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HomeMy WebLinkAboutBPMC Meeting - September 21 1993 1BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE APPROVED MEETING MINUTES September 21, 1993 1. CALL TO ORDER Chairman Highers called the Bradley Lake Hydroelectric Project Management Committee to order at 1:05 p.m. in the Training Room at Chugach Electric Association in Anchorage, Alaska to conduct the business of the Committee per the agenda and the public notice. 2. ROLL CALL Alaska Energy Authority Dennis McCrohan, Designated Representative Chugach Electric Association David L. Highers, Designated Representative and Chairman Golden Valley Electric Association Marvin Riddle, Alternate Representative City of Seward Dave Calvert, Designated Representative Homer Electric Association Norm Story, Designated Representative Matanuska Electric Association Ken Ritchey, Designated Representative Municipal Light & Power Tom Stahr, Designated Representative Others Present: Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Bob Hufman, Alaska Electric Generation & Transmission Cooperative dburger/word/minutes/pmce/09-93 Bradley Lake Project lwanagement Committee Meeting Minutes - September 21, 1993 Page 2 of 10 Dave Hutchens, Alaska Rural Electric Cooperative Association David Burlingame, Chugach Electric Association John Cooley, Chugach Electric Association Gene Bjornstad, Chugach Electric Association Tom Lovas, Chugach Electric Association Jim Hall, Matanuska Electric Association Tim McConnell, Municipal Light & Power Bob Price, Municipal Light & Power Dave Fair, Homer Electric Association Myles Yerkes, Homer Electric Association David R. Eberle, Alaska Energy Authority Stan Sieczkowski, Alaska Energy Authority Larry Wolf, Alaska Energy Authority Brian Walshe, Metzler & Associates Lee Burgess, Metzler & Associates Dan Beardsley, Alaska Industrial Development & Export Authority Brenda Fuglestad, Alaska Industrial Development & Export Authority Eva Carpenter, Alaska Industrial Development & Export Authority Denise Burger, Alaska Energy Authority 35 PUBLIC COMMENT There being no public comment, the meeting continued to the next item. 4. AGENDA COMMENTS Item 12.A., Approval of Synch-Check Relay Installation, was added to the Agenda Ss APPROVAL OF MEETING MINUTES Minutes of the August 17, 1993 meeting were approved with minor corrections. 6. TECHNICAL COORDINATING SUBCOMMITTEE REPORT Mr. Burlingame reported the TCS has scheduled a meeting to be held September 30, 1993. 7. BUDGET SUBCOMMITTEE REPORT Mr. Ritchey reported the Budget Subcommittee recently met and discussed several issues. The Subcommittee expects to receive billing from HEA for dburger/word/minutes/pmc/09-93 Bradley Lake Project laauagement Committee Meeting Minutes - September 21, 1993 Page 3 of 10 transmission line maintenance work. Mr. Ritchey explained there were three categories of transmission line maintenance work: aerial patrol, ground patrol and repairs, and that most of the work would take place in the fourth quarter of the year. HEA has agreed to provide regular quarterly billing information, even in the absence of work for a particular quarter. The Subcommittee also discussed the potential financial impact to the FY94 operating budget due to the assumption of the operation and maintenance of Bradley Lake by Homer Electric Association. The Subcommittee concluded that the impact could not be determined until those specific duties to be assumed by HEA were identified. Additionally, Mr. Ritchey pointed out that a FY94 budget would need to be developed for duties retained by the BPMC, when those specific items are identified. Mr. Ritchey advised the Committee that it was nearing time to begin the FY95 budget process. It was noted that, in the past, most of the budget work had been done by the Energy Authority, however, it was anticipated that HEA would provide future operation and maintenance cost information. Mr. Ritchey noted that AIDEA/AEA has offered assistance with necessary FY94 budget revisions and the development of the FY95 budget. The Budget Subcommittee anticipates a higher level of direct involvement with the Project budget process. Mr. Ritchey informed the BPMC that the Budget Subcommittee approved a proposal by Parisena Stromberg & Company to perform the FY93 O&M cost audit. A. Construction Cost Audit Presentation Mr. Ritchey introduced Brian Walshe and Lee Burgess of Metzler & Associates. Mr. Walshe distributed an outline report of Metzler & Associate's Bradley Lake construction cost audit findings to the Committee (Attachment 1). Mr. Walshe's presentation closely followed the contents of the outline. Expanding on AEA internal cost control, page 13 of the audit outline, Mr. Walshe noted the owner cost was about 6% of the total Project cost. The original owner cost was budgeted at $16.2 million, however, the final cost was projected to be $17.7 million. The difference, a 9% variance, was due, in part, to required additional services. Mr. Walshe