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Home My WebLink AboutBPMC Meeting Weds, June 8, 2011BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES REGULAR MEETING (via electronic media at the Alaska Energy Authority’s Board Room) Anchorage, Alaska June 8, 2011 - 10:00 a.m. 1. CALL TO ORDER Chair Brad Evans called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Wednesday, June 8, 2011, from the AEA Boardroom, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by May Clark. The following members were present: John Foutz City of Seward Joe Griffith Matanuska Electric Association (teleconference) Brad Evans Chugach Electric Association Bob Day Homer Electric Association Henri Dale Golden Valley Electric Association Jim Posey Anchorage Municipal Light & Power Bryan Carey Alaska Energy Authority 3. PUBLIC ROLL CALL Mike Cunningham, CEA (teleconference) Burke Wick, CEA Rick Miller, AML&P Doug Hall, AML&P Brian Bjorkquist, Department of Law Kirk Gibson, McDowell Rackner & Gibson PC (teleconference) Linda MacMillan, AEA Karin St. Clair, AEA May Clark, AEA 4. PUBLIC COMMENT There were no public comments. 5: AGENDA COMMENTS / MOTION FOR APPROVAL The agenda was approved with no objections. 6. APPROVAL OF MEETING MINUTES — March 14, 2011 The March 14, 2011 meeting minutes were unanimously approved. Page 1 of 4 BPMC Minutes 6/8/2011 7. NEW BUSINESS 7A. Authorize refund of $360,000 representing estimated FY11 Operating Budget Surplus The operating surplus is composed of higher interest income and lower FERC land use fees than budgeted, offset by anticipated cost of Dave’s Creek cooling system repair. MOTION: Mr. Day moved that the Bradley Lake Project Management Committee approve the attached amended FY11 Budget and refund the $360,000 reduction in budget to the utilities by June 30, 2011. Seconded by Mr. Carey. A roll call vote was taken: City of Seward: Yes Matanuska Electric Association: Yes Chugach Electric Association: Yes Homer Electric Association: Yes Golden Valley Electric Association: Yes Anchorage Municipal Light & Power: Yes Alaska Energy Authority: Yes The motion passed unanimously. 7B. Update on Bradley Property Insurance Renewal AEA received the proposal for the FY12 Bradley property and equipment insurance from ARECA. The expiring premium for this year is $511,000, renewing premium for next year is $473,000 under the same policy as before. Earthquake coverage is $50M with Zurich being the secondary insurer. The BPMC had no questions. 7C. Update on Battle Creek Diversion Project AEA met with resource agencies on April 21, 2011, and they appear positive to the Battle Creek diversion and have few fish or terrestrial issues. We are moving forward. The BPMC has a $500K Renewable Energy Fund (REF) matching grant request in and we await the Governor's actions on the bill. This year we will be performing our second year of fish surveys. A fish survey was done at low water in May and there were no fish found in the beaver pond following the winter. A terrestrial survey will be requested by FERC which will consist of a helicopter search for eagle nests. Bear and moose are the main animals in the area. We are tentatively planning a public meeting in Homer at the end of July. In regards to fisheries, if all water is diverted at the 2,000 foot level, the difference in the water level at tidewater will be .1 or .2 feet; so the resource agencies do not believe this to be controversial. Environmental flow will be minimal if we have to install a valve. R&M will perform geological survey work this summer; rock types are already known from original permitting, to be followed up this winter with conceptual design which would be brought to 65% completion. We will begin the formal preliminary permit process with FERC, which we should receive in 2013 or early 2014. Mr. Dale asked what the $15M legislative request for the diversion was based on. Mr. Carey said that number was requested by ARCTEC. Chair Evans added that amount was based on 50% match funding of the latest construction estimate. Mr. Carey said when the conceptual 65% design is Page 2 of 4 BPMC Minutes 6/8/2011 completed later this year, another cost estimate will be written. For the FY ending in June we have spent $300,000 on this project. We are also expecting $500,000 from the REF grant which will be matched by the BPMC. We will verify this summer the ditch approach versus tunnel. An update on terrestrial and aquatic surveys will be provided at the end of summer, but no cost estimate updates will be done. R&M prepared a document in March that describes the ditch work alignment and percentages of slope and drainages, which will be provided to the BPMC. 7D. Updated on FERC Land Use Fees Mr. Gibson provided an update on FERC Notice of Inquiry (“NOI”) regarding land use fees. The members of the Group that the BPMC joined to submit comments in the FERC proceeding regarding FERC’s development of a new methodology for determining hydro project land use fees now represents about one-third of the total federal acreage that will be subject to those fees. The Group’s counsel has produced a comprehensive land use fee calculation methodology proposal which was submitted to FERC this month. It’s unknown how long the process will take. The primary thrust of the Group’s proposal points out that hydro project land is almost always not suitable for agriculture or urban type uses, which makes FERC’s use of unadjusted agriculture land values or urban land values inappropriate. A winter photo of the project taken at a recent FERC inspection make a strong case for Bradley Lake’s limited potential land uses. The proposal also points out that lands surrounding a hydro project generally can be, and usually are, used for exactly the same purposes that existed before the project was built, and that the public is only excluded from a small portion of the project lands for safety or security reasons. Finding a suitable land-value index for FERC to use as a base for its fee calculations has proved to be difficult. The proposal recommends taking the National Agriculture Statistical Service (NASS) estimates of land values for each project's lands and reducing them by 40 percent would be a fair valuation of methodology and can be periodically updated. Previously, FERC methodology used Anchorage land values for Bradley Lake lands. The final piece of the proposal is to adopt a single “encumbrance factor” of 30 percent for transmission and non-transmission land uses. The encumbrance factor is designed to reflect the reduced potential usage of transmission rights of way. The Bradley Lake Project’s share of the Group’s fees will total about $4,200, of which $1,460 has already been invoiced. Counsel will provide the BPMC with an accurate estimate of what the costs are likely to be under the new calculation, which will probably be the same or better as before. Counsel’s analysis of the Group’s proposal and the results it yields shows that it provides reasonable and fair results for the Bradley Lake Project. 