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.41 3.12 3027/861/5 Provide 24 hour control of Bradley Lake MW output, including incorporation of Bradley into the existing CEA/AGC software. Provide 24 hour control of Bradley Lake MVAR conditions, including incorporating Bradley into the Automatic VAR Dispatching and Voltage Control program. Provide 24 hour control of station bus and unit bus voltage. Provide 24 hour monitoring of all alarm functions which could affect the ability of the project in meeting operating schedules or scheduled capacity and energy production. Establish, in conjunction with O&M personnel, the priority levels of each alarm. Contact plant operator immediately following each priority level alarm and within an agreed upon time frame for secondary alarms. Establish set points for the operation of the Project for conditions outside the limits of the Project. Establish, in conjunction with maintenance personnel, operating constraints or limits on the Project as a result of necessary maintenance activities. Control operation of the plant within those parameters. Coordinate the timing of those routine maintenance activities at the Project which affect the Project's ability to meet power production schedules. Monitor all activities and items necessary for compliance with FERC operating requirements. Dispatch the plant within the established parameters. Monitor reservoir levels, inflow rates, outflow rates, etc., to schedule the available energy at existing reservoir level and the anticipated energy at future dates. Coordinate with the Power Authority under PMC guidelines to manage the reservoir. Coordinate and schedule requests for wheeling of Bradley power allotments with participating utilities. Determine the need for storing energy at CEA's Cooper Lake facility. Bradley 0&M De@i tions @ As Adopted September 27, 1988 Page 6 of 7 3.13 3.14 3.26 3.20 3027/861/6 Displace wheeled Bradley energy with energy from Soldotna No. 1, pursuant to the terms of the Transmission Services Agreement. Monitor and control all plant 13.8 kV and 115 kV breakers and switches. Monitor and control both 115 kV line breakers terminating the Project boundaries at Diamond Ridge and Soldotna. Direct on-site plant personnel to perform all manual switching associated with dispatching project power. Coordinate, with Homer Electric Association (HEA), al] manual switching requirements associated with the Project 115 kV line at Diamond Ridge Station. Issue all clearances on Project 115 kV transmission lines and unit breakers. Attempt to displace Bradley generation with Northern Kenai- Anchorage generation in the event the Anchorage tie line is unavailable. Operate the Southern Peninsula area as a separate control area in islanded situations. Provide, if studies verify a need, a signal indicating the loss of a synchronizing source to the Bradley Lake units. Provide, if studies verify a need, a signal indicating the loss of the Anchorage tie-line to take the units off-line. Develop and maintain records of: (1) all Project power production, (2) AEG&T/HEA wheeling, (3) CEA wheeling, and (4) utility power allotments. Provide information to the Power Authority data link for distribution to interested parties. Advise maintenance personnel of all line outages affecting the Project production, and place request for action if required. Advise maintenance personnel of operational problems requir- ing maintenance attention. Direct plant personnel to maintain a power production sched- ule in the event of a communications failure or CEA on-site RTU failure. Bradley 0&M De itions As Adopted September 27, 1988 Page 7 of 7 EXHIBIT 4 4.0 Additional Interim/Short Term Responsibilities of Owner. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 3027/861/7 In conjunction with Project Maintenance and Emergency Operator, provide for the hiring and training of all on-site plant personnel. Provide for plant start-up and testing. Provide for initial on-site 0&M functions. Develop Technical Standards, O&M Manuals, and Maintenance Schedule. Coordinate and enforce warranty provisions of Contracts. Negotiate Dispatch and 0&M Agreements. Provide the initial training program on operating the specialized equipment such as the Compact Gas Insulated Substation, digital governor, etc. to be located at the Bradley Lake Project site.