added the variance was not alarming, however, Metzler & Associates maintained that deficiencies existed in the Energy Authority's management control process of its internal costs. Metzler & Associates found it difficult to define payroll charges and overhead expenses for the earlier years of the Project due to limitations of AKSAS (Alaska State Accounting System) and had to rely on budgets for dburger/word/minutes/pmc/09-93 Bradley Lake Project lauagement Committee Meeting Minutes - September 21, 1993 Page 4 of 10 information. Mssrs. Walshe and Burgess, noted these costs should have been allocated ahead of time and a reporting process implemented to track them, which had not been done. Assuming the utilities would be taking a more active role in the project management of future construction projects, Mr. Burgess recommended the development of a good information project control system. Mr. McCrohan concurred, adding the utilities needed to determine how the future intertie projects were going to be handled (i.e., by what contracting approach) before a good management control system could be developed. The Committee discussed the possible benefits of the Energy Authority producing a project management critique on the construction of Bradley Lake. Mr. Burgess pointed out that what worked well for the Bradley Lake Project may not work as well for another project. Mr. Walshe noted the benefits of documentation and the effect of loosing personnel (and important information with them), adding that, such lessons could potentially be applied to any project. Returning to the 6% owner cost identified early by Mr. Walshe, Mr. McCrohan asked if the cost was reasonable. Mr. Walshe stated the 6% owner cost was not unreasonable, however, the owner costs could not be easily documented. Mr. McCrohan observed that the Bradley Lake Project owners costs were, in his experience, on the low side, especially when compared to other construction projects. Mr. Ritchey stated the Budget Subcommittee will review the recommendations made in the Metzler & Associates audit report and determine if any further action by the Subcommittee is necessary. Mr. Ritchey and Chairman Highers expressed the Committee's appreciation to Mssrs. Walshe and Burgess for their work. 8. AGREEMENTS SUBCOMMITTEE REPORT Mr. Sieczkowski deferred discussion of the pending agreements to Item 11. C., BPMC Control Over O&M Decisions and Agreements - Master Agreement. 9. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Wolf reported that the Operations and Dispatch Subcommittee met on August 18, 1993. The Transient Stability Analysis Study by Stone & Webster Engineering Corporation (SWEC) was distributed to the Subcommittee. The study was requested to determine the operating limits of the Project below dburger/word/minutes/pme/09-93 Bradley Lake Project luauagement Committee Meeting Minutes - September 21, 1993 Page 5 of 10 reservoir elevation 1080'. Essentially, the study indicated that two units should be run below elevation 1080'. With two units operating there was no load restriction. The report stated that one unit operation between 16 - 18 megawatts should be avoided. Mr. Wolf reviewed a memorandum distributed to the Committee detailing the unit trips that occurred on August 18, 1993 (Attachment 2). Mr. Wolf stated that the trips were attributed to malfunctions in the cooling water system, adding that several factors contributed to the problem. Mr. Wolf explained that the main cause of the failure was a leak in a two inch valve in the closed loop system. The leaky valve caused the system to become saturated, ultimately resulting in the shut off of all cooling to the bearings and stator. The units tripped off line before any damage occurred. Mr. Wolf advised the Committee that the valve has been repaired and is functioning properly. Other minor deficiencies in the system are being reviewed by the design engineer (SWEC) and are expected to be corrected within the next few months. Additionally, Mr. Wolf stated sensors will be installed on the closed loop system to provide an advance warning. Mr. Stahr expressed some concern that the cooling water system was not unitized (i.e., the cooling water system malfunction tripped both units rather than only one unit), and questioned whether there were other common systems which could result in tripping both units. Mr. Wolf reported that the O&D Subcommittee approved the line loss table prepared and implemented by Chugach Electric Association. A study group has been formed to review the tables. Mr. Wolf stated that the Subcommittee discussed the addition of a synch-check relay and voted to recommend the Project Management Committee approve installation of the relay at a cost not to exceed $10,000 (to be paid from Project construction funds). Mr. Wolf informed the Committee the Project annual maintenance outage is scheduled October 2 - 20, 1993. It was expected that the concurrent outage of both units would be limited to