8. COMMITTEE REPORTS/COMMENTS 8A. Operator’s Report - Bob Day Water inflow projection is poor, down about 15-20% from normal water year. Exciter equipment and design was finalized with Basler and delivery is expected late July. Unit maintenance outages have been rescheduled to October due to delays in new excitation equipment delivery. The final draft “Dam Safety & Surveillance Monitoring Plan” was completed by R&M and Hatch and was sent to AEA for review, then on to FERC for review. ROW clearing work from Bradley Lake to Bradley Junction was completed. CEA replaced metering recorders. Gate hydraulic system nitrogen accumulators in the power tunnel gate house were charged. New gas monitoring systems was installed in the PT gate house. Installed public boat dock and repaired hinge on the dock. HDR continues work at Battle Creek. Penstock testing was done on June 6. Page 3 of 4 BPMC Minutes 6/8/2011 Diversion inspections are scheduled for June 13. USGS gage testing will be done in early June. FERC Part 12 inspection will be conducted in mid-July. HEA personnel are moving around and one has gone to work on the slope. We offer our condolences to the family of Ashley Udelhoven, a former HEA employee and colleague. Senator Murkowski may be visiting Bradley Lake in the near future. O&D annual site visit will be held on June 9 and the utilities have an open invitation to visit the project. 8B. Comments Chair Evans suggested discussion on a formal R&R (Repairs & Replacement) Fund, perhaps 10 percent of the original project construction cost, which would contain more funds than our current R&C fund. This subject should be revisited every decade or so in terms of how the underlying conditions change around the necessity for an R&R fund. The BPMC needs to have a discussion to decide or not to do this and should think about this before the next meeting. Mr. Posey suggested that perhaps the yearly overage refunds could be put into this fund. Ms. MacMillan said she thought the original bond covenant had a provision for an R&R fund that the utilities in the past had decided not to fund. She will look into the bond paperwork and report back to the Committee. 9. NEXT MEETING DATE The next meeting will be at the call of the Chair. 10. ADJOURNMENT The meeting adjourned at 10:39 a.m. BY: “Exeter. rad Evans, Chair fo ATTEST: i Alaska Energy ority, Secretary Page 4 of 4 BPMC Minutes 6/8/2011 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES REGULAR MEETING (via electronic media at the Alaska Energy Authority’s Board Room) Anchorage, Alaska June 8, 2011 - 10:00 a.m. 1. CALL TO ORDER Chair Brad Evans called the regular meeting of the Bradley Lake Hydroelectric Management Committee to order at 10:00 a.m. on Wednesday, June 8, 2011, from Boardroom, Anchorage, Alaska, to conduct the business of the Committee per the public notice. 2. ROLL CALL Roll was called by May Clark. The following members were present: John Foutz City of Seward Joe Griffith Matanuska Electric Association (teleconference) Brad Evans Chugach Electric Association Bob Day Homer Electric Association Henri Dale Golden Valley Electric Association \ Jim Posey. Anchorage Municipal Light & Power Bryan Carey Alaska Energy Authority 3. PUBLIC ROLL CALL Mike Cunningham, CEA (teleconference) Burke Wick, CEA Rick Miller, AML&P Doug Hall, AML&P Brian Bjorkquist, Department of Law Kirk Gibson, McDowell Rackner & Gibson PC (teleconference) Linda MacMillan, AEA Karin St. Clair, AEA May Clark, AEA 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS / MOTION FOR APPROVAL The agenda was approved with no objections. 6. APPROVAL OF MEETING MINUTES — March 14, 2011 The March 14, 2017 meeting minutes were approved unanimously. Page 1 of 4 BPMC Minutes 6/8/2011 7 NEW BUSINESS 7A. Authorize refund of $360,000 representing estimated FY11 Operating Budget Surplus The refund is composed of FERC land use fees, offset for unexpected savings to repairs to Daves Creek cooling system, and interest income. MOTION: Mr. Day moved that the Bradley Lake Project Management Committee approve the attached amended FY 11 Budget and refund the $360,000 reduction in budget to the utilities by June 30, 2011. Seconded by Mr. Carey. A roll call vote was taken: City of Seward: Yes Matanuska Electric Association: Yes Chugach Electric Association: Yes Homer Electric Association: Yes Golden Valley Electric Association: Yes Anchorage Municipal Light & Power: Yes Alaska Energy Authority: Yes The motion passed unanimously. 7B. Update on Bradley Property Insurance Renewal AEA received the proposal for the FY12 Bradley property and equipment insurance from ARECA The expiring premiums for this year is $511,000, renewing premiums for next year is $473,000 under the same policy as before. Earthquake coverage is $50 M with Zurich being the secondary insurer. The BPMC had no questions. 7C. Update on Battle Creek Diversion Project AEA met with resource agencies on April 21, 2011 and they appear positive to the Battle Creek diversion and have few fish or terrestrial issues. We are moving forward. The BPMC has a $500K REF matching grant request in and we await the Governor's actions on the bill. This year ~~~ we will be performing our second year of fish surveys. A fish survey was done at low water in jay and there were no fish found in the beaver pond following the winter. A terrestrial survey requested by FERC which will consist of a helicopter search for eagle nests. Bear id moose are the main animals in the area. We are tentatively planning a public meeting in omer at the end of July. In regards to fisheries, if all water is diverted at the 2,000 foot level, the difference in the water level at tidewater will be .1 or .2 feet; so the resource agencies do not believe this to be controversial. Environmental flow will be minimal if we have to install a valve. R&M will perform geological survey work this summer; rock types are already known from original permitting, to be followed up this winter with conceptual design which would be brought to 65% completion. We will begin the formal preliminary permit process with FERC, which we should receive in 2013 or early 2014. Mr. Dale asked what the $15 M legislative request for the diversion was based. Mr. Carey said that number was requested by ARCTEC. Chair Evans added that amount was based on 50% match funding of the latest construction estimate. Mr. Carey said when the conceptual 65% design is completed later this year, another cost estimate Pe Page 2 of 4 BPMC Minutes 6/8/2011 will be written. For the FY ending in June we have spent $300,000 on this project. We are also expecting $500,000 from the Renewable Energy Fund grant which will be