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BPMC Signed Meeting Minutes 1996-2004
~~ BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 2004 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Wednesday, January 7, 2004 — 9:00 a.m. 1. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:00 a.m. on Wednesday, January 7, 2004, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Howell. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association Rick Eckert . Homer Electric Association Don Zoerb Matanuska Electric Association (teleconference) Jim Posey Anchorage Municipal Light & Power Dave Calvert City of Seward Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Howell, Alaska Energy Authority Brenda Applegate, Alaska Energy Authority Bob Day, Anchorage Municipal Light & Power Doug Hall, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Rick Miller, Anchorage Municipal Light & Power Ed Ruebling, Anchorage Municipal Light & Power Jim Walker, Matanuska Electric Association (teleconference) Mike Cunningham, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association Brian Hickey, Chugach Electric Association Bob Zacharski, Homer Electric Association (teleconference) "Bradley Lake PMC Meeting Minutes for January 7, 2004 Meeting 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS Budget adjustment/construction funds presentation from Mike Cunningham and Brenda Applegate to be added as item 7C. 6. APPROVAL OF MEETING MINUTES - October 21, 2003 Mr. Posey moved to approve the meeting minutes of October 21, 2003. Seconded by Mr. Calvert. A voice vote was taken, and the minutes were unanimously approved. 7A. VATech Budgetary Proposal — Robert Day Bob Day gave a brief overview of the proposal and September 23, 2003 letter (attached). MOTION #04-1: Mr. Griffith moved that be it resolved that the BPMC authorize HEA to immediately proceed with contract negotiations with VA Tech to provide the services and equipment as described in their proposal of September 23, 2003, at a cost not to exceed $1.8 million. A decision to proceed or not to proceed with the work past the modeling phase will be allowed under this contract. The modeling phase is not to exceed $400,000. Proceed to obtain FERC approval of modifications. Seconded by Mr. Posey. A voice vote was taken, and the motion was unanimously approved. MOTION #04-2: Mr. Griffith moved that be it resolved that the BPMC requests HEA to enter into a continued employment arrangement with Don Stead in order to retain his knowledge and services for this governor modification project. Terms to be negotiated by HEA and Mr. Stead. Seconded by Mr. Calvert. A voice vote was taken, and the motion was unanimously approved. 7B. FERC Update Art Copoulos Mr. Copoulos noted that Ron Saxton and Chair Haagenson had met with FERC in Washington, D.C. FERC in D.C. said they will defer to Portland, and the Portland office said they would defer to local permit regulators/evaluators. Permits must be obtained from U.S. Fish and Wildlife, Fish and Game, Department of Natural Resources, and possibly the Corps. The only issue of concern is question of whether when the airstrip is closed, will we continue to allow public access to the Martin River Airstrip. Plans as initially discussed include abandoning the airstrip, put white Xs across it, but leave the airstrip in place. The plan is to not allow any public access. The airstrip will be in accordance with Federal air regulations. Page 2 of 4 Bradley Lake PMC Meeting Minutes for January 7, 2004 Meeting 7C, Budget Adjustment / Const. Funds Mike Cunningham & Brenda Applegate A handout was presented to the committee (attached). Brenda Applegate gave an overview, and also discussed the treatment of surplus amount and its effect on the FY04 contributions. MOTION #04-3: Mr. Griffith motioned to refund the June 2003 balance of $2,013,381.00 in accordance with agreements and approve and bill in accordance with Budget Scenario B and to hold the money and pay out at a later date. Seconded by Mr. Posey. Mr. Zoerb asked to know the background of the $30,000.00 legal item included in the revision. Chair Haagenson stated the following estimated PMC legal costs: $5,000 for insurance issues, $5,000 for FERC licensing, $5,000 for meeting attendance, $5,000 for construction contracting, $10,000 for legislative review of Bradley transfer to utilities including bond review and analysis. The $30,000.00 is an estimate and Chair Haagenson will discuss with Ron Saxton to verify number. MEA expressed its reservations about AterWynne firm representing the PMC given its adverse posture to MEA’s interest in a number of other venues. Mr. Zoerb stated that MEA would be comfortable with the budget revision if not for the $30,000.00 legal item. Absent that, MEA will have a problem concurring to the motion if it includes a further financial commitment to the firm that is adverse to them in other venues. Chair Haagenson stated that what the group was voting on is a budget adjustment, not who the vendor should be. Mr. Zoerb noted that the budget adjustment includes an additional $30,000.00 commitment to the firm that they object to, and because of the $30,000.00 item, they will have to vote against the budget revision. A roll call vote was taken on Motion #04-3: Utility Vote City of Seward Yes Matanuska Electric Association No Chugach Electric Association Yes Homer Electric Association Yes Golden Valley Electric Association Yes Anchorage Municipal Light & Power Yes Alaska Energy Authority Yes Mr. Zoerb requests that the reason for voting against the motion be recorded in the minutes. “Our objection is based solely on the inclusion of an additional $30,000.00 commitment to the AterWynne law firm, based on the conflict_of interest that MEA perceives this law firm to have.” Page 3 of 4 Bradley Lake PMC Meeting Minutes for January 7, 2004 Meeting 8A. Next Meeting Date Chair Haagenson The next meeting will be at the Call of the Chair. 8B. Operators Report Bob Zacharski Mr. Zacharski reported that they have been operating with one operator short for the last nine months. In November they certified a third operator and were fully staffed. One month later, they had another lost time injury with one of the three operators at Bradley. This operator was the electrician and that put them behind on the PMs. In two weeks they will be getting another electrician from the Nikiski power plant and hope to clean up all the outstanding PMs on the electrical side. The runner repairs have been completed. An ongoing document control effort is ongoing in conjunction with Art’s office to categorize and catalog the drawings and publications associated with Bradley. Lastly, he stated that VA Tech visited the site two weeks ago to take a first hand look at the governor and actuator cabinets. 8C. Insurance/Risk Assessment Scope of Work/ Signed _ Chair Haagenson Chair Haagenson stated that he had completed and mailed the Application for Directors & Officers Liability Insurance for the Bradley Lake Project Management Committee. Chair Haagenson will send a letter changing the answer to question #10 under the Organization Information section to clarify and state that AEA, the owning organization is a State/government entity. Chair Haagenson noted that he had two action items — the legal fix on construction funds, as well as the D&O questionnaire issue. 9. ADJOURNMENT The meeting was adjourned at 10:15 a.m. BY: <A — Steve Haagenson, Chairman ATTEST: NS (\ Mg (a\\\ah Alaska Eviergy Authority, Secretary Page 4 of 4 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Thursday, March 18, 2004 — 10:00 a.m. is CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Thursday, March 22, 2004, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Howell. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association (teleconference) Bradley Janorschke Homer Electric Association (teleconference) Wayne Carmony Matanuska Electric Association (teleconference) Jim Posey Anchorage Municipal Light & Power Dave Calvert City of Seward Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Howell, Alaska Energy Authority Brenda Applegate, Alaska Energy Authority Linda MacMillan, Alaska Energy Authority Karl Reiche, Alaska Energy Authority Doug Hall, Anchorage Municipal Light & Power Rick Miller, Anchorage Municipal Light & Power Lee Thibert, Chugach Electric Association (teleconference) Mike Cunningham, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association Brian Hickey, Chugach Electric Association Don Stead, Homer Electric Association (teleconference) Jim Walker, Matanuska Electric Association (teleconference) Bradley Lake PMC Minutes March 18, 2004 Page 2 of 6 Bob Zacharski, Homer Electric Association (teleconference) Gary Stromberg, Parisena, Stromberg & Company (teleconference) Ron Saxton, AterWynne (teleconference) 4. PUBLIC COMMENT There were no public comments. 5: AGENDA COMMENTS The agenda was changed to the following order under Item 7. The order will be A, F, E, D, C, and B. 6. APPROVAL OF MEETING MINUTES — January 7, 2004 Mr. Posey moved to approve the meeting minutes of January 7, 2004. Seconded by Mr. Calvert. Chair Haagenson noted a change on page 2, change SWAG to estimate. On page 4 of 4, in the second paragraph under Operators Report, the second sentence should read “An ongoing document control effort is ongoing in conjunction with Art’s office to categorize and catalog the drawings and publications associated with Bradley.” A voice vote was taken, and the motion passed unanimously as amended. 7A. MEMBER AND ALTERNATE LETTERS Chair Haagenson All members presented a letter stating their representative as well as the alternate. These letters were included in the packets. 7F. ACCEPTANCE OF THE FY03 AUDITED BPMC FINANCIAL STATEMENTS Mr. Stromberg gave a brief overview of the statements. They issued a clean opinion and the statements presented to the BPMC are signed and bound. MOTION #04-4: Mr. Griffith moved to accept the results of the Bradley Lake Project Management Committee Operating and Revenue Funds for Fiscal Year 2003 as presented by Parisena, Stromberg & Company. Seconded by Mr. Posey. A voice vote was taken, and the motion was unanimously approved. 7E. APPROVAL OF AMENDED FY04 0&M BUDGET Cunningham MOTION #04-5: Mr. Posey moved to amend the Fiscal Year 2004 Operating and Capital budget as presented. Seconded by Mr. Griffith. A voice vote was taken and the motion was unanimously approved. 7D. APPROVAL OF FY05 O&M BUDGET Cunningham MOTION #04-6: Mr. Griffith moved to adopt the Fiscal Year 2005 Operating and Capital budget as presented. Seconded by Mr. Posey. Bradley Lake PMC Minutes March 18, 2004 Page 3 of 6 Brenda Applegate and Linda MacMillan of AEA gave an overview of the budget. Art Copoulos noted that what the O&D Committee has proposed is to have contingency money available — a couple of things broke and needed immediate repairs, and we really didn’t have time to go to the BPMC to get the funds to repair them. What we would like in the future, is to have a relatively small contingency fund to deal with the immediate repairs that need to be corrected in the interest of continuing the project operation and safety. What the O&D committee has proposed is basically a three step process: 1) that when something is identified that the O&D Committee will review the request and approve or deny use of the contingency fund; 2) only unbudgeted projects with immediate operating consequences would qualify for consideration; and 3) the O&D Committee would present any activity related to that contingency fund at the next BPMC meeting. Chair Haagenson stated that it’s also wise to get the O&M Committee involved in some of these conditions, because there may be more than one solution. Mr. Carmony stated for the record: “For the same reason as Mr. Zoerb expressed at a previous meeting, we believe that the firm of AterWynne has an inherent conflict of interest and we will be voting against the budget if it includes a $40,000 commitment that would be earmarked for the firm of AterWynne. I'd just like to see it placed in the minutes in the discussion that we believe that AterWynne has this conflict of interest.” Steve Haagenson asked if there is a plan to adequately fund the governor replacement using the R&C fund mechanism, or should we be funding that — what’s the long-term plan for the R&C fund? The number is $553,596, are we depleting the R&C fund or are we planning on using it to do these governor repairs, are we going to get bonding to do that, what’s our plan to do the governor repairs and finance? Linda MacMillan responded that if you look at Schedule D of the FY05 budget packet, we did a cash flow of money going in and out of the R&C fund and where it would leave us based on current plans. She did a recap, based on HEA’s estimates for the governor work on how much should be paid out of the R&C fund and how much should be coming out of the construction fund balance. Mike Cunningham asked that the following be placed into the minutes. “Mr. Chairman, I'd like to commend Brenda and Linda for their work in pulling this budget together and arm wrestling with the committee members on the final numbers. They did a great job.” MOTION #04-7: Mr. Griffith moved to approve the FY05 O&M budget -and a second by Mr. Posey. All members voted aye, with the exception of MEA for the reasons Stated above. This will be noted in the minutes. 7C. INSURANCE ISSUES Cunningham Chair Haagenson stated that there is an active proposal in the street, which is pushed back a little because of the budget process. We are looking at our insurance. One Bradley Lake PMC Minutes March 18, 2004 Page 4 of 6 concern he had was that the person doing the review didn’t think they had access to the ARECA insurance exchange books. Chair Haagenson would like to see that get resolved in the near future before it comes out. Mr. Cunningham stated that he would talk to them again and see if there has been any progress made in that area. Mr. Saxton asked if there was a deadline for that progress. Mr. Cunningham responded, stating that we have received the preliminary report and the Chairman requested that the Budget Committee review the report and given the deadline on the FY05 budget, we have decided to do the budget work first and are now going to turn our attention to reviewing the preliminary report and will be getting a summary and recommendation to the full BPMC within the next month or so. 7B. REFUND OF PRIOR YEAR BUDGET ADJUSTMENT (continuation/clarification) Chair Haagenson stated that in the minutes last month, is reference that we were going to get clarification from counsel on a form for O&D insurance. Mr. Saxton has provided that. Also, there had been a question about the auditor’s opinion about paying back the money for the Power Sales Agreement and the number that is in the budget is $900,000 and apparently on the audited information it’s about $2 million now. Chair Haagenson also stated the auditor’s report says it’s basically $2.13 million refunded per the Power Sales Agreement. In the FY04 budget, there is an analysis of effective amendment of FY04 O&M budget - the first line says budget effective FY03 surplus refund and it has a total amount refunded of $903,501. It was forecasted FY03 surplus budgeted used in budget preparation. So, that number is now moved from $900,000 to $2.013 million. Ms. Applegate explained the dollar amount. When we did the original FY04 budget, FY03 wasn’t complete yet. Part of our budget preparation is a projection of where we thought we would be at the end of FY03, and that was the surplus number we rolled forward. Now that FY03 is complete, our audited financials are done, the number was really the $2 million dollar number. Our projections during the FY04 budget preparation, the original budget, were off. The majority of that was due to the R&C fund and us not spending as much as we thought we would out of that. The true surplus that is going to be refunded is the $2 million. Mr. Saxton stated that the most literal reading of the contract if it says at the end of the year you recalculate and return any surplus, is to write a check and return it. It would be taking that overpayment from the proceeding year and applying it to the current year obligation. Once you have finalized determining what that surplus amount is, each utility will state that they want theirs through a check or would rather have it applied to our current years obligation. Bradley Lake PMC Minutes March 18, 2004 Page 5 of 6 Ms. MacMillan responded that a check can be sent; however, the checks you pay goes to a trust account at US Bank. A check on your behalf with your surplus could be sent. Mr. Posey stated that from an accounting standpoint, it probably is cleaner, and it just makes it simpler. It may be more difficult for others to get the money to roll back in, but his auditors are telling him to get a check. Ms. Applegate responded that the FY04 amended budget that we just approved is calculated based on us actually writing that check back to everyone now, which is what we thought we decided at the last meeting. Mr. Saxton stated that there will be different choices by different utilities. Just be on the record that you have authorized the return of the annual adjustment, but that each utility will be notifying AEA how they wish to receive it. Mr. Calvert stated that the City of Seward would like to roll it over and to consider that notification. Ms. MacMillan stated that she will need an email of who wants a rollover and who wants a check. 8A. Committee Reports / Comments Haagenson Martin River: Mr. Copoulos discussed the Martin River application. The license amendment application to FERC was submitted and received approval from the Army Corps. Preliminary concerns were raised regarding the Fish and Game’s concern about closing the airstrip according to Federal air regulations, and subsequent conversations with them indicate that they are okay with what we have proposed. We don't anticipate any problems getting this amendment approved through the agencies and through FERC, and expect to complete this work as proposed in the amendment and according to the timeline and budget. O&D: Bob Zacharski reported that there had been a battery explosion at the microwave site. A new battery bank is on order as a new charger, and spill clean up should be completed next week. Cable failure happened in late January. They were able to repair it, and will come back with ideas for re-routing that cable so it is more accessible for maintenance purposes. Preventative maintenance tasks are on schedule. They augmented the operations staff at Bradley to get more electrician help at the plant and clean up the outstanding task under the preventative maintenance. Chair Haagenson asked about the SVC training. There is a lot of discussion on the level of training and who is going to be responding and how many people are going to be training on the top and maintain the SVC. Did that get resolved or did the whole thing go into the budget unscathed? Mr. Hickey stated that they have not done major maintenance on the facility since it was installed. There is a series of major maintenance that has come due, and unfortunately because they were both installed at the same time, it all comes due at the same year, Bradley Lake PMC Minutes March 18, 2004 Page 6 of 6 give or take 18 months. They have five relay techs and they all get trained and we have three substation techs and four substation linemen who get trained. They are on a much larger list. Mr. Hall also noted that part of this is for ABB to come up and tell us what we need to look at replacing so we don’t get in a position where we are with the Intertie SVCs. They will tell us where we are obsolete and what we need to be looking at replacing. Operator Report: Bob Zacharski reported that they are at 1,128 in terms of water level. Governor Repiacement: Don Stead reported that the hydraulic transient analysis has been complete and is under review and the State is hiring a third-party to review the results. The way it’s stated now, it will need to be increased by 60 seconds from the current 90 seconds. The change is going to require FERC approval. Change order #1 has been issued to VA Tech, so we got the $100,000 discount. Data collection is in progress. Model test design is currently in progress, and the factory acceptance test is projected for July 9" through the 15". New Control Algorithm has been delivered and the conversion is in progress. The outages are at 35 days each, and probably need to be increased to 45 days each, and also should be slipped from March into April in order to accommodate the changes for the jet dividers. The delay is on Change Order #1, once they complete the model and they develop the model test results, they then have to go into design of the new jet dividers and design of the shield and the operating mechanism. That design pushes delivery to the site to April 16", which fits right into the middle of the second outage. In order to fit it up with that schedule for Change Order #1, you actually need to slip the outages back into April so the material will be available for the first unit. 8B. Next Meeting Date The next meeting will be at the call of the Chair. 9. ADJOURNMENT The meeting was adjourned at 11:05 a.m. BY: ae Steve Haagenson, Chairman ATTEST: rgy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Thursday, November 18, 2004 — 9:00 a.m. 1. CALL TO ORDER Chair Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:00 a.m. on Thursday, November 18, 2004, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2s ROLL CALL Roll was called by Brenda Fuglestad. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association Bradley Janorschke Homer Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Jim Posey Anchorage Municipal Light & Power Dave Calvert City of Seward Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Mike Cunningham, Chugach Electric Association (teleconference) Rick Baldwin, Homer Electric Association (teleconference) Don Stead, Homer Electric Association Ron Miller, AEA/AIDEA Brenda Applegate, AEA/AIDEA Karl Reiche, AEA/AIDEA Ron Saxton, AterWynne Rick Miller, Anchorage Municipal Light & Power John Cooley, Chugach Electric Association Doug Hall, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Ed Ruebling, Anchorage Municipal Light & Power Brian Hickey, Chugach Electric Association Bradley Lake PMC Meeting November 18, 2004 Page 2 of 8 Lee Thibert, Chugach Electric Association Don Zoerb, Matanuska Electric Association (teleconference) 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS Mr. Griffith stated he understood there was an instruction to eliminate Item 7D — AEA Electrical Assets to Railbelt Utilities — Discussion. With the agreement of the group, Mr. Griffith suggested to leave Item D on the agenda. The new title of Item 7D will be Future of the Bradley Lake Project. Chair Haagenson also added an item - Status of the Insurance Study — noting that it will be a question for Mike Cunningham. 6. APPROVAL OF MEETING MINUTES — March 18, 2004 Mr. Griffith moved to approve the meeting minutes of March 18, 2004. Seconded by Mr. Calvert. A voice vote was taken, and the minutes were unanimously approved. 7A. |. AUDIT ENGAGEMENT LETTER Chair Haagenson Chair Haagenson wanted to inform the BPMC that the audit is in process now, and a letter was sent out to the auditor. 7B. 2004 Policy Year Renewal — Valuation Chair Haagenson Chair Haagenson made note of the letter received from ARECA Insurance Exchange thanking them for renewing the insurance for next year. 7C. LEGAL REVIEW OF BPMC CONTRACTS Chair Haagenson Chair Haagenson noted that the concept came up of who was performing legal review on contracts and the one discussed was the Bradley Lake Runner Modifications and Design. The questions are, who is the attorney for the BPMC that is doing the legal review, and are we doing our due diligence by not having someone legally review it for the BPMC? Mr. Saxton stated that the question in all of these contracts, is who is at risk, also stating that if the review needs to be done you need to follow the risk. MOTION: Mr. Carmony moved that if it’s the opinion of the body that these contracts need to be reviewed that the BPMC should hire an independent legal firm to conduct that review. Mr. Griffith seconded the motion for discussion purposes. : Bradley Lake PMC Meeting November 18, 2004 Page 3 of 8 Mr. Carmony stated that he believes there is conflict of interest in having the BPMC legal work performed by AterWynne. Chair Haagenson reminded the BPMC that AterWynne has been counsel since day one, and there are actually letters on file where they have all accepted them to be counsel. Mr. Carmony added that AterWynne is the attorney for Golden Valley, and also because they are involved in hostile legal proceedings against MEA, he does not believe that they can properly represent the BPMC. Mr. Griffith asked what were the hostile actions against MEA? Mr. Zoerb from MEA responded to that question on behalf of Mr. Carmony. He stated that AterWynne is presently representing several utilities in an action by the Regulatory Commission of Alaska that MEA views is hostile to its interests. In addition, Ater-Wynne has in the past been counsel of record on behalf of Golden Valley in lawsuits filed against MEA. Therefore, MEA believes that constitutes a conflict of interest and would impair their ability to independently evaluate risk from MEA’s standpoint as a participant in the BPMC. Mr. Saxton noted that it’s been clear and he’s responded to MEA repeatedly on this, and his representation of this group is just that, representation of the group. It is not representation of any individual member of the group, and therefore, he advised the BPMC that this does not constitute representation of MEA individually or any other utility individually. Mr. Copoulos pointed out that AEA is not prepared to vote on the current motion until legal counsel arrived to the meeting. Mr. Janorschke added one more observation. Talking about assessing the risk to the participants and the BPMC, and in the event the attorney making that evaluation is not independent, we lack confidence that a disproportionate sharing of risk would be properly evaluated from our point of view. In other words, we’re not confident that the evaluation of risk to the body would necessarily translate into an evaluation of the fairness of the apportionment of that risk to the participants in the body. Chair Haagenson asked Mr. Janorschke if he was implying that when AterWynne does a review for the group that they are going to favor Golden Valley in any way, shape, or form. Mr. Carmony also noted that this was not what he said. He believes their statement should stand on its own. MOTION: Mr. Griffith moved to table the motion until AIDEA counsel arrived to the meeting. Seconded by (inaudible). Mr. Griffith also pointed out that there is a point of order on it, and currently there is a motion on the table by Mr. Carmony. Mr. Griffith thinks the tabling supersedes Mr. Carmony’s motion. Bradley Lake PMC Meeting November 18, 2004 Page 4 of 8 Chair Haagenson stated that the motion on the table now is to table the discussion until Brian Bjorkquist shows up to the meeting. Motion tabled. 7E. STATUS OF THE INSURANCE STUDY Mike Cunningham Mr. Cunningham informed the group that the main open item was a proposal received from Stone and Webster to do an appraisal of the property, which was one of the recommendations that came out of the study. The study produced about 34 recommendations in total. Those were forwarded to the ARECA Insurance Exchange (AIE). Discussions with the State regarding waiver of subrogation issue are in place. The biggest issue is the appraisal of the property in order to bring the replacement values in line, and also there was an issue with the powerhouse value in case of a loss. Mr. Cunningham also noted that the cost of the valuation was $75,000 and that includes the powerhouse. As soon as we give them the okay, we have to do a budget amendment to cover it. Mr. Griffith stated he thinks there is a need to get the valuation, but whether that’s the right number or not, he didn’t know. He also asked if there was any feedback from AIE at all on where we are in the appraisal process. Mr. Cunningham responded that the State concurs with getting an appraisal, as does AIE. The consultant went out and solicited proposals and they received a response from Stone and Webster and there was also one other response but that was not for a total appraisal — that was just to do the valuation of the powerhouse, which was an outstanding item at the time. He also stated that based on their discussion of it, he thinks we’re getting more than a valuation — we’re going to get some software to do an annual update on it, things of that nature. There are some things that would benefit the project and certainly the valuation for insurance purposes in the future. Mr. Cunningham said he would get the committee’s recommendation back to the BPMC through the Chairman, and that there will also need to be a budget revision. 8A. RUNNER REPAIR Don Stead Mr. Stead informed the group that this is a combined report in which he and Brian Hickey will present together. They discussed the test rig that was used in Switzerland, the runner, the needle components, overview of the control problem, results they received in Switzerland, and the runner interactions they saw. They also reviewed some various failures and runner replacement. The slide presentation has been attached for review. Discussion ensued following the slide presentation. Mr. Stead noted that the quote we have gotten from FUJI for a new runner is $1.6 million, and in the routine discussions talking with VA Tech, they've said around $1 million. The O&D Committee never really said to go put forth a recommendation. They Bradley Lake PMC Meeting November 18, 2004 Page 5 of 8 wanted us to start this background study and let you know where we're headed, but we haven't heard them yet say we're going to buy a new set of runners. Mr. Copoulos said they will be meeting soon. Mr. Stead asked the O&D Committee if it takes a year and a half, are there short term things — they were talking about monitors, lower the head of the reservoir, those kinds of things. Mr. Stead also informed the group that the worst case scenario is a needle comes off the wall and you’re unable to control the unit. We'll shut the turbine stop valve and if the turbine stop valve doesn’t stop it, then shut the gate. Chair Haagenson asked the O&D Committee to look at some failure modes and probability — how much risk do we really have, and to coordinate with Mike Cunningham's section in insurance, to make sure we've got adequate insurance. Mr. Copoulos added that we're in the middle of a hydraulic transient analysis as a part of this project, because the needle speed is also being looked at as part of this project to address the whole spin issue. We're in the middle of finalizing that analysis and that will give us some idea of what the windows are for the worst case scenarios. We've informed FERC that this is ongoing, and we’ve categorized it as a maintenance issue, which really isn’t of issue to them;.they’re more interested in other things. We haven't really thought about it in terms of probabilities. Art Copoulos is going to find the FUJI contracts and share them with Brian Bjorkquist and Ron Saxton. MATTER OF RECORD: Mr. Griffith wanted to make it a matter of record that we sent those instructions out to the O&D Committee to take a look at it, and for the attorneys to look at the regulatory implications of it, now that we’ve heard the mechanical and hydraulic view. Chair Haagenson also added that the O&D Committee needs to make a recommendation on what to do with the existing runners and getting new runners, and look at the probability of failure in the interim. Mr. Stead provided the following update on the governor. There has been a Notice to Proceed issued for the jet divider, manufacturer, and installation. That has been added on to the project. They probably will invoice us quickly on the model test results, which is 30% of $1.2 million; so they will be invoicing us for that work since the model test report has been issued. Things are progressing, but we still expect to shutdown on time and get started on time for the governor replacement next year. Mr. Posey added that if we’re talking about replacing both within the next five years — we need to figure out a mechanism of how we’re going to accomplish that. Mr. Saxton noted that you either have to let your rates bump up by a significant amount a year or need some other funding arrangement. Then we start talking about where are Bradley Lake PMC Meeting November 18, 2004 Page 6 of 8 you also making Intertie repairs or whatever else is out there that’s a railbelt issue that you might want to somehow package together if you’re going to do some financing. Chair Haagenson asked if that meant to start recovering in advance — by increasing our budget to put money into the R&R fund. Instead of just waiting to spend the money in a year, we've got a year and a half we could start pre-funding it and it makes it a six year event instead of a four or five year event. Mr. Stead responded that he thinks you have to look at the contract to see if you are allowed to bump up the R&R fund. If you are, then you should have a mechanism to do it, if you’re not, you don’t have a mechanism to do it, because all the funds at the end of the budget year have to be returned to participants. Mr. Griffith asked that the Finance Committee give the BPMC a recommendation on it. 7C. LEGAL REVIEW OF BPMC CONTRACTS Chair Haagenson Chair Haagenson went back on the Agenda to Item 7C, which is Legal Review of BPMC Contracts, stating that the discussion had to do with who should be doing the legal review for BPMC contracts. There is a motion on the table that if it’s the will of the body then you would recommend having independent counsel reviewing contracts as opposed to AterWynne, and we have a second on that motion. At that point we tabled the motion. Mr. Saxton clarified that it has always been the case, and remains the case, that he is actually the attorney for the utility members of the BPMC; Brian Bjorkquist is the attorney for the State. What they do as a practical matter, is because the vast majority of items are not adverse between the State and the utilities, is the utilities essentially loan me to the committee, so if it’s a FERC matter and Art needs help, | work with him on behalf of the committee, but that’s because the utilities have made me available to do that task, that’s true 99% of the time again, an issue where the utilities were adverse to the State, clearly Brian’s the State’s lawyer, I’m not, that’s just a clarification. Mr. Copoulos responded that in light of Mr. Saxton’s statement, AEA’s position is to abstain. MOTION: Mr. Griffith moved to take Item 7C off the table and put back in place Mr. Carmony’s original motion. Chair Haagenson stated that we have a motion to bring Item 7C back on the table. Motion and a second (inaudible). Mr. Carmony asked for a roll call vote. Chair Haagenson restated the motion: Retain independent counsel, not AterWynne, is the indication, independent counsel, to review BPMC contracts. So if you vote in favor of that motion, we need to select a new attorney for the review Bradley Lake PMC Meeting November 18, 2004 Page 7 of 8 of contracts, if you vote against it, then it means the motion fails, it doesn’t mean anything. Roll Call Vote: City of Seward: No Matanuska Electric: Yes Chugach Electric: No Homer Electric No Golden Valley: No Municipal Light & Power: No Alaska Energy Authority: Abstain Motion fails. Mr. Saxton added that future contracts to put any risk on the BPMC utilities should be reviewed by himself or counsel on the BPMC’s behalf. MOTION: Mr. Griffith motioned that utility attorney review of contracts that affect the utilities collectively, or Bradley Lake counsel review contract review, that affects the utilities. Second (inaudible.) Mr. Saxton also added that the contracts entered into by contractors for the project, if those contracts impose any risk on the BPMC utilities, then the BPMC’s utilities counsel should review those contracts. Roll Call Vote: City of Seward: Yes Matanuska Electric: No Chugach Electric: Yes Homer Electric: Yes Golden Valley Electric: Yes Municipal Light & Power: Yes Alaska Energy Authority: Abstain Motion passes. 7D. Future of Bradley Lake Project Don Stead MOTION: Mr. Griffith motioned that the Bradley Lake Budget Committee be instructed to identify the costs and the scope of the effort on an activity to undertake the transfer of Bradley Lake Project ownership to the utilities. Seconded by Mr. Janorschke. Chair Haagenson stated that there was a motion on the table, which indicates that the Bradley Lake Budget Committee identify the cost and scope of the effort to consider the transfer of Bradley Lake Project to the utilities by January 15, 2005. : Bradley Lake PMC Meeting November 18, 2004 Page 8 of 8 Steve Haagenson asked for a show of hands and a voice vote. The majority of the group said aye, Mr. Carmony from MEA voted nay, and AEA abstained. 8B. Next Meeting Date The next meeting will be at the call of the Chair, and you can expect a recommendation back from the Finance Committee. 9. ADJOURNMENT The meeting was adjourned at 11:30 a.m. BY: ATTEST: BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 2003 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, February 11, 2003 — 10:00 a.m. a: CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, February 11, 2003, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. a ROLL CALL Roll was called by Shauna Dean. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association Dave Calvert City of Seward Wayne Carmony Matanuska Electric Association Norm Story Homer Electric Association (teleconference) Bob Day Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL { Shauna Dean, Alaska Energy Authority Brenda Applegate, Alaska Energy Authority SIDE Ron Saxton, AterWynne Don Zoerb, Matanuska Electric Association Tuckerman Babcock, Matanuska Electric Association Doug Hall, Anchorage Municipal Light & Power Ed Ruebling, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power John Cooley, Chugach Electric Association Brian Hickey, Chugach Electric Association Bill Bernier, Chugach Electric Association Dora Gropp, Chugach Electric Association Lee Thibert, Chugach Electric Association Bradley Lake PMC Meeting Minutes Tuesday, February 11, 2003 Page 2 of 6 Mike Cunningham, Chugach Electric Association (teleconference) Don Stead, Homer Electric Association (teleconference) Rick Eckert, Homer Electric Association (teleconference) 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES - April 24, 2002, April 30, 2002, & May 8, 2002 MOTION: Mr. Griffith moved to approve the meeting minutes of April 24, 2002, April 30, 2002, and May 8, 2002. Mr. Calvert seconded the motion. A voice vote was taken, and the minutes were unanimously approved. ifs NEW BUSINESS A. Update on Insurance Cunningham Reference insurance review letters dated: July 1, 2002 from Brenda Applegate to Steve Haagenson May 14, 2002 from J. Scott Jordan to Brenda Applegate Mr. Story noted that something discussed in the past was about the limits on insurance, and asked if the committee assigned to look into that had done so. Mr. Cunningham stated that the line item in the FY04 budget for a risk assessment of the project and the operating agreement limits liability with an eye towards looking at the exposure, the insurance limits, and also flanging up the insurance limits between the various operating and maintenance agreements that HEA and CEA have with the project. Chair Haagenson stated that in the by-laws we are required to do this. This is for the property and casualty insurance, which is different than what Mr. Story was questioning. In the April 30, 2002 minutes, Item 7 discussed recommendation on insurance. There was discussion on contractor's insurance. Chair Haagenson asked if Mr. Cunningham's committee had come back with a recommendation on that level. Mr. Cunningham said not at this time, but that is one issue they will look at to try to formalize in the risk assessment. Chair Haagenson wanted to be sure that everyone knew that they were talking about two different insurance levels. One required by the by-laws to be sure we have property and casualty insurance for the project, and the other would be for contractors. Mr. Griffith asked Mr. Story if he had had his risk assessment people look at HEA’s exposure, if any, down there. Mr. Story responded that they are beginning on that now, and have not concluded anything as of yet. One of their conclusions would be that they address all of the Bradley Lake PMC Meeting Minutes Tuesday, February 11, 2003 Page 3 of 6 risks at one time because, of course there are some independent risks that they will have to make those decisions on, but their position is that they are waiting on the assessment to be done relative to all of the risk at Bradley. The answer to Mr. Griffith’s question, was no, they have not done an assessment as far as their own independent contractor’s risk. Mr. Story asked if CEA had done theirs? Mr. Griffith said they had talked about doing it, but couldn't recall the outcome of the discussion. He also stated that the documents provided by Brenda Applegate covers the State and not the utilities, or work they might be doing. Mr. Story noted that the PMC is directing its contractors to do certain work. He’s assuming that what would only be left would be gross negligence or willful neglegence on the company or the contractor or some act like that, which would put them in individual risk relative to the operations at Bradley. Mr. Griffith asked Mr. Cunningham if it was his intention on the risk assessment to cover risk of all parties or risk to the plant itself? Mr. Cunningham responded that they were going to look at all issues. There was a concern expressed regarding the property coverage also relative to losing the plant and the participants being left on the hook for the balance of the debt service on it. They will look at property and also address the issue of the limits of liability for the participants and try to get a definitive answer to this question that keeps hanging out there on the negligence issue. Mr. Story noted that he wasn’t aware that there was a casualty insurance program provided by the State with limits of $75 million. He asked how that fits relative to Bradley operations. Mr. Cunningham responded that he would have to look into that further to see exactly what that covers. Ron Saxton stated that insurance that is required by AEA is really required by the bond resolution. The by-laws are really picking up with the bond resolution. That package is the one where we ask the State whether it’s satisfactory. The question of what insurance you want to protect you is entirely up to you — that’s not a State requirement at all. There have been discussions about that over the past year. These risks are entirely different than your risks as utilities collectively, and your risks as individuals doing tasks for the group. Mr. Griffith asked what might be the vehicle that would clarify the thoughts and responsibilities and coverages and requirements? Mr. Saxton said there are two things, first you have contracts with HEA and with CEA for doing the various work that they do on an ongoing basis. We can amend those so we can clarify those in some way. What needs to be done, by action of this committee says that we read that contract to say what needs to be stated. There are some lines that need to be drawn. Discussion ensued regarding to coverage, language, and limits for the project. It was decided that the finance committee would head up this item. Frame the task and provide information regarding what they believe needs to be done in reviewing this or in submitting this to a third party for review and get it started. If we need to do a budget amendment, then we should do what is necessary to get that work started now. Bradley Lake PMC Meeting Minutes Tuesday, February 11, 2003 Page 4 of 6 Chair Haagenson clarified which review Mr. Story was speaking of. MOTION: Mr. Griffith moved to discuss the letter dated May 14, 2002 from Scott Jordan regarding property and casualty insurance, seconded by Mr. Calvert. Mr. Griffith stated that the numbers related to here either the Willis policy or the comprehensive coverage that the State has, doesn’t really cover the utilities’ ultimate responsibility to the project, either as contractors or as power purchasers, with respect to the debt service payments. Mr. Saxton mentioned that the utilities are required by contract to carry insurance that satisfies the State. The State, by this letter, has told you they are satisfied with the particular level. You ought to go ahead and approve purchasing and carrying whatever it is that the State is saying they want here. The question of whether you want more than that, is entirely up to you, and you don't have enough information today to answer that. Put in place whatever process will get you the information to answer it. Mr. Griffith stated that the State has covered $75 million and there is additional coverage of $40 million per occurrence, excess $20 million placed by ARECA. That's just about the amount of the outstanding debt on the project. So from the standpoint of the State covering their risk for a catastrophic failure and still being able to cover the debt service, | think they are okay. | don’t think that does a thing for any of the rest of us that worry about loss of the project or some suit against any of us that are either operating or working on the machinery. Mr. Carmony asked if the debt associated with Bradley is covered by the insurance being discussed, is it the normal thing that you insure yourselves for replacement costs for generation you own? Mr. Saxton responded by saying that the fact the project costs $340 million to build and today would cost something greater than that to adjust that for inflation, you still assume that if there is something terrible it doesn’t wipe out the whole project. That’s the analysis. Mr. Day also added that they do insure their facilities and it's a matter of individual assessment of the risks and what kind of risks we want to accept. Those plants are insured against major loss in many ways. MOTION: The committee has reviewed the State’s letter and accepts that they have reviewed our current insurance levels as being acceptable relative to the bond covenants and that the 2004 budget retains budget for continuation of this level of insurance coverage. Seconded by Mr. Griffith. A voice vote was taken, and the motion was unanimously agreed upon. MOTION: Turn over to the finance committee the task to put together an outline for tasking, scheduling, and budgeting a consultant. Deliver back to the BPMC a risk assessment on all the insurance issues relative and risks relative to Bradley Lake operations. Seconded by Mr. Griffith. A voice vote was taken, and the motion was unanimously agreed upon. Bradley Lake PMC Meeting Minutes Tuesday, February 11, 2003 Page 5 of 6 7. NEW BUSINESS B. Update on Control System Upgrade Stead Mr. Stead stated that the RFP for the governor hardware and software is out on the street. Bids are due to HEA February 28, 2003. Two bidders attend the pre-bid. Siemens Westinghouse, and VA Tech. After receiving the bids, an evaluation is done and then negotiation begins. They have to bring their suggested winner back to the BPMC for approval. Other RFPs that are on the street which are related are the hydraulic transient analysis, the final operating report, and the review of TSCA, which is the software going into the governor. The schedule for completion on a best estimate is October of 2003, with a worst case date of March 2004 to have the governor completely installed. i. NEW BUSINESS Cc. FY02 Audited Financial Statements Cunningham Mr. Cunningham stated that the budget committee met on February 7, 2003, to review the statement issued by Parisena, Stromberg, & Co. In their opinion, the special purpose financial statements referred to above present fairly and all material respect the assets, liabilities, and surplus the Bradley Lake Project Management Committee operating and revenue funds as of June 30, 2002 and 2001, and its revenue expenses and changes in surplus and its cash flows for the year then ended on the basis of accounting described in note A. The budget subcommittee voted unanimously to recommend that the PMC approve and accept this statement for FY02. MOTION: Mr. Griffith moved to accept the FY02 Audited Financial Statements. Seconded by Mr. Day. A voice vote was taken and the motion was unanimously approved. i. NEW BUSINESS D. FY04 Budget Cunningham Mr. Cunningham stated that the budget subcommittee met on February 7, 2003, to review the FY04 budget and voted unanimously to recommend that the PMC approve the FY04 budget. Brenda Applegate gave a brief summary of the budget handouts. Art Copoulos discussed his handout on the summary of extraordinary O&M costs over and above the normal O&M costs, and the work that has previously been planned on the needle repairs. There is about $400,000 worth of work there relating to damage caused by heavy rains and also some additional improvements. Mr. Copoulos also touched on the Martin River Road, stating that one of the license conditions with FERC is that there is access to the Martin River airstrip and that the road is maintained up to the airstrip. The condition of the road due to the heavy rains is a major concern. This issue is considered to be an ongoing problem due to weather in that area, and will require long-term maintenance. Another concern is having the airstrip out there and not being able to monitor it from the project. The O&D committee has studied this issue and is recommending to do the ” Bradley Lake PMC Meeting Minutes Tuesday, February 11, 2003 Page 6 of 6 minimal level of repairs estimated to be $100,000 and then to do a study to see if there are other transportation alternatives to the Martin River. If suitable alternative transportation is available, then possibly look at amending the FERC permit to abandon the airstrip and remove the road. Mr. Copoulos discussed these items with the PMC and answered questions. He stated that the O&D committee would do a study and come back to the PMC with the findings. Brenda Applegate finished her breakdown of the budget summary. MOTION: Mr. Griffith moved to approve the FY04 budget. Seconded by Mr. Calvert. A voice vote was taken and the motion was unanimously approved. 8. COMMITTEE COMMENTS Mr. Griffith requested that HEA give a brief update on the status of the fire that was down there and the repair. Mr. Stead stated that all of the components had been repaired; however, they have not been returned to service. They are waiting for a short outage to move some wiring over. He was unable to furnish an update of the cost at this time. HEA will provide an update on the cost within a few weeks. Chair Haagenson also requested an update on the FEMA application for the water damage. Mr. Stead noted that that had been rolled into the HEA application. The initial cut from FEMA is that they will give approximately $80,000 to do the work - $30,000 on the Martin River Road and $50,000 to do the Nuka and dam abutment work. John Cooley discussed how they have been dealing with the excess rainwater and runoff this year. Mr. Cooley noted that it had been raining in October and for two months ran the plant at full-out for 24 hours a day. After about three month, they went back to normal operation. Water level now is at 5 to 10 feet higher than normal for this time of year. A. Next Meeting Date Haagenson The next meeting of the Bradley Lake PMC will be held on Monday, March 24, 2003, at 10:00 a.m. at Chugach Electric Association's Board Room. 9. ADJOURNMENT The meeting was adjourned at 11:40 a.m. BY: Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Monday, March 24, 2003 — 10:00 a.m. A. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Monday, March 24, 2003, from Chugach Electric Association’s Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association Wayne Carmony Matanuska Electric Association Norm Story Homer Electric Association (teleconference) Bob Day Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Ron Saxton, AterWynne Don Zoerb, Matanuska Electric Association Tuckerman Babcock, Matanuska Electric Association Jim Posey, Anchorage Municipal Light & Power Doug Hall, Anchorage Municipal Light & Power Ed Ruebling, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power John Cooley, Chugach Electric Association Brian Hickey, Chugach Electric Association Lee Thibert, Chugach Electric Association Don Stead, Homer Electric Association (teleconference) Bradley Lake PMC Meeting March 24, 2003 Page 2 of 5 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES - February 11, 2003 MOTION: Mr. Griffith moved to approve the meeting minutes of February 11, 2003. Mr. Copoulos seconded the motion. A voice vote was taken, and the minutes were unanimously approved. ts NEW BUSINESS A. Scope of Work for Bradley Lake Risk Assessment Cunningham Mr. Griffith spoke on the handout for this item. The group discussed the assessment of the risk and the liabilities they face, and any additional insurance requirements that need to be defined, as well as other miscellaneous items such as collective and individual liability of the purchasers. MOTION: Mr. Griffith moved to accept the RFP, seconded by Mr. Posey. Mr. Griffith spoke about what is appropriate coverage and is there adequate coverage under the circumstances by which we are operating the facility, and paying for it through our role as purchasers. Mr. Copoulos stated that the state made some suggestions that were largely incorporated in terms of what the consultant should look at. AEA made some minor corrections to Mike Cunningham’s final version to better clarify the risk profile as it is portrayed in the PSA. Chair Haagenson asked about maximum probable loss, asking if that was replacement of the entire dam or of the bonds. Mr. Griffith asked what would be the maximum liability we face with the outstanding bonds. Mr. Copoulos responded that when the state estimated the level of coverage that is required, they estimated the maximum probable loss, stating that we’re not covered for everything, but they estimate what the maximum probable loss is and then determine what an appropriate amount of coverage is. Mr. Saxton noted that the maximum loss the purchasers are covering needs to be reviewed. Mr. Carmony made a comment regarding the RFP. He noted he would be more comfortable under section Power Purchaser — rather than a summary of explanation, provide an attachment with a copy of the PSA or a recent prospectus. Bradley Lake PMC Meeting March 24, 2003 Page 3 of 5 Mr. Carmony restated that the information being conveyed in the RFP is a characterization under power purchaser, and he would propose that since it does not add anything to the document, that we provide with the document as information to those responding a copy of the PSA and/or a current prospectus, which should make certain that there is no misunderstanding of the information being conveyed. Mr. Saxton added that there are four places where risk resides on this project: AEA, PMC, individual purchasers, and contractors. If you get an answer telling you what all the risk is, but doesn't tell you what part of the risk goes to each of those four categories, the work product won't be what you want, and the answers won't be there for all the questions. Mr. Story asked that this document be reviewed by all attorneys and have a new draft presented. Mr. Carmony moved to table this item until the next meeting at the call of the Chair. Chair Haagenson asked the group for their thoughts or items to be addressed pertaining to this item. The three items to be noted were the maximum payable loss, the reference to the PSA and amendments, and the governor amendment. Mr. Story noted that his recommendation was to ask Mr. Saxton to do the draft to be provided to the utilities’ attorneys for review. Chair Haagenson appointed Mr. Saxton to be the lead attorney focusing on this issue. Mr. Griffith wanted Mr. Saxton to talk to the finance committee to see what their view was in approaching this, and being sure of the difference in risk to project and risk to purchasers. MOTION: Mr. Carmony moved to table this item until after April 10" until more information can be obtained. Seconded by Joe Griffith. ie NEW BUSINESS B. Report on the governor retrofit recommendations Stead Mr. Stead reported that they have the proposals on the hydraulic transient analysis and on the governor. For the hydraulic transient analysis they have received three proposals — two of which are acceptable. An evaluation is to be performed by the committee. HEA performed its evaluation, but wants to get information from everyone else. Only one proposal was received on the governor. The bid was sent out to seven bidders, and one was received from VA Tech Hydro for $1.2M, but have some difficulty with the proposal and the committee has not met to review these items. The committee just received the proposal on the governor and hasn't met yet to review these bids. They are trying to put together a meeting in early April to talk with VA Tech and the committee. Chair Haagenson asked who were the two hydraulic consultants. Mr. Stead responded that the two who looked the most probable are R.W. Beck and Akers. Chair Haagenson noted that SWEC found some hydrologists back when work was being done on the transient analysis on uA Bradley Lake PMC Meeting March 24, 2003 Page 4 of 5 the power tunnel. He wants Mr. Stead to find out who that was to see if they are interested in doing more work. He believes it was John Schlagle. Mr. Story noted that out of seven people that RFPs were sent out to, only one responded. There appears to be concern on the part of the proposed responders that they don’t want to touch this project, that there are some complications with it — so they want to talk about it and understand more about it. Mr. Stead stated that they received correspondence from both Phoenix governors and their response was they saw the project early in 1990 and at that time noted it had problems and didn’t want to get involved again. GE Power Systems elected not to bid and they also saw problems with the project and didn't want to be involved in it and declined to bid. Those were two responses actually in writing. Several others have responded over the phone and stated they didn’t want to touch it and said that we are asking for something they don't believe we can get. Mr. Stead also noted that in the VA Hydro bid, they stated that they were not going to provide certain things that were asked for. One of the items was their ability to control small signal instabilities. HEA will have discussions with VA Hydro. Mr. Story stated that Don Stead has sent the responses to the subcommittee to discuss the issue of having only one contractor. He also noted that they may not reach all the goals that we set out, but needs to discuss this with the subcommittee. Mr. Story noted that their direction would be to continue with this individual contractor and come back with some recommendations after the subcommittee meeting. At that point, decide to finalize this agreement or go out with something else. Mr. Copoulos requested that FERC be kept involved with the design changes. te NEW BUSINESS C. Bradley Lake Project Essential Bus Evaluation Summary Stead Mr. Stead had provided a summary and he discussed that the one thing he would point out on the cost list is the EPS consultation at $20,000 — that was a not to exceed purchase order, and believes they have spent right at $10,000. Overall are at around $40,000 on this project. He also noted that this falls under normal repair and maintenance. Te NEW BUSINESS D. Air Transport Global Options at Martin River Copoulos Mr. Copoulos stated that at the last meeting there was discussion about the possibility of amending the FERC license to remove the road because of concerns of long-term maintenance costs and BPMC expressed concerns about amending the FERC permit which was amended four years ago to put itin. In light of those concerns, the O&D committee is suggesting that we go forward with the minimum maintenance on the road this summer and re-evaluate the results Bradley Lake PMC Meeting March 24, 2003 Page 5 of 5 and at that point revisit the issue of the entire need for removing and/or applying for an amended FERC permit. Mr. Doug Hall asked if the PMC had been advised of a plane accident about a month ago. Mr. Stead responded that a plane was coming in for landing, touched down, a gust of wind picked the plane back up about 10 feet, and then dropped it on the runway. It broke a strut and the plane spun around on that broken strut. No one was injured. They took two people out to be evaluated but there were no injuries. The strip was closed, the plane was repaired two days later, and removed from the project. The plane was a 206. Mr. Carmony asked if the alternate runway was available for use for the two days that the primary runway was unavailable. Mr. Stead responded that it was not, as it needed to be plowed. The flight was cancelled earlier due to wind gusts. The wind laid down from 40mph to 20mph gusts, which the pilot felt comfortable with — once getting there, a gust came through and lifted the plane. Chair Haagenson asked that if there is a network for notifying the PMC of potential risks or problems that arise at the airstrip. Mr. Copoulos stated that there was an O&D meeting immediately after the incident and they outlined a course of action including investigation and recommendations to handling this in the future. He will bring the notes from that discussion to the next meeting. There was some discussion about a more formal approach to notifying all those who need to be involved. Chair Haagenson asked how to change the FERC license. How did that get included in the project, and how did we apply for the FERC modification? Mr. Copoulos said he would look into those two items. 8. COMMITTEE COMMENTS A. Next Meeting Date Haagenson The next meeting of the Bradley Lake PMC will be April 15, 2003 or at the call of the Chair. 7. ADJOURNMENT The meeting was adjourned at 11:10 a.m. BY: LEE a Steve Haagenson, Chairman ATTEST: Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, May 20, 2003 — 10:00 a.m. 1. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, May 20, 2003, from the Alaska Industrial Development and Export Authority’s Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Steve Haagenson Golden Valley Electric Association Dave Calvert City of Seward (teleconference) Joe Griffith Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Ed Ruebling Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Jim Walker, Matanuska Electric Association (teleconference) Don Stead, Homer Electric Association (teleconference) Ron Saxton, AterWynne Brian Hickey, Chugach Electric Association John Cooley, Chugach Electric Association 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES — March 24, 2003 MOTION: Mr. Griffith moved to approve the meeting minutes of March 24, 2003. Mr. Story seconded the motion. The minutes need to reflect a change on page 2, motion for item 7A, the second was Mr. Posey. A voice vote was taken, and the minutes were unanimously approved as amended. 7. NEW BUSINESS A. Risk Assessment Scope of Work Proposal Saxton Mr. Saxton stated that the risk assessment scope of work proposal includes both comments from himself and AIDEA/AEA and is ready to be acted on. MOTION: Mr. Griffith moved to approve the Risk Assessment Scope of Work for issuance, seconded by Mr. Story. Mr. Saxton noted that before it is approved, the dates on the last page need to be determined. Mr. Griffith stated that the changes looked appropriate but wondered if the changes hit the issues that the group is trying to reach on the insurance. Mr. Story felt that it did. Mr. Copoulos stated that the document has been reviewed, and was provided input on what the consultant should look at to get a comprehensive review and that has been incorporated in addition to the minor edits. Chair Haagenson wants this document to be sent back to the Finance Committee for issuance. A voice vote was taken and the motion passed unanimously. 7. NEW BUSINESS B. Presentation from governor Subcommittee Stead Mr. Griffith withdrew his original motion and Mr. Story recommended the following: MOTION: Authorize HEA to go forward and negotiate a final contract and price with VA Tech Hydro. Seconded by Mr. Carmony. Correspondence will be provided to the BPMC of the two non-bidders for their review. A voice vote was taken and the motion unanimously passed. 7. NEW BUSINESS Cc. HEA Bradley Lake Transmission Losses at Bradley Lake Story Mr. Story expanded on the letter dated April 29, 2003, from HEA to Chair Haagenson. Chair Haagenson will send the letter on to the O&D committee for further action. 7. NEW BUSINESS D. 0O&D Committee Martin River Report Copoulos Mr. Copoulos stated that at the last meeting he was requested to provide some support information on the Martin River, including FERC license amendments. The plan is to do some minimal maintenance; the RFP has gone out. Mr. Saxton suggested that the fist step be a conversation with FERC. Another idea was to suggest to FERC to put up flags and abandon the strip and no longer maintain it. Mr. Saxton suggested that there needs to be a discussion with FERC stating the facts of costs to maintain, usefulness, safety issues and that we don’t want to open up the process that invites others in to discuss other unrelated items. MOTION: Mr. Griffith motioned to set up a dialogue with FERC about the Martin River airstrip and road before spending other monies on a study. Seconded by Mr. Carmony. A voice vote was taken and the motion passed unanimously. i NEW BUSINESS E. Incident Investigation Copoulos Mr. Copoulos noted that at the last meeting the O&D committee was asked to provide documentation on the incident that occurred at the Bradley project. Also provided is a restriction _ supplement to the flight operation guidelines (attachment). Mr. Copoulos noted that this information was provided at the PMC’s request from a prior meeting. Chair Haagenson asked that if other incidents happen, to promptly notify all members of the PMC. 8. COMMITTEE COMMENTS Chair Haagenson requested that the Finance committee look at the $1.2 million anticipated for the governor repair and figure where those monies will come from. Another request to the governor repair committee is to do a benefit analysis as to what the $5 million will be spent on. Mr. Stead also noted that when HEA talked to VA Tech Hydro they asked them for a proposal to fix some of the civil or mechanical problems inside the turbine pit. They will be giving HEA proposals at a later date to do some additional work inside the discharge chamber that will attempt to eliminate some of the splashing and some of the small signal instabilities that are seen on the unit. On their rough order of magnitude costs, it did not approach $1 million for that repair. A. Next Meeting Date Haagenson The next meeting of the Bradley Lake PMC will be at the call of the Chair after negotiations with VA Tech Hydro. 9. ADJOURNMENT The meeting was adjourned at 11:00 a.m. BY: mil Steve Haagenson, Chairman en hie Oly Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Wednesday, September 24, 2003 - 9:30 a.m. 1. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:30 a.m. on Wednesday, September 24, 2003, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. ra ROLL CALL Roll was called by Shauna Howell. The following members were present: Steve Haagenson Golden Valley Electric Association Joe Griffith Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Rick Eckert Homer Electric Association Jim Posey Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Howell, Alaska Energy Authority Don Stead, Homer Electric Association Matt Bucek, Homer Electric Association Bob Day, Anchorage Municipal Light & Power (teleconference) Doug Hall, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Ron Saxton, AterWynne Mike Cunningham, Chugach Electric Association (teleconference) Tuckerman Babcock, Matanuska Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Mike Pauley, Matanuska Electric Association (teleconference) Brenda Applegate, Alaska Energy Authority Valorie Walker, Alaska Energy Authority Brian Bjorkquist, Department of Law Bradley Lake PMC Meeting Minutes September 24, 2003 Page 2 of 4 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS The addition of utilities cost being reimbursed on the governor project was added as Item B1. Also, the Bradley Lake Agreement Briefing was added as Item H. 6. APPROVAL OF MEETING MINUTES — May 20, 2003 Minutes will be changed to action items and brought back at the next meeting for approval. is NEW BUSINESS A. B1. Election of Officers MOTION: Mr. Griffith moved to keep the current slate of officers (Steve Haagenson -— Chair, Jim Posey - Vice Chair, and Secretary/Treasurer — AEA), seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Presentation from governor Subcommittee Matt Bucek Matt Bucek of HEA gave a presentation on the DCS replacement on the overhead projector (copies attached). MOTION: Mr. Eckert moved for approval on the recommendation of governor, which authorizes HEA to enter into the contract with the VA Tech for the replacement of the governor at $1,529,692.00, and work with the budget subcommittee to budget for it in the FY05 budget, seconded by Joe Griffith. A voice vote was taken and the motion passed unanimously. Cost Reimbursement on the governor project Stead Discussion between HEA and CEA over an $8,000 invoice. CEA has been discussing this for quite some time. Mr. Griffith told Mr. Stead to send him the invoice and the group moved on. MOTION: Mr. Griffith motioned for the governor committee to optimize the RAS system in the interim to control system repair, seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Bradley Lake PMC Meeting Minutes September 24, 2003 Page 3 of 4 Martin River Road Recommendations Copoulos Mr. Copoulos gave a brief overview of a letter dated July 8, 2003, regarding this item. MOTION: Mr. Copoulos moved to begin discussions with FERC to remove the Martin River Road as described, which consists of stripping it to ground level, leaving dredges, bridge approaches, and dike in place, and closing the airstrip, seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. Account 544 Budget Adjustment Copoulos O&D committee is recommending an $80,000 budget adjustment to account 544. $30,000 to repair a cracked runner, and $50,000 to replace failed transmission relays. The $30,000 for the cracked runner may end up being more than that, depending on what is found. A welding engineer will review and continue preliminary work that has been done to excavate the crack. It’s anticipated that the work can be done on-site, but won’t know until that work is completed and engineer has arrived. MOTION: Mr. Griffith to approve a budget adjustment of $80,000 for the runner repair, seconded by Jim Posey. A voice vote was taken and the motion passed unanimously. , Water Use Permits Copoulos MOTION: Mr. Copoulos motioned to proceed in obtaining water rights permit, seconded by Mr. Griffith. A voice vote was taken and the motion passed unanimously. MOA Internal Audit Report 2003-6 dated June 17, 2003 Copoulos No discussion of any of the findings in the letter from Ron Miller of AIDEA to Steve Haagenson of GVEA. Insurance Report Cunningham A site visit to Bradley Lake by a Warren-McVeigh-Griffith representative will take place next week. In terms of a report due date — December of this year to present their findings to the committee. MOTION: Mr. Griffith moved to proceed having Warren-McVeigh-Griffin deal with the risk management questions that have been before us, seconded by Wayne Carmony. Mr. Cunningham noted there is $25,000 in Bradley Lake PMC Meeting Minutes September 24, 2003 Page 4 of 4 budget for this. A voice vote was taken and the motion passed unanimously. H. Bradley Lake Agreement Briefing Saxton MOTION: Mr. Posey motioned to have Ron Saxton come to the next meeting to give a briefing on the rules of operation, who makes decisions, etc., and invite the subcommittees to attend as well, seconded by Mr. Griffith. Chair Haagenson requested that in future packets, if the subcommittees have a recommendation, present it as a draft motion for inclusion in the packets. 8. Committee Reports/Comments None to report at this time. A. Next Meeting Date Tuesday, October 21, 2003, from 9:00 a.m. to 12:00 p.m. 9. Adjournment The meeting was adjourned at 11:10 a.m. BY: LE Steve Haggenson, Chairman ATTEST: Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, October 21, 2003 - 9:00 a.m. 1. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:00 a.m. on Tuesday, October 21, 2003, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Howell. The following members were present: Steve Haagenson Golden Valley Electric Association Lee Thibert Chugach Electric Association Rick Eckert Homer Electric Association Jim Posey Anchorage Municipal Light & Power Dave Calvert (teleconference) City of Seward Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Howell, Alaska Energy Authority Don Stead, Homer Electric Association Doug Hall, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Rick Miller, Anchorage Municipal Light & Power Ed Reubling, Anchorage Municipal Light & Power Ron Saxton, AterWynne Michelle Detweiler, AterWynne Dave Carlson, Southeast Conference Mike Cunningham, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association Jim Walker, Matanuska Electric Association (teleconference — observer) Brian Hickey, Chugach Electric Association (teleconference) Page 1 of 3 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS The FERC issue was added as Item 8C. 6. APPROVAL OF MEETING MINUTES — May 20, 2003 and September 24, 2003 Mr. Posey moved to approve the meeting minutes of May 20, 2003, and September 24, 2003. Seconded by Mr. Eckert. A voice vote was taken, and the minutes were unanimously approved. TA. Election of Officers (Resolve Vice Chair Issue) At the previous meeting, the election of officers was held. The committee voted to accept the slated officers currently standing. There was a mis-noted person stated as Vice Chair at the last meeting, which needed to be changed to reflect the true Vice Chair. Dave Calvert was on the slate as the official Vice Chair. Dave Calvert and Jim Posey were nominated. The committee voted Jim Posey as the new Vice Chair. 7B. Briefing on Bradley Lake Responsibilities Ron Saxton Ron Saxton gave an overhead presentation of the responsibilities (see attached handouts). 7C. Response Regarding Inquiries on Bradley Transfer Art Copoulos Mr. Copoulos stated “AIDEA/AEA’s comment on that was that it would be inappropriate at this time to discuss a disposition of assets at least until the Statewide Energy Plan is completed and the utility IRP study that is currently underway.” 8A. Next Meeting Date The next meeting will be at the call of the Chair. 8B. Insurance/Risk Assessment Scope of Work/Signed Copoulos Mr. Copoulos gave a brief overview of the letter from Warren, McVeigh & Griffin dated September 19, 2003, regarding the proposal to perform risk and insurance review for Bradley Lake. Mr. Copoulos will meet with Mike Cunningham to discuss and go over questions. 8C. FERC Issue Copoulos FERC had been contacted and there are plans to visit them on November 3, 2003, to lay out the maps and give an overview and get their input on how we can work best with the Washington, D.C. office. This meeting is timed with other PMC members already being in that area so that if need be to contact them and coordinate a group gathering, location will allow it. A report will be brought to the PMC after the November 3” meeting. Page 2 of 3 Update on Runner Cracks Don Stead Three new cracks have been found in one runner. Those cracks have been excavated and have had Bacon Donaldson come in to provide support on the excavation and weld repairs. A boat sample was done. A section was cut out and sent with Bacon Donaldson to be analyzed. That analysis showed that the crack is a fatigue crack, more than likely caused by significant oscillation events. These cracks are being caused by the power oscillations that the runner is seeing. Fuji has been notified and they are awaiting a report from Bacon Donaldson talking about the cracks. One runner crack repair has been done and was tested to see if it passed. Believe that the repair method is effective and have started repairs on the other cracks in runner. The O&D committee has added the additional response that every six months they will shut down and do a check of the runner. 9. ADJOURNMENT The meeting was adjourned at 11:00 a.m. BY: LLL _— Steve igenson, Chairman ATTEST: : A Alaska Energy Authority, Secretary Page 3 of 3 Bradley Lake Project - Management Committee An Introduction to the BPMC’s Functions and Responsibilities Presentation Compiled by Ater Wymne, LLP October 2003 Bradley Lake PMC * Membership ¢ Alaska Energy Authority (AEA) * Chugach Electric Association (Chugach) ‘* Golden Valley Electric Association (GVEA) + Anchorage Municipal Light & Power (ML&P) * Homer Electric Association (HEA) + Matanuska Electric Association (MEA) * Seward Electric System (Seward) * Alaska Electric Generation & Transmission Co-op (AEG&T) BPMC Powers & Authority * Key documents that set forth the BPMC’s powers and authorities: ~ 1987 Power Sales Agreement — Bradley PMC Bylaws — 1989 AEA Power Revenue Bond Resolution Power Sales Agreement * Termination (PSA s.2): — 50 years after date of Commercial Operation, or — no Bonds outstanding under the Bond Resolution, whichever occurs later. * Renewal (PSA s.2): — Any purchaser may renew for additional successive terms up to the useful life of the project. — If not all parties renew, percentage shares will be reallocated accordingly. + Agreement is a Take or Pay obligation (PSA s.7): — Each Purchaser will make payments as required under the PSA notwithstanding a suspension or reduction in — the amount of power supplied by the Project. Objectives of the BPMC Article 1 of the Bylaws sets forth the objective of the PMC as follows: * Responsibility for the management, operation, maintenance, and improvement of the Bradley Lake Project, subject to the non-delegable duties of the AEA. Representative Appointment and Voting * Each utility member of the BPMC designates one voting representative and one alternate representative to the BPMC. * Each utility member must notify, in writing, all other members of the names, addresses and telephone numbers of the designated and alternate representatives. * No Committee member shall obtain an additional vote through merger with, acquisition of , or assignment from any other Committee member, and AEG&T shall not have a direct vote, but is represented by and through HEA and MEA each of which is entitled to vote as a Purchaser member. * Quorum = 5 members Purchaser’s Percentage Shares of Project Capacity and Annual Project Costs AEG&T 25.8% (MEA = 13.8%; HEA = 12.0%) Chugach 30.4% GVEA 16.9% ML&P 25.9% Seward 1.0% BPMC Responsibilities — Project management, operation, maintenance and improvement — Budgets and audits — Procedural: adopt rules of procedure, hold meetings, elect officers, establish subcommittees (as needed), dispute resolution, hire consultants, etc. * Operation and Maintenance (PSA s.13). — Operate and maintain the Project. — Adopt maintenance schedules for the Project. * Scheduling, Production, and Dispatch of Project Power (PSA s.13). — Adopt procedures for scheduling, production, and dispatch of Project power. + Water Allocation (PSA s.13). — Establish procedures for the use of each Purchaser’s Water Allocation. 10 * Required Project Work (PSA s.13). — Work required to keep project in good and efficient operating condition. — Evaluate and select among alternative methods (if any) of carrying out and funding Required Project Work. * Optional Project Work (PSA s.13). — Adopt provisions to evaluate and approve Optional Project work and to determine the compensation (if any) to be provided if the Committee approves such Optional Project Work. — Only if approved by utilities (AEA cannot force) — BPMC must determine which utilities are benefited and which, if any, are adversely impacted, and allocate expense and compensation accordingly. 12 * Insurance Determination ( PSA s.13). — Make an initial determination of customary insurance (within the meaning of Section 714 of the Bond Resolution), and determine the appropriate amount of insurance for the Project and obtain same (in addition to-other insurance that may be required by the Bond Resolution). * Electric Power Reserves (PSA s.13). — Adopt and implement procedures relating to electric power reserves for the Project. 13 + Renewal and Continuity Reserve Fund. — Consider the need for and approve an additional amount to be added to the Renewal and Continuity Reserve Fund above the Renewal and Continuity Reserve Requirement provided in the Bond Resolution. 14 + Limitation on Certain Contracts: — Section 10(d) of the PSA lays out the conditions under which other take or pay contracts for power can be entered into by the Purchasers, e.g., * No Purchaser can enter into a take or pay contract for power outside of the PSA if payments for that power are equal to or greater than the Purchaser’s obligations under the PSA, unless: — the contract is for two years or less and payment obligations under the contract are on parity with the Purchaser’s payment obligations under the PSA — a formal opinion has been obtained from a Consultant that the contract will contribute to the business of the Purchaser’s System in accordance with Prudent Utility Practice and contract will not impair the ability of the Purchaser to raise revenues sufficient to meet its obligations under the PSA. 5 1 * Sales, mergers and assignments (PSA S.17(c)) — No Purchaser shall abandon, sell, mortgage, lease or otherwise dispose of the Purchaser’s system or any assets of that system or assign the PSA or any interest thereunder to any assignee or “successor in interest. unless: : * consented to by majority of utilities and AEA, or * made to other BPMC utility, or + limited to surplus assets, or * consultant certifies such action will not adversely impact utilities ability to perform 16 * Special Provisions — Establish Accounts if No Bonds Outstanding — Excess Payments 17 Budget Process + Fiscal Year (PSA s.1(r)): July 1 - June 30 * Committee’s Duties in the Budget Process (Bylaws Art.9). — The Committee is responsible for adopting a detailed budget process. The annual budget must include: amounts required for debt service on any outstanding bonds; amounts required for reserved funds created by bond resolution; and costs of producing and delivering power. The budget may include amounts for non-bond funding of additional Project work. 18 * Budget “Default’(PSA s.13(e)). — Each fiscal year, adopt and revise (as necessary) a budget of Annual Project Costs. + Ifthe Committee fails to adopt a budget by the ninetieth (90") day prior to the beginning of a fiscal year (April 2), then AEA may adopt the budget. 19 * Types of Annual Project Costs (PSA s.8) Debt Service on Construction and Acquisition Bonds Debt Service on other Bonds Amounts required for restoration of funds established under the Bond Resolution to appropriate levels Payment for required project work Payments into Funds established under the Bond Resolution Operation and Maintenance costs Insurance costs AEA Administrative costs Committee costs Other Project costs as deemed necessary by the Committee 20 10 + Estimated Annual Payment Obligation (PSA s.13(c)). — Each fiscal year, establish each Purchaser’s estimated Annual Payment Obligation, including a schedule of equal monthly payments that each Purchaser must make during that fiscal year. + If the Committee fails to establish each Purchaser’s Annual Payment Obligation in a timely fashion, then AEA may do so. 21 + Actual Annual Project Costs and Actual Annual Payment Obligation (PSA s.13(c)). i — Determine the actual Annual Project Costs after the conclusion of each fiscal year, the actual Annual Payment Obligation for each Purchaser, and the amount of any additional payment required from (or refund to be given to) each Purchaser. + If the Committee fails to determine the actual Project Costs in a timely fashion, then the Authority may do so. 22 11 * Audit (Bylaws Art. 9.3) An annual audit shall be performed by qualified independent auditors selected by the Committee, to be completed on or before the first day of December of each year. * Capital Asset Acquisition and Accountin, laws Art. 9.4) AEA owns and controls all assets that are part of the Project Asset = value of $500 or more, a useful life of at least one year, and substantially comprises a Retirement Unit as listed in the Federal Energy Regulatory Commission List of Retirement Units, as amended from time to time Committee control and management of capital assets AEA as “Purchasing Agent” on behalf of PMC : 23 + Funds Required to be Established by Bond Resolution (Bylaws Art. 10) Construction Fund Debt Service Fund Capital Reserve Fund Renewal and Contingency Reserve Fund Revenue Fund Operating Fund Revolving Construction Fund . 24 12 Procedural Duties Article 5 of the Bylaws sets forth the following: Rules of Procedure. Adopted for the selection of Committee officers, conduct of Committee meetings, dispute resolution, approval of Consultants, modification of procedural rules and applicable voting requirements (the Bylaws). Annual Meeting. First regular meeting of the Fiscal Year (July 1 through June 30), to elect officers and transact such other business as may come before the meeting. Regular Meetings. Held at least quarterly. Special Meetings. Called by the Chairman .or by three members of the Committee at any time and advising the Secretary of the Committee. Business at a special meeting is limited to the purpose stated in the notice of special meeting. Reasonable written notice needs to be given prior to the meeting. 25 + Notice of Meetings. Public notice is given by the Secretary of the Committee for all meetings of the Committee. Notice required at least five (5) days before date of meeting by mail. + Notice published once in the designated newspaper of the Committee (Anchorage Daily News) + A notice of a meeting includes date, time and place of'the meeting, and if the meeting is by teleconferencing, the location of a teleconferencing facility equipped with.a speaker-telephone or similar listening device. + Itis the intent of the Committee to give the best notice possible to the public of all its transactions, but the inadvertent failure to accomplish any one of the notice requirements shall not invalidate any action of the Committee. 26 13 Waiver of Notice. Whenever any notice is required to be given to any member a waiver of the notice in writing, signed by the person or persons entitled to such notice, whether before or after the time stated in the notice, is deemed equivalent to giving notice. Place of Meetings. The Chairman of the Committee may designate any place for any annual, regular or special meeting. Teleconferencing. Meetings may be held by teleconference. Minutes of Meetings. Written minutes shall be kept for all regular and special meetings of the Committee. Minutes of Committee meetings shall be mailed to each member following each meeting. The official copy of each minutes shall be signed by the Chairman and the Secretary. 27 Manner of Acting. + Committee actions may be taken by any reasonable voting method, provided that any member may request a public roll call vote. All actions taken via teleconferencing shall be by roll call vote. + Except for those matters which expressly require alternative voting procedures, the act of a majority of votes taken during a meeting at any time when a quorum is present, shall be an act of the Committee, and binding on the members. + A representative who is present at a meeting of the Committee at which action on a Committee matter is taken shall be presumed to have assented to such action unless the representative's dissent is both indicated and recorded at the time of the action. 28 14 * Voting Arrangements and Requirements (Bylaws Art.5.10): — Actions that require the affirmative vote of at least four representatives of the Purchasers whose percentage shares of Project capacity are greater than 51%, but no action by the Authority: + Adopting procedures for scheduling, production and dispatch of Project power. + Selecting alternative methods not involving AEA for funding Required Project Work. + Establishment of procedures for the use of each Purchaser's Water Allocation, except that the Authority's affirmative vote shall be required for any water allocation decision which affects performance of the Authority's obligation under its FERC license. 9 — Actions requiring the affirmative vote of at least four representatives of the Purchasers, whose percentage shares of Project capacity are greater than 51 % plus the affirmative vote of AEA: Arrange for the operation and maintenance of the Project. + Adopt budget of Annual Project Costs. + Establish the estimated Annual Payment Obligation of each Purchaser, together with a schedule for each Purchaser of equal monthly payments that such Purchaser is required to make during that year. + After the end of the FY, determine the actual Annual Project Costs. 30 15 Evaluate necessity for and scheduling of Required Project Work. Determine appropriate amount of and obtain insurance for or related to the Project. Adopt additional minimum funding amounts for the Renewal and Contingency Reserve Fund above that required by the Bond Resolution. Select among alternative methods that involve AEA for funding Required Project Work. Adopt or amend procedural rules of the Committee except for procedures for dispute resolution which shall be adopted or amended by unanimous agreement. 31 Adopt maintenance schedules for the Project. If and when no Bonds are outstanding, determination of rules, procedures and accounts necessary to manage the Project. Evaluation and approval of Optional Project Work and the compensation for such work. Application of insurance claims proceeds not governed by the bond resolution. Approval of procedures and any individual utility agreements relating to electric power reserves for the Project in accordance with Section 5 of the Power Sales Agreement. The approval (including possible pre-approval) of consultants. 32 16 — The unanimous concurrence of all Committee members is necessary for: + Adoption of procedures for dispute resolution. — A majority of Committee votes, with each Member receiving an equal vote (including AEA) is required for: + Election of officers. 33 * Conduct of Meetings (Bylaws Art. 5.11): — Robert’s Rules of Order — Open Meetings Policy * Although not required to do so, the BPMC has determined that Alaska public policy favors openness and public access and the Committee desires to conduct its business in public in accordance with certain policies outlined in the Bylaws. 34 17. — The Conduct of Executive Sessions and Topics to be Discussed in Executive Session * Matters the immediate knowledge of which would clearly have an adverse effect upon the finances of the Authority or the Project. + Subjects that tend to prejudice the reputation and character of any person; provided, however, the person may request a public discussion; * Matters which by law, municipal charter or ordinance are required to be confidential. + Matters discussed with an attorney for the Committee or a member of the Committee, the immediate knowledge of which could have an adverse effect on the legal position of the Committee or the Authority. 35 — The Open Meetings Policy does not apply to: + Meetings at which a quorum is not present; + Informal discussions, by telephone or otherwise, among members of the Committee, at which votes are not taken and official business is not conducted; or * Meetings and discussions, formal or informal, of Committee members in which all participants indicate they are acting individually as representatives of the Parties to the Agreement and not as the assembled Committee, and at which no Committee business is conducted and no votes are taken. 36 18 * Special Purpose Committees (Bylaws Art. 6) — The BPMC may appoint special purpose committees, however, these committees may only act upon PMC matters when given prior authorization by the PMC to do so. — The PMC grants authorization by adopting a resolution detailing in writing the purpose and scope of the committee. * Election of Officers (Bylaws Art.7). — Elect a Chairman, Vice Chairman, Secretary/Treasurer, and other officers and agents as necessary,. The Committee is responsible for determining the officers’ term and duties. * The Committee may remove any officer upon the vote of five Committee members. 37 * Dispute Resolution (Bylaws Art.12). — Adopt procedures for the resolution of disputes that may arise between the parties to the Power Sales Agreement regarding the meaning of its terms. + Expense Reimbursement (Bylaws Art.13) — Each Member will be reimbursed for the cost of travel and per diem necessary for its representative and alternate to attend meetings of the Committee in the amount of $150.00 per day. 38 19 + Authority May Take Required Actions if Committee Fails to Do So (PSA s.13(e). — AEA has been granted the default authority to take any action it deems necessary to manage and maintain the Project according to Prudent Utility Practice if the PMC fails to carry out its duties. — AEA may take any other action which it believes to be required in order for it to comply with federal or state law, the orders of licensing and regulatory agencies, the Bond Resolution, or the PSA. 39 20 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 2002 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE @ MEETING MINUTES Via Electronic Media @ AIDEA 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, March 5, 2002 — 10:00 a.m. as CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, March 5, 2002, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. Ze ROLL CALL Roll was called by Shauna Dean. The following members were present: Dave Calvert City of Seward (teleconference) Wayne Carmony Matanuska Electric Association (teleconference) Gene Bjornstad Chugach Electric Association (teleconference) Norm Story Homer Electric Association Steve Haagenson Golden Valley Electric Association Bob Day Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Brenda Applegate, Alaska Energy Authority Brian Hickey, Chugach Electric Association (teleconference) Lee Thibert, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association (teleconference) Mike Cunningham, Chugach Electric Association (teleconference) Don Stead, Homer Electric Association Bob Zaharsky, Homer Electric Association Ron Saxton, AterWynne, LLP (teleconference) Doug Hall, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES - October 16, 2001 MOTION: Mr. Bjornstad moved to approve the meeting minutes of August 28, 2001. Mr. Story seconded the motion. A voice vote was taken, and the minutes were unanimously approved. Tn NEW BUSINESS A. Recommendation by Budget Subcommittee for Approval of FY03 Budget MOTION: Mr. Story moved to approve the recommendation by the Budget Subcommittee for the FY03 Budget, seconded by Mr. Bjornstad. A roll call vote was taken and the motion was unanimously approved. B. Recommendation by Budget Subcommittee for Approval of FY01 Financial Statement for O&M Funds MOTION: Mr. Bjornstad moved to approve the recommendation by the Budget Subcommittee for the FY01 Financial Statement for O&M Funds, seconded by Mr. Story. Mike Cunningham noted that Parisena Stromberg felt that the special purpose financial statements fairly present and all material respects the assets, liabilities, and surplus of the project committee operating revenue funds as of June 30, 2001 and 2000. A voice vote was taken and the motion was unanimously approved. C. 0&D Committee Report Mr. Copoulos noted that the O&D Committee had three projects to report on: the governor instability project, the turbine needle repair project, and the turbine runner repair project. MOTION: Mr. Story moved that by this motion, the PMC acknowledges that the utilities today within the PMC that are providing services to the PMC are doing so representing the PMC. And that further, we launch a review of our risk and our insurance coverages and set up a subcommittee to go do that and bring back to us at the next meeting a report that discusses whether or not we have adequate insurance. Mr. Bjornstad seconded the motion. After much discussion, Mr. Story withdrew his motion and Mr. Bjornstad consented to the withdrawal of the motion. MOTION: Mr. Story moved that the PMC appoint the Finance Committee to review our risk management to see where we are and report back with recommendations within the Page 2 of 3 next 30 days. Mr. Bjornstad seconded the motion. After much discussion, the motion carried. D. Executive Summary Performance Report John Cooley gave a brief overview of the handouts (attached) which show generation, lake levels, historical graphs, monthly statement from Chugach regarding energy levels compared against meters, monthly totals, percentages of output each utility takes, peak outputs and energy usage by each utility and balances. f 8. COMMITTEE COMMENTS A. Next Meeting Date — Haagenson Chair Haagenson recommended that the next regularly scheduled meeting of the committee be held at 10:00 a.m. on Thursday, April 11, 2002, at the Alaska Industrial Development and Export Authority's Board Room. 9. ADJOURNMENT There being no objection and no further business of the Committee, the meeting was recessed at 11:20 a.m. BY: —ZZ Steve Haagerison, Chaipman ATTEST: GPa Alaska Energy Authority, Secretary Page 3 of 3 or BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE @ MEETING MINUTES Via Electronic Media @ AIDEA 813 W. Northern Lights Boulevard Anchorage, Alaska Thursday, April 11, 2002 — 10:00 a.m. 1; CALL TO ORDER Vice Chairman Dave Calvert called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:45 a.m. on Thursday, April 11, 2002, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Dave Calvert City of Seward Wayne Carmony Matanuska Electric Association (teleconference) Gene Bjornstad Chugach Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Steve Haagenson Golden Valley Electric Association Bob Day Anchorage Municipal Light & Power Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Brian Hickey, Chugach Electric Association (teleconference) Lee Thibert, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association (teleconference) Mike Cunningham, Chugach Electric Association (teleconference) Don Stead, Homer Electric Association Don Zoerb, Matanuska Electric Association (teleconference) Rick Eckert, Homer Electric Association (teleconference Larry Hittle, AterWynne, LLP (teleconference) © 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES — March 5, 2002 Minutes for the March 5, 2002, meeting will be consolidated from verbatim minutes into action items only, and will be presented at the next meeting. Discussion ensued as to whether the meeting tapes and corresponding documents should be destroyed after final minutes are prepared. Chair Haagenson asked Larry Hittle to review the legal procedures for Bradley Lake PMC minutes. ts NEW BUSINESS A. Overview of the Governor Repair Project Hickey Mr. Hickey reported that they have gone out for RFQs for vendors to provide digital control system and the power system stabilizer. At the time the qualifications closed, they had received one reply that was non-compliant from GE Global Services. We have contacted a number of vendors and had one response from GE Global Services. ABB declined to submit qualifications because they don't believe it fits in their current business structure. Voight Siemens had a similar response; VA Hydro responded and provided qualifications that were compliant with the request. We also received an unsolicited request from L&S Electric in Wisconsin. They are a group that Terry Bowman works for and he is the person who designed the original governor back in 1990. L&S Electric isn’t qualified for the entire project, but are interested in working on the control scheme. In addition, Mr. Hickey found that Alstom made no reply and that ABB Hydro has been sold to Alstom and is currently trying to reach them in Denver. Mr. Hickey’s recommendation is that even though GE was non-compliant in their Qualification submittal, that we provide them with the functional specification as well as VA Hydro, and if ABB Hydro (now Alstom) is interested, we can provide them with a functional specification as well. Mr. Hickey should be able to come back to the BPMC with a recommendation on a vendor within 30 to 45 days. Mr. Hickey also noted that they are re-running the 1990 load acceptance study, utilizing the governor model that was built a couple years ago to benchmark the existing plant, so that when we build the new controller we can identify before installation what the advantages and disadvantages will be. The O&D Subcommittee will meet and bring a formal recommendation to the PMC. B. Update on Needle Repair Project Don Stead Mr. Stead reported that the RFP is out for review to seven vendors. There will be a mandatory pre-bid on April 22, 2002, and bids will be due at HEA on April 30, 2002 for evaluation. After evaluation, they will meet with the O&D Committee for review and approval. The pre-bid will be at the plant. There will be an outage starting on April 15", so one unit will be open for vendors to inspect. Page 2 of 3 Cc. Update on Turbine Runner Repair Don Stead Mr. Stead noted that they have received the calibration block. One of the issues was that the testing lab could not determine the actual crack depth. A testing lab in Anchorage is going to be at the Bradley plant and will re-test the runner in attempt to determine the crack depth and from that, develop a repair plan. D. Finance Committee Insurance Review Mike Cunningham Mr. Cunningham stated that the Budget Subcommittee met to try and frame the questions to ask the consultants. We decided on referring the issue out to Chugach’s risk management consultant, Warren, McVeigh & Griffin, and to Glen Smith at the Municipality. . The Master Agreement and the O&M Agreement along with copies of the insurance policies to the consultants were sent for review. (See attached report.) MOTION: Mr. Story motioned to charge the BPMC attorney to frame the issues, present the BPMC with what the issues are, and do a thorough review and report back at the next meeting. Seconded by Gene Bjornstad. The motion was unanimously approved. 8. COMMITTEE COMMENTS A. Next Meeting Date Haagenson The next meeting is at the call of the Chair. 