two or three days early during the scheduled maintenance period. Because of the relatively high lake level, one unit will be available to operate during the outage period. Mr. Ritchey questioned why the yearly maintenance was scheduled now, suggesting that another time might be better (when the lake level was lower). It was noted that several factors dictated when the Project maintenance outage was scheduled (i.e., coordination of utility maintenance schedules, weather, and projected lake level). Mr. Wolf noted the O&D Subcommittee is continuing discussions on Homer Electric Association energy losses and SVC station service costs. dburger/word/minutes/pmc/09-93 Bradley Lake Project lwanagement Committee Meeting Minutes - September 21, 1993 Page 6 of 10 10. 11. REVIEW OF PROJECT STATUS Mr. Eberle reported that ABB is coordinating replacement of the SVC capacitors with the Project maintenance outage in October. Mr. Eberle stated ABB is providing an extended five year warranty on those questionable capacitors not being replaced at this time. Mr. Eberle noted that ABB is performing system studies on the effect of the proposed Kenai transmission line to the SVC System. The ABB engineer performing the system studies will be in Anchorage on October 5, 1993 to discuss the preliminary results with the utilities and further define study requirements. OLD BUSINESS A. Spinning Reserve Update Mr. Lovas reported the ASCC group working on the spinning reserve allocation methods met on August 19, 1993 with Mr. Bill Masters (professional consultant). Mr. Masters was supportive, however, cautioned the group regarding the existing system and the role of the participants relative to the system during the current technical evaluations. Mr. Lovas noted that Municipal Light & Power withdrew its earlier operating reserve allocation proposal and has submitted a new proposal. The new proposal is currently under review. Bradley Scheduling vs. Spin Requirement Update Mr. Saxton distributed a report titled, Railbelt Reserve Issues, Jurisdiction and Authority for Resolution (Attachment 3). Mr. Saxton noted that, although it was identified as a draft, the report was in its final form and ready for distribution. Mr. Saxton noted the report contained answers to some of the questions which have been identified, and recommendations on how to proceed. Mr. Saxton suggested that the Committee review the report and submit questions or comments for further discussion at the next scheduled meeting. BPMC Control Over O&M Decisions and Agreements - Master Operating Agreement Mr. Saxton reported that a meeting had been held with AIDEA/AEA to discuss the agreement. The meeting resulted in minor revisions to the dburger/word/minutes/pme/09-93 Bradley Lake Project management Committee Meeting Minutes - September 21, 1993 Page 7 of 10 Master Operating Agreement which are currently being incorporated. It was expected that the Master Operating Agreement would be ready for consideration at the next Committee meeting. Mr. Saxton anticipated beginning work on completion of the remaining agreements within the next few days. In response to inquiry by Mr. Story, Mr. Saxton stated no new drafts of the Master Operating Agreement had been issued since April 1993. Mr. Saxton explained development of the master agreement had been put on hold during the reorganization of the Energy Authority and had just recently been addressed again. Mr. Saxton expected to issue the current draft Master Operating Agreement shortly. O&M Contract Update Mr. Story reported Homer Electric Association has been working with Mr. McCrohan and AIDEA/AEA in an effort to complete the qualifications process for the Bradley Lake O&M contract. Mr. McCrohan distributed a copy of the AIDEA/AEA findings on the qualification of Homer Electric Association to operate and maintain the Bradley Lake Project (Attachment 4). Mr. McCrohan informed the Committee that, based on the State's criteria, HEA was qualified for the on-site operation and maintenance of the Project. Mr. McCrohan noted that, during the qualification process, AIDEA/AEA identified some areas needing additional development by HEA (i.e., training relative to hydroelectric facilities and procurement procedures). Additionally, insurance safeguards were identified as an issue for further discussion with the Committee. Mr. McCrohan anticipated that detailed negotiations for on-site labor and related support services would begin shortly. It was hoped that a contract could be presented to the Committee for review at the next scheduled meeting. Regarding the remaining support services historically provided by the Energy Authority (i.e., engineering, FERC license and permitting compliance), Mr. McCrohan stated a meeting would be held to determine who should perform those services: AIDEA/AEA, Homer Electric Association or the Bradley Lake Project Management Committee. Mr. McCrohan noted that AIDEA/AEA had developed a list of duties that could be delegated, however