matched by the BPMC. We will verify this summer the ditch approach versus tunnel. An update on terrestrial and aquatic surveys will be provided at the end of summer, but no cost estimate updates will be done. R&M prepared a document in March that describes the ditch work alignment and percentages of slope and drainages, which will be provided to the BPMC. 7D. Updated on FERC Land Use Fees Mr. Gibson provided an update on FERC Notice of Inquiry (“NOI”) regarding land use fees. The members of the Group that the BPMC joined to submit comments in the FERC proceeding regarding FERC’s development of a new methodology for determining hydro project land use fees now represents about one-third of the total federal acreage that will be subject to those fees. The Group’s counsel has produced a comprehensive land use fee calculation methodology proposal which was submitted to FERC this month. It’s unknown how long the process will take. The primary thrust of the Group’s proposal points out that hydro project land is almost always not suitable for agriculture or urban type uses, which makes FERC’s use of unadjusted agriculture land values or urban land values inappropriate. A winter photo of the project taken at a recent FERC inspection make a strong case for Bradley Lake’s limited potential land uses. The proposal also points out that lands surrounding a hydro project generally can be, and usually are, used for exactly the same purposes that existed before the project was built, and that the public is only excluded from a small portion of the project lands for safety or security reasons. Finding a suitable land-value index for the FERC to use as a base for its fee calculations has proved to be difficult. The proposal recommends taking the National Agriculture Statistical Service (NASS) estimates of land values for each project's lands and reducing them by 40 percent would be a fair valuation of methodology and can be periodically updated. Previously, FERC methodology used Anchorage land values for Bradley Lake lands. The final piece of the proposal is to adopt a single “encumbrance factor’ of 30 percent for transmission and non-transmission land uses. The encumbrance factor is designed to reflect the reduced potential usage of transmission rights of way. The Bradley Lake Project's share of the Group’s fees will total about $4,200, of which $1,460 has already been invoiced. Counsel will provide the BPMC with an accurate estimate of what the costs are likely to be under the new calculation, which will probably be the same or better as before. Counsel’s analysis of the Group’s proposal and the results it yields shows that it provides reasonable and fair results for the Bradley Lake Project. 8. COMMITTEE REPORTS/COMMENTS A. Operator’s Report — Bob Day Water inflow projection is poor, down about 15-20% from normal water year. Exciter equipment and design was finalized with Basler and delivery is expected late July. Unit maintenance outages have been rescheduled to October due to delays in new excitation equipment delivery. The final draft “Dam Safety & Surveillance Monitoring Plan” was completed by R&M and Hatch and was sent to AEA for review, then on to FERC for review. ROW clearing work from Bradley Lake to Bradley Junction was completed. CEA replaced metering recorders. Gate hydraulic system nitrogen accumulators in the power tunnel gate house were charged. New gas monitoring systems was installed in the PT gate house. Installed public boat dock and repaired hinge on the dock. HDR continues work at Battle Creek. Penstock testing was done on June 6. Diversion inspections are scheduled for June 13. USGS gage testing will be done in early June. Page 3 of 4 BPMC Minutes 6/8/2011 FERC Part 12 inspection will be conducted in mid-July. HEA personnel are moving around and one has gone to work on the slope. We offer our condolences to the family of Ashley Udelhoven, a former HEA employee and colleague. Senator Murkowski may be visiting Bradley Lake in the near future. O&D annual site visit will be held on June 9 and the utilities have an open invitation to visit the project. B. Comments Chair Evans suggested discussion on a formal R&R (Repairs & Replacement) Fund, perhaps 10 percent of the original project construction cost, which would contain more funds than our current R&C fund. This subject should be revisited every decade or so in terms of how the underlying conditions change around the necessity for an R&R fund. The BPMC needs to have a discussion to decide or not to do this and should think about this before the next meeting. Mr. Posey suggested that perhaps the yearly overage refunds could be put into this fund. Ms. MacMillan said she thought the original bond covenant had a provision for an R&R fund that the utilities in the past had decided not to fund. She will look into the bond paperwork and report back to the Committee. 8. NEXT MEETING DATE The next meeting will be at the call of the Chair. 9. ADJOURNMENT The meeting adjourned at 10:39 a.m. BY: Brad Evans, Chair ATTEST: Alaska Energy Authority, Secretary Page 4 of 4 BPMC Minutes 6/8/2011 May Clark From: Linda MacMillan Sent: Tuesday, June 14, 2011 9:33 AM To: May Clark; Bryan Carey Ce: Shauna Howell Subject: RE: BPMC DRAFT June 8th Meeting Minutes Attached May, Below is suggested wording for explaining the refund. Linda The operating surplus is composed of higher interest income and lower FERC land use fees than budgeted, offset by unanticipated cost of Dave’s Creek cooling system repair. From: May Clark Sent: Friday, June 10, 2011 3:54 PM To: Bryan Carey; Linda MacMillan Cc: Shauna Howell Subject: BPMC DRAFT June 8th Meeting Minutes Attached Importance: High Please review and make changes/corrections to the attached draft minutes. Thanks! May Clark Administrative Assistant ALASKA ENERGY AUTHORITY mclark@aidea.org PH: 907-771-3074 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES REGULAR MEETING (via electronic media at the Alaska Energy Authority's Board Room) Anchorage, Alaska June 8, 2011 - 10:00 a.m. 3 CALL TO ORDER Chair Brad Evans called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Wednesday, June 8, 2011, from the AEA Boardroom, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. ee ROLL CALL Roll was called by May Clark. The following members were present: John Foutz City of Seward Joe Griffith Matanuska Electric Association (teleconference) Brad Evans Chugach Electric Association Bob Day Homer Electric Association Henri Dale Golden Valley Electric Association Jim Posey Anchorage Municipal Light & Power Bryan Carey Alaska Energy Authority 3. PUBLIC ROLL CALL Mike Cunningham, CEA (teleconference) Burke Wick, CEA Rick Miller, AML&P Doug Hall, AML&P Brian Bjorkquist, Department of Law Kirk Gibson, McDowell Rackner & Gibson PC (teleconference) Linda MacMillan, AEA Karin St. Clair, AEA May Clark, AEA 4. PUBLIC COMMENT There were no public comments. 