9. ADJOURNMENT There being no objection and no further business of the Committee, the meeting was recessed at 11:45 a.m. BY: ZZ Steve Haagenson, ATTEST: Alaska‘Energy Authority, Secretary Page 3 of 3 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES c tn a | ai Via Electronic Media @ AIDEA \ LA 813 W. Northern Lights Boulevard ; at Anchorage, Alaska Alena J oer’ Wednesday, April 24, 2002 — 10:00 a.m. 1. CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Wednesday, April 24, 2002, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Dave Calvert City of Seward (teleconference) Wayne Carmony Matanuska Electric Association (teleconference) Gene Bjornstad Chugach Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Steve Haagenson Golden Valley Electric Association (teleconference) Bob Day Anchorage Municipal Light & Power (teleconference) Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Keith Laufer, Foster Pepper Rubini & Reeves, Counsel to AEA Bob Zaharsky, Bradley Lake (teleconference) Brian Hickey, Chugach Electric Association (teleconference) Lee Thibert, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association (teleconference) Mike Cunningham, Chugach Electric Association (teleconference) Don Stead, Homer Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Larry Hittle, AterWynne, LLP (teleconference) Bradley Lake PMC Meeting Wednesday, April 24, 2002 Page 2 of 3 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS Chair Haagenson added discussion of Larry Hittle’s contracting issues report, a second item of the recommendation relating to the governor repair project and third, Chair Haagenson requested that everyone receive a copy of the current by-laws. 6. APPROVAL OF MEETING MINUTES — March 5, 2002 and April 11, 2002 MOTION: Mr. Story moved to approve the meeting minutes of March 5, 2002, seconded by Mr. Bjornstad. A voice vote was taken, and the minutes were unanimously approved. MOTION: Mr. Story moved to approve the meeting minutes of April 11, 2002, seconded by Mr. Day. Mr. Bjornstad noted that on item 7A., the third sentence wasn’t clear regarding was there more than one response. Brian Hickey stated that the initial RFQ received one response from GE Global Services. He contacted all the vendors asking them why then hadn’t responded, and at that point VA Hydro responded noting that the Request had been sent to the wrong location. The corrected sentence will read: We have contacted a number of vendors and had one response from GE Global Services. Mr. Bjornstad also noted that the third sentence in the last paragraph ...they aren’t qualified... he thought that was just the opinion of Brian Hickey. Mr. Hickey noted that that was their opinion to him. Minutes would reflect that ‘they’ being L&S Electric, would be changed. This change would include a name insertion of L&S Electric. On page 3 of 3, item 7D, the last sentence didn’t read correctly. The corrected sentence would read: The Master Agreement and the O&M Agreement along with copies of insurance policies were sent to the consultants for review. A voice vote was taken, and the minutes were unanimously approved as amended. i RECOMMENDATION ON INSURANCE _Larry Hittle Mr. Hittle noted that he had sent out two memorandums — one that talked about contracting procedures, and the other which was an examination of various terms and conditions regarding insurance and liability that existed in the current contracts. Mr. Hittle discussed the memorandum relating to contracting procedures and the relationship of the PMC to contracting. Mr. Hittle noted that the Settlement Agreement lays out the financial responsibilities pretty clearly. Mr. Hittle recommends to continue to use AEA as the contracting body for project repairs or project O&M and not have the PMC get involved in the chain of command. In the end it would Bradley Lake PMC Meeting Wednesday, April 24, 2002 Page 3 of 3 just confuse the issue and create an additional insurance wrinkle. His recommendation states that if you do contract, you contract in a way that would be binding on each of the utilities as PMC acting as agents for them. He suggested continuing the practice of using AEA as the primary contracting agency for the project and if you feel it might be more convenient to use HEA or CEA, take action to allow that to happen. After discussion, it was decided to table the item and give the utilities time to meet and come back to the PMC with their suggestion and move forward. MOTION: Charge the finance committee to look at the insurance coverage levels, both internal and external, and compare the various policies to see how well it fits together and see if it’s consistent. Mr. Laufer stated that AEA will undertake a similar review using the Division of Risk Management. The State has an independent interest in making sure there is adequate insurance and has a duty to do that, and under the FERC licenses as well. Mr. Laufer noted that Mr. Copoulos would coordinate with the finance committee so there wasn’t duplicate effort. MOTION to table action on this item by Mr. Bjornstad seconded by Mr. Story until the Tuesday, April 30, 2002 teleconference at 10:00 a.m. Cc. BY-LAWS __ Steve Haagenson Chair Haagenson restated that he wanted everyone to receive a copy of the updated by-laws. 8. COMMITTEE COMMENTS A. Next Meeting Date - Haagenson Chair Haagenson recommended that the next regularly scheduled meeting of the committee be held at 10:00 a.m. on Tuesday, April 30, 2002, via teleconference, at the Alaska Industrial Development and Export Authority's Board Room. 9. ADJOURNMENT There being no objection and no further business of the Committee, the meeting was recessed at 10:50 a.m. BY: ATTEST: / lacy Z OMe Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES TELECONFERENCE Via Electronic Media @ AIDEA 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, April 30, 2002 - 10:00 a.m. fi CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, April 30, 2002, via teleconference, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2 ROLL CALL Roll was called by Shauna Dean. The following members were present: Dave Calvert City of Seward (teleconference) Wayne Carmony Matanuska Electric Association (teleconference) Gene Bijornstad Chugach Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Steve Haagenson Golden Valley Electric Association (teleconference) Bob Day Anchorage Municipal Light & Power (teleconference) Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Keith Laufer, Foster Pepper Rubini & Reeves, Counsel to AEA Bob Zaharsky, Bradley Lake (teleconference) Brian Hickey, Chugach Electric Association (teleconference) Lee Thibert, Chugach Electric Association (teleconference) John Cooley, Chugach Electric Association (teleconference) Joe Griffith, Chugach Electric Association (teleconference) Don Stead, Homer Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Larry Hittle, AterWynne, LLP (teleconference) 4. PUBLIC COMMENT There were no public comments. Bradley Lake PMC Meeting Tuesday, April 30, 2002 Page 2 of 2 5. AGENDA COMMENTS The only item to be discussed during today’s meeting is the insurance issue that was tabled from April 24, 2002. 6. APPROVAL OF MEETING MINUTES There were no meeting minutes available for approval. 7. RECOMMENDATION ON INSURANCE __Larry Hittle Discussion ensued regarding Brian Hickey’s memorandum dated April 28, 2002, on the recommended contracting relationship and management team for the Bradley Lake governor digital control system replacement. Mr. Laufer stated that he wanted to make clear on the part of AEA whatever direction is provided to HEA, is being directed by the PMC. That AEA is being directed by the PMC to enter into these relationships, and that any cost resulting from HEA’s activities, or whoever the ultimate vendor is, is agreed to be a project cost. AEA here is acting as a facilitator, it's more of a conduit relationship at this point. We have no liability for this repair any longer, it’s been settled as a result of the settlement that we entered into back in 1997/98. What we don’t want is that there be any doubt that the activities by HEA and the ultimate vendors and the design that is accepted by whoever ultimately you decide get that authority, that none of that rests with the State. Mr. Bjornstad moved to recess the meeting until Wednesday, May 8" at 10:00 a.m., and table the motion once again and get it all revised and bring back the new information to the PMC. Seconded by Mr. Story. A voice vote was taken, and the motion unanimously passed. 8. COMMITTEE COMMENTS A. Next Meeting Date — Haagenson Chair Haagenson recommended that the next meeting reconvene at 10:00 a.m. on Wednesday, May 8, 2002, via teleconference, at the Alaska Industrial Development and Export Authority's Board Room, and at Chugach Electric Association's Board Room. 9. RECESS There being no objection and no further business of the Committee, the meeting was recessed at 10:40 a.m. BY: ar * Steve Haagengon, Chairman ATTEST: AS he- Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES TELECONFERENCE Via Electronic Media @ AIDEA 813 W. Northern Lights Boulevard Anchorage, Alaska Wednesday, May 8, 2002 - 10:00 a.m. 1. CALL TO ORDER Chairman Steve Haagenson reconvened the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Wednesday, May 8, 2002, via teleconference, from the Alaska Industrial Development and Export Authority's Board Room, and Chugach Electric Association's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Dave Calvert City of Seward (teleconference) Wayne Carmony Matanuska Electric Association (teleconference) Joe Griffith Chugach Electric Association Don Stead Homer Electric Association (teleconference) Steve Haagenson Golden Valley Electric Association (teleconference) Bob Day Anchorage Municipal Light & Power (teleconference) Art Copoulos Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Keith Laufer, Foster Pepper Rubini & Reeves, Counsel to AEA Brian Hickey, Chugach Electric Association (teleconference) Lee Thibert, Chugach Electric Association John Cooley, Chugach Electric Association Don Zoerb, Matanuska Electric Association (teleconference) Larry Hittle, AterWynne, LLP (teleconference) Bradley Lake PMC Meeting Wednesday, May 8, 2002 Page 2 of 2 4. BRADLEY LAKE HYDROELECTRIC PROJECT GOVERNOR REPLACEMENT Discussion ensued on the Homer Electric Association memorandum dated May 3, 2002 regarding Bradley Lake Hydroelectric Project Governor Replacement. Several deletions and changes were made and the memo was approved as amended (attached). Mr. Laufer also brought a Resolution to the committee for approval (attached). Aroll call vote was taken on approval for the Resolution and was unanimously approved. 5. COMMITTEE COMMENTS A. Next Meeting Date Haagenson The next meeting is at the call of the Chair. 6. ADJOURNMENT There being no objection and no further business of the Committee, the meeting was adjourned at 10:30 a.m. BY eee Steve HaagefiSon, Chairman ATTEST: 6 Alaska Energy Authority, Secretary (Attachments) BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 2001 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES TELECONFERENCE Via Electronic Media @ AIDEA 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, March 20, 2001 — 10:00 a.m. 1. CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, March 20, 2001, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Gene Bjornstad Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Steve Haagenson Golden Valley Electric Association (teleconference) Stan Sieczkowski Alaska Energy Authority Michael Scott Anchorage Municipal Light & Power (teleconference) Dave Calvert City of Seward (teleconference) 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Brenda Applegate, Alaska Energy Authority Don Stead, Homer Electric Association (teleconference) Brian Hickey, Chugach Electric Association John Cooley, Chugach Electric Association Mike Cunningham, Chugach Electric Association Hank Nikkels, Anchorage Municipal Light & Power (teleconference) Kate Lamal, Golden Valley Electric Association (teleconference) Ron Saxton, AterWynne LLP (teleconference) Bradley Lake PMC Meeting Page 2 of 4 Tuesday, March 20, 2001 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS Chair Bjornstad added the two items to the agenda. Item A will be a report and recommendation from Stan Sieczkowski from the O&D Committee. Item B will be the Fiscal Year 99-2000 Audited Financials and Item C will be the Budget for 2002. There was no objection to adding these items to the agenda. 6. APPROVAL OF MEETING MINUTES — June 20, 2000 MOTION: Mr. Stead moved to approve the meeting minutes of June 20, 2000. Mr. Sieczkowski seconded the motion. Mr. Hickey noted a change on page 3 of 7, paragraph 4, change the third sentence to read — Units with small droop percentages will pick up more load faster than units with large droop percentages. Page 4 of 7, paragraph 1, the last three words “where it was,” should be “nominal.” The end of paragraph 6, titled Answers, should read “generated by the deflector and turbulence in the turbine pit.” Page 5 of 7, the first paragraph should begin “...The original PTI model...”. Paragraph 5, titled Answers, should end “... for a step speed error input.” A voice vote was taken and the minutes were unanimously approved as amended. 7. NEW BUSINESS 7A. 0&D Committee Report — Sieczkowski Mr. Sieczkowski stated that the Bradley O&D Committee met on September 27, 2000, February 14, 2001, and February 26, 2001. Mr. Stead noted that all the maintenance is current on the unit and are currently preparing for the outage, which will occur on April 6"". Mr. Cooley added that both units are operating normally. HEA had repaired a PLC in one unit about a month ago. There was a reduction in the allocations in October of about 45,000 MWH for the project. Mr. Sieczkowski also noted that at the February 26" meeting the O&D Committee discussed the governor instability project. FERC has requested us to file an amendment to the project license to the Nuka Diversion repairs. A letter was sent back to FERC asking them to reconsider. Brian Hickey spoke on the governor instability project. He noted that the last quarterly update he did for the project was the one that occurred on the 2™ of January. There will be another update to the schedule and the actual accounting side of it at the end of this month. The major issue that has come up is Item #1, Design and Implementation of the Interim Instability Mitigation. Last August a decision was made by the O&D Committee to not proceed with it. In the interim, the cost of manning the plant has become unacceptable. By the end of May, HEA should be able to stop manning the plant. Brian Hickey and the project consultant (EPS) came up with several measures that the O&D Committee believe will allow HEA to stop manning the plant. Three modifications to the AGC Bradley Lake PMC Meeting Page 3 of 4 Tuesday, March 20, 2001 software for CEA, GVEA, and ML&P will be implemented to return frequency to normal after an over-frequency event. Discussion followed on scheduling practices. There is a need to return to an agreement that was in place 4 or 5 years ago, where the participants did not make schedule changes beyond a half hour before the top of the hour. Chugach has relaxed scheduling requirements to allow schedule changes right before the top of the hour, and what that tends to do is have a number of dispatchers in the system trying to schedule units at the last minute causing the system to go into over-frequency events more frequently because of the lack of coordination. Chair Bjornstad asked if the O&D Committee had already discussed these items. Currently EPS is formally writing up the plan and then will send it to the O&D Committee for their approval and implementation. Chair Bjornstad said he wanted to see a write-up of what was just explained. Discussion followed on more technical concerns and operational procedures. Chair Bjornstad restated that he wanted to see a report in writing to better provide information to the PMC. Mr. Sieczkowski stated that at the February 26" teleconference, the O&D Committee discussed and recommends to the Budget Subcommittee and the Bradley PMC, that the fiscal year 2001 budget be adjusted by including an amount of $20,000 for replacing the three existing programmable logic controllers. It was also recommended that the fiscal year 2002 budget include an amount of $250,000 for replacing the existing Bradley Lake SCADA system to include new software, hardware, and installation of the SCADA system. 7B. Fiscal Year 1999 and Year 2000 Audited Financials — Applegate MOTION: Chair Bjornstad entertained a motion of the committee members to approve the Fiscal Year 1999 and Year 2000 Audited Financials. Michael Scott moved, seconded by Don Stead. Chair Bjornstad also noted that they will spend $20,000 additional in the Fiscal Year 2001 for three PLCs. Hearing no objection, the financials were unanimously approved. 7C. Budget 2002 — Sieczkowski Chair Bjornstad asked Mr. Sieczkowski if the O&D Committee is requesting an additional $250,000 to replace the SCADA system software and hardware. Mr. Sieczkowski noted that was correct. Mr. Sieczkowski noted that it is a total replacement of the SCADA system. Don Stead stated that Telegear, who provided the system originally, has ceased production of all spare parts. The only way to get spares now for that system is through salvaging them from other used systems. The Bernulli drives, a tape drive used to transfer data, are no longer manufactured; and in fact, HEA has to go to surplus sites to ask them if they have Bernulli tapes. Replacement Bradley Lake PMC Meeting Page 4 of 4 Tuesday, March 20, 2001 of the CRTs is no longer possible, thus, the recommendation that it receive a complete replacement. Telegear last year told HEA they would no longer provide replacement parts, and they don’t have any technicians to speak with. Mr. Nikkels asked if the replacement system would be a Harris system compatible with the Chugach/ML&P system? Mr. Stead stated that he didn’t think they had picked one, but HEA can write one in there as to what was wanted. MOTION: Don Stead motioned for the approval of the Fiscal Year 2002 budget, seconded by Michael Scott. A roll call vote was taken and the motion passed unanimously. 8. COMMITTEE COMMENTS A. Next Meeting Date Bjornstad Next meeting date is at the call of the Chair, sometime in mid-June. 9. ADJOURNMENT MOTION: Mr. Scott moved to adjourn. Seconded by Mr. Stead. There being no objection and no further business of the Committee, the meeting was recessed at 11:00 a.m. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES TELECONFERENCE Via Electronic Media @ AIDEA 813 W. Northern Lights Boulevard Anchorage, Alaska Friday, May 11, 2001 — 10:00 a.m. 1. CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Friday, May 11, 2001, from the Alaska Industrial Development and Export Authority’s Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Gene Bjornstad Chugach Electric Association Don Zoerb Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Henry Dale Golden Valley Electric Association (teleconference) Stan Sieczkowski Alaska Energy Authority Michael Scott Anchorage Municipal Light & Power (teleconference) 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Brian Hickey, Chugach Electric Association John Cooley, Chugach Electric Association (teleconference) Lee Thibert, Chugach Electric Association (teleconference) Brad Evans, Chugach Electric Association (teleconference) Hank Nikkels, Anchorage Municipal Light & Power (teleconference) Don Stead, Homer Electric Association (teleconference) Bob Zaharsky, Bradley Lake (teleconference) Larry Hittle, AterWynne, LLP (teleconference) 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. NEW BUSINESS 6A. Bradley Lake Turbine Repair Report — Sieczkowski Mr. Sieczkowski asked Bob Zaharsky to discuss this issue (report attached). Mr. Hickey stated that the O&D Committee has devised a remedial action scheme that will minimize the possibility of damage to the units from oscillations. Discussion on technical aspects of the remedial action plan followed. At the O&D meeting this was discussed in more detail, and Stan has a recommendation from that committee to approve the implementation of the remedial action scheme (attached). MOTION: The Bradley Operation and Dispatch Committee recommends approval to proceed to design, install, and implement the remedial action system for a cost not to exceed $40,000.00. Mr. Story moved, seconded by Mr. Dale. A roll call vote was taken, and the motion pass unanimously. a COMMITTEE COMMENTS A. Next Meeting Date — Bjornstad Next meeting date will be Thursday, June 21, 2001 at 10:00 a.m., via teleconference. 8. ADJOURNMENT There being no objection and no further business of the Committee, the meeting adjourned at 11:00 a.m. Page 2 of 2 AUG-22-01 21:38 FROM:ENGINEERING/POWER PRODUCT ID: 198072353305 PAGE 2/72 > ASCG Inspection, Inc of Anchorage was hired to conduit a liquid penetrant inspection of Unit #1 and Unit #2 runners. Their technician arrived at Bradley on April 14, 2001 and began testing. A crack was found on Unit #2 runner at approximately noon on Sunday April 15", At this time, it was decided to also test the spare runner. A small crack was found on the spare runner during the evening of April 16". The State was notified on April 16” of the crack found on Unit #2 runner. The O&D committee was also notified shortly thereafter. A Fuji engineer, who was on site for unrelated work, suggested the small crack be buffed and retested, The runner was buffed. ASCG came back and retested the runner on April 19". The Fuji engineer cleared the spare runner for use once this work was done. Work to drop the runner began on April 22™ and continued for three, 10 hour, days. The work crew consisted of four HEA employees and the Fuji engineer. The spare runner was completely installed by May 24". This effort required four, 10 hour, days with a crew of four HEA employees plus the Fuji engineer. Alaska Testing Institute was contracted to determine the depth of the crack. Their technician, using ultrasound, estimated the depth of the crack at over 13 mm. This work was done on May 24”. Currently, the State is identifying a source to craft the repair specifications. The following are included as part of this report. 1, Fuji’s Recommended Repair Procedure 2. Runner Photos (on CD) 3. Bucket sketches from ASCG Inspection (Bucket #10, Unit #2 show the crack) Cllectric Power Systems Consulting Engineers Bradley Lake O&D Bradley Lake Remedial Action Scheme March, 2001 BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM TABLE OF CONTENTS 1 Background and Scope 2 Description of Problem 3 Discussion of Remedial Action System...........ssssssssssessesssseseseessessssesenesessesenenseesensenens 4 3.1 Annunciate when either of the Bradley units are above a given MW output..............c::ccceceeeees 4 3.2. Annunciate when the deflectors are in the stream at Bradley .................scssssseeeeeeeseseseseneeeeeeess 4 3.3. Begin aggressive control to remove the deflectors from the stream at Bradley ..............::sseeee 5 3.4 Provide aggressive setpoint control when oscillations are detected ............cccccecsseesessseeeeeseeees 5 3:5 Trp Bradley units ifiosclllations COMMNUCL£. «<5 scccsccscessssenccesseosvessns secsesoescovenneccsesecssncesersecurees 5 4 Proposed Remedial Action System Conceptual Design... 5 Proposed Remedial Action System Implementation ..........ssssssesessssssesessessessrsessesenareeees 6 5.1 Eat FOI ose cescienenissinentsnksnbbebihsinad bits ibed eds AOMSANOONS Ae ROE mea aiCR RANE RNRROAISSICL 6 6 Potential Negative Effects of the RAS.........csssssssssssssssessssssseserssssssrssessessrasssssesssenensesteneeee 7 6.1 Reduce Bradley Unit Needle positions ..............csscccsssssssscesssscessseeesssccesseeeessereceseeesesseees 7 6:2 | | Trip Bradley Lake wits oottaci ss cnsscesstoveractcsonnnrcosenstennnsenaecponsnssenoserenneceteorssdecesenschonsesessnesssas 7 7 Preliminary Schedule and Budgetary Cost Estimate...........cssssssssssseseseseesersrseeeseaes 8 ELECTRIC POWER SYSTEMS PAGE2 MARCH 2001 BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM 1. Background and Scope Since the commissioning of the Bradley Lake units, large-scale oscillations have been observed. While observed and recorded on the power system, these oscillations were not reproducible in or anticipated by any of the system studies performed by the Bradley design consultants. In 1997-98, in a cooperative effort between the Bradley owners and Electric Power Systems, Inc. (“EPS”), a computer model was developed whereby the oscillations could be produced and characterized in simulation. Subsequent to the system studies with the “new” model, the Bradley plant was instrumented and testing done on the units to further understand the oscillations and the causes. Oscillations observed previously and predicted in simulation were successfully induced in the online Bradley testing. One of the long-term solutions to the Bradley oscillations involves improvements to the Bradley governor system. The task of defining and implementing a new governor algorithm is currently under study by the utilities. In the interim, a remedial action scheme (“RAS”) is required to (1) alert the system dispatchers when the plant is operating in an area where it may be susceptible to oscillations, (2) initiate plant control in order to dampen or minimize the length and magnitude of the oscillations, and (3) should the oscillations continue, trip the Bradley units in order to minimize their exposure to potentially damaging forces to the machines. Chugach, under the direction of the Bradley Lake Project Management Committee (‘BPMC”) and the Bradley Lake Operations and Dispatch Subcommittee (“O&D”), has assembled a team to undertake the definition and implementation of the RAS. 2 Description of Problem The units at Bradley Lake are subject to potentially severe oscillations for the following conditions: 1. The oscillations are observed when the deflectors are in the water stream. 2. Operation of any unit over approximately 30 MW output. The 30 MW criteria is based on observed behavior of the plant, and not on any analytical investigation. 3. The oscillations are observed to start primarily when there is an overfrequency event on the system. This causes the deflectors to cut into the stream, thus satisfying the requirement (1) above. The risk of damage to the units is not defined at this time, but it is anticipated that there is some potential for damage, give the large oscillations that have been observed. It was also noted in the RAS project scoping meetings that the RAS system needs to annunciate to dispatch personnel the status of the plant with regard to remedial action, but ELECTRIC POWER SYSTEMS PAGE3 MARCH 2001 BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM should not rely on the dispatchers for intervention during or just prior to, an oscillatory event. 3 Discussion of Remedial Action System The RAS at Bradley will be designed to perform annunciation and control functions so as to alarm dispatch personnel when the plant is operating in a potentially critical operating range. Should a deflector be in the stream, the RAS will exert control in an attempt to minimize the likelihood of an oscillation occurring. If an actual oscillation is detected, the RAS will exert control to dampen the oscillations. Specifically, the Bradley RAS will be constructed to: e Annunciate when either of the units are above a MW level that in the past has exhibited oscillatory behavior. e Annunciate when the deflectors are in the water stream at Bradley. e Ifthe deflectors are determined to be in the stream, begin aggressive control of the needles to reduce the water stream such that the deflectors effectively come out of the stream. e If oscillations are detected at Bradley, provide aggressive setpoint control to reduce the needle openings at Bradley unit, in order to dampen or minimize the oscillations at Bradley. e If the oscillations continue, trip the Bradley Lake units offline to minimize their exposure to the potentially damaging oscillations. The Bradley RAS can be disabled from dispatch by a “poke point” on the Bradley Lake plant display. This will allow the system dispatcher to disable the RAS system, should it misoperate, or if unforeseen system conditions require it’s temporary deactivation. 3.1. Annunciate when either of the Bradley units are above a given MW output The Bradley oscillations are generally observed when the machines are above 30 MW, while in six needle operation. The local Bradley RAS system will annunciate to dispatch when either of the units are operating above 30 MW. No specific dispatcher action is required, other than to note that the units are operating in a region where oscillations are possible. 3.2 Annunciate when the deflectors are in the stream at Bradley Both the deflector and needle positions have transducers installed. Given the position indications from the deflector and needle transducers, it can be mathematically determined when the deflectors enter the water stream. ELECTRIC POWER SYSTEMS PAGE 4 MARCH 2001 BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM When the RAS determines that the deflectors have entered the stream, the system dispatcher will be notified via the Chugach SCADA system, that he is operating the plant in a mode where oscillations are possible. 3.3. Begin aggressive control to remove the deflectors from the stream at Bradley When the deflectors are determined to be in the stream at Bradley, and the dispatcher has been notified, the local RAS system will then begin to aggressively close the needles, effectively removing the deflectors from the stream. If the units are in steady state operation, the system will see no appreciable reduction in real electrical power from the Bradley Plant. 3.4 Provide aggressive setpoint control when oscillations are detected When oscillations are detected at Bradley, aggressive control should be implemented at Bradley in an attempt to dampen the oscillations. The local RAS will annunciate to SCADA that local control action is being taken, and the needle openings will be aggressively reduced. This will result in a reduction of mechanical input power to the turbine, thus reducing it’s ability to constructively sustain or exaggerate the oscillations. The aggressive reduction in the mechanical input power of the machines could result in some loadshedding. 3.5 Trip Bradley units if oscillations continue In the case where the local RAS control fails to arrest the oscillation of the Bradley units after 10-15 seconds, and the magnitude of the oscillation are determined to be sufficient to cause possible damage to the units (>+30 MW), the Bradley units should be tripped so as to avoid additional, and possibly increasing, forces on the shafts. The time to trip and magnitude of the oscillations are not analytically derived, but based on the utilities current experience with prior Bradley oscillations. The tripping of the Bradley units will likely result in loadshed throughout the interconnected system. 4 Proposed Remedial Action System Conceptual Design Bradley oscillations have been observed to have a period in the 600 mS range. This period of oscillation requires the processing of plant data onsite in order to avoid aliased data. A local control/processing system will be required onsite to perform the following functions: e Measurement of machine real power output, and the detection of oscillations (in part) by observation of the change of direction of power from the units. This will detect both plant-system oscillations, as well as unit-unit oscillations. The detection of an oscillation by the local control system will be annunciated to dispatch via the RTU. ELECTRIC POWER SYSTEMS PAGE 5 MARCH 2001 BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM e Determination of oscillations by looking at the deflector position transducers, and noting three sequential changes in direction of the deflector motion over a four second period. The detection of an oscillation by the local control system will be annunciated to dispatch via the RTU. e Measurement of deflector and needle position, and the mathematical determination of if the deflector is in the stream. The detection of the deflector in the stream will be annunciated to dispatch. e Reduction in the needle openings if the deflectors are determined to be in the stream. The controlled reduction of needle openings will be annunciated to dispatch. e Tripping of the units if “large” oscillations occur for greater than 10-15 seconds. The implementation of the RAS as described above keeps the dispatcher informed of events and statuses at the plant, but does not require the dispatcher to intervene in order for the system to perform control. 5 Proposed Remedial Action System Implementation The Bradley RAS team proposes to implement the RAS design criteria as follows: 5.1. Local Processing The local control will consist of a GE 90-30 PLC system with the following inputs and outputs: Inputs e Bradley Unit 1 MW e Bradley Unit 2 MW e Deflector position e Needle position e Override control system (Chugach SCADA) e Vibration Detected Outputs e Unit 1 Power > 30 MW e Unit 2 Power > 30 MW e Unit 1 Deflector in Stream ELECTRIC POWER SYSTEMS PAGE6 MARCH 2001 BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM e Unit 2 Deflector in Stream e Unit 1 Oscillation Detected e Unit 2 Oscillation Detected e Unit 1 reduce needle opening e Unit 2 reduce needle opening e Unit 1 Trip e Unit 2 Trip Responsibilities: EPS will design and implement the Bradley RAS, with assistance from Chugach for specification of the “deflectors in stream” calculation. Plant personnel will perform the installation of the system at the plant, and the interface of the system to local and SCADA annunciation. 6 Potential Negative Effects of the RAS The Bradley RAS is designed to operate independently of dispatcher intervention, and thus has predictable results. The potential “negative” effects of implementing the system as described are attributable only to the scenarios where control would be exerted. 6.1 Reduce Bradley Unit Needle positions If the RAS detects the deflector is in the stream, it will attempt to reduce the needle openings to the point that the deflectors are no longer in the stream. For the envisioned application, no significant real power output reduction should occur. The only effect would be to reduce the needle openings so that the deflectors are no longer in the stream. The control system will have verification in the control loop to limit any real power reduction due to this mode of remedial action. 6.2 Trip Bradley Lake units If the oscillations are severe, and the reduction of the Bradley needle positions fails to arrest the oscillations, then the RAS will sequentially trip the Bradley units. One unit will be tripped first, and time allowed to determine if the oscillations are diminished or arrested. If the oscillations do not cease, the second Bradley unit will be tripped so as to minimize damage to the units. If one or both units trip, and, depending on system configuration and spinning reserve, loadshedding may occur throughout, or in a single area of the interconnected system. The tripping logic will only be armed after (1) the “deflector in stream” alarm condition is detected, and (2) oscillations have been detected, either in the real power output or in the deflector “change in direction” calculation. After arming the trip, a timer (10-15 seconds) ELECTRIC POWER SYSTEMS PAGE7 MARCH 2001 BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM will be required to expire prior to tripping the first unit. The second unit will be tripped 5 seconds after the first unit, if the oscillations have not decreased sufficiently (peak to peak oscillations of less than 30 MW). 7 Preliminary Schedule and Budgetary Cost Estimate The design phase of the RAS project, assuming a notice to proceed and an approved design by 5/1/01, could be completed by 5/30/01. Based on plant personnel availability, it is anticipated that the installation could then commence on 6/1/01 and be completed by 6/8/01. Testing could then commence and be completed by 6/15/01, assuming plant scheduling could be arranged. The budgetary estimate for the Bradley RAS is $32,200." ' This includes the RAS hardware ($5000), programming, and markups of plant drawings ($15,000). Installation cost is estimated to be $ 3,000 (3 man-days, ten hours, $100/hour loaded). Estimated testing cost (personnel only, no power production costs included) is $ 8,000 (three test engineers, plus one plant personnel, two days, ten hours per day, $100/hour loaded). Estimated direct expenses for testing and installation is $1,200 (2 RT aircraft for testing/installation @ $200/RT and 8 days subsistence @ $50/day — HEA provided housing). ELECTRIC POWER SYSTEMS PAGE8 MARCH 2001 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES TELECONFERENCE Via Electronic Media @ AIDEA 813 W. Northern Lights Boulevard Anchorage, Alaska Thursday, June 21, 2001 — 10:00 a.m. 1. CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Thursday, June 21, 2001, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Gene Bjornstad Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) John Grubich Golden Valley Electric Association (teleconference) Stan Sieczkowski Alaska Energy Authority (teleconference) Michael Scott Anchorage Municipal Light & Power (teleconference) Dave Calvert City of Seward (teleconference) 3 PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Brian Hickey, Chugach Electric Association John Cooley, Chugach Electric Association Lee Thibert, Chugach Electric Association Hank Nikkels, Anchorage Municipal Light & Power (teleconference) Don Stead, Homer Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Bob Zaharsky, Bradley Lake (teleconference) Ron Saxton, AterWynne, LLP (teleconference) Page 1 of 2 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES ~ March 20, 2001 and May 11, 2001 Chair Bjornstad stated that the above noted meeting minutes were not going to be approved at this meeting. He noted that the minutes needed to be taken out of verbatim format and just kept to motion related items. He also noted that the Bradley Lake O&D Remedial Action Scheme report presented by Brian Hickey needed to be attached to the minutes to better clarify his verbal status report. The above sets of minutes would be brought to the next regularly scheduled meeting for approval once amended. ls NEW BUSINESS 7A. Status Report — Remedial Action Scheme — Hickey Brian Hickey gave a brief update on the report (attached). 7B. Status Report —- Governor — Hickey Brian Hickey discussed governor replacement and needle change-out. No motions were noted at this time. 8. COMMITTEE COMMENTS 8A. Next Meeting Date - Bjornstad Chair Bjornstad recommended that the next regularly scheduled meeting of the committee be held on August 28, 2001, at the Bradley Lake project site, and would include a site visit. 9. ADJOURNMENT There being no objection and no further business of the Committee, the meeting was recessed at 10:35 a.m. Page 2 of 2 E@rectric Power Systems Consulting Engineers Bradley Lake O&D Bradley Lake Remedial Action Scheme March, 2001 BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM TABLE OF CONTENTS 1 Background and Scope 2 Description of Problem 3 Discussion of Remedial Action System........ccssssssscsssssessessecssssseessessssenscoreessesesessenenesese 4 3.1. Annunciate when either of the Bradley units are above a given MW OUtpUt ...........:ccceecrseeenees 4 3.2. Annunciate when the deflectors are in the stream at Bradley..........ccsccsessessereeereeseeecnereneeees 4 3.3 Begin aggressive control to remove the deflectors from the stream at Bradley ............sseseseeres 5 3.4 Provide aggressive setpoint control when oscillations are detected ...........scsescceseeceteereeereneee 5 3.5 — Trip Bradley units if oscillations COMINUE...........cseseseseesserecereeseeseneeeseeeseeeteeeeeeeceenaecnaeenenees 5 4 Proposed Remedial Action System Conceptual DeSigh..........:s:ssssscssssssseessessseeseeseearenees 5 5 Proposed Remedial Action System Implementation ..........sscssssssssssessssssssessseceeseseneneeneerees 6 BT” LE PRI caneersateemremarescnerreccccnarenns cusveresscrecmmevemnesernswetes guesses tretvenrenssibasensdtessis 6 6 Potential Negative Effects of the RAS 6.1 Reduce Bradley Unit Needle positions ...........csccscsessesseseseeseeesesecsseeseseneeaeeeecseeeecsaeeeeeanenees 7 6.2. Trip Bradley Lake units 7 Preliminary Schedule and Budgetary Cost Estimate..........sssssssssssssenssesssssesesrsenensnencensees 8 ELECTRIC POWER SYSTEMS PAGE 2 MARCH 2001 . 4 BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM 1 Background and Scope Since the commissioning of the Bradley Lake units, large-scale oscillations have been observed. While observed and recorded on the power system, these oscillations were not reproducible in or anticipated by any of the system studies performed by the Bradley design consultants. In 1997-98, in a cooperative effort between the Bradley owners and Electric Power Systems, Inc. (“EPS”), a computer model was developed whereby the oscillations could be produced and characterized in simulation. Subsequent to the system studies with the “new” model, the Bradley plant was instrumented and testing done on the units to further understand the oscillations and the causes. Oscillations observed previously and predicted in simulation were successfully induced in the online Bradley testing. One of the long-term solutions to the Bradley oscillations involves improvements to the Bradley governor system. The task of defining and implementing a new governor algorithm is currently under study by the utilities. In the interim, a remedial action scheme (“RAS”) is required to (1) alert the system dispatchers when the plant is operating in an area where it may be susceptible to oscillations, (2) initiate plant control in order to dampen or minimize the length and magnitude of the oscillations, and (3) should the oscillations continue, trip the Bradley units in order to minimize their exposure to potentially damaging forces to the machines. Chugach, under the direction of the Bradley Lake Project Management Committee (“BPMC”) and the Bradley Lake Operations and Dispatch Subcommittee (“O&D”), has assembled a team to undertake the definition and implementation of the RAS. 2 Description of Problem The units at Bradley Lake are subject to potentially severe oscillations for the following conditions: 1. The oscillations are observed when the deflectors are in the water stream. 2. Operation of any unit over approximately 30 MW output. The 30 MW criteria is based on observed behavior of the plant, and not on any analytical investigation. 3. The oscillations are observed to start primarily when there is an overfrequency event on the system. This causes the deflectors to cut into the stream, thus satisfying the requirement (1) above. The risk of damage to the units is not defined at this time, but it is anticipated that there is some potential for damage, give the large oscillations that have been observed. It was also noted in the RAS project scoping meetings that the RAS system needs to annunciate to dispatch personnel the status of the plant with regard to remedial action, but ELECTRIC POWER SYSTEMS PAGE 3 MARCH 2001 .\ BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM should not rely on the dispatchers for intervention during or just prior to, an oscillatory event. 3 Discussion of Remedial Action System The RAS at Bradley will be designed to perform annunciation and control functions so as to alarm dispatch personnel when the plant is operating in a potentially critical operating range. Should a deflector be in the stream, the RAS will exert control in an attempt to minimize the likelihood of an oscillation occurring. If an actual oscillation is detected, the RAS will exert control to dampen the oscillations. Specifically, the Bradley RAS will be constructed to: e Annunciate when either of the units are above a MW level that in the past has exhibited oscillatory behavior. e Annunciate when the deflectors are in the water stream at Bradley. e Ifthe deflectors are determined to be in the stream, begin aggressive control of the needles to reduce the water stream such that the deflectors effectively come out of the stream. e If oscillations are detected at Bradley, provide aggressive setpoint control to reduce the needle openings at Bradley unit, in order to dampen or minimize the oscillations at Bradley. e If the oscillations continue, trip the Bradley Lake units offline to minimize their exposure to the potentially damaging oscillations. The Bradley RAS can be disabled from dispatch by a “poke point’ on the Bradley Lake plant display. This will allow the system dispatcher to disable the RAS system, should it misoperate, or if unforeseen system conditions require it’s temporary deactivation. 3.1 Annunciate when either of the Bradley units are above a given MW output The Bradley oscillations are generally observed when the machines are above 30 MW, while in six needle operation. The local Bradley RAS system will annunciate to dispatch when either of the units are operating above 30 MW. No specific dispatcher action is required, other than to note that the units are operating in a region where oscillations are possible. 3.2 Annunciate when the deflectors are in the stream at Bradley Both the deflector and needle positions have transducers installed. Given the position indications from the deflector and needle transducers, it can be mathematically determined when the deflectors enter the water stream. ELECTRIC POWER SYSTEMS PAGE 4 MARCH 2001 a BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM When the RAS determines that the deflectors have entered the stream, the system dispatcher will be notified via the Chugach SCADA system, that he is operating the plant in a mode where oscillations are possible. 3.3 Begin aggressive control to remove the deflectors from the stream at Bradley When the deflectors are determined to be in the stream at Bradley, and the dispatcher has been notified, the local RAS system will then begin to aggressively close the needles, effectively removing the deflectors from the stream. If the units are in steady state operation, the system will see no appreciable reduction in real electrical power from the Bradley Plant. 3.4 Provide aggressive setpoint control when oscillations are detected When oscillations are detected at Bradley, aggressive control should be implemented at Bradley in an attempt to dampen the oscillations. The local RAS will annunciate to SCADA that local control action is being taken, and the needle openings will be aggressively reduced. This will result in a reduction of mechanical input power to the turbine, thus reducing it’s ability to constructively sustain or exaggerate the oscillations. The aggressive reduction in the mechanical input power of the machines could result in some loadshedding. 3.5 Trip Bradley units if oscillations continue In the case where the local RAS control fails to arrest the oscillation of the Bradley units after 10-15 seconds, and the magnitude of the oscillation are determined to be sufficient to cause possible damage to the units (>+30 MW), the Bradley units should be tripped so as to avoid additional, and possibly increasing, forces on the shafts. The time to trip and magnitude of the oscillations are not analytically derived, but based on the utilities current experience with prior Bradley oscillations. The tripping of the Bradley units will likely result in loadshed throughout the interconnected system. 4 Proposed Remedial Action System Conceptual Design Bradley oscillations have been observed to have a period in the 600 mS range. This period of oscillation requires the processing of plant data onsite in order to avoid aliased data. A local control/processing system will be required onsite to perform the following functions: e Measurement of machine real power output, and the detection of oscillations (in part) by observation of the change of direction of power from the units. This will detect both plant-system oscillations, as well as unit-unit oscillations. The detection of an oscillation by the local control system will be annunciated to dispatch via the RTU. ELECTRIC POWER SYSTEMS PAGES MARCH 2001 i BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM e Determination of oscillations by looking at the deflector position transducers, and noting three sequential changes in direction of the deflector motion over a four second period. The detection of an oscillation by the local control system will be annunciated to dispatch via the RTU. e Measurement of deflector and needle position, and the mathematical determination of if the deflector is in the stream. The detection of the deflector in the stream will be annunciated to dispatch. e Reduction in the needle openings if the deflectors are determined to be in the stream. The controlled reduction of needle openings will be annunciated to dispatch. e Tripping of the units if “large” oscillations occur for,greater than 10-15 seconds. The implementation of the RAS as described above keeps the dispatcher informed of events and statuses at the plant, but does not require the dispatcher to intervene in order for the system to perform control. 5 Proposed Remedial Action System Implementation The Bradley RAS team proposes to implement the RAS design criteria as follows: 5.1 Local Processing The local control will consist of a GE 90-30 PLC system with the following inputs and outputs: Inputs e Bradley Unit 1 MW e Bradley Unit 2 MW e Deflector position e Needle position e Override control system (Chugach SCADA) e Vibration Detected Outputs ° Unit 1 Power > 30 MW e Unit 2 Power > 30 MW e Unit 1 Deflector in Stream ELECTRIC POWER SYSTEMS PAGE6 MARCH 2001 .% BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM e Unit 2 Deflector in Stream e Unit 1 Oscillation Detected e Unit 2 Oscillation Detected e Unit 1 reduce needle opening e Unit 2 reduce needle opening e Unit 1 Trip e Unit 2 Trip Responsibilities: EPS will design and implement the Bradley RAS, with assistance from Chugach for specification of the “deflectors in stream” calculation. Plant personnel will perform the installation of the system at the plant, and the interface of the system to local and SCADA annunciation. 6 Potential Negative Effects of the RAS The Bradley RAS is designed to operate independently of dispatcher intervention, and thus has predictable results. The potential “negative” effects of implementing the system as described are attributable only to the scenarios where control would be exerted. 6.1 Reduce Bradley Unit Needle positions If the RAS detects the deflector is in the stream, it will attempt to reduce the needle openings to the point that the deflectors are no longer in the stream. For the envisioned application, no significant real power output reduction should occur. The only effect would be to reduce the needle openings so that the deflectors are no longer in the stream. The control system will have verification in the control loop to limit any real power reduction due to this mode of remedial action. 6.2 Trip Bradley Lake units If the oscillations are severe, and the reduction of the Bradley needle positions fails to arrest the oscillations, then the RAS will sequentially trip the Bradley units. One unit will be tripped first, and time allowed to determine if the oscillations are diminished or arrested. If the oscillations do not cease, the second Bradley unit will be tripped so as to minimize damage to the units. If one or both units trip, and, depending on system configuration and spinning reserve, loadshedding may occur throughout, or in a single area of the interconnected system. The tripping logic will only be armed after (1) the “deflector in stream” alarm condition is detected, and (2) oscillations have been detected, either in the real power output or in the deflector “change in direction” calculation. After arming the trip, a timer (10-15 seconds) ELECTRIC POWER SYSTEMS PAGE7 MARCH 2001 sy BRADLEY LAKE PMC/CHUGACH ELECTRIC ASSOCIATION, INC. BRADLEY LAKE REMEDIAL ACTION SYSTEM will be required to expire prior to tripping the first unit. The second unit will be tripped 5 seconds after the first unit, if the oscillations have not decreased sufficiently (peak to peak oscillations of less than 30 MW). 