deferred the final determination to the BPMC. Mr. McCrohan added that, if the Committee assumed some of the duties, provisions to accommodate such an arrangement would have to be addressed. dburger/word/minutes/pmc/09-93 Bradley Lake Project lauagement Committee Meeting Minutes - September 21, 1993 Page 8 of 10 Chairman Highers clarified that the agreement for the operation and maintenance of Bradley Lake, negotiated between the Energy Authority and Homer Electric Association, was subject to the review and approval of the Bradley Lake Project Management Committee. Mr. McCrohan did not anticipate that the operation and maintenance agreement and arrangements for the remaining services would be ready for review in advance of the next Committee meeting. BPMC Bylaws - Subcommittee Authority/Voting Procedures Reviewing the issue, Mr. Saxton stated that the Bylaws currently limit all decision making authority to the Committee, and that authority to make decisions cannot be delegated to special purpose subcommittees. Mr. Saxton noted that authority had been delegated by the Committee to the Budget Subcommittee to make minor budget decisions. At issue was the delegation of authority to the other operating subcommittees. The Committee has been considering revision of the Bylaws to permit delegation of authority to the special purpose subcommittees. ! Mr. Saxton noted that he had not yet received comments from all Committee members on the proposed resolution to amend the Bylaws (to allow the delegation of authority). Mr. Saxton stated that comments received from Mr. Stahr favored retaining the current Bylaw provision for authority (no delegation to the subcommittees). Mr. Ritchey commented that certain types or levels of actions were appropriately made by the Committee, however some smaller, lower level issues could be handled by the subcommittees. Mr. Ritchey pointed out that the Committee always had the right to review, revise or repeal any decision made by the subcommittees. Mr. Stahr stated that the authority delegated to the Budget Subcommittee was appropriate, even if it was in violation of the Bylaws. Mr. Stahr cautioned that, under the proposed resolution, a subcommittee comprised of three members could potentially make decisions not reflecting the majority of the Committee. Mr. Stahr objected to the proposed broader application of subcommittee authority, clarifying that he did not object to delegating authority on a specific case by case need. Mr. McCrohan noted what seemed to be contradictions between the Committee and subcommittee voting procedures. Mr. Saxton stated that the current delegation to the Budget Subcommittee may be in violation of the current Bylaws and that proposed changes to the Committee delegation of authority could be limited to delegations of authority to the subcommittees for specifically 1 BPMC Meeting Minutes, July 22, 1993, p. 6. BPMC Meeting Minutes, August 17, 1993, p. 5. dburger/word/minutes/pmc/09-93 Bradley Lake Project lauagement Committee Meeting Minutes - September 21, 1993 Page 9 of 10 12. 13. defined cases. Mr. Saxton asked that other written comments be submitted to him for incorporation into a revised resolution for consideration at the next Committee meeting. The revised resolution will be distributed sufficiently in advance of the next meeting for review by the Committee. NEW BUSINESS A. Approval of Committee Expenses Mr. Ritchey moved to approve payment of $18,612.03 for Committee legal expenses for the month of August 1993. Seconded by Mr. Story, the motion was approved by unanimous roll call vote (Action 93-179). B. Approval of Synch-Check Relay Mr. Stahr moved the Committee approve installation of the synch-check relay for the 115 kV line breakers, as proposed by SWEC, at a cost not to exceed $10,000 to be paid by Project construction funds. The motion, seconded by Ken Ritchey was approved by unanimous roll call vote (Action 93-180). COMMUNICATIONS Mr. McCrohan introduced Ms. Brenda Fuglestad, Alaska Industrial Development and Export Authority. Ms. Fuglestad will be providing administrative support to the Committee for an interim period until the responsibility is permanently delegated. Mr. McCrohan informed the Committee that Mr. Stan Sieczkowski and Mr. Dave Eberle have accepted positions at AIDEA. Mr. McCrohan introduced Mr. Dan Beardsley and Ms. Eva Carpenter, also of AIDEA. Mr. Beardsley is responsible for contracts, procurement, rights-of-way and legal issues. Ms. Carpenter will assist with administrative duties related to the Bradley Lake Project. Chairman Highers, with the support of the Committee, expressed the Committee's appreciation for the service provided to the Committee by Ms. Denise Burger. Ms. Burger has been reassigned to the Department of Community and Regional Affairs under the recent reorganization of the Alaska Energy Authority. dburger/word/minutes/pmc/09-93 Bradley Lake Project luauagement Committee Meeting Minutes - September 21, 1993 Page 10 of 10 A. Schedule Next Meeting Tuesday, October 26, 1993 10:00 a.m. Chugach Electric Association 14. ADJOURNMENT The meeting adjourned at 2:50 p.m. < = > ) (AWA Attest: J Dennis V. McCrohan, Secretary dburger/word/minutes/pme/09-93 >, <A EY LAKE PROJECT MANAGEMENT COMMITTEE DRAFT MEETING MINUTES September 21, 1993 1. CALL TO ORDER Chairman Highers called the Bradley Lake Hydroelectric Project Management Committee to order at 1:05 p.m. in the Training Room at Chugach Electric Association in Anchorage, Alaska to conduct the business of the Committee per the agenda and the public notice. 