5: AGENDA COMMENTS / MOTION FOR APPROVAL The agenda was approved with no objections. 6. APPROVAL OF MEETING MINUTES — March 14, 2011 The March 14, 2011 meeting minutes were approved unanimously. Page 1 of 4 BPMC Minutes 6/8/2011 a NEW BUSINESS 7A. Authorize refund of $360,000 representing estimated FY11 Operating Budget Surplus The refund is composed of FERC land use fees, offset for unexpected savings to repairs to Daves Creek cooling system, and interest income. MOTION: Mr. Day moved that the Bradley Lake Project Management Committee approve the attached amended FY 11 Budget and refund the $360,000 reduction in budget to the utilities by June 30, 2011. Seconded by Mr. Carey. A roll call vote was taken: City of Seward: Yes Matanuska Electric Association: Yes Chugach Electric Association: Yes Homer Electric Association: Yes Golden Valley Electric Association: Yes Anchorage Municipal Light & Power: Yes Alaska Energy Authority: Yes The motion passed unanimously. 7B. Update on Bradley Property Insurance Renewal AEA received the proposal for the FY12 Bradley property and equipment insurance from ARECA The expiring premiums for this year is $511,000, renewing premiums for next year is $473,000 under the same policy as before. Earthquake coverage is $50 M with Zurich being the secondary insurer. The BPMC had no questions. 7C. Update on Battle Creek Diversion Project AEA met with resource agencies on April 21, 2011 and they appear positive to the Battle Creek diversion and have few fish or terrestrial issues. We are moving forward. The BPMC has a $500K REF matching grant request in and we await the Governor's actions on the bill. This year we will be performing our second year of fish surveys. A fish survey was done at low water in May and there were no fish found in the beaver pond following the winter. A terrestrial survey has been requested by FERC which will consist of a helicopter search for eagle nests. Bear and moose are the main animals in the area. We are tentatively planning a public meeting in Homer at the end of July. In regards to fisheries, if all water is diverted at the 2,000 foot level, the difference in the water level at tidewater will be .1 or .2 feet; so the resource agencies do not believe this to be controversial. Environmental flow will be minimal if we have to install a valve. R&M will perform geological survey work this summer; rock types are already known from original permitting, to be followed up this winter with conceptual design which would be brought to 65% completion. We will begin the formal preliminary permit process with FERC, which we should receive in 2013 or early 2014. Mr. Dale asked what the $15 M legislative request for the diversion was based. Mr. Carey said that number was requested by ARCTEC. Chair Evans added that amount was based on 50% match funding of the latest construction estimate. Mr. Carey said when the conceptual 65% design is completed later this year, another cost estimate Page 2 of 4 BPMC Minutes 6/8/2011 will be written. For the FY ending in June we have spent $300,000 on this project. We are also expecting $500,000 from the Renewable Energy Fund grant which will be matched by the BPMC. We will verify this summer the ditch approach versus tunnel. An update on terrestrial and aquatic surveys will be provided at the end of summer, but no cost estimate updates will be done. R&M prepared a document in March that describes the ditch work alignment and percentages of slope and drainages, which will be provided to the BPMC. 7D. Updated on FERC Land Use Fees Mr. Gibson provided an update on FERC Notice of Inquiry (“NOI”) regarding land use fees. The members of the Group that the BPMC joined to submit comments in the FERC proceeding regarding FERC’s development of a new methodology for determining hydro project land use fees now represents about one-third of the total federal acreage that will be subject to those fees. The Group’s counsel has produced a comprehensive land use fee calculation methodology proposal which was submitted to FERC this month. It’s unknown how long the process will take. The primary thrust of the Group’s proposal points out that hydro project land is almost always not suitable for agriculture or urban type uses, which makes FERC’s use of unadjusted agriculture land values or urban land values inappropriate. A winter photo of the project taken at a recent FERC inspection make a strong case for Bradley Lake’s limited potential land uses. The proposal also points out that lands surrounding a hydro project generally can be, and usually are, used for exactly the same purposes that existed before the project was built, and that the public is only excluded from a small portion of the project lands for safety or security reasons. Finding a suitable land-value index for the FERC to use as a base for its fee calculations has proved to be difficult. The proposal recommends taking the National Agriculture Statistical Service (NASS) estimates of land values for each project's lands and reducing them by 40 percent would be a fair valuation of methodology and can be periodically updated. Previously, FERC methodology used Anchorage land values for Bradley Lake lands. The final piece of the proposal is to adopt a single “encumbrance factor” of 30 percent for transmission and non-transmission land uses. The encumbrance factor is designed to reflect the reduced potential usage of transmission rights of way. The Bradley Lake Project's share of the Group’s fees will total about $4,200, of which $1,460 has already been invoiced. Counsel will provide the BPMC with an accurate estimate of what the costs are likely to be under the new calculation, which will probably be the same or better as before. Counsel's analysis of the Group’s proposal and the results it yields shows that it provides reasonable and fair results for the Bradley Lake Project. 