7 Preliminary Schedule and Budgetary Cost Estimate The design phase of the RAS project, assuming a notice to proceed and an approved design by 5/1/01, could be completed by 5/30/01. Based on plant personnel availability, it is anticipated that the installation could then commence on 6/1/01 and be completed by 6/8/01. Testing could then commence and be completed by 6/15/01, assuming plant scheduling could be arranged. The budgetary estimate for the Bradley RAS is $32,200." ' This includes the RAS hardware ($5000), programming, and markups of plant drawings ($15,000). Installation cost is estimated to be $ 3,000 (3 man-days, ten hours, $100/hour loaded). Estimated testing cost (personnel only, no power production costs included) is $ 8,000 (three test engineers, plus one plant personnel, two days, ten hours per day, $100/hour loaded). Estimated direct expenses for testing and installation is $1,200 (2 RT aircraft for testing/installation @ $200/RT and 8 days subsistence @ $50/day — HEA provided housing). ELECTRIC POWER SYSTEMS PAGES MARCH 2001 .% vr 7 0 0 ' BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES SITE VISIT/TELECONFERENCE Via Electronic Media @ AIDEA 813 W. Northern Lights Boulevard Anchorage, Alaska Tuesday, August 28, 2001 — 10:00 a.m. 1. CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, August 28, 2001, from the Bradley Lake Hydroelectric project site, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Gene Bjornstad Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Norm Story Homer Electric Association Steve Haagenson Golden Valley Electric Association Stan Sieczkowski Alaska Energy Authority Michael Scott Anchorage Municipal Light & Power Dave Calvert City of Seward (teleconference) 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority (teleconference) Kate Lamal, Golden Valley Electric Association - Henri Dale, Golden Valley Electric Association Bob Day, Anchorage Municipal Light and Power Doug Hall, Anchorage Municipal Light and Power Don Stead, Homer Electric Association Bob Zaharsky, Bradley Lake Brian Hickey, Chugach Electric Association Lee Thibert, Chugach Electric Association John Cooley, Chugach Electric Association Page 1 of 3 3 0 Tamara Fletcher, Homer Electric Association Mike Cunningham, Chugach Electric Association (teleconference) Ron Saxton, AterWynne, LLP (teleconference) PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS Three items were added to the agenda under the heading New Business. They are: B) Committee Reports, O&D Committee and Budget Committee; C) Remedial Action Scheme; and D) Maintenance Plan. 6. APPROVAL OF MEETING MINUTES — March 20, 2001, May 11, 2001, and June 21, 2001. MOTION: Mr. Story moved to approve the meeting minutes of March 20, 2001. Mr. Haagenson seconded the motion. A voice vote was taken and the minutes were unanimously approved. MOTION: Mr. Scott moved to approve the meeting minutes of May 11, 2001. Mr. Sieczkowski seconded the motion. A voice vote was taken and the minutes were unanimously approved. MOTION: Mr. Scott moved to approve the meeting minutes of June 21, 2001. Mr. Story seconded the motion. A voice vote was taken and the minutes were unanimously approved. 7 NEW BUSINESS 7A. Election of Officers - Bjornstad Dave Calvert and Steve Haagenson were both nominated as Chair. After discussion, the committee did a roll call vote and Steve Haagenson was unanimously voted as the new Chair. Dave Calvert received the only nomination for Vice Chair. A roll call vote was taken, and Mr. Calvert was unanimously voted as Vice Chair. The Secretary/Treasurer remains with the Alaska Energy Authority (Stan Sieczkowski). 7B. O&D Committee Report This committee met August 3, 2001 and discussed three major topics: nozzles, runner repair, and SCADA system. SCADA system: A contractor has been hired to develop the specifications for the system. The spec should be issued by the end of September 2001. Budget Committee Report: The committee met June 30, 2001. At the end of the fiscal year, the project had revenues of $14,378,129 and expenses of $14,596,211. This left a deficit of Page 2 of 3 o 6 J. The deficit has been offset by the surplus at the beginning of the year and leaves a .8 of $18,802 for the beginning of the next fiscal year. ». Remedial Action Scheme — Hickey Brian Hickey gave a brief update on the report (attached). 7D. Maintenance Plan The final report from FUJI was distributed to the committee members. FUJI engineers determined that the needle pressure is too high and they need to be re-built. A spare parts list and delivery schedule were included in the distributed packet. This work needs to be coordinated with the governor work, dispatch, and finance. Discussion ensued to these major projects and determined that a joint meeting between the 0&D Committee and Budget Sub-Committee is required for coordination. Another project to consider was the repair of the runner, which still needs cost development. (FUJI report attached.) 8. COMMITTEE COMMENTS Mr. Scott asked for clarification of Bradley Lake employees that also work at Nikiski Cogen. The Bradley Lake personnel serve as backup to Nikiski Cogen. Mr. Zaharsky noted the lake elevation is nearing the spill level. The state needs to be notified at 1,175, and the spill level is 1,180. Currently the level is approximately 1,173. 8A. Next Meeting Date — Bjornstad Chair Bjornstad recommended that the next regularly scheduled meeting of the committee be held on Tuesday, October 16, 2001, at the Alaska Industrial Development and Export Authority's Board Room. 9. ADJOURNMENT There being no objection and no further business of the Committee, the meeting was recessed at 11:00 a.m. Page 3 of 3 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE 7 A MEETING MINUTES ;D).£U eS S | VE TELECONFERENCE MAR 19 2002 Via Electronic Media @ AIDEA AIDEA/AEA 813 W. Northern Lights Boulevard Anchorage, Alaska “Tuesday, October 16, 2001 — 10:00 a.m. 1; CALL TO ORDER Chairman Steve Haagenson called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, October 16, 2001, from the Alaska Industrial Development and Export Authority's Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2: ROLL CALL Roll was called by Shauna Dean. The following members were present: Steve Haagenson Golden Valley Electric Association Dave Calvert City of Seward Gene Bjornstad Chugach Electric Association (teleconference) Wayne Carmony Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Bob Day Anchorage Municipal Light & Power Stan Sieczkowski Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Brian Hickey, Chugach Electric Association (teleconference) Lee Thibert, Chugach Electric Association (teleconference) Mike Cunningham, Chugach Electric Association (teleconference) Hank Nikkels, Anchorage Municipal Light & Power (teleconference) Don Stead, Homer Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Bob Zaharsky, Bradley Lake (teleconference) Larry Hittle, AterWynne, LLP Doug Hall, Anchorage Municipal Light & Power Page 1 of 3 & Bob Price, Anchorage Municipal Light & Power 4. PUBLIC COMMENT There were no public comments. 5; AGENDA COMMENTS There were no agenda comments. 6. APPROVAL OF MEETING MINUTES — August 28, 2001 MOTION: Mr. Bjornstad moved to approve the meeting minutes of August 28, 2001. Mr. Calvert seconded the motion. A voice vote was taken, and the minutes were unanimously approved. te NEW BUSINESS 7A. OQ&D Committee Report on Cost of Repair Work — Sieczkowski ai Remedial Action Scheme — Hickey Mr. Sieczkowski turned the discussion over to Brian Hickey for response. Mr. Hickey reported that the remedial action scheme was installed on September 10, 2001, and has successfully tripped the unit once and has initiated several unit ramp-downs. However, there are some scenarios that are causing problems, and a trip is scheduled to Bradley Lake to remedy those problems. Mr. Calvert asked Mr. Hickey to be more specific on the problems. Mr. Hickey responded that there were unwanted ramp-down operations; primarily when the unit goes through needle transitions. They are going to put some blinders on the system so that if the unit is in a needle transition it will not initiate a ramp-down, even though it believes the deflectors are in stream (write-up attached). 2: 0&D Committee Report on Cost of Repair Work — Maintenance Plan for Needle Rebuild — Zaharsky Mr. Sieczkowski turned the discussion over to Bob Zaharsky. Mr. Zaharsky stated that the total price is going to be close to $1.5 million. They would like to start the first machine rebuild around mid-June, and a set date has yet to be chosen for the second machine. 7B. 2002 Amended Budget 1. Budget Subcommittee Recommendation on Bonding or R&R Funds — Bob Cunningham The Budget Subcommittee met with the O&D Subcommittee and worked out the items to be amended and the cash flows. It was then determined that rather than doing a bond issuance, they would tap the R&C fund to fund the amendments and increase each participants’ contribution over a four-year payback period (see budget handout). Page 2 of 3 MOTION: Chair Haagenson entertained a motion of the committee members to approve the budget amendment for FY2002. Eugene Bjornstad moved, seconded by Norm Story. A roll call vote was taken and the budget amendment was unanimously approved. 8. COMMITTEE COMMENTS 8A. Next Meeting Date - Haagenson Chair Haagenson recommended that the next regularly scheduled meeting of the committee be held at 10:00 a.m. on Tuesday, January 15, 2002, at the Alaska Industrial Development and Export Authority's Board Room. 9; ADJOURNMENT There being no objection and no further business of the Committee, the meeting was recessed at 10:20 a.m. BY. zee Steve Haagenson, Chair Page 3 of 3 & Attaches to Oct. (6, ai VAL AES CHUGACH ELECTRIC ASSOCIATION INC.. Anchorage, Alaska October 16, 2001 TO; The Bradley Lake Project Management Committee FROM: Brian Hickey, Director, Technical Services SUBJECT: — Status of the Bradley Lake Governor Control Algorithm, Design and Review Attached is the updated project schedule and financial status report for the Bradley Lake Governor Control project. There are four tasks currently under way on the project: e Finalization of the Digital Control System (DCS) functional specification The DCS functional Specification is in final draft. ¢ Completion of the governor and DCS request for qualifications The Governor and DCS RFQ is in draft and will be circulated for comment after completion of the DCS functional specification. e Implementation of the Remedial Action Scheme (RAS) unit ramp-down feature The Bradley Lake RAS was put in service in September 10 2001. The RAS has successfully tripped the unit once and has initiated unit ramp-downs on several occasions. There are three operating scenarios that have caused undesired unit ramp-downs. A trip to Bradley Lake is scheduled for October 29, 2001 to correct these problems. e Load Acceptance Study No status change, waiting on final governor design. BRADLEY LAKE HYDROELECTRIC PROJECT hedule A idget Summary FY98 FY99 FY0o FY2001 FY01 FY2002 ACTUALS ACTUALS ACTUALS BUDGET ACTUALS BUDGET REVENUES, EXPENSES & CHANGES IN SURPLUS REVENUES UTILITY CONTRIBUTIONS 13,210,675 13,843,841 11,813,741 12,488,023 12,488,023 13,765,782 INTEREST INCOME 1,845,862 1,837,883 1,801,425 1,744,000 1,759,898 1,696,000 37,008 130,207 EXCESS FROM BOND PROCEEDS REFUND OF COST OF ISSUANCE FROM BONDS SALE OF VEHICLE 1,477 0 0 0 AEA SETTLEMENT 0 0 0 PRIOR YEAR CORRECTIONS 0 0 o 15,058,014 15,681,724 13,652,174 14,232,023 14,378,129 15,461,782 EXPENSES OPERATIONS 1,748,691 1,905,324 2,399,918 1,887,784 1,937,168 2,398,134 RENEWALS/REPLACEMENTS 23,832 25,764 0 0 574,000 PURCHASE OF VEHICLE 0 35,000 TRANSFER TO OPERATING RESERVE 0 0 0 0 0 BOND REFUNDING COSTS 294,124 (283,289) (10,836) 0 0 0 DEBT SERVICE (net of Capital Reserve Reductions) 13,017,785 13,746,181 11,779,859 12,273,200 12,639,716 12,273,450 ARBITRAGE TRANSFER 27,976 34,110 20,600 30,000 19,327 200,000 15,112,408 15,428,090 14,189,541 14,190,984 14,596,211 15,480,584 CURRENT YEAR SURPLUS (DEFICIT) (54,394) 253,634 (537,367) 41,039 (218,083) (18,802) BEGINNING SURPLUS 575,012 520,618 774,252 (41,039) 236,885 18,802 ENDING SURPLUS (DEFICIT) 520,618 774,252 __ 236,885 Oo 18,802 NCE SHEET EVENUE FUND 481,136 135,622 158,075 : 158,160 OPERATING FUND 296,292 1,099,686 997,420 - 326,073 RECEIVABLES 650 777,428 1,235,308 __1,155,495 ati 484,883 LIABILITIES & SURPLUS LIABILITIES 256,810 461,056 918,611 466,081 SURPLUS 520,618 774,252 236,884 : 18,802 __777,428 1,236,308 _1,185,495 Sa 484,883 OTHER INFORMATION OPERATING RESERVE * 535,000 535,000 1,100,890 1,153,653 984,478 1,040,669 1,040,669 535,000 535,000 535,000 535,000 1,180,572 MONTHLY CONTRIBUTIONS ™ Required to be 20% of budgeted operating expense 10/8/01/1:35 PM, h:all\elaine\bradley2002 Bradley Budget Amended.xis —— Bradley Lake Operations and Maintenance @ FY00 FY2001 FY2002 GIL ACCOUNT BUDGET BUDGET BUDGET SUMMARY HEA O&M Contract Total 835,000 821,500 1,193,300 CEA Dispatch and Substation/SVC Maintenance 47,000 47,000 73,000 Other O&M 585,915 416,584 461,034 Insurance Costs 303,900 303,900 304,800 Regulatory Costs 122,000 143,500 123,000 1,893,815 1,732,484 2,155,134 Administrative Costs 260,300 260,300 243,000 2,154,115 1,992,784 2,398,134 Bond Refunding Costs 0 0 0 2,154,115 1,992,784 2,398,134 Page 1 of 2 10/8/01/1:21 PM, 2002 Bradley Budget Amended.xis os Schedule C Amendments to FY02 Budget Funding Fiscal Year Description Source FY02 FY03 FY04 FY05 FY06 Total Fuji Needle Operating 150,000.00 150,000.00 Carpet Operating 34,000.00 34,000.00 Vehicle Operating 35,000.00 35,000.00 Subtotal Operating 219,000.00 - - - = $ 219,000.00 Needle repairs R&C Fund 240,250.00 240,250.00 240,250.00 240,250.00 961,000.00 Needle repairs R&C Fund 125,000.00 125,000.00 125,000.00 125,000.00 500,000.00 Runner repairs R&C Fund 68,750.00 68,750.00 68,750.00 68,750.00 275,000.00 Runner repairs R&C Fund 62,500.00 62,500.00 62,500.00 62,500.00 250,000.00 SCADA R&C Fund 15,000.00 15,000.00 15,000.00 15,000.00 60,000.00 Governor R&C Fund 187,500.00 187,500.00 187,500.00 187,500.00 750,000.00 Governor R&C Fund 312,500.00 312,500.00 312,500.00 312,500.00 —1,250,000.00 Subtotal-R&C Fund 511,500.00 1,011,500.00 1,011,500.00 1,011,500.00 500,000.00 $4,046,000.00 Total Amendments $730,500.00 $1,011,500.00 $1,011,500.00 $1,011,500.00 $500,000.00 $ 4,265,000.00 $4,265,000.00 ck Syaurns ny nad OL 9/ F Y sp couspany RADLEY LAKE HEDULE E ITHLY UTILITY CONTRIBUTION PERCENT FYS6 FY97 FY98 Fy99 FY2000 FY2001 FY2002 FY2002 POWER PURCHASER SHARE TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL Original © Amendment Total INCREASE CHUGACH ELECTRIC 30.4% 3,968,670 3,947,190 4,016,052 4,208,532 3,591,372 3,796,356 3,940,944 243,856 388,444 MUNICIPALITY OF ANCHORAGE 25.9% 3,381,203 3,362,902 3,421,560 3,585,552 3,059,748 3,234,396 3,357,576 207,759 3,565,335 330,939 AEG&T 25.8% 3,368,148 3,349,918 3,408,360 3,571,704 3,047,940 3,221,916 3,344,616 206,957 3,551,573 329,657 GOLDEN VALLEY ELECTRIC 16.9% 2,206,267 2,194,326 2,232,600 2,339,604 1,996,512 2,110,476 2,190,852 135,565 2,326,417 215,941 CITY OF SEWARD 1.0% 130,548 129,842 132,108 138,444 118,140 124,884 129,636 8,022 137,658 12,774 41,813,712 12,488,028 12,963,624 802,158 13,210,680 13,843,836 100.0% _ 13,054,836 12,984,178 PERCENT FY96 FY97 FY97 Fy99 FY2000 FY2001 FY2002 POWER PURCHASER SHARE MONTHLY MONTHLY MONTHLY MONTHLY MONTHLY MONTHLY | MONTHLY Amendment Total INCREASE CHUGACH ELECTRIC 30.4% 330,723 328,933 334,671 350,711 299,281 316,363 328,412 30,482.00 42,531 MUNICIPALITY OF ANCHORAGE 25.9% (281,767 280,242 285,130 298,796 254,979 269,533 279,798 25,969.87 305,768 36,235 AEG&T 25.8% 280,679 279,160 284,030 297,642 253,995 268,493 278,718 25,869.60 304,588 36,095 GOLDEN VALLEY ELECTRIC 16.9% 183,856 182,861 186,050 194,967 166,376 175,873 182,571 16,945.59 199,517 23,644 CITY OF SEWARD 1.0% 10,879 10,820 11,009 11,537 9,845 10,407 10,803 1,002.70 11,806 1,399 1,180,572 100,270 1,040,669 1,080,302 1,082,016 1,087,904 100.0% FY2001 ANNUAL CONTRIBUTION 12,488,028 DECREASE IN BUDGETED INTEREST EARNINGS 48,000 INCREASE IN BUDGETED O&M COSTS 510,350 PURCHASE OF VEHICLE 35,000 INCREASE IN ARBITRAGE REBATE 170,000 PAYBACK FOR R&C EXPENSE 574,000 INCREASE IN DEBT SERVICE 250 ECREASE IN BUDGETED USE OF PRIOR YEAR ACCUMULATED SURPLUS (41,044) 11 ACTUAL SURPLUS (18,802) 12 ANNUAL CONTRIBUTION 10/8/01/1:22 PM,h;all\elaine\bradiey\ 2002 Bradley Budget Amended.xis BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 000 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE ee MEETING MINUTES Via Electronic Media @ AIDEA - Board Room 480 W. Tudor Road Anchorage, Alaska Teleconference Friday, March 24, 2000 — 10:00 a.m. 1. CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Friday, March 24, 2000, via teleconference from the AIDEA Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Brenda Fuglestad. The following members were present: Gene Bijornstad Chugach Electric Association Wayne Carmony Pe Matanuska Electric Association (teleconference) Don Stead Homer Electric Association (teleconference) Brad Evans Golden Valley Electric Association (teleconference) Stan Sieczkowski Alaska Energy Authority (teleconference) Meera Kohler Anchorage Municipal Light & Power (teleconference) 3. PUBLIC ROLL CALL Lee Thibert, Chugach Electric Association Don Zoerb, Matanuska Electric Association (teleconference) Ron Saxton, Ater Wynne LLP (teleconference) Joe Griffith, Chugach Electric Association Brian Hickey, Chugach Electric Association Brenda Fuglestad, Alaska Energy Authority Alice Mullins for John Cooley, Chugach Electric Association (teleconference) Bob Zaharsky, Homer Electric Association (teleconference) 4. PUBLIC COMMENT There were no public comments. q .. AGENDA COMMENTS -- Bradley Lake PMC Meeting Minutes March 24, 2000 Page 2 of 4 There were no agenda comments. 6. APPROVAL OF MEETING MINUTES ~ September 15, 1999 MOTION: Ms. Kohler moved to approve the meeting minutes of September 15, 1999. Mr. Stead seconded the motion. A voice vote was taken and the minutes were unanimously approved. Te NEW BUSINESS TA. I j - Mr. Evans stated that the budget had gone through the Budget Committee and they are seeking approval for the FY2001 annual contributions of $12,488,023, and need approval of that inclusive of the operating portion of that budget. Chair Bjornstad entertained a motion to approve the budget. Motion by Don Stead, second by Meera Kohler. A roll call vote was taken and the motion passed unanimously. Chair Bjornstad entertained a motion to approve the financial statement — operating and revenue funds. Moved by Meera Kohler, second by Brad Evans. Motion unanimously approved with no objections. 7C. Status Update on Fire at Bradley -- Story Don Stead noted that the transformer was placed back in service on January 14, 2000, and the temporary generator was removed January 26, 2000. We have replaced all the cable on the high side of the transformer, and replaced a lot of the cable on the low side to eliminate any fire damage. The Subcommittee formed to investigate the cause of the fire has met twice and has never come back with any recommendations, solutions, or causes. It appeared they had an internal fault on the transformer and all the relay actions were appropriate. Cost for the fire has been $44,000 in labor, and $134,000 in materials, for a total of approximately $178,000. The majority of that cost was for diesel fuel. The transformer itself was only $34,000. Mr. Stead also noted that another issue associated with this facility's transformer fire is the reason why we moved the Bradley outage up into March or up as soon as we could get it available was because we wanted to go in and inspect the isolated phase buss coming out of the generators. We are into Unit 2 currently, and have found two reflexes where the buss actually faulted. We have two phase-to-ground fault and one phase-to-phase fault that are going to require some repair. We are working with the manufacturer (Unibus). We have found several other things that cause concern inside this buss; basically there is cracking of the insulation around the buss. The manufacturer mentioned that the insulation in an oil environment deteriorates rapidly. Busses have been exposed to an oily environment and that is why we believe they are cracking and why they Bradley Lake PMC Meeting Minutes March 24, 2000 Page 3 of 4 faulted during this fire. Currently, we are taping all the cracks found with a rubber tape overlaid with a vinyl electrical tape and are asking Unibus for a permanent repair plan. Unibus is saying to pull the buss out and heat shrink it. We are recommending that not be done until next year because we are looking at about 3,000 feet of heat shrink plus tape and metal, and time to accomplish. We still want to restore the Unit by April 1, 2000, and we will have a tight squeeze trying to get the buss back together in that time frame. There are more charges to follow associated with the fire. | could classify this as fire recovery. Unit 1 hasn’t been opened yet, so we don’t know what its buss is going to look like. Chair Bjornstad asked who was on the investigation committee. Mr. Stead named Luke Slylen, Ashley Utilholden, and Ray Morgan. Chair Bjornstad stated that he would like to see something written up in the form of a report or recommendation including cost estimates. Mr. Stead stated that he would get a written recommendation from that committee on the relay actions and the transformer fault, and will prepare a written recommendation on the buss inspection. Mr. Sieczkowski requested that Mr. Stead get information to him as soon as possible so that he could forward it to the insurance company. Mr. Stead noted that they are working up the costs and know of insulators that are bad and need prices on the heat-shrink. Chair Bjornstad asked if there were any time constraints on getting a claim to the insurance company. Mr. Sieczkowski wasn’t aware of any time constraints, but he did need to let them know immediately so that they can come out to investigate on their own if they so choose. On the initial fault they opted not to come out and do an inspection, but rélied upon our input. However, now that this is more involved, they should be called immediately and given that opportunity. Mr. Sieczkowski said he would get the committee scheduled to meet to discuss this issue. 7D. Status Update on Stability Study -- Hickey Mr. Hickey stated they had completed the installation of the data acquisition system and ran the generator tests in May 1999. They have collected a significant amount of data and since then have developed some detailed mathematical models of the governor control blocks and developed a program that streams the results of the test data into these control block models, and then compares the actual output to the measured, to benchmark the control block models. Mr. Hickey presented a report to the O&D Committee on the 16", which details the findings. Several tasks are in progress right now which include: completing a benchmarking of the compiled mathematical model, and once that is done we will convert that model to PTI’s PSSE program in flex code and then will run a benchmark on the actual power system model. It is much easier to work in this mathematical modeling program than in PSSE’s flex code. Once that is completed, the fine tuning on the model and sensitivity analysis will take place, and we will rerun the load acceptance study done by PTI in 1988. Once completed, we will have numbers for spinning reserve for Bradley as well as some information on its control response. At that point, we will do an economic analysis of the value of repairing/fixing the control response problem and find out what the value of the spinning reserve is. Mr. Hickey also stated that he will also have a recommendation for you on how to repair the instability problem. We have identified what the source of the instability is, and it comes down to four items within the Unit. One is there are feedback time delays in the server motors, the shaft speed Bradley Lake PMC Meeting Minutes March 24, 2000 ~~ Page 4 of 4 transducer, and the governor control algorithm. There are significant feedback time delays, which essentially cause the governor to not respond properly to the power system. What complicates this is the Unit has zero droop on its deflectors and that means that once the deflectors cut into the stream on an overspeed condition, it tries to control all frequency in the system. During the testing we did re- create the instability seven or eight times, it’s fairly predictable and we know how to do it. When we come back to you with recommendations, they will include how to repair that. We identified the sources of the control response problems and they primarily lie in the way the needles are scheduled and the way the feed forward PID controller works. We will come back with recommendations on how we can repair that. Mr. Hickey stated that he sees the recommendations coming forward in three options. One will be a do nothing alternative where we essentially turn the governor off on Bradley, make a constant power machine out of it, and it just doesn’t control frequency. There are costs that we will define that will be associated with that. The second option will be a replacement of the brains or the microprocessor part of the governor and we think that we could fix the instability by replacing that part of the governor, without messing with the hydraulics and the server motors. If we are going to fix the control response problems and get spinning reserve out of Bradley, there is going to be a more expensive option of putting in some high speed server motors and hydraulic equipment, and doing some work on the needle orifices. Mr. Hickey noted that by the end of July he would have a report to the PMC detailing what he just mentioned, giving the Committee some alternatives on how to fix the problem. Chair Bjornstad inquired as to the cost of this. Mr. Hickey stated less than $3 million. He also noted that he would get the Gant chart out to everyone. More details should be available by June 22, 2000. 8. COMMITTEE COMMENTS A. Next Meeting Date Bjornstad Thursday, June 8, 2000, at the AIDEA Board Room 9. ADJOURNMENT MOTION: Ms. Kohler moved to adjourn. Seconded by Chair Bjornstad. There being no objection and no further business of the Committee, the meeting was recessed at 10:30 a.m. BY: cS Eugene BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Via Electronic Media @ Chugach Electric Association — Training Room 5601 Minnesota Drive Anchorage, Alaska Tuesday, June 20, 2000 — 10:00 a.m. ls CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Tuesday, June 20, 2000, from the Chugach Electric Association's Training Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Gene Bjornstad Chugach Electric Association Wayne Carmony Matanuska Electric Association Norm Story Homer Electric Association George Kitchens Golden Valley Electric Association Stan Sieczkowski Alaska Energy Authority (teleconference) Hank Nikkels Anchorage Municipal Light & Power Dave Calvert City of Seward 3. PUBLIC ROLL CALL Bob Zharsky, Homer Electric Association Don Stead, Homer Electric Association Bob Day, Anchorage Municipal Light & Power Brian Hickey, Chugach Electric Association Dora Gropp, Chugach Electric Association John Cooley, Chugach Electric Association Mike Keech, Anchorage Municipal Light & Power Larry Hembree, Anchorage Municipal Light & Power Mike Mass, Chugach Electric Association Bob Price, Anchorage Municipal Light & Power Tuckerman Babcock, Matanuska Electric Association Steve Haagenson, Golden Valley Electric Association Ron Saxton, Ater Wynne, LLP Dennis McCrohan, Alaska Energy Authority Shauna Dean, Alaska Energy Authority 4. PUB T There were no public comments. 5: AGENDA COMMENTS Chair Bjornstad noted that the group is not technically required to have the Election of Officers until after the first meeting in July. He left the Election up to the Committee to decide. Also, on the Bradley Lake Instability Study, Brian Hickey will make a presentation, which will be followed by a recommendation from the O&D Committee, which will be handled by Stan Sieczkowski. 6. APPROVA TING MINUTES — March 24, 2000 MOTION: Mr. Story moved to approve the meeting minutes of March 24, 2000. Mr. Kitchens seconded the motion. A voice vote was taken and the minutes were unanimously approved. 7. NEW BUSINESS 7A. ELECTION OF OFFICERS - Bjornstad The Chair opened the floor for nominations of Chairman, Vice Chairman, and Secretary/Treasurer. MOTION: Mr. Story moved to nominate Eugene Bjornstad as Chairman, seconded by Dave Calvert. Mr. Calvert moved to nominate Norm Story as Vice Chairman, seconded by Wayne Carmony, and Secretary/Treasurer remains with the Alaska Energy Authority and will be filled by Stan Sieczkowski. There being no other nominations, the Chair closed nominations. A voice vote was taken, and the motion passed unanimously. 7B. NSTABILITY ST! = Hi P ACH We have completed our analysis of the problems at the plant and developed three alternatives for you to look at. Those alternatives were not in a report that went out in your package on the 9". There have been some minor modifications to that report and there are new copies on the table. We have completed a preliminary economic analysis of the alternatives and have done it a couple different ways. We have a recommendation on where we should go from here with the plant. What | want to do first is talk about Bradley and the Kenai Peninsula and a concept called dynamic instability. What you have at Bradley is a lake and a dam at the top of the mountain, a power tunnel that’s about 3 % miles long and at the end of the power tunnel you have a device called needles. Beyond the needles you have the deflectors and a jet brake and those are devices which are used to control the generator. They exist in the turbine pit, which is an important part of our problem. Also in the turbine pit are the buckets attached to the runner and shaft and the water hits the buckets and spins the shaft in the generator. You've got the turbine Page 2 of 7 shaft, you've got a generator, and then you've got this concept called the deflector vs. power curve. We built a power tunnel that bypasses the river, takes water out of the lake and feeds it into a powerhouse down at the bottom of the hill. At Bradley Lake this tunnel is about 3% miles long and 13 feet in diameter and has 1,100 feet of head. A typical Pelton turbine operates off of kinetic energy. What happens at a Pelton turbine is the water is fired out of the needle with very high kinetic energy and it strikes the bucket right there which spins the generator. There is a device called a deflector which you can barely see but it’s a scoop that can go over the front of the needle and deflect the water down into the tailrace so you can deflect the water away from the buckets and slow the machine down. What you have at Bradley is water coming in, goes through the needle, the deflector, if the deflector is active it will drive water down, if it is not active, it will let the water hit the bucket, spin and turn around and make electricity. At Bradley, we have six needles (on each turbine). Essentially you have two units down there, water comes out of the lake, goes around here, and this is needle one, needle two, needle three, four, five, six, and the same on the second unit. You are looking at the shaft of the generator so the buckets which are not shown on here would be right there and the water would strike buckets and spin the generator around in that general direction. The deflectors at Bradley Lake can go from 0 power out to full power out in 1% seconds. They are the fastest control devices in the railbelt, they are faster than combustion turbines. Bradley can operate in two modes — needle mode or deflector mode. In needle mode, the needles are the primary source of controlling power out to the unit and they are very slow. If you put the unit into deflector mode, the deflector comes partially into the stream, deflects part of the water and it controls the unit so you can contro! frequency with the deflectors. In needle mode, if you have a system disturbance, the deflectors will come into the stream even though you are not in deflector mode — they will come in and slow the unit down. Most of the problems that we are talking about are problems we have experienced in needle mode but the deflectors are active because they come in for over-speed control. The Kenai Power System is tied by a single 115 kV transmission from Anchorage to Quartz Creek. There are two important components from a stability standpoint on the Kenai — at Daves Creek there is a static var compensator which has a power oscillation dampening piece of equipment on it and that is a device that will dampen power swings on the system. There is another one of those at Soldotna and those devices are tuned to dampen oscillations between Kenai and Anchorage at 1% seconds. They are not tuned to dampen any oscillations that happen at Bradley Lake. You also have Soldotna 1 located in Soldotna. It is a 36 MW combustion turbine soon to be moved to Nikiski and then you've got the Bernice Lake plant which has two 25 MW turbines and a third turbine that we don't run very often. Generator Control: The first thing you have to understand about generator control is that for generators to operate stable in power system they require a drooping characteristic, which means that as load increases on a generator, speed must decrease. How much of a decrease is defined by a droop and that number is defined by a percentage. Units with small droop percentages will pick up more load faster than units with large droop percentages. Imagine you have a unit with zero droop — a unit with zero droop for no change in frequency will open its gate entirely. Because a zero percent change in frequency gets you full opening of the gate, minute change in frequency causes the gate to open fully. That's a concept that is going to be important. Once you have a change in the steady-state system — let's say you're operating at some level and a generator drops off line — the governor responds on droop and they will stop at a frequency that is not nominal frequency. If you were running at 60 cycles and you lost a generator, the other Page 3 of 7 generators will pick up the load, and they will end at a point that is different than 60 cycles. Then you would have to send a new speed reference to the governor to go to 60 and it would put the frequency back at 60 cycles. After droop control is over, the system is no longer at 60 cycles a second and AGC has to raise the system frequency back to nominal. On the power system, if you lose a generator your system will go under speed, it will slow down because you have a drooping characteristic. On a power system, if you lose load, your system will go over frequency and you have to slow the system down. When the system goes over speed at Bradley Lake, the deflectors cut into the stream even though you were in needle mode. namic In ili All mechanical systems have a natural frequency — they will oscillate when they are disturbed. Most mechanical systems are designed to have equipment that will dampen that oscillation or slow that oscillation down. Positive Feedback In a control system, negative feedback is good. It causes the system to drive back to the steady-state. Positive feedback causes the system to drive away from the steady state. We experienced a number of unstable oscillations at Bradley starting in 1991. We had control response problems that caused load shed or blackouts on the Kenai Peninsula. Questions: From a Power System perspective, does the Bradley Project initiate instability, or is Kenai Power System or some other external system the source of the problem? nswers: Bradley Lake is the source of the instability problems observed on the Kenai Peninsula. It's a classic case of dynamic instability, and small signal disturbances that initiate the instability are generated by the deflector and turbulence in the turbine pit. Questions: If Bradley is the source of the instability, wnat control system components contribute to or cause the instability? Answers: The instability is caused by positive feedback in the deflector control circuits. The positive feedback is a result of a dynamic time delay in the shaft speed transducer combined with time delays in the governor logic and hydraulic servomotor system. Questions: Why doesn't the PTI PSS/E model replicate this problem? Page 4 of 7 Answers: The original PT| model did not accurately represent the Woodward 501 governor nor the power tunnel. The EPS model accurately represents the governor and tunnel, and the tuning performed following machine testing has allowed us to accurately reproduce the oscillations. Question: Why is Bradley's control response significantly slower than was predicted in the Bradley commissioning and operating studies? Answer: The answer lies in the needle scheduling logic of the Woodward 501 controller. The algorithm contains needle equalization logic that severely limits response time. In addition, speed error is incapable of scheduling additional needles, thus limiting capacity. Question: What is the maximum response rate of the plant? Answer: For the current governor, the maximum open close rate via AGC is approximately 8 minutes. The response can be as long as 25 minutes for a step speed error input. Alternative 1 This involves limiting plant operating output such that the units operate low on their deflector verses power curve (below 30 MW). This implies a two-unit plant limit of 60 MW and a single unit plant limit of 30 MW. Alternative 2 Replace governor electronics to reduce time delays. If possible, dampen turbine pit turbulence, and add external intelligence to optimize gains based on power system conditions. Successful implementation of these concepts can virtually eliminate instability and potentially provide the current 27 MW of non-responsive spin. Alternative 3 In addition to number two, install dual-rate hydraulic servomotors to increase needle speeds. Change needle orifices. Implement a dual mode algorithm, “efficiency” verses “system support.” Efficiency mode would maintain needle equalization and system support mode would open six needles as fast as possible. As far as cost is concerned, early in the project we estimated a worst case cost for replacement of the governor, servomotors, and needle orifices at approximately $5M. We have used this value as a worst case cost to perform a net present value analysis on each of the alternatives. REQUEST: Page 5 of 7 The Bradley Lake Operations and Dispatch Subcommittee recommends that the Bradley Lake Project Management Committee fund Proof of Concept designs and studies for alternative three in the amount of $856,200. * e * This number represents a correction in the amount of $60,000 over the total request for the estimated cost of the Droop Coordination Study found in the draft final report dated June 9, 2000. MOTION: Mr. Story moved that the BPMC authorize $856,200 from the construction funds for the purpose of the schedule module with the understanding that we get quarterly update status reports and that during the first quarter you refine the schedule and by doing so the intention would be that we have some control. Seconded by Hank Nikkels. A roll call vote was taken and the motion passed unanimously. MOTION: Mr. Nikkels moved that the PMC supports a progressive effort to improve the operation and safety of the Bradley plant by studying and enhancing controls and other critical elements of the plant, thereby enhancing the value to the participating utilities. Second by Norm Story. A roll call vote was taken and the motion passed unanimously. Mr. Kitchens expressed his appreciation, thanks, and gratitude to the Operation and Dispatch Committee for the work they have done identifying this problem and suggesting its proposed resolution. 7C. i f i 4 = Sieczkowski. MOTION: Mr. Sieczkowski moved to approve the reallocation of the SVC spares funding from the current amount of $145,000 to $0.00. Seconded by Norm Story. When we developed this list for the construction funds, part of the approval done by the PMC was for buying SVC spares for the amount of $145,000 and Chugach Electric was going to head up that effort. Over the years, after numerous discussions, the Bradley O&D committee has discussed the possibility and the need to go ahead with purchasing those SVC spares and have come to the conclusion that it is not necessary and that spares for the SVC should be purchased as needed. Based on that recent information, the O&D recommends to reallocate the SVC spares funding from $145,000 to $0.00. A voice vote was taken, and the motion passed unanimously. 8. COMMITTEE COMMENTS A. Next Meeting Date Bjornstad Next meeting date is at the call of the Chair. Page 6 of 7 9. ADJOURNMENT MOTION: Mr. Kitchens moved to adjourn. Seconded by Mr. Nikkels. There being no objection and no further business of the Committee, the meeting was recessed at 11:45 a.m. BY: — “A , ; Alaska Energy Authority, Secretary Page 7 of 7 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 1999 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Alaska Industrial Development and Export Authority 480 West Tudor Road Anchorage, Alaska Teleconference Monday, March 22, 1999 — 10:00 a.m. ls CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Monday, March 22, 1999, via teleconference from the Alaska Industrial Development and Export Authority Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2 ROLL CALL Roll was called by Brenda Fuglestad. The following members were present: Gene Bjornstad Chugach Electric Association Wayne Carmony Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Brad Evans Golden Valley Electric Association (teleconference) Dennis McCrohan Alaska Energy Authority Meera Kohler Anchorage Municipal Light & Power (teleconference) 3. PUBLIC ROLL CALL Joe Griffith, Chugach Electric Association Stan Sieczkowski, Alaska Energy Authority Elaine McCambridge, Alaska Energy Authority Brenda Fuglestad, Alaska Energy Authority Ron Saxton, Ater Wynne LLP (teleconference) Don Stead, Homer Electric Association (teleconference) Rick Eckert, Homer Electric Association (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Ray Morgan, Matanuska Electric Association (teleconference) 4. PUBLIC COMMENT There were no public comments. Bradley Lake Project Management Committee Meeting Minutes Monday, March 22, 1999 Page 2 of 3 5. AGENDA COMMENTS There being no additions or comments, the agenda was adopted by unanimous consent. 6. APPROVAL OF MEETING MINUTES — November 3, 1998 MOTION: Mr. Story moved to approve the meeting minutes of November 3, 1998. Mr. Evans seconded the motion. It was noted that a change be made on page 7 the word “failed” should be changed to “filed.” A voice vote was taken and the minutes were unanimously approved as amended. Th NEW BUSINESS A. Bradley Lake FY2000 Budget of Annual Project Costs — Joe Griffith MOTION: Chairman Bjornstad entertained a motion to approve the budget. Mr. Story moved to approve the FY2000 budget of annual project costs. Seconded by Wayne Carmony. The question was asked if this was a June 30 fiscal year. Chairman Bjornstad stated that it was. Mr. Zoerb asked that someone provide some insight regarding the AEA admin fee listed at $200,000 annually. Mr. McCrohan responded that a few years prior, AEA had a settlement with the Bradley Lake PMC that had a provision where AEA would ratchet down the admin fee to no lower than a certain level, depending on the services AEA is providing. Elaine McCambridge noted that $275,000 is what it is if we don’t take away any of our duties unless we see that it is costing us less, we are entitled to $275,000 because none of our duties have been reduced at this point, but we see that it is costing us less, so we have on our own reduced it down to the $200,000 over the last few years. However, AEA retains the right to keep it at the negotiated fee of $275,000. If the costs go back up, then this would allow AEA to go back up again, until such time as the duties are relieved, and if the duties go down, then we would drop down to $175,000 if certain duties become non-existent as defined by the Settlement Agreement. A roll call vote was taken and the motion passed unanimously. 8. COMMITTEE COMMENTS A. Next Meeting Date — Bjornstad The next meeting date will be at the call of the Chair. B. Status Report — Refunding Bonds — Joe Griffith Bradley Lake Project Management Committee Meeting Minutes Monday, March 22, 1999 Page 3 of 3 Mr. Griffith stated that the closings for the third and fifth series refunding bonds are scheduled for April 6, 1999 and April 13, 1999. We will need certificates similar to those done in February. Mr. Zoerb asked that to the extent that there are questions or concerns with the changes in language as did in the third series official statement, do we communicate those to Mr. Hittle through counsel? Mr. Griffith noted that was correct, or to himself. 9. ADJOURNMENT MOTION: Ms. Kohler moved to adjourn. There being no objection and no further business of the Committee, the meeting was recessed at 10:20 a.m. BY: rea TK . is 0 Z e Bgebe ejorstac, Ghaikman ATTEST: ome Coho Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Via Electronic Media @ Chugach Electric Association — Board Room 5601 Minnesota Drive Anchorage, Alaska Teleconference Monday, May 17, 1999 — 2:00 p.m. ic CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 2:00 p.m. on Monday, May 17, 1999, via teleconference from the Chugach Electric Association Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2 ROLL CALL Roll was called by Shauna Dean. The following members were present: Gene Bjornstad Chugach Electric Association Ray Morgan Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Brad Evans Golden Valley Electric Association (teleconference) Dennis McCrohan Alaska Energy Authority Meera Kohler Anchorage Municipal Light & Power 3. PUBLIC ROLL CALL Brian Hickey, Chugach Electric Association Lee Thibert, Chugach Electric Association John Cooley, Chugach Electric Association Hank Nikkels, Anchorage Municipal Light & Power Shauna Dean, Alaska Energy Authority Ron Saxton, Ater Wynne LLP (teleconference) Larry Hittle, Ater Wynne LLP (teleconference) Don Stead, Homer Electric Association (teleconference) John Yale 4. PUBLIC COMMENT There were no public comments. Bradley Lake PMC Meeting Minutes May 17, 1999 Page 2 of 6 5. AGENDA COMMENTS Under New Business Item 7 — make a new 7A Bradley PMC Communications Plan that Homer is proposing and then change the Bradley Lake Instability System Test Plan to Item 7B. There were no objections to the changes to the agenda. 6. APPROVAL OF MEETING MINUTES — March 22, 1999 MOTION: Mr. Story moved to approve the meeting minutes of March 22, 1999. Mr. Evans seconded the motion. A voice vote was taken and the minutes were unanimously approved. i. NEW BUSINESS 7A. Bradley Lake PMC Communication Plan — Norm Story Mr. Story stated HEA has completed a 90-mile study using 24 strands between Homer and Kenai. Four strands were retained for HEA’s use for communications on the Bradley Project. This makes for significant savings when coupled with Chugach’s new link between Bernice Lake and Anchorage. HEA is proposing to take over the power between Homer and Bradley, and manage, operate, and maintain it to get the signal to Bradley and then to HEA’s private project. We would then take the communications to Kenai where Chugach would take over and link it to Anchorage. Our studies show that this proposal would show a significant savings and profit. He said he is bringing this before the Committee because HEA needs to spend money to set up the in-use equipment to allow this process to take place. Coupled with this is the O&M contract, which comes up for renewal in June, which thereafter becomes a year to year extension. HEA would like to have the project O&M Agreement extended to an additional five years that would couple this section into the original Agreement and make them concurrent. Mr. Stead briefly reviewed the document and discussed the background costs with the Committee. He stated that the Division of Communications provides all of the communications to the project through a microwave link that goes from Bradley to Seldovia and then is transmitted to Homer Electric where void circuits get dropped off for PTI — there are approximately 40 circuits that are carried by the Division of Communications. The project also has approximately 19 VHF radio channels. He said HEA’s proposal is that HEA would take over all of the communications for Bradley Lake, which includes VHF and all microwave signals. Mr. Stead said that HEA has noticed that the Division of Communications has had several outages and it appears to be becoming a more frequent occurrence as the equipment is getting worn out. Mr. Stead said that Chugach is the ultimate end-user with the exception of Golden Valley and ML&P, which basically were several data circuits. HEA will install some additional equipment especially at the Diamond Ridge point — most likely to the sites that control that aspect. For clarification, both towers that HEA are planning on using were installed for and owned by the Bradley Lake Project. HEA will be adding a 20-foot section to the tower at the Homer office, redirecting the antennas so they will directly communicate between Bradley Mountain and the Homer office. The Homer office will pick it up and transfer it to the fiber, which will then carry it into Diamond Ridge, Soldotna, and Kenai, and make the appropriate drops. We are currently working on a contract with PTI to then carry this fiber over to Bernice Lake which then goes over to Chugach. Bradley Lake PMC Meeting Minutes May 17, 1999 Page 3 of 6 Mr. Morgan asked that if what has been happening between the powerhouse and HEA’s office is still continuing to be microwave? Mr. Stead responded that HEA will continue to microwave, except one of the hops will be cut out. The current situation is a two hops system that goes from Bradley Mountain to Seldovia and then Seldovia to Homer office, Diamond Ridge, and Anchor Point. Homer office and Diamond Ridge are operating as radio and continuing to carry the majority of the traffic up from Anchor Point into Anchorage. Our current plan is to go from Bradley Mountain to the Homer office — we have verified that the path is good between Bradley and Homer. Mr. Story said he has not had a chance to speak with Stan (AEA) regarding this proposal and the Agreements, however, once the PMC has given the go-ahead we will need to conclude our discussions relative to the state’s communications system with the AEA because we do contract with the state AEA. | am under the assumption that Stan is working on that issue from the O&D committee side. He said he has developed a draft proposal-amendment and believes a copy went to Dennis McCrohan (AEA), and Ron Saxton, representing the PMC management group. It would be the understanding that it would have to be followed up between the state and Homer Electric, and in fact, the PMC for concurrence or ratification. He said that, as seen from the study, there is considerable savings for transporting the signals — we save approximately $90,000 a year on the Division of Communications projected rate for this year. Meera Kohler and Hank Nikkels with ML&P joined the meeting at this time. Mr. Saxton said that the Homer O&M contract is a contract between Homer and the Energy Authority to operate the project, but the PMC does have to agree to it. The contract is up for renewal and | am assuming that the state intends to renew Homer as the operator and that all of you are agreeable with that. If this is not true, then we need to put that out on the table. Since, however, that the O&M contract itself does not provide for the rate payment than it is still subject to the budget process. If AEA and the group intends to renew Homer’s O&M contract then it is easy enough to simply amend that contract that would add to their duties providing those communications, and for that sole part — the communications part — adding some payment terms. Mr. Bjornstad asked whether there will be a motion to recommend approval. Mr. Saxton replied that what Homer wanted was approval for the idea that they are going to provide the communication service at this rate so that they can make some decisions. The PMC would not approve the O&M contract. The assumption is that we will amend the O&M contract to reflect the new communications duties if that is what the group approves today. Mr. Story said that if we can approve the communications then we can begin to spend money to develop our end of it and then direct AEA, HEA, and the PMC attorney to complete the amendment of the O&M agreement which will include the communications piece. It was briefly discussed on whether the segment from Chugach would be handled separately or together without a contract — they would become subcontractors to us. | would offer this to all parties to consider making it where you deal with one entity. Then we can work that out with Chugach and just include it as a part of this Agreement. However, if you wish to have a separate Agreement with Chugach we will work that up. Mr. Bjornstad said that he would choose whichever contract is cleaner. Ms. Kohler said that this concept was talked about at the last meeting and it hasn't really changed much. She said she has no problem with it. Bradley Lake PMC Meeting Minutes May 17, 1999 Page 4 of 6 MOTION: Mr. Story moved to approve Homer Electric’s proposal to provide the communication service with a cost of $90,000 per year for a term of five years as detailed in the proposal, and that Homer Electric, AEA, and the PMC attorney be directed to complete an O&M Agreement extension for five years and include the communications segment. Ms. Kohler seconded the motion but added the suggestion that the $90,000 a year actually inciude the Chugach portion of $27,684. Mr. Story amended the motion to include both pieces to get the signals from Bradley to Anchorage, and that we will negotiate with Chugach as a subcontractor. Ms. Kohler seconded the amended motion. Mr. Evans asked whether there was an issue on when it was implemented, when we contract with the state, was that for the year or at the beginning of a new fiscal year? Mr. Bjornstad said the Agreement ends at the end of June, we have to renew it for the new fiscal year. Mr. Story affirmed this and stated that an amendment is needed for an additional five years. He said the O&D committee has communicated that they would like to have that by October and that is the reason why we want to get early approval so we can begin to develop our end of the process. Mr. Evans asked whether anybody checked with the state. He asked if we are allowed to contract with them for three months and then only pay the 3/12" of the contract with them. He asked that when we get near the end of the contract does anybody now of the provisions to get out of that. Mr. Story responded that regarding Homer Electric’s proposal that we would begin to expect payment for our payment when the Division of Communications budget year ends. Our goal is that we have our work completed and ready to pick up that communication. After that, if there is a problem, and the system has to be worked out and we have to be on the Division of Communications system a little bit longer then we have to run that down and see what would be necessary. | am sure we could work something out, they are not just going to cut us off. Mr. Saxton said that the Division of Communications contract ends July 1. We then have the window from July 1 to October where we could end up with 0 or maybe 2 servers for the next fiscal year. Mr. Evans said that Mr. Story indicated that he would have his commercial ready to go October 30. If so, then we will be on those guys for a couple of months. Mr. Saxton said we will be on the Division of Communications from July 1 to October — we are committed to the Division of Communications for the whole fiscal year. Mr. Evans said he wanted to make sure someone addressed that issue. Mr. Cooley said that he believes that the Division of Communication is a monthly rental fee and that there is no contract. As such, you would just need 30 days notice to let them know that you do not want the circuit anymore. Mr. Saxton requested Mr. Cooley confirm that belief because if this is the case then we could end up paying for double service for a year. Bradley Lake PMC Meeting Minutes May 17, 1999 Page 5 of 6 Mr. McCrohan said that is also his understanding. He said that this could be taken care of with the discussions regarding the amendment to Homer’s contract. In response to Mr. Story, Mr. Evans stated that July would be the end of the contract — it would be the end of the budget year. Mr. Story said that it will have to be verified that they will go month-to-month with us and give them 30 days notice when we are ready to cut over and our costs will not start until we cut over. Hearing no further discussion, Mr. Bjornstad requested a roll call vote. A roll call vote was taken and the motion passed unanimously. 