2. ROLL CALL Alaska Energy Authority Dennis McCrohan, Designated Representative Chugach Electric Association David L. Highers, Designated Representative and Chairman Golden Valley Electric Association Marvin Riddle, Alternate Representative NOTE: RETA FOR City of Seward RECORD — Comm avk Dave Calvert, Designated Representative DELEVED PER Dym ¢ SES Homer Electric Association be heli Norm Story, Designated Representative 10/6/93 RE- Matanuska Electric Association Ken Ritchey, Designated Representative Municipal Light & Power Tom Stahr, Designated Representative Others Present: Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Bob Hufman, Alaska Electric Generation & Transmission Cooperative dburger/word/minutes/pmce/09-93 Bradley Lake Project! agement Committee Meeting Minutes - September 21, 1993 Page 2 of 10 Dave Hutchens, Alaska Rural Electric Cooperative Association Dayid\Burlingame, Chugach Electric Association ley, Chugach Electric Association wy» ne Bjornstad, Chugach Electric Association a Tom Lovas, Chugach Electric Association Jim Hall, Matanuska Electric Association Tim McConnell, Municipal Light & Power Bob Price, Municipal Light & Power Dave Fair, Homer Electric Association Myles Yerkes, Homer Electric Association David R. Eberle, Alaska Energy Authority Stan Sieczkowski, Alaska Energy Authority Larry Wolf, Alaska Energy Authority Brian Walshe, Metzler & Associates Lee Burgess, Metzler & Associates Dan Beardsley, Alaska Industrial Development & Export Authority Brenda Fuglestad, Alaska Industrial Development & Export Authority Eva Carpenter, Alaska Industrial Development & Export Authority Denise Burger, Alaska Energy Authority ay PUBLIC COMMENT There being no public comment, the meeting continued to the next item. 4. AGENDA COMMENTS Item 12.A., Approval of Synch-Check Relay Installation, was added to the Agenda 5s APPROVAL OF MEETING MINUTES Minutes of the August 17, 1993 meeting were approved with minor corrections. 6. TECHNICAL COORDINATING SUBCOMMITTEE REPORT Mr. Burlingame reported the TCS has scheduled a meeting to be held September 30, 1993. We BUDGET SUBCOMMITTEE REPORT Mr. Ritchey reported the Budget Subcommittee recently met and discussed several issues. The Subcommittee expects to receive billing from HEA for dburger/word/minutes/pmc/09-93 Bradley Lake Project ......agement Committee Meeting Minutes - September 21, 1993 Page 3 of 10 transmission line maintenance work. Mr. Ritchey explained there were three transmission line maintenance work: aerial patrol, ground patrol d that most of the work would take place in the fourth quarter of A has agreed to provide regular quarterly billing information, even The Subcommittee also discussed the potential financial impact to the FY94 operating budget due to the assumption of the operation and maintenance of Bradley Lake by Homer Electric Association. The Subcommittee concluded that the impact could not be determined until those specific duties to be assumed by HEA were identified. Additionally, Mr. Ritchey pointed out that a FY94 budget would need to be developed for duties retained by the BPMC, when those specific items are identified. Mr. Ritchey advised the Committee that it was nearing time to begin the FY95 budget process. It was noted that, in the past, most of the budget work had been done by the Energy Authority, however, it was anticipated that HEA would provide future operation and maintenance cost information. Mr. Ritchey noted that AIDEA/AEA has offered assistance with necessary FY94 budget revisions and the development of the FY95 budget. The Budget Subcommittee anticipates a higher level of direct involvement with the Project budget process. Mr. Ritchey informed the BPMC that the Budget Subcommittee approved a proposal by Parisena Stromberg & Company to perform the FY93 O&M cost audit. A. Construction Cost Audit Presentation Mr. Ritchey introduced Brian Walshe and Lee Burgess of Metzler & Associates. Mr. Walshe distributed an outline report of Metzler & Associate's Bradley Lake construction cost audit findings to the Committee (Attachment 1). Mr. Walshe closely reviewed the contents of the report. Expanding on ABA internal cost control, page 13 of the report, Mr. Walshe noted the owner cost was about 6% of the total Project cost. The original owner cost was budgeted at $16.2 million, however, the final cost was projected to be $17.7 million. The difference, a 