8. COMMITTEE REPORTS/COMMENTS A. Operator’s Report — Bob Day Water inflow projection is poor, down about 15-20% from normal water year. Exciter equipment and design was finalized with Basler and delivery is expected late July. Unit maintenance outages have been rescheduled to October due to delays in new excitation equipment delivery. The final draft “Dam Safety & Surveillance Monitoring Plan” was completed by R&M and Hatch and was sent to AEA for review, then on to FERC for review. ROW clearing work from Bradley Lake to Bradley Junction was completed. CEA replaced metering recorders. Gate hydraulic system nitrogen accumulators in the power tunnel gate house were charged. New gas monitoring systems was installed in the PT gate house. Installed public boat dock and repaired hinge on the dock. HDR continues work at Battle Creek. Penstock testing was done on June 6. Diversion inspections are scheduled for June 13. USGS gage testing will be done in early June. Page 3 of 4 BPMC Minutes 6/8/2011 a * . FERC Part 12 inspection will be conducted in mid-July. HEA personnel are moving around and one has gone to work on the slope. We offer our condolences to the family of Ashley Udelhoven, a former HEA employee and colleague. Senator Murkowski may be visiting Bradley Lake in the near future. O&D annual site visit will be held on June 9 and the utilities have an open invitation to visit the project. B. Comments Chair Evans suggested discussion on a formal R&R (Repairs & Replacement) Fund, perhaps 10 percent of the original project construction cost, which would contain more funds than our current R&C fund. This subject should be revisited every decade or so in terms of how the underlying conditions change around the necessity for an R&R fund. The BPMC needs to have a discussion to decide or not to do this and should think about this before the next meeting. Mr. Posey suggested that perhaps the yearly overage refunds could be put into this fund. Ms. MacMillan said she thought the original bond covenant had a provision for an R&R fund that the utilities in the past had decided not to fund. She will look into the bond paperwork and report back to the Committee. 8. NEXT MEETING DATE The next meeting will be at the call of the Chair. 9. ADJOURNMENT The meeting adjourned at 10:39 a.m. BY: Brad Evans, Chair ATTEST: Alaska Energy Authority, Secretary Page 4 of 4 BPMC Minutes 6/8/2011 Ww ok "IDEN. /= ALASKA Alaska Industrial Development Ke Export Authority BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Wednesday, June 8, 2011 — 10:00 a.m. (via electronic media at the Alaska Energy Authority's Board Room — 813 West Northern Lights Boulevard, Anchorage, AK) 1. CALL TO ORDER Evans 2 ROLL CALL (for Committee members) 3. PUBLIC ROLL CALL (for all others present) 4. PUBLIC COMMENT §. AGENDA COMMENTS / MOTION FOR APPROVAL 6. APPROVAL OF MEETING MINUTES — March 14, 2011 7. NEW BUSINESS A. Authorize refund of $360,000 representing estimated FY11 Operating budget surplus (Action Item) Cunningham B. Update on Bradley property insurance renewal Carey C. Update on Battle Creek Diversion project Carey D. Update on FERC land use fees Gibson 8. COMMITTEE REPORTS / COMMENTS A. Operators Report Day B. Next Meeting Date Evans 9. ADJOURNMENT 813 West Northern Lights Boulevard * Anchorage, Alaska 99503 www.aidea.org ¢ 907/771-3000 * FAX 907/771-3044 ® Toll Free (Alaska Only) 888/300-8534 * www.akenergyauthority.org BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES REGULAR MEETING (via electronic media at the Alaska Energy Authority’s Board Room) Anchorage, Alaska March 14, 2011 - 10:00 a.m. 1. CALL TO ORDER Chair Brad Evans called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. on Monday, March 14, 2011, from the AEA Boardroom, Anchorage, Alaska, to conduct the business of the Committee per the agenda and public notice. 2. ROLL CALL Roll was called by May Clark. The following members were present: Joe Griffith Matanuska Electric Association (teleconference) Brad Evans Chugach Electric Association Brad Janorschke Homer Electric Association Brian Newton Golden Valley Electric Association (teleconference) Doug Hall Anchorage Municipal Light & Power Bryan Carey Alaska Energy Authority 3. PUBLIC ROLL CALL Mike Cunningham, CEA (teleconference) Bob Day, HEA Burke Wick, CEA Henri Dale, GVEA Rick Miller, AML&P Brian Bjorkquist, Department of Law (teleconference) Kirk Gibson, McDowell Rackner & Gibson PC (teleconference) Linda MacMillan, AEA Christel Petty, AEA Judy Bradshaw, AEA May Clark, AEA 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS / MOTION FOR APPROVAL Operator's Report, to be presented by Mr. Kingrey, was added to the agenda as Item 7F with no objections. Page 1 of 5 BPMC Minutes 3/14/2011 6. APPROVAL OF MEETING MINUTES June 3, 2010, September 14, 2010 and December 29, 2010 The meeting minutes were approved with the following corrections to the June 3, 2010 minutes: Page 4, 8A re: Middle Fork flows, should read: “to request flow deviations...” Page 6, 8C: the Manufacturer, written as Sweetwater should be “Swede Water” te NEW BUSINESS 7A. Battle Creek Update (Bryan Carey) Mr. Carey referenced the R&M March 8, 2011 letter regarding preliminary feasibility study for capturing Upper Battle Creek Drainage Basin/Potential Diversions. The tunnel method will cost about $50M, however, the ditch option would be less costly and R&M came up with a cost estimate using 30% contingency at about $31M. The Stone & Webster calculated flows in the Preliminary Feasibility Study were higher than measured by USGS. We installed the gauge last year, but we don’t have the high summer flows yet. Diverting 100% flow would be around 44,000 acre feet and diverting 80% flow during summer is about 36,000 acre feet MWh. This year the flows may be low due to snowmelt. Snow-Water equivalent at Nuka glacier is about 65% of normal. We will meet with the resource agencies next month to discuss specific environmental flows. We'd like to divert 80% or more of the flow. If they counter with a 50% conceptual flow offer, we need to decide how to proceed. If they conceptually agree to a diversion of around 80%, then we will continue. We hope to have this issue resolved within the next month. USFWS and NMFS tended to let Fish & Game take the lead on this matter. This would be a non-capacity amendment to the Bradley license and would not require an Environmental Impact Statement, but will require an Environmental Assessment. Jim Thrall has done a lot of the environmental compliance work. One year ago it was estimated that the licensing and permitting costs will be about $2.5M. The winter coho habitat is the most important to the resource agencies. Diversion would not occur during the winter and the flow would remain the same. We believe that State DNR owns the land, it was transferred to DNR from BLM; therefore, no additional FERC land use fees would be required. We may also be able to improve the habitat by using the old Martin River gravel pits which are now flooded. There’s an existing small diversion structure on Battle Creek which is included in the Bradley license. The pending grants were discussed. One has been applied through ARCTEC and the other that CEA applied for on behalf of the BPMC in the State’s Renewable Energy Fund (REF). Mr. Hall pointed out that (Mr. Posey requested) we not proceed with additional funding until the REF monies are granted. We should know within the next six weeks. Mr. Griffith suggested the BPMC write a letter of support for the ARCTEC funding, inasmuch as the REF request appears to be in good standing. Chair Evans will research this stating a letter of support signed by the BPMC participants may be in order. 