7B. Bradley Lake Instability System Test Plan — Executive Summary -- Hickey Mr. Hickey stated that the test plan for the Bradley Lake Project was completed and sent out to Stone & Webster, Power Technologies, and Woodward Governor approximately six weeks ago. They submitted comments on the test plan and those comments were incorporated into the plan on Saturday. We will be sending the revised plan to the people who will be participating in the testing. Mr. John Yale will be on-site while the testing is being done at the plant. We have set up a test schedule and the testing should be starting on Wednesday the 19". We tried to schedule any testing that would have any effect on the system in the evenings so we will be doing some load rejections and load acceptance Wednesday evening. Thursday evening, Power Technologies is scheduled to do power system stabilizing testing and the tunnel transient pressure evaluation. Friday evening, we will be doing the deflector vs. power curves and then evaluate some of the gaining sensitivity on Saturday morning. The testing should be complete by Saturday afternoon. Woodward Governor, Stone & Webster, and Power Technologies will be on site whenever we are testing any of their equipment. Basically, WWoodward Governor and Stone & Webster will be on site for the entire duration of the test, along with Electric Power Systems who participated in the original analysis of the system stability problems. Mr. Hickey stated that if the projections for the next week come out correct, we will be at $382,600. The original budget was $382,015. Mr. Hickey stated that he would like a motion from the general managers or from the project management committee to approve going ahead with the testing this week. Mr. Stead said that he would like to move some of the testing schedule around. ML&P had some concerns and questions about having both units off line at the same time. We would like to do some of the more rigorous testing in the morning rather than the evening. Mr. Hickey stated they are flexible with the testing schedule. Mr. Nikkels said the morning testing would be fine. There will be more equipment on line in the morning so it will take a bigger bump. Mr. Hickey said that they are going to try to run pretty much everything on the Kenai while they are testing this. They will maximize the spin on the Kenai. Bradley Lake PMC Meeting Minutes May 17, 1999 Page 6 of 6 Mr. Story stated that regarding the timing of the testing where the system may be in jeopardy during certain phases, we believe that off-day peak would be the best for us as far as our services go. We do understand, however, that the utilities wanted to have less equipment up and as many people in place as possible so they were focusing on it during the day. We just want that to happen in the morning so if we do have a problem we have the opportunity to get it back up before most of the businesses open. We will work with our industrials here to make sure they know that the testing is going to commence. We need to discuss the scheduling and fine tune it. Mr. Hickey said they are flexible with the testing. Motion: Mr. Bjornstad moved to approve testing the Bradley Lake units within the plants design parameters as outlined in the Bradley Lake test plan. The testing will be scheduled for May 19-22, and details of it will be worked out with the respected utilities. Ms. Kohler seconded the motion. Hearing no further discussion, Mr. Bjornstad requested a roll call vote. A roll call vote was taken and the motion passed unanimously. Mr. Story expressed his thanks to the group for working with us on getting a project that will help us with our communications. We will be saving money for everyone. 8. COMMITTEE COMMENTS A. Next Meeting Date The next meeting date will be at the call of the Chair. 9. ADJOURNMENT MOTION: Ms. Kohler moved to adjourn, seconded by Norm Story. There being no objection and no further business of the Committee, the meeting was adjourned at 2:35 p.m. es Cy ‘ BY: : Eugen Bjokostad, Chairnaan ATTEST: On ww V Me Cen Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Via Electronic Media @ AIDEA — Board Room 480 W. Tudor Road Anchorage, Alaska Teleconference Wednesday, September 15, 1999 — 10:00 a.m. 1. CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Wednesday, September 15, 1999, via teleconference from the AIDEA Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Gene Bjornstad Chugach Electric Association Dave Calvert City of Seward (teleconference) Wayne Carmony Matanuska Electric Association (teleconference) Norm Story Homer Electric Association (teleconference) Brad Evans Golden Valley Electric Association (teleconference) Dennis McCrohan Alaska Energy Authority Meera Kohler Anchorage Municipal Light & Power (teleconference) 3. PUBLIC ROLL CALL Ray Morgan, Matanuska Electric Association (teleconference) Stan Sieczkowski, Alaska Energy Authority Elaine McCambridge, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Ron Saxton, Ater Wynne LLP (teleconference) Don Stead, Homer Electric Association (teleconference) 4. PUBLI MMENT There were no public comments. Bradley Lake PMC Meeting Minutes September 15, 1999 Page 2 of 3 5. AGENDA COMMENT: There were no agenda comments. 6. APPROVAL OF MEETING MINUTES — May 17, 1999 MOTION: Ms. Kohler moved to approve the meeting minutes of May 17, 1999. Mr. Story seconded the motion. Mr. Story noted a correction on page 4 of 6, fifth paragraph from the bottom of the page — the date “October 1” should read “October 30.” Also, a spelling correction on the same page the second paragraph from the bottom, the word “wan” should be changed to “want.” The minutes were unanimously approved as amended. t INE: 7A. Nuka Diversion — Norm Story MOTION: Mr. Story moved to approve the Nuka watershed divide and Nuka diversion in weir restoration design, and authorize Homer Electric to execute the contract with Herndon & Thompson. Seconded by Ms. Kohler. Don Stead gave a brief description of the design. On June 17, 1999, Homer Electric received word that the Nuka diversion was being over-topped. Homer went out on the 18", and found that all of the water out of Nuka Glacier was being forced onto the Nuka diversion area, and the spillway was what was being over-topped and it was running all of the water from the Nuka Glacier down the Nuka River. On June 19" Homer found the diversion had actually busted through and all of the water was still going down the Nuka River, but now instead of going over the spillway, it was going through this new breach. Homer initiated action to remedy the situation. Homer called the civil engineer, Mr. Cushing, to see if he could determine why this had happened. In the spring, the Glacier face “crushed,” and that is what caused all of the water to be diverted to the Nuka diversion side. On August 15, 1999, Homer found out that the Glacier had again shifted and all of the water was running towards the Bradley River system. Homer lost water from sometime in June, through the middle of August, and now all of the water is going back into the lake, as it should. Mr. Cushing has designed a long-term fix by designing a trench to remove the gravel from in front of Nuka Glacier, re-establish the correct elevation in the Nuka pool, and also provide a path for if this Glacier shifts again and starts forcing water towards the diversion that it will have a path to get back over into the lake. Mr. Stead noted that long-term, this is going to be a problem — the Glacier is going to continue to deposit gravel and silt. There will be continual work by Homer to clean this out on a periodic basis. Last year Homer knew they would have to go and remove the gravel and redistribute them so that they would not have this problem. Norm Story noted that Homer is required to release 5 CFS down the Nuka River as part of the requirement. There are two 12” conduits laid under the Nuka diversion. Homer knows that one Bradley Lake PMC Meeting Minutes September 15, 1999 Page 3 of 3 of them has started to silt up and is not flowing water as it should. Part of the mechanics or hydraulics are that the Nuka pool is to be maintained at a certain elevation, which is the top of the spillway of the Nuka diversion. With it being maintained at that elevation, then we get our 5 CFS through these 12” conduits that run underneath the diversion itself. Currently, with all of the water being diverted towards the Bradley River system and the elevation not being maintained because of the breach, Homer is not meeting their 5 CFS down the Nuka River. Homer is at 4.5 CFS. Homer has notified the Park Service that they are in technical violation, and they have not come back to talk with them about this issue. Mr. Sieczkowski stated that he had called the Park Service and notified them of the 2.1 CFS going down and the reasons for it. The Superintendent of the Park Service assured him that as long as they continued to work diligently and do the best that they can and do the repairs, that this should not be a problem. To the best of his knowledge, everyone is aware of it and they are working with us to insure that negative responses do not develop. Mr. Story noted that the Contractor has indicated that they are ready to move on the job, and shouldn't take more than about a week to do the job. They have approval to walk heavy equipment up there this time, as so not to chopper in heavy equipment. MOTION: Mr. Story moved to approve the Nuka watershed divide and Nuka diversion and weir restoration design, and authorize Homer Electric to execute the contract with Herndon & Thompson in the amount of $197,921.00. Seconded by Meera Kohler. A roll call vote was taken and the motion passed unanimously. 8. COMMITTEE COMMENTS 8A. Next Meeti — Chai The next meeting date will be at the call of the Chair. 9. AD RNMEN MOTION: Ms. Kohler moved to adjourn, seconded by Mr. Story. There being no objection and no further business of the Committee, the meeting was adjourned at 10:20 a.m. BY: am (! Eugen&gjornstad, CKairlyan ATTEST: Me Sten Alaska Energy Authority, Secretary Unapproved Minutes — They were never presented at a meeting for approval. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE UNAPPROVED MEETING MINUTES Chugach Electric Association 5600 Minnesota Drive Anchorage, Alaska Teleconference / Regular Meeting Tuesday, January 5, 1999 — 9:00 a.m. ue CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project, Project Management Committee to order at 9:00 a.m. on Tuesday, January 5, 1999, via teleconference from Chugach Electric Association, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2: ROLL CALL Roll was called by Shauna Dean. The following members were present: Gene Bjornstad (teleconference) Chugach Electric Association Dennis McCrohan Alaska Energy Authority 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Ron Saxton, Ater Wynne Hewitt Dodson & Skerritt (teleconference) John Moore, Prudential Securities (teleconference) Jim Seagraves, Seagraves & Hein, LLC (teleconference) Joe Griffith, Chugach Electric Association (teleconference) Chairman Bjornstad recessed the meeting until Thursday, January 7, 1999 at 8:30 a.m. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Alaska Industrial Development and Export Authority 480 West Tudor Road Anchorage, Alaska Teleconference / Regular Meeting Thursday, January 7, 1999 — 8:30 a.m. 43 CALL TO ORDER Chairman Eugene Bjornstad reconvened the meeting of the Bradley Lake Hydroelectric Project Management Committee at 8:30 a.m. on Thursday, January 7, 1999, via teleconference from the Chugach Electric Association Board Room, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present: Gene Bjornstad Chugach Electric Association Valorie Walker Alaska Energy Authority Meera Kohler Anchorage Municipal Light & Power 3. PUBLIC ROLL CALL Shauna Dean, Alaska Energy Authority Joe Griffith, Chugach Electric Association (teleconference) Cindy Cartledge, Wohlforth, Vassar, Johnson & Brecht Ken Vassar, Wohlforth, Vassar, Johnson & Brecht Keith A. Laufer, Alaska Energy Authority Rick Gifford, City of Seward (teleconference) Norm Story, Homer Electric Association (teleconference) Rick Baldwin, Homer Electric Association (teleconference) Rick Eckert, Homer Electric Association (teleconference) Steve Ellis, Matanuska Electric Association (teleconference) Ray Morgan, Matanuska Electric Association (teleconference) Wayne Carmony, Matanuska Electric Association (teleconference) Ron Saxton, Ater Wynne Hewitt Dodson & Skerritt (teleconference) Larry Hittle, Ater Wynne Hewitt Dodson & Skerritt (teleconference) John Moore, Prudential Securities (teleconference) Jim Seagraves, Seagraves & Hein, LLC (teleconference) 4. PUBLIC COMMENT There was no public comment. 5. AGENDA COMMENTS: There were no agenda comments. 6. MEETING MINUTES: The December 9, 1998, meeting minutes were unanimously approved as presented. fT. NEW BUSINESS A. BRADLEY LAKE BOND REFUNDING - Griffith The City of Seward, Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, Municipal Light & Power, and the Alaska Energy Authority indicated they had no issues with the changes in the language suggested by Lewis Greenbaum. Mr. Ellis stated MEA had not received the preliminary official statement from Lewis Greenbaum and suggested the meeting be postponed until they have had a chance to review the changes. Mr. Laufer said that the Authorizing Resolution will be irrevocable once passed. Mr. Ellis reiterated that MEA is requesting that the meeting be postponed until they can fully review the completed document. Mr. Vassar said that he wanted it clearly understood by all of the parties that what MEA will be looking at is a draft of the official statement. It is a preliminary official statement. If this resolution is approved, the preliminary official statement will be printed. There will be a final official statement and that final official statement may change from what you have in the preliminary official statement. He said he did not want any party that is voting on this resolution to say that they did not vote on a document that they did not have and, therefore, the resolution would not be valid. If MEA and all the other parties vote on this resolution, they are voting on the basis of a preliminary official statement and approving our going forward and completing it in final form. Mr. Ellis asked whether the purchasers have the right to sign off on any changes in the preliminary official statement that are implemented into the final statement. Mr. Vassar replied that they would not have that authority. Mr. Vassar said we would not expect to make changes that are incorrect and we would expect to have the cooperation of each of the purchasers. We, in turn, are expected to cooperate with the purchasers. But the statement was made before and it is a correct statement: Once this resolution is passed it is irrevocable. Mr. Saxton said the utility role in this transaction is to approve having the Authority go forward with the deal saying that we consent to the Authority refunding these bonds and to various documents to verify certain information. Discussions ensued as to the changes to the preliminary official statement. The PMC decided to recess this issue until later today at 11:00 a.m. Alaska time. B. ELECTION OF OFFICERS - Bjornstad Mr. Saxton briefed the PMC as to the necessity of appointing officers at this time. He said it is a requirement of the PMC By-laws that officers are appointed at the first regular meeting after July 18. MOTION: Mr. Story moved to adopt the officers as they are currently slated. Seconded by Ms. Kohler. A roll call vote was taken and the motion was unanimously approved. Chairman Bjornstad recessed the meeting at 9:45 a.m. to be reconvened at 11:00 a.m. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 1998 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Chugach Electric Association - Board Room 5601 Minnesota Drive Anchorage, Alaska Regular Meeting Friday, March 20, 1998 - 10:00 a.m. 1. CALL TO ORDER Chairman Eugene Bjomstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Friday, March 20, 1998, in the Board Room of Chugach Electric Association, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2 ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Eugene Bjornstad, Chairman Chugach Electric Association Dave Calvert City of Seward Wayne Carmony Matanuska Electric Association Mike Kelly (arrived 10:10 a.m.) Golden Valley Electric Association Don Stead Homer Electric Association Dennis McCrohan Alaska Energy Authority Meera Kohler Anchorage Municipal Light & Power 3. PUBLIC ROLL CALL Others Present: Shauna Dean, Alaska Energy Authority Jim Hall, Matanuska Electric Association Stan Sieczkowski, Alaska Energy Authority Brian Hickey, Chugach Electric Association Bob Hufman, AEG&T Elaine McCambridge, Alaska Energy Authority Bradley Lake Project Management Committee Meeting Meeting Minutes March 20, 1998 Page 2 Larry Hembree, Anchorage Municipal Light & Power Lee Thibert, Chugach Electric Association Dan Helmick, Anchorage Municipal Light & Power Mike Yerkes, AEG&T Joe Griffith, Chugach Electric Association Tim McConnell, Anchorage Municipal Light & Power 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There being no additions or comments, the agenda was adopted by unanimous consent. 6. APPROVAL OF MEETING MINUTES - December 9, 10, and 12, 1997 MOTION: Ms. Kohler moved to approve the meeting minutes of December 9, 10, and 12, 1997. Seconded by Mr. Stead. There being no changes or additions, a voice vote was taken, and the minutes were unanimously approved as presented. Mr NEW BUSINESS A. Status of Instability and Control Response Project - Hickey B. Request to Increase Funding to Continue Studies Associated With Project - Hickey Using a slide presentation, Mr. Hickey provided an update on the status of resolution of the instability issue, including a recap of the history commencing with voltage problems in the Kenai Peninsula area in 1996. He noted that ever since Bradley had been commissioned, they have experienced electrical instability problems with the plant. He described various studies they had conducted and improvements that had been made in an attempt to correct the instability problems. Using various pieces of correspondence from years past, Mr. Hickey highlighted outages and load sheds that had occurred and the analyses and modeling programs that had been developed to study these events in order to determine the cause. He stated that on January 14, 1997, the PMC had approved funding for Items 1, 2, and 3 of the O&D Subcommittee's action plan for correction of the instability problems at Bradley Lake. Mr. Hickey said O&D Subcommittee was supposed to come before the PMC at the completion of Action Plan Items 1, 2, and 3, and the presentation he was giving today was the O&D Subcommittee's revised action plan. He noted that Item 1 had been completed. He said there remained additional work to be done on Item 2, and he gave the details regarding the deflector time delays addressed in Item 3. He said Items 3(d), (e), and (f) have not been completed. He said that the original completion date for Items 1, 2, and 3 had been July 31, 1997, but due to delays in awarding the RFP and the magnitude of the scope of the simulation had delayed the final report so that they are approximately six months behind schedule. He said that due to the Bradley Lake Project Management Committee Meeting Meeting Minutes March 20, 1998 Page 3 inconsistency of system instability events, they had had to experiment with the model and stability factors until they were able to reproduce the oscillations that were present when the system lost stability. Mr. Hickey said that on February 2, 1998, they had been given a presentation by industry representatives on machine testing, and the next day they had held a utility roundtable meeting and brainstorming session. Mr. Hickey said to date, the PMC had approved two funding sources for work related to Bradley instability, one being Construction List Item 18, the system analysis equipment, and Items 1, 2, and 3 of the O&D Subcommittee's Instability Action Plan. Mr. Hickey briefly reported on the system analysis equipment budget and the Instability Action Plan budget. He said they would be asking the PMC to approve installation of the system analysis equipment at Bradley Lake instead of at Daves Creek in Soldotna, which was approved by the PMC. Mr. Hickey said they had identified the 750-millisecond oscillation and determined that it is unique to Bradley Lake. They had benchmarked the events, evaluated the speed reference and time delays, and developed an accurate model of the tunnel to determine if oscillations inside it had any impact on the instability problems. He also described a couple of quirks in the system, which limit the control response that had been discovered. He said they would be requesting funding to determine what the deflector position error was and how it was impacting the problem. He said they had verified that the PSSE settings are reasonable. Mr. Hickey said change in scope will be required because some of the work that is now needed was not anticipated in 1997. He said the change in scope of work consisted of accurately measuring the actual deflector positions and the hydraulic pressure that drives the deflectors. He also said that outside the Bradley plant, there are parts of the PSSE model which do not accurately reflect the railbelt power system, and they would need to address programming issues related to AGC control, capacity based on unit temperature, and overspeed. Mr. Hickey summarized by saying that work that still needs to be done includes correcting the PSSE, developing a formal machine testing plan to collect the parameterization data, and moving the system monitoring equipment originally destined for Daves Creek to Bradley Lake. He said the cost for these three items of additional work consisted of: $43,600 for the PSSE model work and $40,000 for machine testing assistance. So the total increase in funding required to complete Items 1, 2, 3, and 4 in their entirety would be approximately $83,600. He noted that this would increase the original anticipated budget from $299,000 to $382,000 for this phase of the work. He said they intended to complete the PSSE revisions by July 31, 1998, and they would like to have the machine testing plan completed by July 1st and perform the testing by July 31st. Mr. Hickey said they would review the data they had gathered in August and would come back before the PMC in September with the test results. He said at that time, if their current simulations are accurate, he believed they would be able to make recommendations for changes to the control system that will eliminate the instability problem. Based on their current knowledge, Mr. Hickey gave a range of recommendations and costs for completing them that may be presented to the PMC in September. Bradley Lake Project Management Committee Meeting Meeting Minutes March 20, 1998 Page 4 Mr. Hickey responded to questions and discussion was heard. Mr. Hickey noted that additional items of the Instability Action Plan would probably have to be undertaken as they completed the projects he was currently proposing, potentially including reviewing the final operating study for Bradley and revisiting the system analyses that had been done with respect to the southem interties. MOTION: Ms. Kohler moved to approve Recommendation No. 1 to issue contracts in the amounts requested. Seconded by Mr. Kelly. There being no discussion, a voice vote was taken, and the motion was unanimously approved. MOTION: Mr. Kelly moved to approve Recommendation No. 2 for the system monitoring equipment that had originally been approved by the PMC to be installed in Soldotna at Daves Creek to be installed instead at Bradley Lake to facilitate machine testing and data collection. Seconded by Mr. Calvert. There being no discussion, a voice vote was taken, and the motion was unanimously approved. Mr. McCrohan recommended that the Chair direct the O&D Subcommittee to update the construction list to include the new projected costs for the items just approved by the PMC during Mr. Hickey's presentation. Mr. McCrohan also pointed out that they currently have in place an agreement with Homer Electric to allow HEA to implement construction items and to provide liability protection for everyone. He said as long as testing work takes place at the site, the HEA agreement applies. However, if Chugach was to install equipment or make any changes, they would need to have a separate agreement in place with CEA as well or, in the alternative, have HEA perform installation work. Brian concurred and said they would work with Mr. Stead on these types of issues. C. FY '99 Project Budget - Evans/McCambridge Ms. McCambridge said the Budget Subcommittee had reviewed and proposed for PMC approval the FY '99 budget. Referring to a handout from the meeting packet, Ms. McCambridge recapped the summary which compared the proposed FY '99 budget and FY '98 projected budget, and she highlighted individual large-ticket items, and explained how this would impact the various budget categories and increase the overall budget. Ms. McCambridge said the current year budget for O&M costs is $2,087,000, excluding the bond refunding; the proposed budget for FY '99 O&M costs is $2,246,947. Ms. McCambridge responded to questions regarding how the bond refunding impacted the budget. In response to Mr. Carmony's question, Ms. McCambridge stated that the proposed budget must be submitted to the Trustee for approval by April 1. Discussion was heard. MOTION: Ms. Kohler moved to approve the Budget Subcommittee’s proposed FY '99 project budget as submitted. Seconded by Mr. Stead. Bradley Lake Project Management Committee Meeting Meeting Minutes March 20, 1998 Page 5 Mr. Carmony noted that it would have been convenient to have received the proposed budget earlier since they had only received it on Monday, the 16th of March. There being no further discussion, a voice vote was taken, and the motion was unanimously approved. D. Revisions of the FY '98 Project Budget - Evans/McCambridge Referring to page 1 of the same handout, Ms. McCambridge reviewed the revised FY '98 budget as compared to the original budget. She said last fall, the Budget Subcommittee had been directed to revise the budget to reflect the approval of the PMC to fund the refunding costs out of this year's budget, and the revised FY '98 Project Budget was being presented to the PMC for formal approval at this time. Ms. McCambridge said the funding sources they had determined could be tapped to pay for the $350,000 refunding expenditure were: (1) $100,000 from the revenue fund, (2) reduce the operating reserve to the mandatory 20-percent level for an additional $102,000, and (3) the possibility that additional contributions would be required from the utilities to pay the remaining $148,000 refunding cost. Ms. McCambridge said the revised budget needed to be approved by the PMC, but she advised that she did not feel any additional contribution from the utilities would be necessary as the project is currently running under budget, and HEA is under budget in operations expense. She said if this trend continued, they would be significantly under budget on O&M, and the $148,000 utility contribution would not be necessary. MOTION: Ms. Kelly moved to approve the revised FY '98 Project Budget as submitted. Seconded by Mr. Carmony. There being no discussion, a voice vote was taken, and the motion was unanimously approved. 8. COMMITTEE COMMENTS Ms. McCambridge noted that Parisena Stromberg had completed their FY '97 Annual Report, and it was available in the meeting packets. Ms. McCambridge said the report had been reviewed by the Budget Subcommittee, and she recommended that the PMC review it and accept it at their next meeting. At Mr. Kelly’s request, Ms. McCambridge reviewed Parisena Stromberg's FY '97 Annual Report with the Committee. MOTION: Mr. Carmony moved to accept Parisena Stromberg's FY '97 Annual Report as submitted. Seconded by Ms. Kohler. There being no discussion, a voice vote was taken, and the motion was unanimously approved. Mr. Sieczkowski advised that the O&D Subcommittee's next meeting was scheduled for April 22, 1998, at Bradley Lake. Mr. Carmony noted that this would be Mr. Hall's last meeting as a regular MEA employee. Mr. Hall was commended for his contributions, and several people expressed their appreciation. Bradley Lake Project Management Committee Meeting Meeting Minutes March 20, 1998 Page 6 There were no other Committee member comments. A. Next Meeting Date It was the consensus of the Committee that the next meeting of the Bradley Lake Hydroelectric Project Management Committee be at the call of the Chair. 9. ADJOURNMENT MOTION: Ms. Kohler moved to adjourn. There being no objection and no further business of the Committee, the meeting was recessed at 11:20 a.m. see KH. eae Egerk ERITIiAd, Chai ATTEST: AMe Chor Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Chugach Electric Association - Board Room 5601 Minnesota Drive Anchorage, Alaska Regular Meeting Monday, June 15, 1998 — 10:00 a.m. ils CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Monday, June 15, 1998, in the Board Room of Chugach Electric Association, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Diane Hillemeyer. The following members were present, and a quorum was established: Eugene Bjornstad, Chairman Chugach Electric Association Dave Calvert City of Seward Ray Morgan Matanuska Electric Association Mike Kelly (teleconference) Golden Valley Electric Association Don Stead Homer Electric Association Dennis McCrohan Alaska Energy Authority Meera Kohler Anchorage Municipal Light & Power 3. PUBLIC ROLL CALL Others Present: Brian Hickey, Chugach Electric Association Lee Thibert, Chugach Electric Association Ron Saxton, Ater Wynne Hewitt Dodson & Skerritt Tim McConnell, Anchorage Municipal Light & Power Dora Gropp, Chugach Electric Association Mike Yerkes, AEG&T John Cooley, Chugach Electric Association Bradley Lake Project Management Committee Meeting Meeting Minutes June 15, 1998 Page 2 4. Bob Hufman, AEG&T Stan Sieczkowski, Alaska Energy Authority PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There being no additions or comments, the agenda was adopted by unanimous consent. 6. APPROVAL OF MEETING MINUTES -— Friday, March 20, 1998 Brian Hickey noted on page 3 in the fourth paragraph “speed records” should be changed to “speed reference...” and in the fifth paragraph “drives the governors” should be changed to read “drives the deflectors...”. MOTION: Mr. Story moved to approve the meeting minutes of March 20, 1998, as amended above. Mr. Calvert seconded the motion. A voice vote was taken and the minutes were unanimously approved as amended. 7. NEW BUSINESS A. Status of Instability and Control Response Project — Hickey Brian Hickey stated that with the help of ML&P, Chugach, and Homer Electric, the data acquisition system has been designed. The parts arrived and it would be assembled in the next couple of weeks. The Woodward governor is up and data acquisition boards have been installed. We have received one deliverable from EPS defining the deflector power curves in the unit in the PSSE software and they are working on the other two deliverables. We believe they will be done by the July 31* deadline. We do anticipate doing unit testing in late July and are developing a test plan. In response to Mr. Saxton, Mr. Hickey stated that the range of alternatives is between the wholesale replacement of the governors to modification. He noted that this would come back to the PMC in September with the testing results. Mr. Hickey also noted that the costs of those alternatives are still in the range of what was discussed before. B. Update — Construction Punchlist — McCrohan Mr. McCrohan stated that he had asked the O&D Committee to review and provide the PMC with a status report. 8. COMMITTEE COMMENTS Bradley Lake Project Management Committee Meeting Meeting Minutes June 15, 1998 Page 3 There were no Committee member comments. A. Next Meeting Date It was the consensus of the Committee that the next meeting of the Bradley Lake Hydroelectric Project Management Committee be at the call of the Chair. 9. ADJOURNMENT MOTION: Ms. Kohler moved to adjourn. There being no objection and no further business of the Committee, the meeting was recessed at 10:15 a.m. ‘Eugen jo nstad, au oe attest: OMe (shorn Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Alaska Industrial Development and Export Authority 480 West Tudor Road Anchorage, Alaska Regular Meeting Tuesday, November 3, 1998 — 1:00 p.m. 1: CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 1:00 p.m. on Tuesday, November 3, 1998, in the Board Room of the Alaska Industrial Development and Export Authority, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. a ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Eugene Bjornstad, Chairman Chugach Electric Association Wayne Carmony (teleconference) Matanuska Electric Association Mike Kelly (teleconference) Golden Valley Electric Association Norm Story (teleconference) Homer Electric Association Dennis McCrohan Alaska Energy Authority Meera Kohler (teleconference) Anchorage Municipal Light & Power 3. PUBLIC ROLL CALL Others Present: Joe Griffith, Chugach Electric Association Brian Hickey, Chugach Electric Association Brad Evans, Golden Valley Electric Association (teleconference) Robert Hanson, Golden Valley Electric Association (teleconference) Rick Eckert, Homer Electric Association (teleconference) Don Stead, Homer Electric Association (teleconference) Dan Helmick, Anchorage Municipal Light & Power (teleconference) Tim McConnell, Anchorage Municipal Light & Power (teleconference) Don Zoerb, Matanuska Electric Association (teleconference) Bradley Lake Project Management Committee Meeting Minutes Tuesday, November 3, 1998 Page 2 of 7 4. Ray Morgan, Matanuska Electric Association (teleconference) Ron Saxton, Ater Wynne Hewitt Dodson & Skerritt (teleconference) Larry Hittle, Ater Wynne Hewitt Dodson & Skerritt (teleconference) Stan Sieczkowski, Alaska Energy Authority Ken Vassar, Wohlforth, Argetsinger, Johnson & Brecht Keith Laufer, Alaska Energy Authority Valorie Walker, Alaska Energy Authority Shauna Dean, Alaska Energy Authority John Moore, Prudential Securities (teleconference) Nancy Watkins, Prudential Securities (teleconference) PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS There being no additions or comments, the agenda was adopted by unanimous consent. 6. APPROVAL OF MEETING MINUTES — June 15, 1998 MOTION: Ms. Kohler moved to approve the meeting minutes of June 15, 1998. Mr. Story seconded the motion. A voice vote was taken and the minutes were unanimously approved. ts NEW BUSINESS A. Bradley Lake Bond Refunding — Joe Griffith Mr. Griffith said Prudential approached AIDEA and the power purchasers in early October with a refunding analysis for the first series bonds that are due in 2021. He said Valorie Walker did additional work regarding the various funds that are guaranteed and they must be kept in place for the duration of the deal. This resulted in a reassessment dated October 29" that he faxed out to all the parties. It appears the time is right for a forward refunding activity on the 2021 term bond. It appears that option three from Prudential’s October 29" letter could save approximately a $2.8 - $2.9 million in present value savings. He said he had discussions with Ron Saxton and Valorie Walker and the conclusion was that it was worthy of bringing forward to the PMC for consideration. He said there is potential for this to be a beneficial transaction, and if it is the will of the PMC, we, or other so designated by the PMC would proceed forward. Mr. Saxton said this would be a good opportunity to refund the bonds. Mr. Bjornstad asked whether a budget amendment or a motion to authorize work by bond counsel is needed today. Mr. Ron Saxton replied that no decisions on options will be made today and there is currently no proposal for a budget amendment. Bradley Lake Project Management Committee Meeting Minutes Tuesday, November 3, 1998 Page 3 of 7 Mr. Saxton said there is work to be done with Prudential for a more definitive schedule and budget and then have another conference call to actually approve a budget amendment. The budget amendment being the cost of moving the transaction forward. He said it is his understanding, from conversations with AIDEA and Prudential, that the Energy Authority will receive no financial benefit from this transaction — the benefit would go to the utilities. While the Authority was willing to cooperate fully, they do expect to be reimbursed for their costs to the extent that there are costs incurred and the transaction ultimately didn’t go forward. The approach is that although there is a substantial payback if interest rates stay in the range they are the state would be expecting the utilities to bear the costs and to accept the risks if the transaction did not close. Mr. Griffith said it appears, at this point in time, that if the PMC is genuinely interested in proceeding with this transaction the PMC could authorize the budget amendment of $150,000 to proceed with the deal. Then, at some point in the future, a more concrete proposal could be brought back before the PMC. Mr. Kelly inquired as to the fees. He asked that if the transaction does not occur, would there be any other costs besides the $150,000? Mr. Griffith replied there would be no other costs besides the $150,000 if the transaction failed. Mr. Helmick asked whether this transaction could be done as a current refunding in early 1999. Mr. Moore said that this is almost a current refunding as it stands now. It is called a forward, but the existing bonds that we are looking to refund are callable on April 1, 1999. Tax law gives us the ability to sell refunding or close a refunding issue 30 days prior. With that you could be closing on April 1, 1999, if the schedule works out such that you are selling the bonds in January, then you have a three-month forward and accordingly we have assigned a very low interest rate penalty for that three months forward. Mr. Helmick asked whether Prudential could run an analysis showing the difference between the current refunding and the forward refunding. Mr. Moore said the mechanics would be virtually identical between a current refunding and a forward refunding. The interest rate impact is very minor. He said Prudential would provide an analysis comparing the two transactions. Mr. Saxton said in the original financing each of the utilities provided an opinion of counsel about the various corporate capability to enter into the contract and our firm, acting on behalf of you collectively, need to be able to rely on those opinions saying that everything is still okay — that all of you still believe the contract to be binding against you. When we entered into this discussion on the previous refunding, a few of the lawyers believed that they needed to put a substantial amount of work into updating their opinions before they would allow us to rely on them. That was done and ultimately each of them was satisfied. In this round, we would still need something from each of your lawyers that basically says nothing has changed in the period since they updated it a year or so ago until now. He said he hoped that would be a minor activity for the lawyers. If there is a fear of that turning into a big activity, discussions will need to be held because the timeline is tight. Bradley Lake Project Management Committee Meeting Minutes Tuesday, November 3, 1998 Page 4 of 7 Mr. Hittle said the last time there was a settlement agreement it roused a lot of interest in all of the attorneys and that does not appear to be happening in this financing. Mr. Story stated that we need to consider moving forward with the transaction. Mr. Carmony asked what the PMC is expected to receive for the $150,000 investment. Mr. Griffith replied that it is a contingency budget for expenses related to pulling together the documentation of the opinions that are necessary for Ron Saxton and companies efforts and principally AIDEA bond counsel. He said the agreement with the PMC is that the utilities will fund their in-house attorneys. We have never used Bradley Lake operating funds to pay for in-house attorneys. Mr. Carmony indicated that he would like for Mr. Don Zoerb to become more involved in this transaction as it moves forward. Mr. Bjornstad stated he did not think this would be a problem. Mr. Kelly stated GVEA would like to move forward. He also asked whether there would be a discussion today about the three alternatives. Mr. Griffith said the PMC could talk about the options today. He said the only difference is how you might structure the remaining amount of the debt once you have done a forward refunding to preserve the funds and the requirements we have. What Prudential recommended in option three, in essence, is to keep some portion of the existing debt in place so we do not end up with a large negative arbitrage. Mr. Kelly said that AIDEA was very hesitant to move forward until the utilities were all in agreement with the transaction. MOTION: Mr. Kelly moved to authorize the expenditure not to exceed $150,000 to pursue a refunding of the 2021 bond series for Bradley and to also authorize Joe Griffith and Ron Saxton to move ahead with AIDEA and their bond people as proposed. Mr. Carmony asked whether the motion could be amended to include Mr. Zoerb also. Mr. Kelly said that every utility is going to participate, however each utility will pay for their own expenses. Mr. Carmony said he didn’t think that Mr. Griffith’s expenses were going to be paid. He said it was his understanding that it was just the attorney's that the PMC was paying with this money. Mr. Kelly indicated that was his understanding as well. Mr. Griffith said that is how the last transaction was handled and presumed this transaction would be handled in the same manner. Mr. Carmony said he just wanted to make sure that Don would be involved with all stages in the process. Mr. Carmony withdrew his request to amend the motion. Bradley Lake Project Management Committee Meeting Minutes Tuesday, November 3, 1998 Page 5 of 7 Mr. Saxton said the way the PMC is set up as an organization is that he received his directions for legal work from the Chairman. It is always clear who has authority to tell him to do something and who can answer his questions. At the last refunding, this group collectively, on the Chairman’s recommendation, designated Joe as the point person to work with him. Mr. Carmony asked if it is possible to have a process that includes more than just Ron and Joe’s review. Mr. Saxton replied that the process could be amended. Mr. Saxton said that each utility will have somebody who has to be involved in reviewing documents. Each utility will need to have their attorney involved at least in some limited capacity. He said his point is that somebody has to be playing the coordinator role with Prudential and with AIDEA to put all of this together. MOTION: Mr. Dennis McCrohan moved to amend the motion to replace the word AIDEA with AEA and to also amend the Prudential documentation to refer to AEA instead of AIDEA. Mr. Story seconded the amended motion. A roll call vote was taken, and the motion passed unanimously. B. Status of Instability and Control Response Project - Hickey Mr. Hickey briefed the PMC on the status of the project. He stated the assembly and testing of the data acquisition system has been completed. The final wiring is being completed on the assembly and is intended to be shipped to Bradley Lake around the 15" of November. At that time, the data acquisition system will be installed and commissioned and an off-line testing will be done, depending on unit outages and development of the test plan. He complimented Randy Johnson and Larry Hembree at ML&P stating they put a lot of time into developing and assembling the data acquisition system. Mr. Hickey said they did encounter some delays in the assembly of the data acquisition system. There were some bad boards and it was not scanning at the rate expected. The boards were sent back to National Instruments and the problem was found and corrected. Chugach is completing the relay control wiring on it so it’s in its final assembly. It will be moved to Bradley around the 15" of November. At that time, it will be commissioned, which will require an end-to-end check on all the circuits that Don has installed. A draft test plan should be out for the review of the O&D committee by this Thursday which would include the commissioning of the data acquisition system and the offline testing. The window for online testing of the unit was missed because from a reliability standpoint, it would not be appropriate to test it in the middle of winter. The online testing of the unit is scheduled for early June. If we can get an outage, once the online testing is complete we will have at least 60 to 90 days in evaluating the data we get. Essentially, we’ve lost a year because we missed the August window for testing. Mr. Hickey briefed the PMC on the current budget situation. He said the current budget situation is as follows: of the $150,000 Bradley instrumentation system, $113,659 has been expended; of the $228,600 action plan budget, $148,055 has been expended; and of the $4,000 O&D expense budget, $3,235 has been expended. Bradley Lake Project Management Committee Meeting Minutes Tuesday, November 3, 1998 Page 6 of 7 C. Budget Amendment/Adjustment $45,000 — Repairs to the Nuka Diversion — Story Mr. Story said that during the past winter there was a damage cost to the Nuka diversion. Discussions were held with the Chairman and, subsequently, the repair was made because the water was hemorrhaging at a strong rate. He indicated the O&D committee has reviewed this issue. Mr. Stead briefed the PMC as to the damage to the Nuka diversion. He said that during winter, an ice dam formed that backed up a considerable amount of water that overtopped the diversion. In June, the ice dam broke when the water went out. It downcut the Nuka diversion on the West side and it caused a breach in that diversion about 20 feet wide by 6 feet deep. USGS informed us of the problem in July when they went to inspect their equipment. A repair plan was developed in August and the repairs were accomplished in September. The diversion was rebuilt to its original specifications and the cost was approximately $37,000. Civil Engineer Jack Cushing performed a study of the Nuka marine and is developing recommendations on how to prevent this from occurring in the future. We are asking for a $45,000 amendment to the budget for the cost of this study. MOTION: Mr. Story moved to approve a budget adjustment of $45,000 to cover the Nuka diversion repair. Seconded by Mr. Kelly. A roll call vote was taken, and the motion passed unanimously. D. Authorization — HEA to Pursue Assumption of Communications — Bradley Lake Hydroelectric Project — Story Mr. Story said approximately $180,000 is spent for communications from Bradley back to Chugach control. A majority of this is microwave cost from the State of Alaska. Recently, Homer Electric completed a 24 fiber optic project between Homer and Kenai. We are proposing that we take over the maintenance of the necessary microwave links from Bradley down to the Homer facility. We would then pack the signals up via our fiber optic project and turn those signals over to Chugach Electric for transport to Anchorage by their recently upgraded microwave project. In doing so we believe that we can cut the budget to approximately $90,000 a year. We believe that we can probably save $50,000 to $60,000 a year in communications by taking over the project. He requested approval to pursue the issue. MOTION: Mr. Story moved to authorize Homer Electric to work with the O&D committee and the state to pursue the assumptions of the communications for Bradley in conjunction with Chugach Electric for the last link. Seconded by Mr. Mike Kelly. In response to Mr. Kelly, Mr. Story said that they would report back to the O&D committee and the O&D committee report back to the full board with recommendations. In response to Mr. Carmony, Mr. Bjornstad said that this will not resuit in lost revenue to Chugach. Bradley Lake Project Management Committee Meeting Minutes Tuesday, November 3, 1998 Page 7 of 7 8. Mr. Carmony requested that the O&D committee look at the terms of the net cost and where they file when the evaluation is done and bring that back to the board. A roll call vote was taken, and the motion passed unanimously. Mr. Sieczkowski said he would contact the state and get an update on all the circuit paths and purposes and bring that to the O&D committee for the evaluation and comparison. COMMITTEE COMMENTS There were no committee comments. A. Next Meeting Date _It was the consensus of the Committee that the next meeting of the Bradley Lake Hydroelectric Project Management Committee be set for December 9" at 9:00 a.m. ADJOURNMENT Chairman Bjomstad adjourned the meeting at 10:15 a.m. B - i . ate Spiral irman = > S ATTEST: Vi; Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Alaska Industrial Development and Export Authority 480 West Tudor Road Anchorage, Alaska Regular Meeting — VIA TELECONFERENCE Wednesday, December 9, 1998 — 9:00 a.m. : CALL TO ORDER Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:00 a.m. on Wednesday, December 9, 1998, in the Board Room of the Alaska Industrial Development and Export Authority, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Eugene Bjornstad, Chairman Chugach Electric Association Mike Kelly (teleconference) Golden Valley Electric Association Norm Story (teleconference) Homer Electric Association Dennis McCrohan Alaska Energy Authority Dan Helmick (teleconference) Anchorage Municipal Light & Power 3. PUBLIC ROLL CALL Others Present: Valorie Walker, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Joe Griffith, Chugach Electric Association Ken Vassar, Wohlforth, Argetsinger, Johnson & Brecht Jim Seagraves, Seagraves & Hein, LLC (teleconference) John Moore, Prudential Securities (teleconference) Jim Patras, Homer Electric Association (teleconference) Rick Eckert, Homer Electric Association (teleconference) Rick Baldwin, Baldwin & Butler (teleconference) Robert Hanson, Golden Valley Electric Association (teleconference) Ron Saxton, Ater Wynne Hewitt Dodson & Skerritt (teleconference) Bradley Lake PMC Meeting Minutes Wednesday, December 9, 1998 Page 2 of 5 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS Chair Bjornstad stated that MEA indicated that they do not intend to participate in this conference call because they have not had enough time to review the documents. 