9% variance, was due, in part, to required additional services. Mr. Walshe added the variance was not alarming, however, Metzler & Associates maintained that deficiencies existed in the Energy Authority's management control process. Metzler & Associates found it difficult to define payroll charges and overhead expenses for the earlier years of the Project due to limitations of AKSAS (Alaska State Accounting System) and had to rely on budgets for information. dburger/word/minutes/pmce/09-93 Bradley Lake Project }......agement Committee Meeting Minutes - September 21, 1993 Page 4 of 10 Mssrs. Walshe and Burgess, noted these costs should be allocated ahead ime. and a reporting process implemented to track them, which had of sta done. Assuming the utilities would be taking a more active le in the project management of future construction projects, Mr. Burgess recommended the development of a good information project control system. Mr. McCrohan concurred, adding the utilities needed to determine how the future intertie projects were going to be handled (i.e., by what contracting approach) before a good management control system could be developed. The Committee discussed provision of a project management critique by the Energy Authority. Mr. Burgess pointed out that what worked well for the Bradley Lake Project may not work as well for another project. Pointing out the need for documentation, Mr. Walshe noted the effect of loosing personnel (and important information with them), adding such lessons could be applied to any project. Returning to the 6% owner cost identified early by Mr. Walshe, Mr. McCrohan asked if the cost was reasonable. Mr. Walshe stated the 6% owner cost was not unreasonable, however, the owner costs could not be easily documented. Mr. McCrohan observed that the Bradley Lake Project owners costs were on the low side, especially when compared to other construction projects. Mr. Ritchey stated the Budget Subcommittee will review the recommendations made in the Metzler & Associates audit report and determine if any further action by the Subcommittee is necessary. Mr. Ritchey and Chairman Highers expressed the Committee's appreciation to Mssrs. Walshe and Burgess for their work. 8. AGREEMENTS SUBCOMMITTEE REPORT Mr. Sieczkowski deferred discussion of the pending agreements to Item 11. C., BPMC Control Over O&M Decisions and Agreements - Master Agreement. 9. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Wolf reported that the Operations and Dispatch Subcommittee met on August 18, 1993. The Transient Stability Analysis Study by Stone & Webster Engineering Corporation (SWEC) was distributed to the Subcommittee. The study was requested to determine the operating limits of the Project below reservoir elevation 1080'. Essentially, the study indicated that two units should dburger/word/minutes/pmc/09-93 Bradley Lake Project 1agement Committee Meeting Minutes - September 21, 1993 Page 5 of 10 be run below elevation 1080'. With two units operating there was no load restriction.<The report stated that one unit operation between 16 - 18 megawatts should Be , otherwise output would be limited. Wen reviewed a memorandum distributed to the Committee detailing the unit trips that occurred on August 18, 1993 (Attachment 2). Mr. Wolf stated that the trips were attributed to malfunctions in the cooling water system, adding that several factors contributed to the problem. Mr. Wolf explained that the main cause of the failure was a leak in a two inch valve in the closed loop system. The leaky valve caused the system to become saturated, ultimately resulting in the shut off of all cooling to the bearings and stator. The units tripped off line before any damage occurred. Mr. Wolf advised the Committee that the valve has been repaired and is functioning properly. Other minor deficiencies in the system are being reviewed by the design engineer (SWEC) and are expected to be corrected within the next few months. Additionally, Mr. Wolf stated sensors will be installed on the closed loop system to provide an advance warning. Mr. Stahr expressed some concern that the cooling water system was not unitized (i.e., the cooling water system malfunction tripped both units rather than only one unit). Mr. Wolf reported that the O&D Subcommittee approved the line loss table prepared and implemented by Chugach Electric Association. A study group has been formed to review the tables. Mr. Wolf stated that the Subcommittee discussed the addition of a synch-check relay and voted to recommend the Project Management Committee approved installation of the relay at a cost not to exceed $10,000 (to be paid from Project construction funds). Mr. Wolf informed the Committee the Project annual maintenance outage is scheduled October 2 - 20, 1993. It was expected that the concurrent outage of both units would be limited to two or three days early during the scheduled maintenance period. Because of the relatively high lake level, one unit will be available