7B. Approve FY12 Operating Budget Ms. MacMillan stated the budget was approved by the Budget & Finance committee and that the O&D (Operations & Development) Committee may ask for changes to the recommendations. The overall FY12 budget will show a decrease of about $1.2M due to FERC land use fees, Series 5 bond refunding and non R&C capital purchases recommended by the Budget & Finance Committee. The budget included $1,000,000 for Battle Creek feasibility studies to be paid one half by the utilities and one half by a matching grant from AEA Renewable Energy fund. If the grant is not awarded, then the budget will be amended to Page 2 of 5 BPMC Minutes 3/14/2011 remove that item from the R&C portion of the budget. The large capital projects to be financed over four years are SCADA and plant controls, Battle Creek feasibility and replacing the fire alarm system. Mr. Janorschke asked why the Operations and Development committee budget recommendations were modified by the Budget and Finance committee. He also inquired about removal of the helicopter pad repairs since it is a safety matter. Mr. Cunningham said the committee modified recommendations in Schedule A-1, which was originally proposed at $815,000. The finance committee was concerned when seeing a trend over the last three years of significant increases each year. They requested Mr. Day to review and prioritize each of the items in order to level out the annual expenditures. Mr. Day said the Operations & Development committee made their recommendations for capital expenditures based on long range plan (30-50 years) for repairs and replacement. Many of the items proposed for FY12 were small capital repairs that were put into Schedule A-1 by the finance committee, rather than in the R&C fund. The BPMC approved seven items that the budget subcommittee removed, totaling $253,000. The BPMC decided to approve the budget as proposed and requested the O&D Committee to meet with the Budget & Finance committee to determine if an amended budget is required to put the items back. MOTION: Mr. Griffith moved that the Bradley Lake Project Management Committee approve the fiscal year 2012 Operating & Capital Budget as presented. Seconded by Mr. Newton. A roll call vote was taken: City of Seward: (absent) Matanuska Electric Association: Yes Chugach Electric Association: Yes Homer Electric Association: Yes Golden Valley Electric Association: Yes Anchorage Municipal Light & Power: Yes Alaska Energy Authority: Yes The motion unanimously passed. 7C. Authorize refund to utilities of FY09 and FY10 overpaid FERC land use fees Mr. Gibson suggested and the Chair agreed to moving Item 7E to this point of the meeting and combining the same subject discussion. There were no objections. In February, the DC Circuit Court ruled in favor of the group that the BPMC joined with 15 other hydro facilities (the group now represents 35% of all federal acres subject to FERC) to protest FERC’s implementation of increased land use fees. This determination resulted in a refund of $190,000 to the BPMC utilities and savings over three years of $1.2M. In March, FERC adopted a more open approach to developing new methodology, by issuing an Notice of Intent before issuing a Notice of Proposed Rulemaking, which will hopefully allow us a chance to help shape FERC’s methodology proposal in the early stages — deviating from the original process from the USFS on how to value land. Although the process will be long, this is the first time Page 3 of 5 BPNC Minutes 3/14/2011 rulemaking will be of benefit to the BPMC and we need to think about the new methodology. Until this is finished, FERC will be calculating the annual fees according to the 2008 fee schedule. The budget for this legal effort was about $50,000. Previously the BPMC has paid 10% of the bills, but will now pay about 3.69% now that the larger utilities will pay a greater share of the costs, agreed by them in February. Since the last meeting we received two bills but should still be under the additional $20K authorized by the BPMC. After a discussion on how the funds should be refunded to the utilities, the motion was amended as follows: MOTION: Mr. Janorschke moved that the Bradley Lake Project Management Committee approve refund of the excess FERC land use fee paid in FY09 and FY10 as received to the participating utilities. Seconded by Mr. Hall. A roll call vote was taken on the amended motion: City of Seward: (absent) Matanuska Electric Association: Yes Chugach Electric Association: Yes Homer Electric Association: Yes Golden Valley Electric Association: Yes Anchorage Municipal Light & Power: Yes Alaska Energy Authority: Yes The motion unanimously passed as amended. 7D. Authorize renewal option for audit services from Swalling & Associates Mr. Cunningham stated the finance committee recommends approval of this item and the total fee increase amounts to $325/year, with a total contract amount of $14,000. MOTION: Mr. Janorschke moved that the Bradley Lake Project Management Committee approve a one year renewal of the contract with Swalling and Associates for audit services and also provide 2.5% audit fee increase per 2010 CPI index for Anchorage. Seconded by Mr. Newton. A roll call vote was taken: City of Seward: (absent) Matanuska Electric Association: Yes Chugach Electric Association: Yes Homer Electric Association: Yes Golden Valley Electric Association: Yes Anchorage Municipal Light & Power: Yes Alaska Energy Authority: Yes The motion unanimously passed. 7E. FERC Land Use Fees Update -— combined with Item 7C. There were no questions nor objections. Page 4 of 5 BPMC Minutes 3/14/2011 7F. Operator’s Report (Jim Kingrey) Completed 2010 with only one first aid event and no recordable injuries. Over excitation trips occurred on Unit 2 during normal unit shut down due to failed latch coil on 4M2 master control relay resulting in the generator field breaker remaining closed during shutdown until being tripped open by relay action. Latch coil was replaced and the unit has operated properly since. Potable water well pump stopped pumping on 1/18/2011 and was discovered to be badly corroded, pump and piping replaced. Repaired PT gatehouse sump pump, inspected accessible areas of the dam area and no abnormalities were found. Repaired control room SCADA RTU-15 due to failed card. Replaced RTU 2 in January due to problems. Power tunnel gate house UPS will be replaced to improve reliability. Received new inverter on 1/28/2011 which was damaged in shipment. Working with vendor and UPS for repairs. Basler Electric successful bidder to replace excitation system with integrated PSS. Working with ML&P and local vendor to develop & configure electronic plant log book. Working with R&M and Hatch to complete final draft of Dam Safety & Surveillance Monitoring Plan. Document control conversion of manuals to electronic storage continues. Completed FY12 O&M budget preparations. 