6. APPROVAL OF MEETING MINUTES — Tuesday, November 3, 1998 Chair Bjornstad noted that the meeting minutes were not available for this meeting. Mi: NEW BUSINESS 7A.) Bradley Lake Bond Refunding Mr. Saxton reviewed the Consenting and Approving Resolution for the PMC stating that the resolution is a preliminary step to indicate that the PMC will move forward with this transaction once the Bond Refunding documents are in substantially final form. He said the Approving Resolution is anticipated to be presented to the PMC in January 1999 when the Bradley Lake Bond Refunding documents are in final form. Mr. Saxton said the Alaska Energy Authority is having a board meeting on December 16, 1998, and the Board is going to be asked to approve going forward with this transaction. The Board would like an indication from the utilities that it is the utilities’ intention to go forward with this transaction once the AEA Board has taken their action. Mr. Saxton stated that even though MEA is absent at this meeting the Consenting and Approving Resolution can be passed with a majority vote. However, there must ultimately be a unanimous vote for the transaction to close because the transaction will require all of the utilities to sign the certificates, have their attorney’s cooperate with the reliance letters, etc. Mr. Kelly stated that MEA indicated at previous meetings that they support this transaction. Mr. Saxton said that over the past month his office has had conversations with most of the utilities. There were meetings held in Seattle last week and Steve Ellis attended for Matanuska, Rick Baldwin for Homer, ML&P, Chugach, etc. had people there, so | believe each of you is individually working with me and my office in addition to this collective work. Mr. Bjornstad said the City of Seward did not respond to Roll Call so it is assumed they are not on line for this conference call. Mr. Saxton said Seward is in a different position than the rest of the utilities because of their small percentage. Because of their 1% share, they are generally excluded from the Bradley Lake PMC Meeting Minutes Wednesday, December 9, 1998 Page 3 of 5 requirements that the rest of the utilities have about delivering some of these key documents. Mr. Jim Seagraves stated Prudential has been running numbers and the current numbers show a present value savings on the transaction of approximately $3.3 million for 11% of the amount of bonds outstanding that will be refunded. He said this is considered an excellent savings level. Mr. Saxton said the savings are not a lump sum up front but will show up in the future through reduced annual debt service payments. Mr. Seagraves affirmed Mr. Saxton’s statement saying the current structure shows approximately $300,000 in annual actual dollar savings for approximately the next 16 years. This is the real reduction in the debt service payments every year. In response to PMC members, Mr. Seagraves stated the bonds that are issued typically have an optional redemption. The bonds can be called out of the market and replaced. Having the option to redeem bonds in the future has its advantages. Discussions ensued as to the advantages of optional redemption. Mr. Seagraves said the decision to have optional redemption for the bonds will not be needed until right at pricing so there is time for discussion on the subject. Mr. Seagraves said that for this transaction Prudential has a proposed underwriter’s discount of $8.50 a bond. He said, in his opinion that’s a little higher than the market would dictate today. There are provisions in the Forward Purchase Agreement that are still being sorted out. We want to make sure that it is a balanced and fair Agreement for both sides. One of the provisions is that Prudential has requested they be paid at closing whether this transaction occurs or not. A lot of things could happen outside of anybody's control that could cause this transaction to fail. There could be a collapse of the stock market, banking moratoriums, things that are not likely to occur especially with a short forward period like this. We believe Prudential’s request to be paid at closing is reasonable — they will have to sell the bonds anyway. On the other hand, we have asked that if they fail to perform for some reason; either the market goes bad or interest rates go way up, they have to pay us the savings that we would have gotten otherwise. We are still negotiating these aspects of the deal. John Moore and Prudential have been very cooperative on all of these issues and | don’t think that we are going to have any problem negotiating the final details of this transaction as it moves along. Mr. Griffith said the bond insurance premium is yet to be finalized, there is an estimate that is certainly in the ballpark. He said the other decision to make is a percent of the issue to hold out to preserve the funds. He asked if the 10% discussed earlier is satisfactory. Mr. Vassar affirmed that the 10% will be satisfactory. Mr. Griffith said the option is whether we do a three-month forward or wait for the call date. Bradley Lake PMC Meeting Minutes Wednesday, December 9, 1998 Page 4 of 5 Mr. Seagraves said that if you do a forward transaction you would pay a small interest rate penalty for that benefit. Roughly five to seven basis points higher than you would have paid if you would have done a current issue on that date. We believe it is more prudent to get a good market in January and pay a small penalty, than to wait a few months and do it as a current refunding without the penalty. The prevailing view is that if the market is really good and attractive and the savings are where we want to be in early January, the prudent thing to do would be to complete the transaction. Mr. Saxton said the bonds could not be settled until April because of the provisions of the existing bonds. We are scheduling a meeting of the attorneys in Seattle on December 21“. Then on January 13" we would have a pricing and a PMC meeting later in the day to approve the transaction. The paper closing would be around February 1“ and would not be settled until April. However, if we get to January and the advice we receive is that we might not want to close, we can put the transaction on hold for as long as we wanted. The goal is to be ready to take the opportunity if interest rates are good in January or have the ability to hold and close later if the advice was to the contrary. One question, on the previous bond re-issuances where we have had forward delivery, those most recent two issues, how did the underwriters get paid, they didn’t get their money up front did they? Mr. Seagraves said in the previous bond re-issuances, it is my understanding from conversations that the provisions in the agreements were the same as the ones that we are currently negotiating. Prudential would like to be paid at the settlement date, whether it settles or not, which is a current standard in the industry. We don’t feel this is unreasonable, however we also believe it is reasonable for the utilities to ask for a quid pro quo should they back out of the transaction the utilities should get paid as well. Ms. Walker clarified that Goldman has received no compensation to date and will not receive compensation until the two series close and there will be compensation in April of 1999 and April of 2000, when the bonds actually settle. But, to date on that transaction, the only entities that have been paid have been our contractors — the utilities’ and the Authority's contractors. Mr. Seagraves stated that is the same way the document is written for this transaction. Mr. Saxton said we are looking for approval of the Consenting and Approving Resolution. MOTION: Mr. Kelly moved to approve the Consenting and Approving Resolution. Seconded by Mr. Story. There being no further discussion, the question was called. A roll call vote was taken, and the motion passed unanimously. Mr. Seagraves indicated they would like to have a teleconference on January 5, 1999, with the underwriters to discuss the conditions of the market and whether the conditions are good enough to proceed with the forward transaction before the Preliminary Official Statement is sent out. He said we can do that independently, but it seemed prudent to include the PMC in that process. Bradley Lake PMC Meeting Minutes Wednesday, December 9, 1998 Page 5 of 5 8. COMMITTEE COMMENTS Chair Bjornstad said the committee needs to consider voting on new officers for the PMC at the next meeting. A. Next Meeting Date It was the consensus of the Committee that the next meetings of the Bradley Lake Hydroelectric Project Management Committee be set for January 5" at 9:00 a.m. and also on January 13" at 9:00 a.m. 9. ADJOURNMENT MOTION: Mr. Kelly moved to adjourn. Seconded by Mr. Story. There being no objection and no further business of the Committee, the meeting was adjourned at 9:35 a.m. attest: G7 ey, uy V. Me bobo Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 1997 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East 1st Avenue Anchorage, Alaska Tuesday, January 14, 1997 10:00 a.m. fz CALL TO ORDER Chairman Tom Stahr called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:05 a.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. es ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Tom Stahr, Chairman Municipal Light & Power Eugene Bjomstad, Vice Chairman Chugach Electric Association Dave Calvert City of Seward Norm Story Homer Electric Association Dennis McCrohan Alaska Energy Authority Wayne Carmony Matanuska Electric Association Mike Kelly Golden Valley Electric Association Others Present: Stan Sieczkowski, Alaska Energy Authority Shauna Dean, Alaska Energy Authority John Cooley, Chugach Electric Association Lee Thibert, Chugach Electric Association Brian Hickey, Chugach Electric Association Bradley Lake Project Manac ent Committee Meeting Minutes Tuesday, January 14, 1997 Page 2 of 9 Don Stead, Homer Electric Association Bob Price, Municipal Light & Power Mary Ann Pease, Municipal Light & Power Jim Hall, Matanuska Electric Association Brad Evans, Golden Valley Electric Association Bob Hufman, AEG&T Mike Yerkes, AEG&T Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Steve Haagenson, Golden Valley Electric Association 3. PUBLIC COMMENT Mr. Hufman introduced Mike Yerkes, Planning Engineer, who was hired by AEG&T and came on board January 8, 1997. There were no other public comments. 4. AGENDA COMMENTS Mr. Bjornstad requested that Item 9.B., Bradley Lake Instability and Control Problems, be added under New Business for discussion and action. Mr. McCrohan asked that Item 9.C., AIDEA/AEA Management Changes, be added under New Business as an informational item. There being no further additions or corrections to the agenda, it was adopted by unanimous consent. 5. APPROVAL OF MEETING MINUTES - NOVEMBER 19, 1996 MOTION: Mr. Bjornstad moved, seconded by Mr. Story, to approve the meeting minutes of November 19, 1996. There being no additions or corrections, a roll call vote was taken, and the minutes were unanimously approved as presented. 6. BUDGET SUBCOMMITTEE REPORT Ms. Pease reported that the Budget Subcommittee had met twice since the last PMC meeting: on December 4, 1996, and on January 13, 1997. Ms. Pease summarized the content of the January 14, 1997, memo contained in the Committee members' packets. She said after lengthy discussion on the disposition and status of Bradley Lake bonds, a motion was made and passed unanimously approving Pete Raiskums to immediately proceed with an audit of the administrative costs incurred by the power administration and to reconcile the debt service schedules with AEA. Referencing Mr. Raiskums’ memo to the Budget Subcommittee, dated January 13, 1997, Ms. Pease stated that an adjustment of $350,524 needed to be made to reflect the actual recoverable construction costs of the project. Ms. Pease noted that Mr. Saxton would distribute copies of a subsequent memo on that issue. Bradley Lake Project Mana, ent Committee Meeting Minutes Tuesday, January 14, 1997 Page 3 of 9 Budget Subcommittee recommendations submitted for PMC approval: > That Mr. Raiskums be authorized to perform the preliminary audit of the Bradley Lake Project Funds as of June 30, 1996, in conjunction with Parisena, Stromberg. » That Mr. Saxton’s invoices for legal services, in the amounts of $3,045.82 and $2,739.01, be approved and forwarded to AIDEA for payment. » That Mr. Raiskums be authorized to conduct a feasibility analysis on the ability to perform an audit of AIDEA’s and AEA’s charges to the Bradley Lake Construction Fund. » That Mr. Saxton be directed to issue a memo to the Bradley Lake Managers requesting that the excess debt service payments be remitted back to the Participants. Ms. Pease reported that the Subcommittee had reviewed the FY 98 budget. She said several changes needed to be made by the Subcommittee, and it would be finalized and submitted to the PMC for approval at the February meeting. Ms. Pease said there had been a consensus that the budget for the Bradley Lake Transmission Line Junction to the Soldotna portion of the line needed to be submitted to the Budget Subcommittee for review. She said Mr. Stead would provide that within the next two weeks. Referencing the summary of financial condition as of January 7, 1997, contained in the Subcommittee’s memo, Ms. Pease said the PMC was under budget at this time by approximately $340,000, and at year-end close-out, they would be under by approximately $300,000. With respect to the last recommendation, Mr. Saxton said he had been requested by the Budget Subcommittee to draft a letter to Mr. Randy Simmons requesting that AEA transfer funds to the Bradley PMC in the amount of $350,524. Due to AEA’s failure to make the required adjustment at the date of Commercial Operation, the Utilities had overpaid debt service, principal, and interest in excess of their contractual obligations under the Section 8 (a) (i) limitation. Mr. Saxton noted a typographical error in the last three lines of the first paragraph of the letter. Ms. Pease clarified that the $350,524 did not include interest. Mr. Saxton said interest would have to be calculated and added to that amount for the total amount due the PMC. MOTION: Mr. Bjornstad moved, and it was seconded by Mr. Calvert, that the Budget Subcommittee report and all recommendations be approved. Mr. McCrohan stated that AEA had not had an opportunity to review the request that AEA reimburse the PMC in the amount of $350,524. He noted his no vote for the record at this time. A roll call vote was taken, and the motion passed with one nay. Bradley Lake Project Manac ent Committee Meeting Minutes Tuesday, January 14, 1997 Page 4 of 9 te OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the O&D Subcommittee had met the previous day and had discussed the following topics: Homer Electric was making the necessary preparations to have the fish water bypass intake and the diversion facility cleaned out this spring. The lake will be drawn down below elevation 1,065; some water may have to be pumped to bypass the area in order to supply the required fish water releases. Chugach and Homer Electric are scheduling the draw-down rate and energy deliveries to accommodate the work. The govemor studies are progressing. Chugach Electric has developed the historical data and is prepared to submit for PMC approval its proposal that the O&D Subcommittee continue the project. The O&D Subcommittee has scheduled a teleconference following the PMC’s action on this item to discuss and schedule the necessary procedures to carry out the work. Mr. Hickey reported that operations are a little ahead of schedule for the May 1, 1997, draw-down. He noted that some of the information that had come to light through the historical data on the governor problems had led them to believe that the instability problem was caused by the transition from speed to deflector mode, causing them to be unable to put the units in deflector mode. At the present time, the Kenai turbine is being operated to meet load. He said the turbine would have been operated 24 hours a day regardless; however, at some point in the spring, they would be forced to continue to operate the turbine because they do not have the ability to control frequency on the Kenai without the deflector mode of the Bradley units should the transmission line open. Mr. Stead reported that maintenance on the units is current with one exception: The dam survey had not been performed in 1996 due to a clerical error. He said the 1996 survey was being performed this week, and another survey (1997 survey) would be conducted in August 1997. There were no other maintenance problems. Mr. Sieczkowski reported that the O&D Subcommittee continued its work on the renewal and replacement list, and that information would be presented to the PMC upon completion. MOTION: Mr. Story moved, seconded by Mr. Bjornstad, to accept the report of the O&D Subcommittee. There being no discussion, a roll call vote was taken and the motion passed unanimously. There was a consensus of the PMC that Item 8.A. be deferred until Mr. Lovas was in attendance to give the report. Agenda Item 9.A. was taken up next out of order. 9. NEW BUSINESS A. Reimbursement for Transfer Trip Scheme - Mr. Story Mr. Story distributed backup documentation to support the billing request for reimbursement for transfer trip scheme costs dating back to 1991. Referring to HEA's letter to Tom Stahr dated August 28, 1996, Mr. Story provided the history and sequence of events relating to the request. Bradley Lake Project Mana, ent Committee Meeting Minutes Tuesday, January 14, 1997 Page 5 of 9 HEA requested PMC approval for reimbursement to HEA in the total amount of $173,853.28 for the Diamond Ridge to Soldotna and the Soldotna to Quartz Creek transfer trip schemes. Mr. Story also reviewed the HEA and CEA invoices attached to the August 28th letter. He noted that reimbursements in the amount of $35,000 for CEA and $62,000 for HEA for the Soldotna to Quartz Creek scheme had been approved by the BPMC at its August 23rd, 1991 meeting. Mr. Kelly asked if there were any time constraints on the request that would preclude Budget Subcommittee review. Mr. Story said there was not, and he would provide the documentation to the Subcommittee for review. Chair Stahr referred the matter to the Budget Subcommittee for review and recommendation to the PMC. Discussion was heard regarding what percentage of the requested amount would be allocable to construction expense. B. Bradley Lake Instability and Control Problems - Mr. Bjornstad Mr. Bjomstad distributed and explained a motion with attached Action Plan to correct the instability and control problems of the Bradley Lake Project. MOTION: Mr. Bjornstad moved, seconded by Mr. Story, that: (1) The Bradley Lake O&D Subcommittee be authorized to request proposals from consulting engineers to perform Phases |, Il, and Ill of the action plan entitled "Action Plan for Correction of Bradley Lake Project Instability and Control Problems." (2) Funds in an amount not to exceed $145,000 be allocated to Phases |, Il, and Ill of the plan from the remaining Bradley Lake Construction Funds, and that the O&D Subcommittee provide regular interim reports to the BPMC of progress in completing the action plan. (3) That the O&D Subcommittee, after technical evaluation of the proposals, be authorized to award task order contracts in an amount not to exceed $145,000 in the aggregate to consulting firms, based on qualifications and costs, to complete Phases I, Il, and Ill of the action plan, and that final reports be submitted to the BPMC no later than July 31, 1997. (4) And that upon completion of Phases |, Il, and Ill, the O&D Subcommittee will return to the BPMC with findings and a revised action plan detailing the steps required to complete the remaining tasks. Mr. Bjornstad reviewed the action plan with the PMC. Discussion was heard, and it was agreed by unanimous consent that Item II on page 1 of the Action Plan be revised to read: "JZ Resolve the instability problem." Bradley Lake Project Mana, ent Committee Meeting Minutes Tuesday, January 14, 1997 Page 6 of 9 Further discussion was heard regarding the impact on the Construction Funds. Mr. McCrohan stated that although AEA would support the concept of the study, he would have to register his no vote at this time as AEA would have to review whether usage of the Construction Funds was allowable. He pointed out that there was currently only about $700,000 available in the Construction Fund. Homer Electric Association’s current request for reimbursement of late construction invoices, and the PMC’s request for reimbursement of the $350,000 directly to the PMC for the Utility portion of the Construction Fund Balance would exceed the available funds. He suggested that the $2.3 million set-aside for construction items that had been approved by the PMC. about a year ago could be reassessed and reprioritized in order to obtain additional funds for the instability project. Mr. Saxton advised that Mr. McCrohan's no vote would effectively veto the motion because the construction process is under the State's control. He explained that the remedy on the construction items is not a voting right, it is that the State is obligated to pay 50 percent of construction costs. In other words, the BPMC does not have the right to spend construction funds without AEA agreement. Discussion was heard regarding whether the BPMC could approve the engineering phase to proceed at this time, as time was of the essence in correcting the instability and control problems of the project. Mr. Saxton advised that the BPMC would run the risk of having to pay 100 percent of the costs as utility costs instead of the 50 percent as construction costs. Mr. Kelly suggested that the BPMC vote on the motion contingent upon receiving approval from AEA. Mr. Bjomstad said if AEA declined to provide approval, the BPMC could fund the project with O&M funds. Further discussion was heard regarding alternative solutions. The question was called, and a roll call vote was taken. The amended motion passed with one nay. MOTION: Mr. Kelly moved, seconded by Mr. Story, that AEA be requested to make the determination whether the study should be deemed Construction Funds, and further, regardless of AEA's determination, that the study proceed with the understanding that should AEA determine that it is not a construction fund expense, the BPMC will fund the study from FY '97 O&M budget funds. In response to Mr. Calvert, Mr. Kelly said if AEA declined the usage of the Construction Fund, the project would still be pursued. Mr. McCrohan said he would expect to have a decision within a week and a half. He reminded the Committee that there were currently three separate actions requesting reimbursement from the Construction Funds. (These were the HEA billing, the instability study and repairs, and the Utility request for remittance of the Construction Fund balance.) Discussion was heard regarding the funding priority that would be given to the study. To ensure that the record was clear, Mr. Saxton advised that if the BPMC proceeded to fund the project with FY ‘97 budget funds, the BPMC was doing so under protest. They considered this an emergency need, but they would preserve their rights to pursue the matter of funding with AEA. In other words, the BPMC does not concede any legal issues; they have only agreed to advance Bradley Lake Project Manac_ ent Committee Meeting Minutes Tuesday, January 14, 1997 Page 7 of 9 funds from the O&M budget so that the project would not be delayed and the work could proceed on an interim basis. MOTION: Mr. Kelly moved to amend his motion to include that should AEA determine that it is not a construction fund expense, the BPMC would fund the study from FY ‘97 O&M budget funds under protest. There being no further discussion, the question was called and a roll call vote was taken. The amended motion passed unanimously. With respect to Agenda Item No. 6, Mr. Calvert asked for clarification of the Committee's earlier action regarding Mr. Saxton's letter to the Bradley Lake managers requesting that the excess debt service payment be remitted back to the participants. Chair Stahr responded that the Board had approved the letter being sent to Mr. Simmons, not that the matter should be referred to the Budget Subcommittee. Mr. Calvert felt that a letter to AEA should also be drafted requesting a refund in the amount of $350,524. MOTION: Mr. Calvert moved to reconsider the motion to accept the report of the Budget Subcommittee. Seconded by Mr. Story. Discussion was heard regarding the form of the motion and Mr. McCrohan's options with respect to the reimbursement matter. There being no further discussion, the question was called on the motion to reconsider, and a roll call vote was taken. The motion passed unanimously. (Item 6 was revisited at this time.) 6. BUDGET SUBCOMMITTEE REPORT (On Reconsideration) Agenda Item No. 6 was back on the floor for reconsideration at this time with respect to the following Budget Subcommittee recommendation: > That Mr. Saxton be directed to issue a memo to the Bradley Lake managers requesting that the excess debt service payment be remitted back to the participants. MOTION: Mr. Bjornstad moved, seconded by Mr. Kelly, to amend the motion that the Budget Subcommittee's report be accepted by the BPMC with the exclusior: of the above-mentioned recommendation to send the memo. Mr. McCrohan said he would still have to vote no as the Committee's meeting notes state that it would be recoverable construction costs. At Chair Stahr's request, Mr. Saxton advised that this was not a veto-able vote. Bradley Lake Project Mana, ent Committee Meeting Minutes Tuesday, January 14, 1997 Page 8 of 9 There being no further discussion, the question was called, and a roll call vote was taken on the motion to amend. The motion passed with one nay. The question was called on the main motion to approve the Budget Subcommittee's report as amended, and a roll call vote was taken. The main motion as amended passed with one nay. 9. NEW BUSINESS (CONTINUED) Cc. AIDEA/AEA Management Changes - Mr. McCrohan Mr. McCrohan reported that at its December Board meeting, Mr. Randy Simmons, was appointed Executive Director of AIDEA. Mr. McCrohan advised that Mr. Dan Beardsley, who had handled the Authority's insurance matters and contract agreement work with the Bradley group, had resigned from the Authority. However, he would continue working with the Authority on a contract basis for six to nine months and would be available to work on the Bradley matters and would continue to be the focal point for agreements and insurance issues. 8. OLD BUSINESS A. Spinning Reserves Update Mr. Lovas reported that the ASCC Reliability Criteria Committee was continuing its work on the economic evaluation of the 70-percent response to spin requirement. He said they expected to have the initial results on the impact to the Railbelt to the BPMC for review by mid-February. Mr. Lovas said the ASCC/RCC had completed the draft scope of engineering services required to evaluate the specifications, requirements, and method of installation of a demand dynamic system monitor throughout the Railbelt. He added that the monitor would provide verification of unit responsiveness. Mr. Lovas said Mr. Stahr had requested the ASCC and the individual Utilities to do a review of an economic dispatch of a system using a frequency-based reserve policy. The ASCC/RCC had reviewed the request and had some questions regarding the implementation and methodology. Mr. McConnell had agreed to forward the ASCC/RCC's questions to the authors of the policy for clarification on some aspects of the operation of the system model that is used to predict the frequency response impact of various contingencies. Mr. Lovas said once the ASCC/RCC received the feedback, they would consider the matter as a potential alternative during a full session of the ASCC. Mr. Lovas advised that CEA had been requested by Mr. Stahr of ML&P to investigate Siemans, the manufacturer and provider of the new SCADA system being installed, and to look at the availability and applicability of a system model. The ASCC had taken this request under advisement, and no action has yet been taken. Mr. Lovas reported that proposed bylaw changes had been submitted to the NAERC that would impact the various regions' involvement in the Regional Coordination Councils. The suggested revisions to the bylaws included mandatory membership in regional councils and mandatory Bradley Lake Project Mana, ent Committee Meeting Minutes Tuesday, January 14, 1997 Page 9 of 9 adoption of and compliance with operating and reliability standards. The suggested revisions had been approved by the NAERC Board. Mr. Lovas said the RCC was tasked with evaluating the approved bylaw changes and reporting back to the ASCC with a recommendation. The RCC had scheduled an all-day meeting on Friday, January 17th, to evaluate the NAERC bylaw changes and the potential impacts to reliability standards and operating criteria in the Railbelt. He said the RCC would prepare a report and provide its recommendations to the ASCC at the March 3rd meeting in Juneau. 10. COMMITTEE MEMBER COMMENTS Mr. Saxton advised Ms. Pease that she needed to act on approving the budget prior to April 2, 1997. Chair Stahr advised that a brief RUG meeting would be held before the IPG commenced. There were no other comments. A. Next Meeting Date The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for Tuesday, March 25, 1997, at 10:00 a.m. in the Commission Room of ML&P. 11. | ADJOURNMENT MOTION: Mr. Calvert moved, seconded by Mr. Story, to adjourn. There being no objection and no further business of the Committee, the meeting was adjourned at 11:15 a.m. BY: “a Tom Stahr, Chairman ATTEST: GM G (4 hal Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East 1st Avenue Anchorage, Alaska Tuesday, March 25, 1997 10:00 a.m. 1. CALL TO ORDER Chairman Tom Stahr called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:05 a.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2; ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Tom Stahr, Chairman Municipal Light & Power Eugene Bjornstad, Vice Chairman Chugach Electric Association Dave Calvert City of Seward Don Stead Homer Electric Association Dennis McCrohan Alaska Energy Authority Jim Hall Matanuska Electric Association Mike Kelly Golden Valley Electric Association Others Present: Stan Sieczkowski, Alaska Energy Authority Elaine McCambridge, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Brenda Fuglestad, AIDEA John S. Cooley, Chugach Electric Association Dora Gropp, Chugach Electric Association Brian Hickey, Chugach Electric Association i Bradley Lake Project Manayement Committee Meeting Minutes Tuesday, March 25, 1997 Page 2 of 7 Tim McConnell, Municipal Light & Power Mary Ann Pease, Municipal Light & Power Brad Evans, Golden Valley Electric Association Steve Haagenson, Golden Valley Electric Association Bob Hufman, AEG&T Mike Yerkes, AEG&T 3. PUBLIC COMMENT There was no public comment. 4. AGENDA COMMENTS Mr. McCrohan requested that Item 8.D., Construction Fund Residual Balance, be added under Old Business. There being no further additions or corrections to the agenda, it was adopted by unanimous consent. 5. APPROVAL OF MEETING MINUTES - JANUARY 14, 1997 MOTION: Mr. Bjornstad moved, seconded by Mr. Hall, to approve the meeting minutes of January 14, 1996. It was noted that Jim Hall should be corrected to Wayne Carmony in the Roll Call. On page 2, under "Others Present," Wayne Carmony should be replaced with Jim Hall. On page 7, In the third paragraph, the first motion on that page, “Mr. Calvert voted...." should be corrected to read, "Mr. Calvert moved..." On page 6, in the first line of the fourth paragraph, "Homer Electric Association's current request for reimbursement of the $350,000 directly..." should be corrected to read, “Homer Electric Association's current request for reimbursement of late construction invoices, and the PMC's request for reimbursement of the $350,000 directly to the PMC for the utility portion of the Construction Fund balance would exceed the available funds." There being no other additions or corrections, a roll call vote was taken, and the minutes were unanimously approved as amended. 6. BUDGET SUBCOMMITTEE REPORT Chair Stahr reminded the Committee that the budget had to be adopted by Friday, March 28th. He said another meeting would be held prior to that date if necessary. A. FY98 Budget Proposal and Approval Ms. Pease reported that the Bradley Lake Budget Subcommittee had met via teleconference on Wednesday, March 5th, to finalize the FY98 budget. She said the budget had been ‘Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 3 of 7 unanimously approved by the Budget Subcommittee at that meeting. She noted that the budget was attached to her meeting notes which were being distributed at this time. Ms. Pease reviewed the meeting notes containing the FY98 budget for Bradley Lake, the monthly utility contributions, and a summary of the operations and maintenance budget and detailed FERC account. In summary, the total budget proposed for approval was $15,501,635, which consisted of: debt service of $13,389,435, O&M budget of $2,087,200, and renewals and replacements at $25,000. MOTION: Mr. Kelly moved, and it was seconded by Mr. Bjornstad, to approve the FY98 budget as presented. There being no discussion, a roll call vote was taken, and the motion passed unanimously. Ms. Pease reported that two invoices were received from Ron Saxton at Ater, Wynne, et al., for legal services rendered, the December 1996 invoice in the amount of $4,114.50 and the January 1997 invoice in the amount of $8,063.87. She requested Committee approval for payment of those invoices. MOTION: Mr. Bjornstad moved, seconded by Mr. Kelly, to approve payment of the December 1996 and January 1997 invoices from Ater, Wynne, et al. There being no discussion, a roll call vote was taken, and the motion passed unanimously. tT OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the O&D Subcommittee had met via teleconference three times since the last PMC meeting to discuss the governor instability study proposals and the fish water bypass debris removal projects. Mr. Sieczkowski reported that on February 20th, the Subcommittee met via teleconference to discuss the governor scope of work, phase two. He noted that Chugach Electric had received comments at that meeting and had subsequently revised the scope of work. At the March 7th teleconference meeting, the Subcommittee had reviewed and approved the revised scope of work. Since that time, Chugach had issued the scope of work and requested proposals from several firms. At the March 7th meeting, the Subcommittee had also discussed the details of removing debris from the fish water bypass area. Mr. Sieczkowski reported that Chugach had been regulating the reservoir and coordinating the operation to have the lake down to an elevation of 1,070 by April 15th, with a further reduction to 1,060 by May 1st. He said the resource agencies have agreed to a reduction in the fish water flows to 30 CFS during the cleanup period. Mr. Sieczkowski said pumps would be on hand to provide the fish water releases during the low side flow periods. He noted that FERC had also been notified of the project, and their comments and approval were pending. During the March 20th teleconference meeting, the Subcommittee had discussed the Chugach proposed project operation guidelines during the low lake level periods and the debris cleanup procedures. Mr. Sieczkowski reported that AEA had drafted a construction services agreement between CEA and AEA, which was similar in form and content to the HEA/AEA agreement. He said this would cover the work performed by Chugach when construction "Bradley Lake Project Manayement Committee Meeting Minutes Tuesday, March 25, 1997 Page 4 of 7 funds are provided for the tasks such as the governor instability studies, purchase of the DSMs, and SVS equipment. He anticipated that the draft would be sent to Chugach for review next week. Mr. Hickey addressed the details of the governor instability study and the operations of the project. He reported that they were on schedule with the draw-down and had gone to single- unit operation when they had reached the 1,080 level. He said the governors had been converted to a four-jet operating mode to minimize the impact of a needle disintegration. He said the reservoir was currently at 1,078.9, and they had discontinued allocating spinning reserves from the project until the lake is back above the 1,080 level. With respect to the governor instability study project, Mr. Hickey reported that they had issued the RFQ to Southern Engineering, Power Engineers, Power Technologies, and Engineering Power Systems, and the responses are due today. He said they had completed compilation of the DSM data and the SCADA alarm data for 35 oscillation events that had occurred from July 14, 1993 to present, and they were currently analyzing the compiled data. He said they had determined that all of the events fell into one of three oscillation periods that the Kenai oscillates under, i.e., 750 milliseconds, 1.1 seconds, and 1.4 seconds. Mr. Hickey advised that the O&D Subcommittee was scheduled to meet on April 3rd to review the proposals and issue the contract for the governor instability study project. Mr. Stead reported that maintenance of the project had been on schedule and satisfactory since the last PMC meeting. There was one trip related to a SCADA programming change which was performed to provide Chugach with pen stock pressure for the draw-down. He said the problem had been corrected and the units were restored within about 10 minutes. Mr. Stead said the O&D Subcommittee's primary focus at this time was the clean-out of the fish water intake area. He said the budget developed in 1995 for the construction punchlist to perform this job was $100,000; the current estimated cost of performing the job was $400,000. He said at the time the $100,000 was allocated, they were not aware of the pumping and equipment requirements. Mr. Stead requested Subcommittee approval to increase the budget from $100,000 to $400,000 for completion of this project. Discussion was heard regarding the source of the additional funds. Mr. Stead recommended that the PMC direct the O&D Subcommittee to re-evaluate other lower priority projects to see where funds could be taken from to reallocate to the fish water bypass project. He emphasized the importance of addressing this project first. At Mr. Stahr's request, Mr. Stead described the extra work that needed to be done and who had provided the cost estimates for the project. He gave a breakdown of the estimated project costs. Mr. McCrohan concurred that the fish water bypass project should take priority. He advised that the construction completion list should be revised to reflect the changes proposed by Mr. Stead. Mr. McCrohan noted that the PMC would be discussing Items 8.B. and C later in the meeting, which would also impact the construction completion list. In response to Mr. Stahr regarding whether the O&D Subcommittee had reviewed this proposal, Mr. Stead stressed that time was of the essence as the bid process would need to Bradley Lake Project Manayement Committee Meeting Minutes Tuesday, March 25, 1997 Page 5 of 7 commence immediately in order to get the pumps installed on schedule. Chair Stahr said this was a significant increase that was being requested, and he was not accustomed to being required to act so quickly on extras requests with so little supporting documentation. He said he understood that expediency was essential in this case, but he did not want this to become a precedent. Further discussion was heard regarding potential sources of funds that could be reallocated to the fish water bypass project to accommodate the expanded scope of the project. MOTION: Mr. Bjornstad moved that the fish water bypass project budget be increased from $100,000 to NTE $500,000. Seconded by Mr. Kelly. ” In response to Mr. Yerkes, Mr. Stead said the bid proposals would be provided to the O&D Subcommittee for review once they were received so that the O&D Subcommittee could work with Mr. Stead pre-award. Discussion was heard regarding the probability of this situation reoccurring and the potential need for future projects of this type. There being no further discussion, a roll call vote was taken, and the motion passed unanimously. Chair Stahr said a working draft of the audit should have been distributed during Ms. Pease's report. He noted that this was being handed out at this time and would be an agenda item for discussion at the next PMC meeting. Ms. Pease added that Mr. Pete Raiskums and Ms. Amy McCullen had performed the audit, and they would address it at the next PMC meeting. 8. OLD BUSINESS A. Spinning Reserves Update Mr. Cooley said the ASCC-RCC was scheduled to meet on April 2nd. He said they had earlier evaluated the cost to change the spinning reserves requirement to require 70 percent to be from responsive units, currently assumed to be combustion turbines. He said they would also determine what the technical effects of the increased responsive spin and the feasibility of expending additional funds for increased reliability would be. B. Reimbursement for Transfer Trip Scheme for HEA/CEA Late Invoices Mr. McCrohan reported that they had reviewed the late invoices, and they accept, in principle, that they were construction expenses chargeable to the construction punchlist. He noted that they had some questions regarding some of the sub-items contained in the invoices, and Ms. McCambridge was currently discussing these items with HEA. In response to Mr. Stahr, he advised that no action of the Committee was required. Chair Stahr advised that with respect to the earlier vote approving the increase from $100,000 Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 6 of 7 to NTE $500,000 for the fish water bypass project, he would appoint a committee for the purpose of reviewing and reprioritizing the construction completion list. ® Mr. McCrohan advised that since it related to construction expenses, AEA would take the lead on the review and reprioritization of the construction completion list. C. Bradley Governor Stability Funding Mr. McCrohan reported that AEA had reviewed the scope of work and the study, and they accepted, in principle, that the governor study is a construction completion expense item. He said it would be incorporated into the amended construction completion list. D. Construction Fund Residual Balance Mr. McCrohan said he had distributed a cover letter from himself to Mr. Stahr with an attachment from AEA’s bond counsel, Mr. Vassar. He said Mr. Vassar's letter explained how any residual funds in the Construction Fund would be disposed of to the utilities and the State. He said this letter had resulted from the discussion at the previous meeting regarding the PMC's request for reimbursement for the residual balance. Mr. McCrohan said AEA had been of the opinion that they are not permitted to do this, but Mr. Vassar's letter described how the AEA could refund the utility portion. He recommended that Mr. Saxton review this matter and discuss it with Mr. Vassar, and they would hopefully come to agreement in principle upon the methodology to be used. Mr. McCrohan added that it would be the State's preference to get closure on the fund, with an adequate contingency, and then do the proper refunding of any remaining balance. Brief discussion was heard regarding potential issues that may arise with respect to this item. 9. NEW BUSINESS A. Bond Refunding - Ms. Pease Referring to the letter and attachment from Mr. Randy Simmons to Mr. Stahr dated March 14, 1997, Mr. Bjornstad advised that forward refunding of the Bradley Lake project bonds may be a possibility, and this had been discussed with Ms. Pease. Mr. Bjornstad recommended that a subcommittee be appointed for the purpose of reviewing this issue or inviting Goldman, Sachs, at its own expense, to give a presentation at the next meeting of the PMC to explain the forward refunding technique. Mr. Bjornstad invited Ms. Pease to elaborate. Ms. Pease stated that the market has been very volatile recently. She noted that there has been as much as a 20-basis-points change in the market in a given day, and one basis point on the PMC bonds represents approximately $50,000. She recommended that they should set a goal for a percentage of the refunded debt, perhaps 5%, or $3 to $5 million net present value savings, and begin compiling the necessary documents so they could act quickly to take advantage of the advance refunding through the forward mechanism if the market swings in their favor. She pointed out that if the market went against them, they did not have to proceed with the forward refunding, but they should be prepared in the event the market moves in a favorable direction for them so they did not miss a golden opportunity. Discussion was heard. Bradley Lake Project Management Committee Meeting Minutes Tuesday, March 25, 1997 Page 7 of 7 Chair Stahr appointed an ad hoc Bond Refund Subcommittee to monitor the market and prepare for action in the event the market becomes favorable to do a forward refunding. The subcommittee was comprised of Mr. McCrohan, Chair, Ms. Pease, Mr. Bjornstad, and Mr. Evans. Mr. Bjornstad said he would check with Mike Cunningham regarding filling a seat on the subcommittee. Mr. McCrohan advised that he would contact ML&P, GVEA, and CEA for names of additional subcommittee members and would arrange for Goldman, Sachs' participation. Mr. McCrohan added that AEA would have soft costs involved, and AEA would seek to have those recouped from the bond refunding, which is the typical procedure. He said if this could not be done, AEA would have to come back for a budget amendment to their admin costs. 10: COMMITTEE MEMBER COMMENTS There were no Committee member comments. A. Next Meeting Date The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for Tuesday, May 20, 1997, at 10:00 a.m. in the Commission Room of ML&P. 11. ADJOURNMENT MOTION: Mr. Bjornstad moved, seconded by Mr. Kelly, to adjourn. There being no objection and no further business of the Committee, the meeting was adjourned at 11:00 a.m. BY: b (, Vice Gaiman ATTEST: Gon U4 VMc (he. Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East 1st Avenue Anchorage, Alaska Tuesday, May 20, 1997 10:00 a.m. 1. CALL TO ORDER Chairman Tom Stahr called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Tom Stahr, Chairman Municipal Light & Power Eugene Bjornstad, Vice Chairman Chugach Electric Association Dave Calvert City of Seward Norm Story Homer Electric Association Dennis McCrohan Alaska Energy Authority Jim Hall Matanuska Electric Association Mike Kelly (In at 11:50 a.m.) Golden Valley Electric Association 3. PUBLIC ROLL CALL Others Present: Stan Sieczkowski, Alaska Energy Authority Elaine McCambridge, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Mary Ann Pease, Anchorage Municipal Light & Power Bob Price, Anchorage Municipal Light & Power Tim McConnell, Anchorage Municipal Light & Power John S. Cooley, Chugach Electric Association Bradley Lake Project Managuinent Committee Meeting Minutes Tuesday, May 20, 1997 Page 2 of 8 Brian Hickey, Chugach Electric Association Mike Massin, Chugach Electric Association Dora Gropp, Chugach Electric Association Don Stead, Homer Electric Association Brad Evans, Golden Valley Electric Association Steve Haagenson, Golden Valley Electric Association Bob Hufman, AEG&T Mike Yerkes, AEG&T Ron Saxton, Purchasing Utilities Peter Raiskums, Municipality of Anchorage, Internal Audit Amy McCullom, Municipality of Anchorage, Internal Audit 4. PUBLIC COMMENT There was no public comment. 5. AGENDA COMMENTS Mr. McCrohan requested that Item A., Draft Resolution Regarding Bradley Lake Completion, be added under Agenda Item 10., New Business. Mr. McCrohan added that Item 9.C., Construction Fund Residual Balance, could be deleted. There being no further additions or corrections, the agenda was adopted by unanimous consent. 