to operate during the outage period. Mr. Ritchey questioned why the yearly maintenance was scheduled now, suggesting that another time might be better (when the lake level was lower). It was noted that several factors dictated when the Project maintenance outage was scheduled (i.e., utility maintenance schedules, weather, and projected lake level). Mr. Wolf noted the O&D Subcommittee is continuing discussions on Homer Electric Association energy losses and SVC station service costs. dburger/word/minutes/pmc/09-93 Bradley Lake Project) agement Committee Meeting Minutes - September 21, 1993 Page 6 of 10 11. REVIEW OF PROJECT STATUS rted that ABB is coordinating replacement of the SVC with the Project maintenance outage in October. Mr. Eberle stated Ee providing an extended five year warranty on those questionable capacitors not being replaced at this time. Mr. Eberle noted that ABB is performing system studies on the effect of the proposed Kenai transmission line to the SVC System. The ABB engineer performing the system studies will be in Anchorage on October 6, 1993 to discuss the preliminary results with the utilities and further define study requirements. OLD BUSINESS A. Spinning Reserve Update Mr. Lovas reported the ASCC group working on the spinning reserve allocation methods met on August 19, 1993 with Mr. Bill Masters (professional consultant). Mr. Masters was supportive, however, cautioned the group regarding the existing system and the role of the participants relative to the system during the current technical evaluations. Mr. Lovas noted that Municipal Light & Power has withdrawn its earlier proposal on operating reserve allocation and has submitted a new proposal. The new proposal is under review. Bradley Scheduling vs. Spin Requirement Update Mr. Saxton distributed a report titled, Railbelt Reserve Issues, Jurisdiction and Authority for Resolution (Attachment 3). Mr. Saxton noted that, although it was identified as a draft, the report was in its final form and ready for distribution. Mr. Saxton noted the report contained answers to some of the questions which have been identified, and recommendations on how to proceed. Mr. Saxton suggested that the Committee review the report and submit questions or comments for further discussion at the next scheduled meeting. BPMC Control Over O&M Decisions and Agreements - Master Operating Agreement Mr. Saxton reported that a meeting had been held with AIDEA/AEA to discuss the agreement. The meeting resulted in minor revisions to the dburger/word/minutes/pmc/09-93 Bradley Lake Project h......4gement Committee Meeting Minutes - September 21, 1993 Page 7 of 10 Master Operating Agreement which are currently being incorporated. It wa ted that the Master Operating Agreement would be ready for tion at the next Committee meeting. Mr. Saxton anticipated “ying work on completion of the remaining agreements within the ‘ next few days. In response to inquiry by Mr. Story, Mr. Saxton stated no new drafts of the Master Operating Agreement had been issued since April 1993. Mr. Saxton explained development of the master agreement had been put on hold during the reorganization of the Energy Authority and had just recently been addressed again. Mr. Saxton expected to issue the current draft Master Operating Agreement shortly. D. O&M Contract Update Mr. Story reported Homer Electric Association has been working with Mr. McCrohan and AIDEA/AEA in an effort to complete the qualifications process for the O&M contract. Mr. McCrohan distributed a copy of the AIDEA/AEA findings on the qualification of Homer Electric Association to operate and maintain the Bradley Lake Project. Mr. McCrohan informed the Committee that, based on the State's criteria, HEA was qualified for the on-site operation and maintenance of the Project. Mr. McCrohan noted that, during the qualification process, AIDEA/AEA identified some areas needing additional development by HEA (i.e., training relative to hydroelectric facilities and procurement procedures). Additionally, insurance safeguards were identified as an issue for further discussion with the Committee. Mr. McCrohan anticipated that detailed negotiations for on-site labor and related support services would begin shortly. It was hoped that a contract could be presented to the Committee for review at the next scheduled meeting. Regarding the remaining support services historically provided by the Energy Authority (i.e., engineering, FERC license and permitting compliance), Mr. McCrohan stated a meeting would be held to determine who should perform those services: AIDEA/AEA, Homer Electric Association or the Bradley Lake Project Management Committee. Mr. McCrohan noted that AIDEA/AEA had developed a list of duties that could be delegated, however deferred the final determination to the BPMC. Mr. McCrohan added that, if the Committee assumed some of the duties, provisions to accommodate such an arrangement would have to be addressed. Mr—Me€rehan_expected-te- > AEE 5 