8. NEXT MEETING DATE The next meeting will be at the call of the Chair. 9. ADJOURNMENT The meeting adjourned at 11:06 a.m. BY: Brad Evans, Chair ATTEST: Alaska Energy Authority, Secretary Page 5 of 5 BPMC Minutes 3/14/2011 Bradley Lake Project Management Committee Regular Meeting Wednesday, June 8, 2011 Agenda Item: 7A MOTION: Approve attached amended FY11 Budget and refund the $360,000 reduction in budget to the utilities by June 30, 2011. Move: Le D Second: [eae ell aU RECAP OF PROJECT SURPLUS REFUND Description Budget Actual Surplus Sch A Interest Income (1,667,963) 1,905,127 237,164 Sch B-540 FY11 FERC Land Rent 380,000 (62,623) 317,377 Sch B-562 Daves Creek SVC Cooling System Repair 0 (193,922) (193,922) 360,619 Proposed FY11 Budget Amendment 360,000 REFUND BY UTILITY CHUGACH ELECTRIC 30.4% 109,440 MUNICIPALITY OF ANCHORAGE 25.9% 93,240 AEG&T-HEA 12.0% 43,200 AEG&T-MEA 13.8% 49,680 GOLDEN VALLEY ELECTRIC 16.9% 60,840 CITY OF SEWARD 1.0% 3,600 ~ 360,000 BRADLEY LAKE HYDROELECTRIC PROJECT Schedule A AMENDED ORIGINAL FY2008 FY2009 FY2010 FY2011 FY2011 REFUND ACTUALS ACTUALS BUDGET BUDGET BUDGET AMOUNT REVENUES, EXPENSES & CHANGES IN SURPLUS REVENUES UTILITY CONTRIBUTIONS 15,649,321 16,596,797 17,645,106 16,997,417 17,357,417 |_360,000_ INTEREST INCOME 1,776,916 1,717,303 1,652,616 1,904,508 1,667,963 OTHER MISC INCOME 0 1,000 0 0 0 0 0 oO 0 0 17,426,237 18,315,100 19,297,722 18,901,925 19,025,380 EXPENSES OPERATIONS 3,259,328 4,123,107 4,024,112 4,390,890 4,514,345 RENEWALS/REPLACEMENTS (R&C FUND REPAYMENTS) 1,456,372 1,425,893 1,912,264 1,088,636 1,088,636 NON R&C FUND CAPITAL PURCHASES-SEE A1 117,728 166,573 675,196 802,000 802,000 TRANSFER TO (FROM) OPERATING RESERVE 48,000 5,000 66,000 97,250 97,250 DEBT SERVICE (net of Capital Reserve Reductions) 12,269,850 12,268,950 12,270,150 12,273,150 12,273,150 ARBITRAGE TRANSFER 274,959 325,577 350,000 250,000 250,000 0 0 0 17,426,237 18,315,100 19,297,722 18,901,925 19,025,380 CURRENT YEAR SURPLUS (DEFICIT) 0 0 oO (0)| (0) BEGINNING SURPLUS (DEFICIT) 0 0 oO 0 oO ENDING SURPLUS (DEFICIT) BALANCE SHEET ASSETS REVENUE FUND 1,531,244 1,851,848 0 OPERATING FUND 821,997 447,324 0 RECEIVABLE FROM UTILITIES - 0 0 OTHER RECEIVABLES - 15,077 0 PREPAID EXPENSES 17,929 9,132 0 2,371,170 2,323,381 0 LIABILITIES & SURPLUS LIABILITIES 643,508 260,757 0 PREPAID UTILITY CONTRIBUTION - 0 0 PAYABLE TO UTILITIES 280,290 740,267 0 R&C REPAYMENT 1,447,372 1,322,357 0 _ 2,371,170 2,323,381 0 OTHER INFORMATION OPERATING RESERVE * 686,400 734,406 739,400 902,652 902,652 MONTHLY CONTRIBUTIONS 1,320,652 1,383,066 1,406,795 1,416,451 1,446,451 Required to be 20% of budgeted operating expense 5/31/201110:15 AMH:\all\imacmillan\BradleyLake\FY 1 1BRADLEY\201 1 BradleyBdgt-amended.xisSchedule A-Budget Summary ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Schedule A-1 CAPITAL PURCHASES NOT FUNDED BY R&C FUND CULVERT REPAIRS AMBULANCE TRUCK, MOWER ATTACH, MILLING MACHINE FIRE WATER CONTROL VALVE REPLACEMENT CATHODIC PROTECTION REPLACEMENT HALCON FIRE SYSTEM REPLACEMENT MAN-LIFT, TRUCK & PLOW ATTACHMENT. EMERGENCY BACKUP BATTERIES Purchase FW relief valve RV-8*** Grating in Transformer pits Acquire, develop Work Management System Procure spare facilities transformer Purchase small forklift w/ outside capability Modify Camp Residencies--add efficiency apartments. Excavator w/ mower attachment Vehicle Lift Emergency/Standby Facilities Diesel Generator Snow Cat with plow Replace Furniture/Lockers/Appliances in Crew Quarters \Vidmar Storage Cabinets for Shops & Warehouse Shop Tools New Equipment Storage Barn for Heavy Equipment and Long Term Outage Equipment. Replace Telephone System / Upgrade Network ae a FY2008 FY2009 FY2010 FY2011 ACTUALS ACTUALS BUDGET BUDGET Current valve is leaking by because of problems the control which will be replaced shortly. The set point has been raised from the original 135psi to 170psi as a work around due to control valve. Operation of a firewater system at these pressures is outside current code requirements Safety implications during Nitrogen addition to the transformers Process improvement in work control, scheduling, PM optimization, materials inventory & lcomponent database Two transformers have failed leading to a fire and loss of power to the non-power house facilities. Since the cause of the failures is really unknown, we could be at risk for a repeat failure. Last failure cost >100K O&D says buy it. [A need based on the movement of smaller items into and out of the warehouse and Power House which cannot be performed with the big loader. This will effectively modify the two duplexes from a 2 dwelling unit to a 4 dwelling unit; this will 225,000} 250,000}help support space availability for an apprentice position-FY10 and complete 3 duplex units in FY11 220,000 Needed for tail race repair, ditch and riprap maintenance, brush removal at the dam and other areas Current lift original design and placement does not-allows vehicles to be serviced unless the roll up door is open--this is a problem in winter and fowl weather [An emergency source of power is needed to provide backup power in case of future trouble 50,000} with the normal facilities power. This will provide cost savings for replacement power and repairs due to frozen pipes Replace snow machines to enhance safe travel to the dam and gate house areas. Allows 100,000 operators and contractors to travel to the dam in a sheltered environment which will increase safety in case of breakdown. Also, allows transport of equipment, parts, and tools to perform repairs at the dam. This could save lots of $$$ if generation was affected 20,000} Furniture is original furniture and needs to be updated. 0 Furniture and beds are aged and in need of repairs and replacement. Several appliances need replacement. 40,00 50,00 35,00 }00) ‘i equipment and parts from further degradation. Telephone system and network are obsolete and unreliable. Need to replace phone switch 0, 000Jand some phone lines. Also, add voicemail capability. Integrate phone system with HEA Homer phone system to reduce phone company charges, wo ° S 3 Slo ek le 802,000 BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B 31-Dec-09 FY2009 FY2009 FY2010 FY2010 FY2011 BUDGET ACTUAL VARIANCE BUDGET ACTUAL BUDGET SUMMARY (A) HEA Annual Operations & Maintenance 1,932,339 1,831,960 100,379 1,968,817 795,915 2,181,514 (B) CEA Dispatch and Substation/SVC Maintenance 70,500 229,627 (159,127) 80,000 47,821 119,327 (C) Other O&M and Maintenance Projects 437,540 877,910 (440,370) 735,242 228,336 795,085 (D) Insurance Costs 642,270 596,196 46,074 644,203 540,962 615,340 (E) Regulatory Costs 355,000 266,823 88,177 329,900 15,730 413,674 (H) Contingencies 0 59,393 (59,393) 0 0 0 3,437,649 3,861,909 (424,260) 3,758,162 1,628,764 4,124,940 (F) Administrative Costs 259,500 261,196 (1,696) 265,950 229,626 265,950 3,697,149 4,123,105 (425,956) 4,024,112 1,858,390 4,390,890 (G) BUDGET ADJUST ESTIMATE 0 0 0 0 0 0 3,697,149 4,123,105 (425,956) 4,024,112 1,858,390 | 4,390,890 5/31/2011 10:16 AM Page 1 of 4 H:\all\Iimacmillan\BradleyLake\FY 11BRADLEY\201 1BradleyBdgt-amended.