6. APPROVAL OF MEETING MINUTES - MARCH 25, 1997 MOTION: Mr. Bjornstad moved, seconded by Mr. Story, to approve the meeting minutes of March 25, 1997. In the fourth line of the next-to-the-last paragraph on page 3, the word “potential” was replaced with the word "impact." Mr. Story noted that his name appeared under Agenda Item 9, New Business, Item A., Bond Refunding, on page 5, and twice in the first paragraph on page 6. He said he was not in attendance at that meeting. Mr. Bjornstad said he thought the two on page 6 were attributable to himself. In the first line under Agenda Item 8., Old Business, Item A., Spinning Reserves Update, on page 5, "ASE" was corrected to “ASCC/RCC." Mr. Bjornstad said on page 6, in the paragraph beginning "Chair Stahr appointed...," the line, "Mr. Kelly said he would check with Mike Cunningham...." should be changed to himself as the speaker. In the second line of Agenda Item D., Construction Fund Residual Balance, on page 5, it was noted that, "PMC's bond counsel, Mr. Vassar" should be corrected to "AEA's bond counsel, Mr. Vassar." Bradley Lake Project Manageinent Committee Meeting Minutes Tuesday, May 20, 1997 Page 3 of 8 There being no other additions or corrections, a voice vote was taken, and the minutes were unanimously approved as amended. ie BUDGET SUBCOMMITTEE REPORT A. Bradley Lake Construction Audit Briefing - Pete Raiskums Mr. Raiskums reported that the audit.of the AEA costs to the Bradley project had been completed. The costs, covering a period between 1982 through June 30, 1996, totaled approximately $18 million. Mr. Raiskums said AEA had used the State accounting system to track the costs and then charged them to the appropriate project. Mr. Raiskums briefly recapped how the costs were broken down in the draft audit report and said the costs were detailed out by the year in which they were charged. He said no costs were found to be inappropriate, they were well documented, and AEA had been very cooperative throughout the audit process. 8. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the O&D Subcommittee had met the previous day at the Bradley Lake Power Plant. He said AEA had been working with state and federal agencies to reduce the potential fire hazard around the project facilities caused by the spruce-beetle-killed timber. He said a proposal to clear away the hazardous timber was expected within the next month. The general recommendation was that an area 300 feet back from the facilities be cleared, and that an additional 300 feet be selectively cleared to eliminate all potential fire hazards, and that this be done as soon as possible. Mr. Sieczkowski reported that the North Fork flow monitoring project would be completed this summer. He said the project would provide better real-time flow monitoring from the side flows, which would enable the project operators to reduce the fish water releases from the reservoir. Mr. Sieczkowski stated that the construction list ‘iad been reviewed, and the estimates for project completion had been revised. Homer and Chugach had developed a schedule and projected completion date for each item listed. He said the revised list would be provided to the Committee within the next 30 days, and the O&D Subcommittee would formally present it to the PMC for approval. Mr. Stead reported that the current maintenance was up to date, and the annual maintenance was being performed and was on schedule. He said a problem had been discovered in some bolting on the first day of the outage. Mr. Stead said the failure report received from FPI in Hayward, California, reflected that the bolts had failed due to a combination of three factors: (1) bolt brittleness, (2) overload, and (3) the manufacturing process used on the bolts. He said 40 new bolts had been ordered to replace the bolts in both units, and both units will remain out of service until the bolts have been replaced. With respect to the fish water debris, Mr. Stead reported that the contract had been let and was completed ahead of schedule and under budget. He said the NTE $500,000 contract would be completed for approximately $305,000. He noted that the divers had found little debris in the intake and trash racks and very few rocks in the rock trap, and they had completed their inspection within two days. Bradley Lake Project Manage:nent Committee Meeting Minutes Tuesday, May 20, 1997 Page 4 of 8 Mr. Stead responded to questions regarding the fish water debris project and the bolt failure on the units. Mr. Hickey reported on operations. He stated that lake elevation was back up above the 1080 to 1082.1. He said they would allow the lake to refill until the 27th when there would be an unscheduled Eklutna outage. He said the units would probably be utilized at that time for about a week, and then they would let the lake refill for another 15 days following that. Mr. Hickey said a FERC inspection was scheduled for the 18th or the 20th of June, and they would return to normal operations after that time. Mr. Hickey reported that the governors had been reset back to the 2/4/16 operating mode, and they had been using the units as synchronous condensers from time to time. Mr. Hickey said Scope 1 of the instability study, which consisted of the evaluation of historical events, had been completed for $22,000. He said the report had been completed and would be distributed on Friday. Scope 2 of the instability study had been awarded to EPS. He said they were the only responsive bidder, with a fixed price proposal of $107,717. Mr. Hickey said the contract schedule and a list of fixed milestone payments had been negotiated with EPS; the first milestone payment was due today, along with the report on the analysis of the governor control system and the tunnel model. Mr. Hickey reported that a task order contract had also been established with Woodward Governor Company, and they had been issued a notice to assist EPS, in an amount not to exceed $10,000, in the analysis of the control system. A task order contract was also established with Power Technologies for assistance, but they have not yet been utilized on the project. A task order contract established with Stone & Webster had authorized them to obtain from their records correspondence relating to the project to be provided to the O&D Subcommittee. Mr. Hickey noted that $139,717 of the $145,000 had been committed to date. The project completion date is August 30th. Mr. Hickey responded to questions regarding the governor project. Mr. Sieczkowski explained that the construction list he had distributed had been revised by the O&D Subcommittee at its meeting the previous day. Mr. Sieczkowski gave an overview of the revised construction list as compared to the original list approved by the PMC on February 9, 1996. He said it was the O&D Subcommittee's recommendation that the items and estimates under the new column, "Recommended Estimate Revised" be approved by the PMC so they could proceed with completion of the construction list. Specifically, he said the amount being requested for approval was $1,938,959, with a contingency of $290,844, for a total of $2,229,803. Mr. Sieczkowski responded to questions, and discussion was heard. The requested Committee action on this item was deferred until after discussion of Agenda Item 8.B., Budget Subcommittee Bond Refunding. Bradley Lake Project Manage:nent Committee Meeting Minutes Tuesday, May 20, 1997 Page 5 of 8 9. OLD BUSINESS A. Spinning Reserves Update Mr. Cooley reported that the ASCC/RCC had completed its preliminary economic analysis of changing the spinning reserve requirements. The analysis was currently under Committee review, and a recommendation was expected in about a month. Preliminary results indicate that on a pooled basis, if responsive reserves were required to be carried in either Fairbanks or Kenai, there would be an estimated cost of a million dollars per year to change the spinning reserve criteria. If spinning reserve responsive spin was not required on either end of the system, there would only be a negligible additional cost, on a pooled basis, to change the spinning reserve requirement. Mr. Cooley noted that one assumption that was being taken into consideration included whether any geographic distribution would be required on the spinning reserve, which would be a major factor in whether there would be an additional cost, on a pooled basis, to change the spinning reserve requirement. Mr. Cooley reported that the Committee would meet Thursday of next week to final the NERC recommendations. Mr. Cooley responded to questions. B. Budget Subcommittee Bond Refunding Ms. Pease said she would also provide the Budget Subcommittee report at this time since she had not provided it earlier in the meeting. Ms. Pease reported that two invoices had been received from Ron Saxton at Ater, Wynne, et al., for legal services rendered, the February 1997 invoice in the amount of $2,614.61 and the March 1997 invoice in the amount of $2,085.50. She requested Committee approval for payment of those invoices. MOTION: Mr. Story moved, seconded by Mr. Bjornstad, to approve payment of the February and March 1997 invoices from Ater, Wynne, et al. There being no discussion, a voice vote was taken, and the motion passed unanimously. Referring to the audit completed by Parisena, Stromberg & Company for the period ending 6/30/96 that had been distributed, Ms. Pease noted that the only open issue addressed in the report was contained in Footnote E, labeled "Contingency." She said the issue involves the concurrent audit done by the Municipality's internal auditor, Mr. Raiskums. She said the bonds issued exceeded the recoverable construction costs by $350,524, resulting in an over-payment of debt service and interest by the PMC. Ms. Pease said the Budget Subcommittee had received updated information from AEA, and it was the Subcommittee's recommendation that the PMC authorize Mr. Raiskums to finalize the examination of the Bradley Lake bond fund and identify the final amount to be refunded to the participants under the issue. MOTION: Mr. Story moved to approve the Budget Subcommittee's recommendation, and that the PMC authorize Mr. Raiskums to finalize the examination of the Bradley Lake Bradley Lake Project Manage.nent Committee Meeting Minutes Tuesday, May 20, 1997 Page 6 of 8 bond fund and identify the final amount to be refunded to the participants under the issue. Seconded by Mr. Bjornstad. Upon request, Ms. Pease stated that the audit assignment to Mr. Raiskums would be that he update and finalize the figures contained in his preliminary audit, which Parisena, Stromberg had used in the preparation of its report. Mr. Raiskums' final report would be as of May 1997. Ms. Pease responded to Committee questions, and Mr. McCrohan and Ms. McCambridge provided additional explanation. Ms. Pease reported that the Bond Refunding Subcommittee established by the Chair at the previous PMC meeting had met on numerous occasions to discuss the advance refunding of the Bradley Lake First Series bonds. She noted that the last report provided by Goldman Sachs on May 14th reflected that the market had rallied, and a bond refunding at that time would have provided an approximate 5% savings, which translated into about $550,000 per year savings to the PMC, continuing out to the year 2017. Ms. Pease stated that no additional work had been done on the bond refunding, and Mr. Stahr would address the outstanding issues that needed to be addressed before proceeding with any additional work on the bond refunding. There being no further discussion, a voice vote was taken, and the motion passed unanimously. Mr. Saxton addressed the variety of issues associated with the bonds that were still outstanding as they affected the status of physical projects and the construction work that remained to be done. He said those issues would need to be resolved expeditiously if further work was to be done in contemplation of a bond refunding. He noted that in doing any refunding, they should use caution to proceed in a way that would preserve their APUC exemption. Mr. Saxton addressed other issues and problems that would have to be addressed prior to proceeding with a bond refunding. 10. NEW BUSINESS A. Draft Resolution Regarding Bradley Lake Completion Mr. McCrohan reviewed the draft resolution pertaining to project completion. He requested Ms. McCambridge to address the two attached tables which correlated to the construction list reported on by Mr. Sieczkowski earlier in the meeting. Ms. McCambridge gave an overview of the original and updated construction lists and explained the reasons for the additional and revised costs on the updated list. Ms. McCambridge said that assuming the revised estimates were accurate, the revised figure needed from now forward to final project completion would be $2,001,453. Ms. McCambridge stated that the second schedule incorporated the $2,001,453 to complete the project into the total construction costs incurred to date, for a total of $315,408,790.00. Ms. McCambridge briefly summarized the breakdown of the categories of costs, interest earnings, and contributions. Ms. McCambridge responded to questions. Bradley Lake Project Manage. nent Committee Meeting Minutes Tuesday, May 20, 1997 Page 7 of 8 The Chair called a break at 11:05 a.m. due to construction noise interfering with the meeting. The meeting was reconvened at 11:10 a.m. Mr. McCrohan said the actions called for in the resolution which would be required and/or recommended in order for the bond refunding to go forward were as follows: (1) the requirement that issuance of the bonds in the aggregate initial amount of $165,260,157 must be within the maximum principal amount authorized by the Power Sales Agreement; (2) the requirement that the construction punchlist must be approved by the PMC; and (3) the recommendation that the balance to date of $500,591 be made available to the Bradley Project in the form of reduction in interest payments and that the remaining balance be returned to the State. Mr. McCrohan briefly elaborated on other requirements of the resolution. He noted that this was a draft resolution, and it could be revised, but it addressed the substantive issues. He requested the PMC's approval of the resolution before the bond refunding activities were resumed. Lengthy discussion was heard regarding AIDEA's position on the bond refunding issue and the feasibility of proceeding with it in view of the current spinning reserves and other issues. Mr. Saxton drew an outline on the board and elaborated on the various issues under the main headings of: (1) Future Work, (2) Obligation for Bonds, and (3) Refunding. Further discussion was heard regarding the APUC exemption issue and the current state of the bond market. The PMC concurred that Mr. Saxton should research the statutes and any legal restraints and report back to the PMC regarding how the bond refunding would impact the APUC exemption, and also that he meet with AEA's attorneys regarding AEA's position on the refunding. Further discussion was heard regarding other issues, including how projects such as the governor study and the spinning reserves responsiveness, would impact the refunding. Ms. Pease was directed to have the Budget Subcommittee review the bond refunding issue and develop a plan of the steps and costs involved in the process for presentation to the PMC. It was agreed that a teleconference could be scheduled to discuss any results. 8. OPERATION AND DISPATCH SUBCOMMITTEE REPORT (Deferred) With respect to the requested action on the construction punchlist, which was deferred until after the above agenda item was taken up, Mr. Sieczkowski reiterated his earlier recommendation that the PMC act on the revised estimate. MOTION: Mr. Story moved, seconded by Mr. Evans, to approve the revised construction punchlist. There being no discussion, a voice vote was taken, and the motion passed unanimously. 11. COMMITTEE MEMBER COMMENTS There were no Committee member comments. A. Next Meeting Date Bradley Lake Project Manage:inent Committee Meeting Minutes Tuesday, May 20, 1997 Page 8 of 8 The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was tentatively scheduled for the third week in July at the call of the Chair. 12. ADJOURNMENT MOTION: Mr. Kelly moved to adjourn, second by Mr. Story. There being no objection and no further business of the Committee, the meeting was adjourned at 11:55 a.m. ATTEST: Syn Uy) Vc Cole, Alaska Energy Authority, Secretary = BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Alaska Industrial Development and Export Authority 480 West Tudor Road Anchorage, Alaska Teleconference Thursday, September 4, 1997 10:00 a.m. i. CALL TO ORDER Vice Chairman Eugene Bjornstad called the teleconference meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. at Alaska Industrial Development and Export Authority, 480 West Tudor Road, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Eugene Bjornstad, Vice Chairman Chugach Electric Association Dave Calvert City of Seward Norm L. Story Homer Electric Association Dennis McCrohan Alaska Energy Authority Wayne Carmony Matanuska Electric Association Mike Kelly Golden Valley Electric Association 3 PUBLIC ROLL CALL Others Present: Elaine McCambridge, Alaska Energy Authority Valorie Walker, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Hank Nikkels, Anchorage Municipal Light & Power Claudette Petty, Anchorage Municipal Light & Power John S. Cooley, Chugach Electric Association Brian Hickey, Chugach Electric Association Lee Theibert, Chugach Electric Association Joe Griffith, Chugach Electric Association Bradley Lake Project Management Committee Meeting Minutes Thursday, September 4, 1997 Page 2 of 4 Don Stead, Homer Electric Association Rick Eckert, Homer Electric Association Bob Hufman, AEG&T Ron Saxton, Purchasing Utilities Ken Vassar, Wohlforth, Argetsinger, Johnson & Brecht 4. PUBLIC COMMENT There was no public comment. 5s AGENDA COMMENTS There were no additions or corrections, and the agenda was adopted by unanimous consent. Mr. Saxton reminded the Committee that elections were due to be held at the first meeting after July 1. He said since election of officers was not scheduled for today's meeting, it should be an agenda item for the next meeting. 6. BUDGET SUBCOMMITTEE REPORT A. Bond Refunding Mr. Griffith reviewed the status of the forward refunding of the Bradley bonds with the Committee. He said it appeared that a refunding would be a timely action for the Committee to take, and it was the recommendation that the Committee proceed. Mr. Griffith said the Committee would be asked at this meeting to approve the funds required to complete the transaction. Mr. Saxton said he would meet with Messrs. Laufer and Vassar to finalize the details of the bond refunding transaction. Mr. Bjornstad said Mr. Saxton had sent a memo on August 29th advising that the amount of funds the Committee would need to approve to complete the transaction was in the range of $350,000 and $450,000. MOTION: Mr. Kelly moved to authorize the expenditure of the funds for the purpose of completing the bond refunding. Seconded by Mr. Story. Mr. McCrohan said Mr. Vassar had reviewed the options for proceeding with the refunding and closure of the existing construction fund, and Mr. Vassar believed a minor amendment to the Power Sales Agreement (PSA) would be the appropriate action to take in order to proceed. Mr. McCrohan said Mr. Vassar would discuss this with Mr. Saxton when they met. In addition, Mr. McCrohan said AEA felt they should not release Goldman, Sachs or bond counsel to perform any work until after they had met with Mr. Saxton and an agreement was reached regarding the process and timing for completing the transaction. At that point, they would proceed to the pricing stage as defined by Goldman, Sachs. Bradley Lake Project Management Committee Meeting Minutes Thursday, September 4, 1997 Page 3 of 4 Mr. McCrohan said AEA would ask that the PMC direct Mr. Saxton to meet with them to discuss all the changes which may be necessary to proceed with the refunding. Mr. Bjornstad asked Mr. Saxton's input regarding Mr. McCrohan's comments. Mr. Saxton said he had not been aware that they needed to discuss amending the Power Sales Agreement, but he was scheduled to meet with AEA on Monday morning, and it could be included as a topic of discussion. He also said it had been his understanding from meeting with AEA a week ago that it was agreed Goldman, Sachs and bond counsel could proceed, and the utilities would take the financial risk in the event the work was not able to be completed. However, he said he would be willing to discuss this topic on Monday as well. Mr. McCrohan asked Mr. Vassar to explain why amending the PSA may be the most expeditious manner in which to proceed. It appears that what we're talking about are agreements to the PSA that may involve either an interpretation of the PSA, that not all parties agree to, or to the extent that these are not part of the PSA then the best approach would be to amend the existing agreement rather than trying to operate under some new and different agreement. In any event, with the issuance of refunding bonds the existing PSA has some indication that there were refunding bonds or the possibility of refunding bonds contemplated, but there are some adjustments that should be made to reflect those refunding bonds so that we’re sure that when the refunding bonds are issued that they are treated as though they were the original bonds and there is no interruption of the PSA. Mr. McCrohan suggested that an amendment to the motion be made that approval of the funds for the bond refunding be contingent upon the resolution of the process. Mr. Bjornstad suggested that a utility representative be present during Mr. Vassar and Mr. Saxton's meeting. Discussion was heard. Mr. Carmony suggested that if nothing could be accomplished on this item today, they recess the meeting until after Mr. Vassar and Mr. Saxton's meeting and then reconvene the PMC meeting to accomplish the approval of funds action. Mr. Kelly withdrew his motion, with the concurrence of his second. Mr. Saxton suggested that the meeting be reconvened at the call of the Chair. The Committee concurred. Mr. Nikkels asked what would happen to the reserve fund that had been established. Mr. Saxton responded there was nothing in this transaction which would change the status of any of the reserve funds. Mr. McCrohan said he would like to get some indication as to when the consultant would provide a report on the Bradley governor. Mr. Hickey gave an update on the status of the governor project. He said machine testing would be required in the next phase of the project, but he did not exactly know what would be necessary, and he did not have a time line for the completion of the second phase. Mr. Hickey said the reports that had been completed to date have been distributed. Bradley Lake Project Management Committee Meeting Minutes Thursday, September 4, 1997 Page 4 of 4 Mr. Calvert said he would need to call an IPG meeting in September. Mr. Bjornstad suggested the 18th, 19th, or the 22nd of September. There was a consensus that the 22nd would be the best for everyone, and that a PMC meeting be scheduled in conjunction with the IPG meeting. Mr. Carmony asked that an outline of the items discussed and agreed upon during Mr. Saxton's and Mr. Vassar's meeting be provided to the Committee members. Mr. Saxton said if Mr. Vassar convinced him an amendment to the PSA was the best way to proceed, Mr. Saxton would expect that another PMC meeting would be convened so he could address the process with the Committee members before he put anything on paper. Discussion was heard regarding the form of the agreement in relation to the amount of money being requested for approval. te OLD BUSINESS A. Spinning Reserves Update B. Budget Subcommittee Bond Refunding Agenda Items 7.A. and B. were tabled. 8. NEW BUSINESS A. Draft Resolution Regarding Bradley Lake Completion Agenda Item 8.A. was tabled. 9. COMMITTEE COMMENTS A. Next Meeting Date The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for September 22, 1997. 10. ADJOURNMENT MOTION: Mr. Kelly moved to adjourn. Seconded by Mr. Story. There being no objection and no further business of the Committee, the meeting was recessed at 10:35 a.m., to be reconvened at the call of the Chair next week. \ 2 ATTEST: rk We Cohen Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Training Room Chugach Electric Association 5601 Minnesota Drive Anchorage, Alaska Monday, September 22, 1997 10:00 a.m. (Continuation of meeting of September 4, 1997) il CALL TO ORDER Vice Chairman Eugene Bjomstad reconvened the meeting of the Bradley Lake Hydroelectric Project Management Committee of September 4, 1997, at 10:00 a.m. on Monday, September 22, 1997, in the Training Room of Chugach Electric Association, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. Mr. Bjomstad said he would entertain a motion to adjourn this meeting and the topic of discussion at this meeting would be taken up during the regular PMC meeting to convene directly following adjournment of this meeting. 2: ROLL CALL This item was tabled. 3. PUBLIC ROLL CALL This item was tabled. 4. PUBLIC COMMENT This item was tabled. 5. AGENDA COMMENTS The agenda was previously adopted by unanimous consent. 6. BUDGET SUBCOMMITTEE REPORT A. Bond Refunding (Continued from September 4, 1997) This item was tabled. Bradley Lake Project Management Committee Meeting Minutes Monday, September 22, 1997 Page 2 of 2 7. OLD BUSINESS A. Spinning Reserves Update B. Budget Subcommittee Bond Refunding Agenda Items 7.A. and B. were tabled. 8. NEW BUSINESS A. Draft Resolution Regarding Bradley Lake Completion Agenda Item 8.A. was tabled. 9. COMMITTEE COMMENTS A. Next Meeting Date The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled to follow this meeting on September 22, 1997. 10. ADJOURNMENT MOTION: Mr. Story moved to adjourn. Seconded by Mr. Kelly. There being no objection and no further business of the Committee, the meeting was adjourned at 10:05 a.m. BY: 2 A, Lugeke Bjomstad, ics Chairman ATTEST: CUMc Coho~ Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Training Room Chugach Electric Association 5601 Minnesota Drive Anchorage, Alaska Regular Meeting Monday, September 22, 1997 - 10:00 a.m. il CALL TO ORDER Vice Chairman Eugene Bjornstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 11:00 a.m. on Monday, September 22, 1997, in the Training Room of Chugach Electric Association, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Eugene Bjomstad, Vice Chairman Chugach Electric Association Dave Calvert City of Seward Norm L. Story Homer Electric Association Dennis McCrohan Alaska Energy Authority Wayne Carmony Matanuska Electric Association Mike Kelly Golden Valley Electric Association 3. PUBLIC ROLL CALL Others Present: Valorie Walker, Alaska Energy Authority Cindy Cartledge, Wohlforth, Argetsinger, Johnson & Brecht Shauna Dean, Alaska Energy Authority Hank Nikkels, Anchorage Municipal Light & Power Jim Walker, Municipality of Anchorage Bradley Lake Project Man.,ement Committee Meeting Minutes Monday, September 22, 1997 Page 2 of 5 Tim McConnell, Anchorage Municipal Light & Power John S. Cooley, Chugach Electric Association Brian Hickey, Chugach Electric Association Joe Griffith, Chugach Electric Association Jim Hall, Matanuska Electric Association Don Stead, Homer Electric Association Bob Hufman, AEG&T Robert Hansen, Golden Valley Electric Association Bradley Evans, Golden Valley Electric Association Steve Haagenson, Golden Valley Electric Association Ron Saxton, Purchasing Utilities Ken Vassar, Wohlforth, Argetsinger, Johnson & Brecht 4. PUBLIC COMMENT There was no public comment. 5. AGENDA COMMENTS Mr. McCrohan asked that Agenda Item 9 be restructured as follows: A. Spinning Reserves Update — Joe Griffith B. Qut-of-Pocket Bond Refunding Costs — Dennis McCrohan C. Budget Subcommittee Bond Refunding Report — Joe Griffith D. Settlement Agreement — Ron Saxton There were no other additions or comments, and the agenda was adopted by unanimous consent. 6. APPROVAL OF MEETING MINUTES - May 20, 1997 MOTION: Mr. Calvert moved to approve the meeting minutes of May 20, 1997. Seconded by Mr. Kelly. There being no changes or additions, a voice vote was taken, and the minutes were unanimously approved as presented. ite BUDGET SUBCOMMITTEE REPORT A. Bond Refunding (Continued from September 4, 1997) Mr. Griffith recapped the status of the bond refunding. He said there was in the neighborhood of $500,000 in unexpended funds still remaining in the account. Mr. Evans reported that the Budget Subcommittee had recently approved the audit performed by Pete Raiskums. 8. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. McCrohan said Mr. Stead would present the O&D report in Mr. Sieczkowski's absence. u Bradley Lake Project Mana,ement Committee Meeting Minutes Monday, September 22, 1997 Page 3 of 5 Mr. Stead reported that the operations and maintenance of the project were running smoothly. He said they were scheduled to fly a shack up to the North Fork today for additional stream gauging, but they were unable to do so due to high winds. Mr. Cooley reported that the lake level was currently at 1,167 feet. He said they had had a significant problem last Wednesday in that the line between Anchorage and Kenai tripped with both Bradley units and a Bernice Lake unit on. One Bradley unit had to be taken off line to stabilize the system, and they were unable to control frequency on the Kenai for about 20 minutes. Homer had shed three feeders during this period. He said the cause of the problem had originated on the Kenai side, but the specific problem had not yet been determined. Discussion was heard. Mr. Hickey reported that the O&D Subcommittee had met on the 5th and had discussed the status of the GPS. The consultant had advised that they were currently working on benchmarking the model, and the report on this phase of the project would be completed next week. 9. OLD BUSINESS A. Spinning Reserves Update Mr. Griffith said the ASCC/RCC economic evaluation was still in progress, and that was all he had to report. B. Qut-of-Pocket Bond Refunding Costs - Dennis McCrohan MOTION: Mr. McCrohan moved that the Committee approve the following on reimbursement: Incurred out-of-pocket expenses for all parties involved in the refunding, other than the underwriters, be reimburseable by the PMC for work done prior to the pricing stage, and all parties' incurred out-of-pocket expenses, including the underwriters, be reimbursed by the PMC for activities prior to document closing. Seconded by Mr. Kelly. Mr. McCrohan asked Ms. Walker to address the motion, and discussion was heard. MOTION: Mr. Kelly moved to table action on this item until after the Committee had taken up Agenda Item 9.D. Seconded by Mr. Griffith. There being no discussion, a voice vote was taken, and the motion passed unanimously. This item was tabled until after Agenda Item 9.D. C. Budget Subcommittee Bond Refunding Report - Joe Griffith Mr. Griffith said Ms. Walker had gone over the first three steps, and he would pick up at that point. He reported that the due diligence was currently being conducted, and the pricing will occur at the completion of the due diligence process. He said after closing, the current estimate was approximately $350,000. Mr. Griffith said the last two steps are secondary offerings and final settlement, and by the time they got to that point, they would have incurred an additional $1.3 million, but that would be picked up in the refunding issues. Bradley Lake Project Manayement Committee Meeting Minutes Monday, September 22, 1997 Page 4 of 5 Mr. Griffith summarized the meeting with Mr. Saxton last week in Seattle. He said action items and topics had been designated to each individual participant. The large action items on the utility side consist of compiling the descriptions of the power purchaser service area, regulations and operations, and financial summaries. He added that the only financial summaries he currently has are Homer's and Chugach's and everyone else needs to submit their audited financial summaries. Discussion was heard. D. Settlement Agreement - Ron Saxton Mr. Saxton reported that the settlement agreement remained unchanged. He said he and Mr. Vassar had reached tentative agreement as follows: Mr. Vassar said he would prefer approval by the different boards, but he would accept execution by the managers if an opinion from their counsel could be provided stating the attorney had reviewed the agreement and concurred that execution by the manager or the board was sufficient to bind the utilities to the agreement without further action. Mr. Saxton further explained that the attomey's opinion would not address the merits of the settlement or anything else about Bradley Lake. Mr. Saxton said if the attorneys and/or boards would accomplish execution of the agreement, he and Mr. Vassar would work on revising the settlement agreement so it could be distributed within the next couple of days. Mr. Kelly suggested that Mr. Saxton fax the Committee members a statement outlining his and Mr. Vassar's agreement in that regard. Mr. Saxton responded that they would be provided a form of opinion to provide their attorneys. Discussion was heard. 9. OLD BUSINESS B. Out-of-Pocket Bond Refunding Costs - Dennis McCrohan MOTION: Mr. Kelly moved to take off the table and place back before the Committee Mr. McCrohan's earlier motion under Item 9.B. concerning reimbursement of out-of-pocket expenses associated with the bond refunding. Seconded by Mr. Story. A voice vote was taken, and the motion passed unanimously. Mr. McCrohan addressed his earlier motion. Mr. Carmony clarified that the estimate was $100,000 for the first part of the motion, with a total of $350,000 through the second part of the motion. Mr. McCrohan said that was correct, and he assumed it would have to be reviewed and approved by the Budget Subcommittee. He added that it did not include PMC or the PMC's counsel's costs. Discussion was heard. : MOTION: Mr. Kelly moved to make the $100,000 amount a not-to-exceed amount without prior approval of the Budget Subcommittee. Seconded by Mr. Story. Discussion was heard. There being no further discussion, a voice vote was taken and the motion passed unanimously. Bradley Lake Project Manayement Committee Meeting Minutes Monday, September 22, 1997 Page 5 of 5 The question was called on Mr. McCrohan's main motion: Incurred out-of-pocket expenses for all parties involved in the refunding, other than the underwriters, be reimbursable by the PMC for work done prior to the pricing stage, and all parties' incurred out-of-pocket expenses, including the underwriters, be rein:bursed by the PMC for activities prior to document closing. A voice vote was taken, and the motion passed unanimously. 10. NEW BUSINESS A. Election of Officers The Chair opened the floor for nominations of Chairman, Vice Chairman, and Secretary/Treasurer. MOTION: Mr. Kelly moved to retain the current slate of officers: Mr. Bjornstad, Chairman; Mr. Story, Vice Chairman; and Mr. McCrohan, Secretary/Treasurer, and he asked unanimous consent. Seconded by Mr. Story. There being no other nominations, the Chair closed nominations. A voice vote was taken, and the motion passed unanimously. TA; COMMITTEE COMMENTS Chair Bjornstad advised that they needed to appoint a Chair for the Budget Subcommittee. MOTION: Mr. Kelly moved to appoint Mr. Brad Evans as Chair. Seconded by Mr. Story. There was no discussion, and a voice vote was taken. The motion passed unanimously. A. Next Meeting Date It was the consensus of the Committee that the next meeting of the Bradley Lake Hydroelectric Project Management Committee be scheduled for a teleconference on October 27, 28, or 29, 1997, at the call of the Chair. 12. ADJOURNMENT MOTION: Mr. Story moved to adjourn. Seconded by Mr. Kelly. There being no objection and no further business of the Committee, the meeting was recessed at 11:45 a.m. Eugehe Bjornstad, Chairman ATTEST: WM Cobo. Alaska Energy Authority, Secretary eo BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Board Room Alaska Industrial Development and Export Authority 480 West Tudor Road Anchorage, Alaska Regular Meeting Wednesday, November 5, 1997 10:00 a.m. JF CALL TO ORDER Chairman Eugene Bjomstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Wednesday, November 5, 1997, in the Board Room of Alaska Industrial Development and Export Authority, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2 ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Eugene Bjomstad, Chairman Chugach Electric Association Dave Calvert City of Seward Wayne Carmony Matanuska Electric Association Mike Kelly (Telephonic) Golden Valley Electric Association Norm L. Story (Telephonic) Homer Electric Association Dennis McCrohan Alaska Energy Authority Hank Nikkels Anchorage Municipal Light & Power (Arrived at approximately 10:15 a.m.) 3. PUBLIC ROLL CALL Others Present: Stan Sieczkowski, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Dan Helnick, Anchorage Municipal Light & Power (Arrived at approximately 10:15 a.m.) John S. Cooley, Chugach Electric Association Brian Hickey, Chugach Electric Association Joe Griffith, Chugach Electric Association ~ » Bradley Lake Project Management Committee Meeting Minutes Wednesday, November 5, 1997 Page 2 of 5 (Others Present Continued) Don Zoerb, Matanuska Electric Association Bob Hufman, AEG&T Don Stead, Homer Electric Association Rick Eckert, Homer Electric Association Ron Saxton, Purchasing Utilities Ken Vassar, Wohlforth, Argetsinger, Johnson & Brecht Cindy Cartledge, Wohlforth, Argetsinger, Johnson & Brecht Bill Pinakiewicz, Smith Bamey Paul Bloom, Goldman, Sachs & Co. Valorie Walker, Alaska Energy Authority John Flory, Member of the Public Elaine McCambridge, Alaska Energy Authority Robert Hanson, Golden Valley Electric Associaton (Telephonic) 4. PUBLIC COMMENT There was no public comment. 5. AGENDA COMMENTS There being no additions or comments, the agenda was adopted by unanimous consent. 6. APPROVAL OF MEETING MINUTES - September 4 and September 22, 1997 MOTION: Mr. Calvert moved to approve the meeting minutes of September 4 and 22, 1997. Seconded by Mr. Carmony. There being no changes or additions, a voice vote was taken, and the minutes were unanimously approved as presented. ts BUDGET SUBCOMMITTEE REPORT There was no report from the Budget Subcommittee. The Committee agreed to take up Agenda Item 9.B. next out of order. 9. OLD BUSINESS B. Budget Subcommittee Bond Refunding Report - Joe Griffith Mr. Griffith asked Mr. Saxton to provide the Committee an update on the legal issues involved in preparing the documentation for the bond refunding. He said following Mr. Saxton's update, Mr. Bill Pinakiewicz, with Smith Bamey, would review the financial status of the project with the Committee. Mr. Saxton reported that the work was proceeding more slowly than anticipated due to the delays in getting participants' feedback on the documents. He said there were 10 separate documents related to the transaction and several parties involved, and the Pi) Bradley Lake Project Management Committee Meeting Minutes Wednesday, November 5, 1997 Page 3 of 5 process was complex. He said they were not ready to present anything for the Committee to act upon today. Mr. Griffith introduced Mr. Bill Pinakiewicz, the financial consultant who had been hired as the financial advisor for the power purchasers. Mr. Pinakiewicz provided an overview of the status of the financial aspect of the bond refunding as well as the current status of the market. Mr. Pinakiewicz said that he had spent some time reviewing the structure and economic assumptions underlying the transaction with Goldman, Sachs & Co. He said while the outlook was favorable, there were still some outstanding issues which will require further discussion with Goldman, Sachs & Co. Mr. Pinakiewicz noted that the markets had been volatile recently but had more or less retumed to normal and were reasonably stable at this time. He said the downside risk was less than the upside risk in going forward with the transaction at this time. He urged the Committee that the documentation process be completed as quickly as possible. Mr. Pinakiewicz responded to questions, and discussion was heard. Mr. Griffith recommended that action on this item be tabled until further notice. The Chair recessed the meeting at 10:15 a.m., and the meeting was reconvened following a 10-minute break. Chair Bjomstad said he had received a request from Mr. McCrohan to have Mr. Vassar outline the sequence of events with respect to the bond refunding. Mr. Vassar provided the Committee an outline of the steps that needed to be taken to bring the bond refunding process to closure: (1) That the PMC adopt the resolution prepared by Ater Wynne which authorizes and agrees to the concept of the forward purchase format of the bond issue, requests the AEA to proceed with that type of arrangement, and which would appoint an agent to act on behalf of the PMC to review the final terms and provide a certificate to this effect. (2) Finalize and have every party to the Power Sales Agreement execute the Settlement Agreement. Also, following complete execution of the Settlement Agreement, each utility's attorney must provide an opinion stating that it is a valid, binding obligation of the utility. Mr. Vassar said the opinion form had been prepared, and Ater Wynne had delivered one to each of the utilities. (3) Finalize and execute the forward purchase Contract. Simultaneously, the certificate from the agent appointed by the PMC in No. (1) above should be provided. Mr. Vassar said the interest rate which would apply to the bonds would be determined upon execution of the forward purchase contract. (4) Prepare and effectuate the closing of the transaction, currently scheduled for December 19, 1997. There was a consensus of the Committee that this item be tabled. - ” Bradley Lake Project Management Committee Meeting Minutes Wednesday, November 5, 1997 Page 4 of 5 OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported that the O&D Subcommittee had met the previous day, and the following topics were discussed: The fish water bypass flow monitoring and SCADA input for the North Fork Bradley River had been installed. Mr. Sieczkowski said when the river is not frozen over, the operator can monitor and set the releases from the dam to offset the side flows, which should reduce the release water from the dam, providing more for generation. He noted that in the near future, Homer, Chugach, and AEA would discuss improvement of the real-time monitoring and reaction to the releases, specifically when there is a reduction. Mr. Sieczkowski said the State agencies and FERC have been advised of the variations during the last six months and have also been advised regarding potential modifications to reduce the variances. He noted that a meeting would be scheduled with the agencies to coordinate the flows, and also to coordinate their studies, with the ultimate goal being to reduce the flows. Mr. Sieczkowski said the O&D Subcommittee was next scheduled to meet at Chugach Electric Association on January 14, 1998, at 9:00 a.m. Mr. Cooley reported that both units have been operating with no problem. Mr. Stead reported that all maintenance was current, and there were no problems to report. Mr. Hickey gave an overview of the status of the ongoing instability study. He said Electric Power Systems had given a presentation the previous day on the status of the project, and they had delivered the updated governor model for implementation by the Railbelt utilities in their PSSE program. The scheduled completion date for this project is December 8, 1997. Mr. Hickey noted that this was significantly behind schedule of the original projected completion date of August 30th. He said the reason for this was because the vendor had severely underestimated the benchmarking of the model against reality. He said although the scheduled date for completion was December 8th, he did not expect to receive the contractor's report until after the first of the year. OLD BUSINESS A. Spinning Reserves Update Mr. Griffith reported no change on the spinning reserves since the last meeting. B. Budget Subcommittee Bond Refunding Report - Joe Griffith This item was taken up earlier in the meeting. Cc. Construction Fund Agreement Bradley Lake Project Management Committee Meeting Minutes Wednesday, November 5, 1997 ; Page 5 of 5 This item was tabled. 10. NEW BUSINESS There was no new business. 11. COMMITTEE COMMENTS There were no Committee member comments. A. Next Meeting Date It was the consensus of the Committee that the next meeting of the Bradley Lake Hydroelectric Project Management Committee be at the call of the Chair. 12. ADJOURNMENT MOTION: Mr. Carmony moved to adjourn. Seconded by Mr. Calvert. There being no objection and no further business of the Committee, the meeting was adjoumed at 10:30 a.m. < BY: L ( : Eugehe\Bjornstad, irman ATTEST: Vania CoO Alaska Energy Authority, Secretary rs ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY {= ALASKA iE =ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 ALASKA ENERGY AUTHORITY BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE DECEMBER 9, 1997 EXCERPT FROM UNAPPROVED MINUTES 9. OLD BUSINESS B. Budget Subcommittee Bond Refunding Mr. Griffith gave a brief update regarding the Bradley Lake Hydroelectric Project Forward Delivery Refunding Bonds. He stated Senate Bill 1483, which was introduced by Senator Murkowski, has caused some concern on the part of Goldman Sachs. The bill has soft grandfathering language for tax-exempt refundings on bonds of this nature. He also stated that delaying the pricing until the issue was resolved would not be detrimental. Mr. Saxton said that one of the effects of Senate Bill 1483 would be that if utilities are to compete they would no longer have the advantages of being able to issue tax-exempt debt. The bill, as structured, would make this deal a risk to Goldman Sachs and they are not comfortable with that risk. Mr. Girffith stated the purpose of the bill is not aimed at bonds like these, but unfortunately they could possibly get swept up in it. All of the rest of the documentation appears to be in order. There are some options, but they will not be discussed until we know the kind of problem we will have if the bill passes. Discussions ensued regarding Senate Bill 1483 and the effect it may have on the Bradley Refunding. Mr. Saxton stated the Approving Resolution needs to be approved at this meeting. He stated the Settlement Agreement and the Agreement to Support the Forward Refunding are part of the Approving Resolution. Mr. Vassar stated his office needs the signed documents by December 10, 1997. Mr. Bjornstad polled the members as to the status of the Settlement Agreement and the Agreement to Support the Forward Refunding. It was unanimously stated that all members had approved both Agreements. Excerpt from Unapproved Minutes December 9, 1997 Meeting Page 2 MOTION: Mr. Calvert moved to approve the Approving Resolution of the Bradley Lake Hydroelectric Project and that such resolution be delivered by the Bradley Lake PMC Chairman to the Alaska Energy Authority once it is confirmed and ratified by the Project Management Committee by appropriate resolution at a future BPMC meeting. Seconded by Ms. Kohler. Mr. Saxton explained the Confirming Resolution for the members of the committee. There being no further discussion, a roll call vote was requested. Upon roll call vote, the motion passed unanimously. Mr. Saxton said that on page two of the Approving Resolution the date should read April 6, 1999. Mr. Bloom briefed the committee regarding the tax-exempt issue and also the current market situation. He said the savings, using December 8, 1997 market conditions, was $7.7 million present value, which works out on a percentage basis to 7.4%. Hearing no objection, Chairman Bjornstad recessed the meeting to December 10, 1997, at 10:00 a.m. Couna Me C= Secretary ALASKA INDUSTRIAL DEVELOPMENT * AND EXPORT AUTHORITY / = ALASKA iE ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 ALASKA ENERGY AUTHORITY BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE DECEMBER 10, 1997 EXCERPT FROM UNAPPROVED MINUTES 6. NEW BUSINESS A. Bond Pricing Mr. Griffith briefed the committee regarding phone conversations with Senator Murkowski’s legislative director, Alexander Polanski. He stated Mr. Polanski will be drafting up a letter for Senator Murkowski’s signature clarifying the issue on Senate Bill 1483. He requested the meeting be recessed to December 12, 1997 at 10:00 a.m. Hearing no objection, Chairman Bjornstad recessed the meeting to December 12, 1997 at 10:00 a.m. eee Chon Secretary Ze gen oN Wanted * ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY /= ALASKA mm =ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 ALASKA ENERGY AUTHORITY BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE DECEMBER 12, 1997 EXCERPT FROM UNAPPROVED MINUTES 6. NEW BUSINESS A. Bond Pricing Mr. Laufer said a change is needed in the Forward Refunding Bond Purchase Agreement that states that opinion letters from counsel to the individual utilities’ counsel will be received sometime before the closing scheduled for January 1998. There will also be a change to the Confirming Resolution. In the second Whereas provision it should read, “WWHEREAS, the Alaska Energy Authority (“Authority”) intends to enter into the Forward Delivery Bond Purchase Agreement with Goldman Sachs & Co. and agreeing to interest costs on Refunding Bonds pursuant to such Agreement; and.” Mr. Bloom briefed the committee on the current market and the present value savings on the two refunding series combined. The two series combined present value savings was just over $8.5 million; the third series was approximately $5.3 million; and the fourth series was approximately $3.2 million. Discussions ensued regarding changes to the Confirming Resolution. Mr. Saxton read the Confirming Resolution in its entirety into record: “Confirming Resolution of the Bradley Lake Project Management Committee Relating to Forward Bond Purchase Agreement. Whereas, the Bradley Lake Project Management Committee adopted the Approving Resolution of Bradley Lake Hydroelectric Project, Project Management Committee on December 9, 1997 (‘Approving Resolution”); and Whereas, the Alaska Energy Authority (“Authority”) intends to enter into the Forward Delivery Bond Purchase Agreement with Goldman Sachs & Co. agreeing to interest costs on Refunding Bonds pursuant to such Agreement; and Whereas, the purpose of this resolution is to confirm and ratify the Approving Resolution and the actions to be taken by the Authority to execute the Forward Bond Purchase Agreement; Excerpt from Unapproved Minutes December 12, 1997 Meeting Page 2 Now, Therefore, Be It Resolved by the Bradley Lake Project Management Committee that the actions to be taken by the Authority to execute the Forward Bond Purchase Agreement with Goldman Sachs & Co. are approved, confirmed, and ratified. Adopted this 12" day of December, 1997.” MOTION: Mr. Norm Story moved to approve the Confirming Resolution as so stated by Mr. Ron Saxton. Seconded by Ms. Meera Kohler. There being no discussion, a roll call vote was requested. Upon roll call vote, the motion passed unanimously. Hearing no objection, Chairman Bjornstad adjourned the meeting at 10:20 a.m. Galas Teel Secretary ie BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES 1996 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East ist Avenue Anchorage, Alaska Tuesday, February 13, 1996 10:30 a.m. te CALL TO ORDER Chairman Tom Stahr called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:30 a.