7 dburger/word/minutes/pmc/09-93 Bradley Lake Project 1......agement Committee Meeting Minutes - September 21, 1993 Page 8 of 10 1 2 E. Chairman Highers clarified that the agreement for the operation and m ce of Bradley Lake, negotiated between the Energy Authority and me Electric Association, was subject to the review and approval ie Bradley Lake Project Management Committee. Mr. McCrohan did not anticipate that the operation and maintenance agreement and arrangements for the remaining services would be ready for review in advance of the next meeting. HoweverMr—MeCrohar-expected both— BPMC Bylaws - Subcommittee Authority/Voting Procedures Reviewing the issue, Mr. Saxton stated that the Bylaws currently limit all decision making authority to the Committee, and that authority to make decisions cannot be delegated to special purpose subcommittees. Mr. Saxton noted that authority had been delegated by the Committee to the Budget Subcommittee to make minor budget decisions. At issue was the delegation of authority to the other operating subcommittees. The Committee has been considering revision of the Bylaws to permit delegation of authority to the special purpose subcommittees. ! Mr. Saxton noted that he had not yet received comments from all Committee members on the proposed resolution to amend the Bylaws (to allow the delegation of authority). Mr. Saxton stated that comments received from Mr. Stahr favored retaining the current Bylaw provision for authority (no delegation to the subcommittees). Mr. Ritchey commented that certain types or levels of actions were appropriately made by the Committee, however some smaller, lower level issues could be handled by the subcommittees. Mr. Ritchey pointed out that the Committee always had the right to review, revise or repeal any decision made by the subcommittees. Mr. Stahr stated that the authority delegated to the Budget Subcommittee was appropriate, even if it was in violation of the Bylaws. Mr. Stahr cautioned that, under the proposed resolution, a subcommittee comprised of three members could potentially make decisions not reflecting the majority of the Committee. Mr. Stahr objected to the proposed broader application of subcommittee authority, clarifying that he did not object to delegating authority on a specific case by case need. Mr. McCrohan noted what seemed to be contradictions between the Committee and subcommittee voting procedures. Mr. Saxton stated that the current delegation to the Budget Subcommittee may be in violation of the current Bylaws and that proposed changes to the Committee delegation of authority could be BPMC Meeting Minutes, July 22, 1993, p. 6. BPMC Meeting Minutes, August 17, 1993, p. 5. dburger/word/minutes/pmc/09-93 Bradley Lake Project } ___agement Committee Meeting Minutes - September 21, 1993 Page 9 of 10 13. limited to delegations of authority to the subcommittees for specifically defingd. cases. Mr. Saxton asked that other written comments be to him for incorporation into a revised resolution for Dy sideration at the next Committee meeting. The revised resolution will be distributed sufficiently in advance of the next meeting for review by the Committee. NEW BUSINESS A. Approval of Committee Expenses Mr. Ritchey mov Vi ment of $18,612.03 for Commi legal expenses for the month of Ai t_ 1993. Seconded by Mr. Sto the motion was approved by unanimous roll call vote (Action 93-179). B. Approval of Synch-Check Relay Mr. Stahr moved the Committee ve ins ion of the synch-check relay for the 115 kV line breakers, as proposed b ita cost not xceed $1 to be paid by Project construction funds. The motion. nded by Ken Ritchey was approved by unanimous roll call vote (Action 93-180). COMMUNICATIONS Mr. McCrohan introduced Ms. Brenda Fuglestad, Alaska Industrial Development and Export Authority. Ms. Fuglestad will be providing administrative support to the Committee for an interim period until the responsibility is permanently delegated. Mr. McCrohan informed the Committee that Mr. Stan Sieczkowski and Mr. Dave Eberle have accepted positions at AIDEA. Mr. McCrohan introduced Mr. Dan Beardsley and Ms. Eva Carpenter, also of AIDEA. Mr. Beardsley is responsible for contracts, procurement, rights-of-way and legal issues. Ms. Carpenter will assist with administrative duties related to the Bradley Lake Project. Chairman Highers, with the support of the Committee, expressed the Committee's appreciation for the service provided to the Committee by Ms. Denise Burger. Ms. Burger has been reassigned to the Department of Community and Regional Affairs under the recent reorganization of the Alaska Energy Authority. dburger/word/minutes/pmc/09-93 Bradley Lake Project 1.__.agement Committee Meeting Minutes - September 21, 1993 Page 10 of 10 A. Ae Next Meeting ns OAaay, October 26, 1993 10:00 a.m. Chugach Electric Association 14, ADJOURNMENT The meeting adjourned at 2:50 p.m. David L. Highers, Chairman Attest: Dennis V. McCrohan, Secretary dburger/word/minutes/pme/09-93