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2 ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Tom Stahr, Chairman Anchorage Municipal Light & Power Eugene Bjormstad, Vice Chairman Chugach Electric Association Dan Beardsley Alaska Energy Authority, Secretary Wayne Carmony, Treasurer Matanuska Electric Association Don Stead Homer Electric Association Bradley Evans Golden Valley Electric Association Others Present: Tim McConnell, Municipal Light & Power Bob Price, Municipal Light & Power Moe Aslam, Municipal Light & Power Mary Ann Pease, Municipal Light & Power Stan Sieczkowski, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Brian Hickey, Chugach Electric Association Lee Thibert, Chugach Electric Association John S. Cooley, Chugach Electric Association Dora Gropp, Chugach Electric Association Dennis Lapp, Chugach Electric Association Mike Kelly, Golden Valley Electric Association Steven Haagenson, Golden Valley Electric Association Jim Hall, Matanuska Electric Association Bob Hufman, AEG&T Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Del LaRue, Dryden & LaRue Bradley Lake Project Management Committee Meeting Minutes Tuesday, February 13, 1996 Page 2 of 8 3. PUBLIC COMMENT None. 4. AGENDA COMMENTS Chair Stahr asked that Item 6., Budget Subcommittee Report, and Item 10.A., Scheduled Maintenance Fund, be moved to follow Item 10., New Business. He said Mary Ann Pease, who was scheduled to give those reports, would be arriving late to the meeting. Mr. Bjormstad asked that he be allowed to report on two old outstanding bills from Ater, Wynne following Mr. Carmony's comments on recent expenses under Item 10.B., Approval of Legal Expenses and Other Expenses. Item C. was added under No. 10., New Business, for a report on the Bradley Lake Dispatch Audit Report by Mr. Bjomstad. The above additions were approved by unanimous consent. 5. APPROVAL OF MEETING MINUTES - DECEMBER 6, 1995 MOTION: Mr. Bjornstad moved for approval of the minutes. Seconded by Mr. Evans. Mr. McConnell noted the "was" before "surplus" in the first sentence on page 3 should be deleted. There being no further corrections, a voice vote was taken, and the minutes were approved as amended. 6. BUDGET SUBCOMMITTEE REPORT AND MAINTENANCE REPORT This item was heard following Agenda Item No. 10., New Business, in conjunction with Agenda Item No. 10.A., Scheduled Maintenance Fund. if OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski distributed the Construction List and said Committee action would be required. He reported that the O&D Committee had met on January 18 and February 5, 1996. Mr. Sieczkowski reported that Homer Electric had contracted with Shannon & Wilson to evaluate the Fish Water Bypass Release program. The Phase 1 report had been submitted in December 1995, at which time the O&D Committee had discussed the alternatives with HEA. At this time, HEA is proceeding with completion of the study. Mr. Sieczkowski reported that there had been a plant outage on December 17th. The Bradley operator had been recognized by the O&D Committee for the appropriate action he had taken, and the O&D Committee had requested HEA to notify the employee of its support. The O&D Committee was continuing its review of the plant multiple shutdown list, and HEA would provide recommendations in the near future. Bradley Lake Project Management Committee Meeting Minutes Tuesday, February 13, 1996 Page 3 of 8 Mr. Sieczkowski said the recommended Construction List of tasks to be accomplished had been finalized, and the O&D Committee would be recommending approval of the List. The remaining balance in the fund would be $774,222.92 as of December 31, 1995, if the List was approved. Mr. Sieczkowski reported that the communications network was under review to determine if the current Bradley system was adequate and the most economical system. HEA had requested an alternative quote from the local communications company for providing communications at the Bradley site. The use and number of circuits had been reviewed by the O&D Committee and determined to be appropriate at the current time. The Bradley governors performance would be reevaluated upon Committee approval. ML&P had requested a modification in the governor response to coordinate better with the proposed SMES system. The O&D Committee had recommended that a scope of work be developed for the study for the purpose of evaluating the existing governor performance and providing analysis and recommendations. ML&P, CEA, and HEA were currently developing the scope of work for the O&D review and recommendations, and it was anticipated it would take four months to complete the study. Mr. Sieczkowski reported that the O&D and Budget Subcommittees had met to discuss the auditor's report for HEA and CEA. CEA had also provided detailed information for the dispatcher duties. No conclusions or recommendations were reached regarding the auditor's report. Mr. Hickey reported that Bradley operations were normal, although there had been an intermittent problem with the static var compensator at Soldotna. He said it was believed the problem with the synchronizing circuit had been resolved when the board was replaced. Modified boards had been ordered for both the Soldotna and the Daves Creek SVCs. With respect to maintenance, Mr. Stead reported that a dual-unit outage had occurred on December 17th. He said the outage was the result of operator error when fuses that went to a Schweitzer relay were pulled and opened both line breakers. A second event occurred when a capacitor blew up inside the govemor on Unit 1 and took that unit off line. Both items had been repaired, and the 12/17/95 outage was still under investigation. Discussion was heard regarding the Construction List and the O&D Committee's recommendation for approval of the expenditure of $2,336,000. In response to Mr. Saxton's request, Mr. Sieczkowski said a breakdown of the funding sources would be provided at the next meeting by Mr. McCrohan. MOTION: Mr. Carmony moved that the expenditure for the governor speed contro! modification study be approved, and that approval of the remainder of the Construction List expenditures be deferred until the next meeting, after the Committee members had had an opportunity to review the List. Seconded by Mr. Bjornstad. In response to Mr. Kelly's question, Mr. Stahr explained what portion of the study would be SMES related. Mr. Aslam elaborated on the purpose of the study. The question was called. A roll call vote was taken, and the motion passed unanimously. 8. INSURANCE SUBCOMMITTEE Mr. Beardsley reported that the officers and directors insurance had been renewed, with a slight increase in premium over last year of approximately $200. Bradley Lake Project Management Committee Meeting Minutes Tuesday, February 13, 1996 Page 4 of 8 With respect to the aircraft insurance, Mr. Beardsley reported that he had been contacted by Mr. Stead about three weeks ago. Mr. Stead had informed him at that time the local carrier was having difficulty in meeting the million-dollar-per-seat requirement, and Mr. Stead was taking the appropriate steps to ensure that the required insurance would either be provided by the carrier or through its own insurance policies. Mr. Beardsley explained that it was HEA's obligation to provide coverage of a million dollars per seat, and the contractor was unable to obtain that type of coverage at this time. He commented that this requirement was largely due to the Bradley accident and its current status. As a consequence, the contractor would have to find supplemental coverage to make up the difference. He anticipated Mr. Stead would have that problem resolved by the next meeting. In response to Mr. Kelly's question, Mr. Beardsley said he understood Mr. Stead would obtain quotes, and if the amount was significantly greater than what was budgeted, it would need to come back to the Committee for approval. If it stayed within the budget, he said it would be appropriate to proceed with obtaining the coverage. Mr. Beardsley provided an update on the Bradley aircraft accident with respect to the insurance issue. The Zidalis claim had been settled with the insurance company for approximately $2.2 million. Larry Wolfe's claim had gone to trial, and a judgment had been entered against the insurance company in the amount of $1.6 million. However, both sides had indicated they would appeal. Mr. Beardsley had been advised that Risk Management would provide an accounting and current status of all claim issues within the next 30 days. In response to Chair Stahr’s question, Mr. Beardsley said the Committee's concern would be one of recouping funds rather than any potential liability the Committee may have. 9. OLD BUSINESS A. Spinning Reserves Update In Mr. Lovas' absence, Mr. Bjormstad reported there had been no further action on this item. Mr. Lovas had said the ASCC anticipated discussing this issue at their next meeting, which was scheduled for March. B. Agreement Briefing Mr. Saxton distributed an outline and a bound document containing the key agreements. Using the overhead projector, he gave his presentation on the substantive content of the contracts. Mr. Saxton said the initial Bradley Lake Agreements consisted of three documents which had been executed at the same time: (1) Power Sales Agreement (the principal document), (2) Agreement with Chugach (the Services Agreement), and (3) the Homer Transmission Agreement. The latter two agreements were executed to create a transmission path, both in the physical sense and in the legal sense, for the power from Bradley Lake. He said the Homer Agreement would continue in perpetuity, but the Chugach Services Agreement would only continue until such time as there was an alternative transmission path. The other two documents contained in Mr. Saxton's packet were the Committee Bylaws and the Master Maintenance and Operating Agreement (MMOA). Mr. Saxton provided an overview of the contents, provisions, requirements, and responsibilities set out in those two documents. Mr. Saxton summarized the different project funds and the purposes they served. Mr. Saxton stated that the Services Agreement created the path utilizing the Chugach system to get power from the Kenai Peninsula north. Mr. Saxton described that agreement with respect to the items Chugach Bradley Lake Project Management Committee Meeting Minutes Tuesday, February 13, 1996 Page 5 of 8 would provide. The Transmission Capability Agreement with HEA provided for the financing of the new transmission line to be constructed by Homer. He said the agreement provided for use of the old Homer Beluga line as well as the new line. Mr. Saxton said the three agreements were currently exempt from APUC review and oversight until such time as the bonds were retired. Mr. Saxton also reviewed the succeeding agreements in chronological order. They were: (1) Allocation and Scheduling Procedures, (2) the Master Maintenance and Operating Agreement, (3) the Project Operating and Maintenance Agreement, and (4) the Transmission Facilities and O&M Agreement. Two agreements currently pending active review are: (1) the Static Var Compensator Facilities Maintenance Agreement, and (2) the Substation Agreements. Mr. Beardsley provided a brief update on the status of the latter two agreements. He said the remaining agreements that had not been executed had been submitted last month for review by the PMC, and some Committee members had provided comments. Mr. Saxton added that the Dispatch Agreement had been signed in 1992, prior to execution of the Master Maintenance and Operating Agreement (MMOA), with the understanding it would be revised following execution and implementation of the MMOA. He said the Dispatch Agreement was in the process of being revised at this time, and several comments had been received from Anchorage and Chugach. Once those comments had been incorporated, the Dispatch Agreement would be submitted for Committee approval. Mr. Saxton discussed voting requirements, the open meetings laws as they relate to the PMC, and percentages for voting purposes. Mr. Beardsley recommended that individuals who had issues to be resolved meet with the Subcommittee so the agreements could be finalized. He said the Subcommittee consisted of himself, Don Edwards from Chugach, Rick Baldwin from HEA, and Larry Hittle from Ater, Wynne. He said the Subcommittee would schedule a meeting when someone was ready to work with them. Mr. Kelly asked what was the target date for execution of all the agreements. Mr. Saxton responded that he concurred with Mr. Beardsley's recommendation that individual agency representatives have a final opportunity to meet with the Subcommittee to resolve any issues of concern and to provide comments, and then the agreements be finalized and submitted to the PMC for approval. Mr. Beardsley reiterated that the three agreements to be submitted to the PMC for approval were the Transmission Facilities Agreement, the Static Var Compensator Maintenance Agreements, and the Bradley Lake Dispatch Agreement. He reminded that the PMC had received the Subcommittee's final draft of those Agreements in December. Mr. Kelly suggested that final approval of those agreements be scheduled for July, which should give everyone ample opportunity to discuss their issues of concern with the Subcommittee. Mr. Carmony asked that the meeting be noticed so that interested parties would be present. Mr. Beardsley said he would schedule and notice the meeting. The Committee concurred. C. Moose Mitigation Mr. Beardsley said the plan established under the license through the resource agencies to address mitigation consisted of three components: (1) waterfowl, (2) fish, and (3) moose. The waterfowl component had been resolved with the ponds and the runway effort. He said that effort appeared to have been successful, and closure from Fish and Game was imminent. The fish studies had been completed Bradley Lake Project Management Committee Meeting Minutes Tuesday, February 13, 1996 Page 6 of 8 this year. The only issue remaining was reducing flows, and that was being addressed, but the fish component had been resolved with respect to the license. The moose mitigation consisted of a plan adopted in November of 1989 which provided that certain lands would be set aside to allow for increased or enhanced moose habitat, and that the Authority would fund habitat enhancement as well as research. Mr. Beardsley said the Authority had been working toward a final agreement with the Homer Fish and Game Advisory Board, as well as Alaska Department of Fish and Game and the U.S. Fish and Wildlife Service, and the result had been the establishment of a nonprofit corporation, which had been reviewed and approved by staff at Mr. Saxton's office. He said ownership of the lands would be turned over to the nonprofit corporation for the purpose of overseeing the lands, which would relieve the PMC from liability. In addition, Mr. Beardsley reported that funds from the Construction Fund had been set aside to establish an endowment, in the approximate amount of $183,000, and to pay as a lump sum the obligation for the nonprofit organization to continue to provide annual reports, studies, and research related to moose habitat in the Homer area. Mr. Beardsley said the three Fish and Game entities mentioned earlier had given their approval of the plan, and it would be filed with the State once approved by the AEA Board. He said this, then, would satisfy PMC's obligations under the license. He concluded by saying this issue should be resolved within the next 30 to 60 days. 10. NEW BUSINESS A. Scheduled Maintenance Fund Ms. Pease said the scheduled maintenance fund discussion was part of the budget, and she suggested postponing this item to be heard along with the budget discussion. The Committee concurred. This item was moved to Agenda Item No. 6, Budget Subcommittee Report, following Item No. 10. B. Approval of Legal Expenses and Other Expenses Mr. Bjornstad reported a bill had been received from Ater, Wynne, Hewitt, Dodson & Skerritt in the amount of $5,052.09 for the month of September 1995. MOTION: Mr. Bjornstad moved to approve payment of the above-mentioned legal expenses in the amount of $5,052.09 for September 1995. Seconded by Mr. Beardsley. There being no discussion, a voice vote was taken, and the motion passed unanimously. Mr. Bjornstad said he also had a bill from Ater, Wynne for November 1995. He said payment had been approved at the December 6th meeting, but he was unsure whether it had been paid. He said he would forward it to the appropriate personnel for payment. Mr. Carmony reported a bill had been received from Ater, Wynne in the amount of $2,789.77 for the month December 1995. MOTION: Mr. Carmony moved to approve payment of the above-mentioned legal expenses in the amount of $2,789.77 for December 1995. Seconded by Mr. Bjornstad. There being no discussion, a voice vote was taken, and the motion passed unanimously. C. Bradley Lake Dispatch Audit Report Bradley Lake Project Management Committee Meeting Minutes Tuesday, February 13, 1996 Page 7 of 8 This item was discussed following the next item being tabled. 6. BUDGET SUBCOMMITTEE REPORT 10. NEW BUSINESS A. Scheduled Maintenance Fund Ms. Pease reported that the Budget Subcommittee met February 6, 1996, to discuss the proposed FY 97 budget. Ms. Pease read a document entitled, "Bradley Lake Subcommittee Report" into the record at this time. The Subcommittee's recommendation was that the BPMC support a motion to exclude payments for a scheduled maintenance fund in the FY 97 budget. Ms. Pease summarized the budget attachments to the Subcommittee report. She said the major increases in the FY 97 budget would be for the five-year inspection and the FERC administrative fees. Ms. Pease reported that the Budget Subcommittee had voted unanimously to support the FY 97 budget that was being submitted to the BPMC today. The total operating budget would be $2,499,154, with debt service payments of $13,390,560, for a total FY 97 budget of $15,889,714. The proposed FY 97 budget would be a 22% decrease from the approved FY 96 budget of $15,921,375. Utility contributions for FY 97 would be $13,089,178, as compared to $13,054,836 in FY 96. Ms. Pease said a $1,059,000 surplus had been used in FY 96; a surplus of $959,037 would be used in FY 97. Through utilization of the surpluses, the Revenue Fund balance had been reduced to $100,000. The budget still contained an operating reserve of $535,000. Ms. Pease said the Budget Subcommittee recommended that the BPMC support a motion to adopt the FY 97 budget as presented. Mr. Saxton added that the FY 97 budget reflected an administrative cost reduction from the AEA. Because of the reduction, the amount AEA was entitled to through the settlement agreement had been reduced. Ms. Pease responded to questions, and discussion was heard. MOTION: Mr. Kelly moved to approve the FY 97 budget as submitted. Seconded by Mr. Stead. MOTION: Mr. Kelly moved to table the motion until later in the meeting. There being no objection, this item was tabled. 10. NEW BUSINESS Cs Bradley Lake Dispatch Audit Report Mr. Bjornstad said the State and all the general managers had received a proposal from Chugach regarding the dispatch agreement and the price it would charge to perform the dispatching functions. Mr. Bjornstad said Chugach would provide the services at no charge if the southem and northem intertie controllers would agree to do likewise. MOTION: Mr. Bjornstad moved that Chugach's proposal to provide dispatching services at no charge be approved contingent upon the southern and northern intertie controllers agreeing to do the same. Seconded by Mr. Carmony. Chair Stahr explained ML&P's position on the proposal. Discussion was heard regarding potential problems. Mr. Kelly said he would be willing to discuss the proposal from GVEA's perspective. Bradley Lake Project Management Committee Meeting Minutes Tuesday, February 13, 1996 Page 8 of 8 The question was called, and a roll call vote was taken. The motion passed with one nay from ML&P. MOTION: Mr. Kelly moved that the Committee return to Agenda Items 6. and 10.A., the Budget Subcommittee Report and the Scheduled Maintenance Fund Report. Seconded by Mr. Beardsley. The motion passed by unanimous consent. 6. BUDGET SUBCOMMITTEE REPORT (CONTINUED) 10. NEW BUSINESS (CONTINUED) A. Scheduled Maintenance Fund (Continued) Chair Stahr asked if there was further discussion on the pending motion. Mr. Beardsley said AEA's position was that the maintenance fund should be established as a prudent initiative of the utilities. He recommended that the BPMC approve the maintenance fund and added that AEA would not be in a position to provide interim financing for replacement of any items. Mr. Kelly suggested that the Committee plan on revisiting this issue in the future when the Bradley cost of power had been reduced as compared to the alternative power. The question was called on the motion to approve the FY 97 budget as submitted. A roll call vote was taken, and the motion passed unanimously. 11. COMMITTEE MEMBER COMMENTS None. 12. NEXT MEETING DATE The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for Tuesday, April 2, 1996, at 10:00 a.m., in the Commission Room of ML&P. 13. ADJOURNMENT MOTION: Mr. Kelly moved to adjourn. Seconded by Mr. Bjornstad. There being no further business of the Committee, thefneeting was adjourned at 11:55 a.m. BY: Tom Stahr, Chairman ATTEST: OM oe = Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East 1st Avenue Anchorage, Alaska Tuesday, April 2, 1996 10:00 a.m. 1. CALL TO ORDER Chairman Tom Stahr called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Tom Stahr, Chairman Anchorage Municipal Light & Power Dave Calvert City of Seward Eugene Bjornstad, Vice Chairman Chugach Electric Association Wayne Carmony, Treasurer Matanuska Electric Association Don Stead Homer Electric Association Bradley Evans Golden Valley Electric Association Dan Beardsley Alaska Energy Authority Others Present: Tim McConnell, Municipal Light & Power Mary Ann Pease, Municipal Light & Power Stan Sieczkowski, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Lee Thibert, Chugach Electric Association John S. Cooley, Chugach Electric Association Dora Gropp, Chugach Electric Association Mike Kelly, Golden Valley Electric Association Steven Haagenson, Golden Valley Electric Association Jim Hall, Matanuska Electric Association Bob Hufman, AEG&T Bradley Lake Project Management Committee Meeting Minutes Tuesday, April 2, 1996 Page 2 of 5 Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Del LaRue, Dryden & LaRue Al Peabody, Dryden & LaRue 3. PUBLIC COMMENT None. 4. AGENDA COMMENTS Agenda Item 9.C., Moose Mitigation, was deleted. Under Item 10.A., Approval of Legal Expenses and Other Expenses, it was noted the person giving that report would be Mr. Carmony rather than Mr. Bjornstad. There being no further additions or corrections to the agenda, they were adopted by unanimous consent. 5. APPROVAL OF MEETING MINUTES - FEBRUARY 13, 1996 MOTION: Mr. Bjornstad moved for approval of the minutes. Seconded by Mr. Calvert. On page 4, second paragraph under Item 9.B., Agreement Briefing, Mr. Saxton asked that the first line be changed from "Mr. Saxton said the Power Sales Contract consisted of three documents...." to "Mr. Saxton said the initial Bradley Lake agreements consisted of three documents...." There being no further corrections, a voice vote was taken, and the minutes were approved as amended. 6. BUDGET SUBCOMMITTEE REPORT Ms. Pease reported the Budget Subcommittee had met March 19, 1996, to discuss the Parisena Stromberg audit. Ms. Pease said Bonnie Godfred and Gary Stromberg were present to provide an overview of the audit. Ms. Godfred said the litigation between the Bradley PMC and the AEA regarding administrative charges had resulted in an uncertainty in the independent auditor's report last year. She said that matter had been resolved, and the PMC had received a clean opinion this year. Ms. Godfred briefly addressed the revenue surplus reflected in the Statements of Revenue, Expenses, and Surplus on page 3 and how it related to the Balance Sheet on page 2. Ms. Godfred pointed out a new footnote on page 9 related to contingencies for pending claims as a result of the airplane crash and explained how it related to the second paragraph regarding the results of the internal audit conducted in 1995 by the Municipality of Anchorage. She said the $73,000 still in dispute between Bradley and Chugach had been expensed, and no adjustment was made for the uncertainty. MOTION: Mr. Beardsley moved to accept the audit as presented. Seconded by Mr. Kelly. There being no discussion, a voice vote was taken, and the motion passed unanimously. Bradley Lake Project Management Committee Meeting Minutes Tuesday, April 2, 1996 Page 3 of 5 ws OPERATION AND DISPATCH SUBCOMMITTEE REPORT A. Construction Funding Sources Mr. Sieczkowski reported the O&D Subcommittee had met March 14, 1996. HEA had reported the maintenance scheduling program was operational following installation of the updates. The water and energy allocation reports were being modified for clarification of the information reported. The permitting process for reopening the Martin River airstrip was 98 percent complete at this time. Mr. Sieczkowski reported the comments had been received from the utilities regarding the governor response and control study approved by the Committee at the last meeting. He said the scope was being finalized, and Mr. Stead, from HEA, had been designated as the Project Engineer for the study, with support from Moe Aslam, ML&P, and Alice Mullens, CEA. He said the report would be finalized and returned to the O&D Subcommittee for action. Mr. Sieczkowski said that Bradley operations had been normal since the last Committee meeting. He said Mr. Stead would give the maintenance report. Mr. Sieczkowski said the next meeting of the O&D Subcommittee was scheduled for May 16, 1996. Mr. Stead said they were currently preparing for the scheduled outage at the end of the month. B. Construction List - Consideration and Action Referring to the March 28 letter from Mr. McCrohan to Mr. Stahr regarding Bradley construction funds and punchlist, Mr. Beardsley reviewed the outstanding items with the Committee. He said it was AEA's intention to identify the outstanding items as budget items and provide HEA an escrow account so they could complete the punchlist items and construction could be finalized. Mr. Beardsley briefly discussed the three items at the bottom, two of which related to outstanding issues with Brown & Root. Mr. Beardsley also provided an overview of the Analysis of Costs and Contributions. Mr. Sieczkowski responded to questions, and discussion was heard. Ms. Pease recommended that a final audit be conducted on the construction fund to ensure the balances shown on the report were accurate. Chairman Stahr concurred and proposed that the report be submitted to the Budget Subcommittee for review and recommendation regarding the advisability of conducting a final audit. Further discussion was heard regarding individual items, cost control methods, and contract procedures. MOTION: Mr. Kelly moved that the Committee approve the Bradley Lake Hydroelectric Project proposed final construction list dated 3/27/96 for a total of $2,598,958, which included 18 individual items and $212,000 in contingency funding, and that the Committee authorize the O&D Subcommittee to approve the 18 items, provided the actual cost did not exceed the cost set forth on the final construction list plus the allocated contingency funding for each item. Seconded by Mr. Bjornstad. Bradley Lake Project Management Committee Meeting Minutes Tuesday, April 2, 1996 Page 4 of 5 Mr. Carmony stated his opposition to the motion and the reasons therefore. Discussion was heard. The question was called, and a roll call vote was taken. The motion passed with one objection by Matanuska Electric Association. MOTION: Mr. Kelly moved that the Committee delegate to the Budget Subcommittee the task of reviewing the AEA close-out and making a recommendation to the Committee as to whether or not a final audit should be conducted. Seconded by Mr. Bjornstad. There being no discussion, a roll call vote was taken, and the motion passed unanimously. 8. INSURANCE SUBCOMMITTEE Mr. Beardsley said he was still awaiting a copy of the certificate of insurance on the aircraft from Mr. Stead for HEA. Mr. Stead confirmed that HEA had contacted Gwaltney & Gwaltney, and the insurance certificate would be forwarded. 9. OLD BUSINESS A. Spinning Reserves Update In Mr. Lovas' absence, Mr. Bjornstad read into the record Mr. Lovas' report from the ASCC meeting in Juneau that was held March 8, 1996. ASCC March 8, 1996 Meeting Tom Lovas As discussed at the ASCC meeting on March 8", the Reliability Criteria Committee remains at work on the 70% minimum responsive spin requirement. The committee’s role was clarified at that time, and will expand its work to develop monitoring and verification procedures and requirements. Meanwhile, the Alaska Intertie Operating Committee has recently begun an independent review of the RCC’s proposal. B. Agreements Status Mr. Beardsley reported that a meeting was scheduled for April 4, 1996, at 9:30 a.m. for the final effort to resolve the agreements. He said he was aware ML&P would be submitting comments. He said the objective was to deal with the substantive and wordsmithing issues, and to bring policy issues back to the PMC. He said it was his intention to resolve all issues for submission of a final draft to the PMC at the next Committee meeting. In response to questions, Mr. Beardsley elaborated on specific outstanding issues. C. Moose Mitigation This item was deleted under Item 4., Agenda Comments. 10. NEW BUSINESS Bradley Lake Project Management Committee Meeting Minutes Tuesday, April 2, 1996 Page 5 of 5 A. Approval of Legal Expenses and Other Expenses Mr. Carmony reported that the payment of $2,789.77 approved by the Committee at the last meeting had not been made, and they were taking steps to correct the problem and issue the check. Mr. Carmony reported that bills had been received from Ater, Wynne, Hewitt, Dodson & Skerritt in the amount of $5,052.09 for the months of January and February 1996. Mr. Carmony said he was concerned that the activities to which the billings related involved persons other than himself, and he was unable to request authorization of the expenditures because he had no knowledge whether they were valid or not. He suggested that the Committee determine a more appropriate method by which to review and approve the legal expenses. There was a consensus that this item would be tabled until the next meeting for further discussion of Mr. Carmony's request. 11. COMMITTEE MEMBER COMMENTS Chairman Stahr reported he had received a request for reconsideration from Mr. McCrohan regarding the sinking fund that the Board had previously rejected for funding from the budget. Mr. Stahr distributed copies of the letter from Mr. McCrohan dated 3/15/96, and discussion was heard. Chair Stahr asked the O&D Committee to review the list of future expenditures and then to turn it over to the Budget Subcommittee for their review and recommendation to the Board. 12; NEXT MEETING DATE The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for Tuesday, June 18, 1996, at 10:00 a.m., in the Commission Room of ML&P. 13. ADJOURNMENT MOTION: Mr. Bjornstad moved to adjourn. Seconded by Mr. Kelly. There being no objection and no further business of the Committee, the meeting was adjourned at 11:09 a.m. BY: ohn, Ss Tom Stahr, Chairman ATTEST: DEM Ca i Alaska Energy Authority, Secretary BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East 1st Avenue Anchorage, Alaska Tuesday, August 6, 1996 1:30 p.m. 1. CALL TO ORDER Chairman Tom Stahr called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 1:30 p.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2: ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Tom Stahr, Chairman Anchorage Municipal Light & Power Dave Calvert City of Seward Eugene Bjornstad, Vice Chairman Chugach Electric Association Wayne Carmony, Treasurer Matanuska Electric Association Don Stead Homer Electric Association Bradley Evans Golden Valley Electric Association Dennis McCrohan Alaska Energy Authority Others Present: Tim McConnell, Municipal Light & Power Moe Aslam, Municipal Light & Power Dan Beardsley, Alaska Energy Authority Stan Sieczkowski, Alaska Energy Authority Shauna Dean, Alaska Energy Authority Tom Lovas, Chugach Electric Association John S. Cooley, Chugach Electric Association Dora Gropp, Chugach Electric Association Norm Story, Homer Electric Association Mike Kelly, Golden Valley Electric Association Jim Hall, Matanuska Electric Association Bob Hufman, AEG&T Virgil Gillespie, Fairbanks Municipal Utility System Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt , Bradley Lake Proje=t Management Committee Meeting Minutes Tuesday, August 6, 1996 Page 2 of 6 a PUBLIC COMMENT None. 4. AGENDA COMMENTS There were no additions or corrections to the agenda, and they were adopted by unanimous consent. 5. APPROVAL OF MEETING MINUTES - APRIL 2, 1996 Mr. Stahr asked that an "e" be added to "therefor" in the first sentence on page 4 of 5. Mr. Bjornstad asked that the report he had read into the record in Mr. Lovas' absence under Agenda Item No. 9., Old Business, Item A., Spinning Reserves Update, be appended to and incorporated by reference into the April 2, 1996 minutes. There being no further additions or corrections, a roll call vote was taken, and the minutes were approved by unanimous consent as amended. . 6. BUDGET SUBCOMMITTEE REPORT In Ms. Pease's absence, Mr. Saxton distributed a written Budget Subcommittee report from the June 12th, 1996 meeting. He asked if there were any questions. Mr. Bjornstad asked if the Subcommittee had discussed the Chugach proposal on the budget adjustment. Mr. Saxton said he would pass this question along to Ms. Pease for a response. Mr. McCrohan asked if Mr. Peter Askums had presented a report yet. Mr. Saxton responded Mr. Askums had completed some preliminary work but had not yet presented a report. He said they planned to discuss the preliminary work during the RUG meeting today. 7. OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski reported the O&D Subcommittee had met the previous day, Monday, August 5, 1996, at the Bradley Lake Power Plant. Mr. Sieczkowski reported that the Martin River airstrip was now accessible for alternative landings. HEA staff had completed the road and low water crossings. Mr. Sieczkowski said the Martin River was continuing to change course and may be a problem in the future as the flow may cut off the end of the airstrip. He said HEA would continue to monitor the situation. Mr. Sieczkowski reported that the utilities were planning to clean out the fish water bypass intake at the dam, and plans were underway to pull the lake down for the work, which was scheduled to be completed in June 1997. He said CEA would coordinate documentation of the design parameters of the governor and control systems and verify the data, studies, and field tests. He said this task would be part of the system analysis construction funded project, which had been reviewed and approved by the O&D Subcommittee as part of the previously approved construction plans. Mr. Sieczkowski reported that the RFP for the governor response study requested by ML&P was out for bid, and responses were to be submitted this week. Evaluations and recommendations regarding the bids would be submitted to the O&D Subcommittee prior to award. ” Bradley Lake Project Management Committee Meeting Minutes Tuesday, August 6, 1996 Page 3 of 6 Mr. Sieczkowski said the O&D Subcommittee was still reviewing the renewal and replacement equipment scheduling and funding as requested by the Chair. He said this was a discussion item on the Subcommittee's next meeting agenda. Mr. Sieczkowski said the next meeting of the O&D Subcommittee was scheduled for Wednesday, October 2, 1996, at 10:00 a.m. at the AIDEA office in Anchorage. Mr. Sieczkowski asked Mr. Stead to present the operations and maintenance portion of the report. Mr. Stead said that since the last reporting period, they had completed a dual-unit outage for annual maintenance. During that outage, a problem had been encountered with loose pole stoppers. Fuji had gone to the site and inspected both units, prepared a report, and provided a repair plan. The problems with Unit 2 were not as serious as Unit 1. Unit 2 was placed back in service so the outage could be terminated, and the Unit 1 pole stoppers were repaired. All the pole stoppers would be tightened and repaired during the next annual maintenance outage. Mr. Stead reported that there had been a forced dual-unit outage on July 1 when a Zenor diode at the upper gate house shorted and failed, causing a solenoid valve to open, bleeding the oil supply off the hydraulic ram and causing the control gate on the power tunnel to close. When the gate was at 80% open, both units tripped, and the operator was dispatched to the upper gate works. When the operator saw that the gate was continuing to close, he opened the bypass around the gate and commenced troubleshooting. Both units had been restored approximately 10 hours later. Mr. Stead reported that during the Kenai blackout on July 18th, the units operated as designed, with the ring bus opening at 55 cycles. During the July 24th outage, Unit No. 1 tripped on an 86-GB relay, and the cause has not yet been determined. There were no other flags dropped at that time, and one unit continued to run. A. Balance of Construction Funds Mr. McCrohan distributed a report on bond counsel's opinion regarding disposition of the residual balances in the Bradley Lake Construction Fund. He said the audit was not yet available, and they were not requesting action at this time. He summarized the report for the Committee. He said two questions had been asked: (1) What would be the significance of adding to the work list? Mr. McCrohan noted that approximately $1,000,000 in additional items had already been added. Bond counsel had advised that as long as these were legitimate construction costs, the additional items and increased costs were acceptable. It was up to the Committee to determine the legitimacy of the additional construction costs. (2) Disposition of residual amounts. The bond resolution in §503 clearly stated the remaining money in the construction fund would be returned to the State of Alaska. However, item (3) allowed interest to accrue prior to and during construction and for such additional period of time as the Authority determined to be reasonably necessary for placing the project or any facility thereof into operation in accordance with the provisions. In addition, the Authority could make the determination that it was necessary to use a portion of the remaining amount in the construction fund to pay interest on the bonds for a reasonable period of time. Mr. McCrohan said there was no differentiation in the proportions of utility and State contributions in the bond resolution. He said once the O&D Subcommittee received the construction audit, they would present to the Committee their recommendations regarding the disposition of the remaining funds. Bradley Lake Project Management Committee Meeting Minutes Tuesday, August 6, 1996 Page 4 of 6 Mr. Saxton requested, and was granted, the opportunity to review bond counsel's opinion and discuss it with the utilities. B. HEA Construction Agreement Mr. Beardsley said a construction agreement had been submitted to and reviewed by HEA. HEA had provided comments based on their review, and a few points were still under discussion regarding budgeting. He felt those would be resolved within the next couple of weeks. No action was required by the Committee. 8. OLD BUSINESS A. Spinning Reserves Update Mr. Lovas reported that since the March meeting of the ASCC, the Reliability Criteria Committee had met a couple of times and had developed three areas of agreement with respect to proceeding with the proposal for spinning reserves to protect against largest unit losses. He said that was still 70% response of spin requirement as on-line reserve protection against load-shedding resulting from loss of the largest generating unit. There was a consensus of the RCC that verification requirements through dynamic system monitors or equivalent means should be investigated for each unit considered for carrying responsive reserve. An evaluation of the economic impact of modifying the reserve requirement from today's contractual arrangement to the 70% proposal would be needed in order to support implementation, along with evaluation of dynamic monitor installation costs. Mr. Lovas reported that specifications were being developed for monitoring equipment and locations, and work had commenced to investigate commonality of communications protocols and installation methods. He said work had also commenced to develop assumptions and criteria for the economic evaluation of the impact of changing the reserve computation. B. Agreements Status Mr. Saxton reported that he and Mr. Beardsley had sent out over the past several months a variety of agreements and related correspondence, and four agreements were ready for Committee approval at this time: (1) The Bradley Lake Dispatch Agreement between AEA and CEA was an existing document which required Committee approval of modifications that would bring it into compliance with the Master Operating Agreement. (2) The Bradley Lake Transmission Facilities Agreement separated out the maintenance of the Bradley Lake transmission facilities from the maintenance of the facility itself, work that HEA was currently performing and would continue to perform under the agreement. (3) The Bradley Lake Static VAR Compensation O&M Agreement, consisting of work to be performed by CEA. (4) An amendment to the Bradley Lake O&M Agreement, which outlined the segregation of the transmission maintenance from the O&M. He said meetings had been he'd to address the concerns of the various parties, and it was his and Mr. Beardsley's understanding that all concerns had been resolved. Bradley Lake Project Management Committee Meeting Minutes Tuesday, August 6, 1996 Page 5 of 6 MOTION: Mr. Bjornstad moved to approve the above-mentioned four agreements. Seconded by Mr. Story. Mr. Bjornstad noted that "of" should be inserted after the word "approval" in Section 9 on page 7 of the SVS O&M Agreement. There being no further corrections or discussion, a roll call vote was taken, and the motion passed unanimously. Mr. Saxton said the agreements now needed to be executed by AEA, HEA, and CEA, respectively, and finalized copies would be distributed to the Committee members. Mr. McConnell commended Mr. Beardsley for his work on this project. 9. NEW BUSINESS A. Approval of Legal Expenses and Other Expenses Mr. Carmony stated that the Committee had delegated review of the legal expenses to the Chair, and this item should be deleted from the agenda in future. B. Budget Adjustment - 2 CEA Line Items (-$105k) Mr. Bjornstad reported that a motion had been made and seconded during the Budget Subcommittee meeting to reduce the FY '97 budget by $105,000 from the amount previously budgeted for the Chugach dispatch and software maintenance. Though the minutes did not reflect the moticn had passed, Mr. Bjornstad said he assumed it had. It was confirmed that the motion had passed. MOTION: Mr. Bjornstad moved that the Committee approve the FY '97 budget reauction of $105,000. Seconded by Mr. Kelly. In response to Mr. McConnell's question, Mr. Bjornstad said this line item would be considered on a year-by-year basis. There being no further discussion, a roll call vote was taken, and the motion passed unanimously. 10. COMMITTEE MEMBER COMMENTS There were no Committee member comments. 11. NEXT MEETING DATE The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for Thursday, October 17, 1996, at 10:00 a.m., in the Commission Room of ML&P. Bradley Lake Project Management Committee Meeting Minutes Tuesday, August 6, 1996 Page 6 of 6 12. ADJOURNMENT MOTION: Mr. Bjornstad moved to adjourn. Seconded by Mr. Kelly. There being no objection and no further business of the Committee, the meeting was adjourned at 2:00 p.m. BY: Thomas R. Stafir, Chairman ATTEST: DOM Cc Co Al Alaska Energy Authority, Secretary SD:Executary/csc 1486bpmc.min 08/26/96 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES Commission Room Anchorage Municipal Light & Power 1200 East 1st Avenue Anchorage, Alaska Tuesday, November 19, 1996 10:00 a.m. ad CALL TO ORDER Vice Chairman Eugene Bjomstad called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:10 a.m. in the Commission Room of Anchorage Municipal Light & Power, 1200 East 1st Avenue, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by Shauna Dean. The following members were present, and a quorum was established: Eugene Bjomstad, Vice Chairman Chugach Electric Association Dave Calvert City of Seward Dan Beardsley Alaska Energy Authority Jim Hall Matanuska Electric Association Mike Kelly Golden Valley Electric Association Don Stead Homer Electric Association Tim McConnell Municipal Light & Power Others Present: Stan Sieczkowski, Alaska Energy Authority Shauna Dean, Alaska Energy Authority John S. Cooley, Chugach Electric Association Dora Gropp, Chugach Electric Association Norm Story, Homer Electric Association Hank Nikkels, Municipal Light & Power Mike Cunningham, Municipal Light & Power Bob Hufman, AEG&T Virgil Gillespie, Fairbanks Municipal Utility System Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt ‘Bradley Lake Project Management Committee Meeting Minutes Tuesday, November 19, 1996 Page 2 of 4 3. PUBLIC COMMENT None. 4. AGENDA COMMENTS There were no additions or corrections to the agenda, and it was adopted by unanimous consent. 5; APPROVAL OF MEETING MINUTES - AUGUST 6, 1996 MOTION: Mr. Calvert moved, seconded by Mr. Kelly, to approve the meeting minutes of August 6, 1996. The following correction was noted: Page 3, second line of the fourth paragraph - "cellunoid" should be corrected to "solenoid." There being no further additions or corrections, a roll call vote was taken, and the minutes were unanimously approved as amended. 6. BUDGET SUBCOMMITTEE REPORT On behalf of Ms. Pease, Mr. Cunningham said the Budget Subcommittee had not met recently, but a meeting was tentatively scheduled for December 4, 1996. le OPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski said the O&D Subcommittee had met the previous day, Monday, November 18, 1996. He reported that Bradley maintenance had been performed routinely, and the monthly reporting of the maintenance activities would be resumed. Mr. Stead had advised that the SCADA system seemed to be becoming a maintenance problem, and Homer Electric would monitor the system and recommend action in the future. Mr. Sieczkowski said the operations at Bradley had been routine, and the November 1 water allocation revision updates would be provided to the utilities by November 27. He noted that the actual water in-flows into the lake had been below the projections and statistical normal averages. Mr. Sieczkowski reported that the govemor response study had been delayed due to the high-dollar proposal that had been received, changes in the personnel evaluating the proposals, and the negotiations with the sole bidder on the RFP. The committee had been requested to resume negotiations with the sole bidder and/or to make a proposal to the O&D Subcommittee for action. Mr. Sieczkowski reported that the North Fork Bradley River flow monitoring equipment had been installed by the U.S.G.S. The permanent site was being developed by AEA, and Homer Electric was providing the SCADA modifications through its contractor, Shannon & Wilson. It was anticipated the project would be completed by the end of the summer of 1997. Bradley Lake Project Management Committee Meeting Minutes Tuesday, November 19, 1996 Page 3 of 4 The FERC Part 12 safety inspection had been completed and filed with FERC. No structural or operational deficiencies were noted, but the following minor maintenance recommendations were made: (1) Monitor the survey movement monuments on the dam face every five years; (2) Measure dam seepage annually; (3) Measure, record, and plot the spillway gallery drain flows; (4) Measure the penstock drains flow annually; and (5) Observe the dam and spillway conditions during the winter months by doing a monthly fly-over. Mr. Sieczkowski reported that the FAA had identified and noted the Martin River airstrip and the airstrip adjacent to the power house as private, and the paperwork was being completed. The renewal and replacement equipment list was being developed and was under review by the O&D Subcommittee. Upon completion, a recommendation would be made to the BPMC. Mr. Sieczkowski said that due to the excessive amount of beetle-killed timber, AEA had requested the State Division of Forestry to survey the area around the project facilities. The Division of Forestry had conducted the survey and advised that a potential problem existed. They had recommended that the danger trees be cleared away from the project structures. Mr. Sieczkowski said the O&D Subcommittee was currently evaluating the situation and was working with HEA and the Homer Fire Department to develop a plan to alleviate the fire hazard posed to the project facilities and personnel. In response to Mr. Hufman's question regarding the reason for the high maintenance costs on the SCADA system, Mr. Stead said most of the problems were related to the Bernoulli tape storage drives. Citing the August 6th meeting minutes, Mr. McConnell asked if the cause had been determined for the Unit No. 1 trip which had resulted in an outage on July 24th. Mr. Stead said although they had suspected vibration as the culprit, they were unable to determine the actual cause. 8. OLD BUSINESS A. Spinning Reserves Update Reporting for Mr. Lovas, Mr. Cooley said the Reliability Criteria Committee from ASCC had met and discussed spinning reserves, and they were in the process of performing an economic study to determine what it would cost to change the spinning reserve requirements. He reported that Mr. Stahr had provided an article regarding a study that had been conducted in Ireland recommending that an on-line study be conducted on a continuous basis which would determine the ending frequency when a machine dropped off, and spinning reserves could be adjusted on an ongoing basis based on this data. The RCC had agreed that this was an interesting idea, and that they Bradley Lake Project Management Committee Meeting Minutes Tuesday, November 19, 1996 Page 4 of 4 would review additional data to determine whether it would be viable to incorporate this concept into the new SCADA system. B. Construction Agreement Mr. Beardsley said he just wanted to confirm that the construction agreement between AEA and HEA was ready to be executed. He said he had distributed copies to all the parties about a month and a half ago, and he wanted to verify that there were no additional concerns or comments to be raised. He said AEA and HEA were agreeable to the form of the document, and if no objection was raised, the contract would be executed. There was no action required by the BPMC at this time. Brief discussion was heard regarding the history of the construction agreement. 9. NEW BUSINESS A. New Agenda Item for Next Meeting With respect to the previous item, Mr. Story noted that HEA had sent a letter te Mr. Stahr in August advising that HEA needed to be reimbursed for the installation charges for the transfer trip scheme in support of the Bradley project. He said these expenses had been paid by HEA on an ongoing basis since 1991, and the amount totaled approximately $173,000. He said he would compile the documentation, and this should be included as an agenda item for the next BPMC meeting. 10. COMMITTEE MEMBER COMMENTS There were no Committee member comments. A. Next Meeting Date The next regular meeting of the Bradley Lake Hydroelectric Project Management Committee was scheduled for Tuesday, January 14, 1997, at 10:00 a.m. in the Commission Room of ML&P. 12. © ADJOURNMENT There being no objection and no further business of the Committee, the meeting was adjourned at 10:25 a.m. vE aacath eee jornstad, Vice Ghairman ATTEST: Fv lp A~ Alaska Energy Authority, Secretary