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B FERC 535 - Operation Supervision & Engineering (A) HEA O&M Contract (C) HEA Perform Exciter Stability Study (C) HEA Digitize & Control Project Drawings FERC 537 - Hydraulic Expenses (A) HEA O&M Contract FERC 538 - Electric Expenses (A) HEA O&M Contract (C) HEA Clean Generators #1 & #2 (A) HEA O&M Contract (C) Repair Microwave Tower Waveguide (C) HEA Circuits and Radio - To Bernice Lake (C) CEA Circuits -Bernice Lake to Anchorage FERC 540 - Rents (C) Bradley Lake FERC land use fees (5% increase b FERC 541 - Maintenance Supervision & Engineering (A) HEA O&M Contract FERC 542 - Maintenance of Structures (A) HEA O&M Contract (C) Architect Review (09) - Structure Maintenance (11 (C) Replace Haylon w/ FM-200 in Oil Separator RM (A) HEA O&M Contract Page 2 of 4 FERC 539 - Misc. Hydraulic Power Generation Expenses FERC 543 - Maintenance of Reservoirs, Dams & Waterways 31-Dec-09 FY2009 FY2009 FY2010 FY2010 FY2011 BUDGET ACTUAL VARIANCE BUDGET ACTUAL BUDGET 226,274 187,036 39,238 237,941 122,336 250,283 0 0 40,000 25,138 0 0 0 0 226,274 187,036 39,238 277,941 147,474 250,283 71,159 47,347 23,812 75,698 26,121 | 92,619 71,159 47,347 23,812 75,698 26,121 92,619 191,122 195,305 (4,183) 193,733 73,059 201,203 0 0 0 50,000 0 0 191,122 195,305 (4,183) 243,733 73,059 201,203 382,016 327,079 54,937 420,059 177,085 427,785 0 0 0 0 0 20,000 0 90,000 (90,000) 90,000 45,000 90,000 0 28,746 (28,746) 30,000 14,373 30,000 382,016 445,825 (63,809) 540,059 236,458 567,785 65,000 378,141 (313,141) 65,000 0 62,623 65,000 378,141 (313,141) 65,000 0 62,623 125,283 142,863 (17,580) 120,000 72,813 126,000 125,283 142,863 (17,580) 120,000 72,813 126,000 45,809 39,554 6,255 113,641 45,505 105,339 30,000 11,669 18,331 0 0 45,000 0 0 0 30,000 0 0 75,809 §1,223 24,586 143,641 45,505 150,339 29,023 99,389 (70,366) 27,095 16,587 77,498 5/31/2011 10:16 AM H:\all\imacmillan\BradleyLake\FY 11BRADLEY\2011BradleyBdgt-amended.xisSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B (C) Trailer Mounted Sewer Cleaner (C) Power Tunnel Maintenance (C) Repairs. Cleaning & Inspections (C) North Fork Comm Equipment Replacement (Cc) FERC 544 - Maintenance of Electric Plant (A) HEA O&M Contract (C) Maint. Study (09)-Replace Control Room Console( FERC 545 - Maintenance of Misc. Hydraulic Plant (A) HEA O&M Contract (C) Transfer Switch for PT Gatehouse (C) Fish Water Design & Middle Fork Equip. Shack Im FERC 556 - System Control & Load Dispatching (A) HEA O&M Contract (A) HEA-Power House PCs & Develop Electronic Ops (C) SCS Snow Measurement (C) UAA Seismic monitoring and reporting (C) USGS Streamguaging (C) State of Alaska Permits FERC 562 - Station Expenses (B) CEA SVC/Substation Maintenance Contract (C) Daves Creek Cooling System Repair FERC 571 - Maintenance of Overhead Lines (A) HEA Overhead Line Maintenance (H) Contingencies 31-Dec-09 FY2009 FY2009 FY2010 FY2010 FY2011 BUDGET ACTUAL VARIANCE BUDGET ACTUAL BUDGET 0 47,472 (47,472) 0 0 0 30,000 13,632 16,368 0 0 15,000 0 0 0 90,000 9,344 0 0 0 0 0 0 5,000 0 0 0 0 0 0 59,023 160,493 (101,470) 117,095 25,931 97,498 285,004 415,547 (130,543) 296,763 169,699 359,824 40,000 27,841 12,159 0 0 10,000 325,004 443,388 a — 296,763 169,699 369,824 178,019 73,196 104,823 110,000 74,966 148,909 0 0 0 0 0 5,000 0 0 0 55,000 14,150 20,000 178,019 73,196 104,823 165,000 89.116 | f: 173,909 49,195 51,482 (2,287) 51,237 16,204 63,444 0 0 0 20,000 1,540 15,000 9,000 16,769 (7,769) 9,000 10,481 9,270 56,500 56,500 0 56,500 0 56,500 207,040 207,040 0 219,642 109,750 232,670 0 100 (100) 100 100 100 321,735 331,891 (10,156)} 356,479 138,075 376,984 70,500 229,627 (159,127) 80,000 47,821 119,327 0 0 0 0 0 193,922 70,500 229,627 | (159,127) 80,000 47,821 313,249 349,435 253,162 96,273 302,650 0 313,610 349,435 253,162 96,273 302,650 0 313,610 L 0 59,393 | (59,393) 0 0 0 Page 3 of 4 5/31/2011 10:16 AM H:\all\imacmillan\BradleyLake\FY11BRADLEY\201 1BradleyBdgt-amended.xlsSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B 31-Dec-09 FY2009 FY2009 FY2010 FY2010 FY2011 BUDGET ACTUAL VARIANCE BUDGET ACTUAL BUDGET FERC 920 - Administrative Expense (F) AEA Admin Fee 200,000 200,000 0 200,000 200,000 200,000 AEA Administrative Costs 200,000 200,000 0 200,000 200,000 200,000 PMC Costs (F) Bradley Lake Audit fees 9,500 12,750 (3,250) 15,950 12,750 15,950 (F) Bradley Lake PMC Legal 25,000 25,677 (677) 25,000 2,904 25,000 (F) Bradley Lake Arbitrage Report 5,000 5,175 (175) 5,000 5,175 5,000 (F) Bradley Lake Trustee fees 20,000 17,594 2,406 20,000 8,797 20,000 (F) PMC Costs 59,500 61,196 (1,696) 65,950 29,626 65,950 Bond Refunding Costs Reimburseable costs Refunding Costs 0 0 0 0 0 0 TOTAL FERC 920 259,500 261,196 (1,696) 265,950 229,626 265,950 FERC Insurance Premiums 578,000 545,300 32,700 572,565 516,193 542,003 (D) Homer Electric Insurance 49,270 49,239 31 56,638 24,769 58,337 (D) Risk Assessment 15,000 1,657 13,343 15,000 0 15,000 642,270 596,196 46,074 644,203 540,962 615,340 FERCFERC administrative fees 200,000 184,249 15,751 229,900 0 202,674 (E) FERC Part 12 Inspection 0 0 0 0 0 75,000 (E) 0 0 0 (E) Contractual Engineer - FERC license issues 155,000 82,574 72,426 100,000 15,730 136,000 355,000 266,823 88,177 329,900 15,730 413,674 3,697,149 4,123,105 (425,956) 4,024,112 1,858,390 4,390,890 TOTAL BRADLEY LAKE BUDGET 5/31/2011 10:16 AM Page 4 of 4 H:\all\imacmillan\BradleyLake\FY 11BRADLEY\201 1BradleyBdgt-amended.xlsSchedule B-Budget Detail BRADLEY LAKE MONTHLY UTILITY CONTRIBUTION SCHEDULE C POWER PURCHASER CHUGACH ELECTRIC MUNICIPALITY OF ANCHORAGE AEG&T-HEA AEG&T-MEA GOLDEN VALLEY ELECTRIC CITY OF SEWARD Rounding POWER PURCHASER CHUGACH ELECTRIC MUNICIPALITY OF ANCHORAGE AEG&T-HEA AEG&T-MEA GOLDEN VALLEY ELECTRIC CITY OF SEWARD ORIGINAL BUDGET ACTUAL BUDGET PERCENT FY2009 FY2010 FY2011 FY2011 SHARE TOTAL TOTAL TOTAL INCREASE 30.4% 5,045,424 5,364,108 5,167,212 (196,896) 25.9% 4,298,568 4,570,080 4,402,332 (167,748) 12.0% 1,991,616 2,117,412 2,039,688 (77,724) 13.8% 2,290,356 2,435,028 2,345,640 (89,388) 16.9% 2,804,856 2,982,024 2,872,560 (109,464) 1.0% 165,972 176,448 169,980 (6,468) 2 g 5 100.0% 16,596,794 17,645,102 16,997,417 (647,688) ACTUAL BUDGET FY2009 FY2010 PERCENT MONTHLY MONTHLY FY2011 FY2011 SHARE AVERAGE AVERAGE MONTHLY INCREASE 30.4% 420,452 447,009 430,601 (16,408) 25.9% 358,214 380,840 366,861 (13,979) 12.0% 165,968 176,451 169,974 (6,477) 13.8% 190,863 202,919 195,470 (7,449) 16.9% 233,738 248,502 239,380 (9,122) 1.0% 13,831 14,704 14,165 (539) 100.0% 1,383,066 1,470,425 1,416,451 53,974 §/31/201110:16 AM H:\all\imacmillan\BradleyLake\FY 11BRADLEY\2011BradleyBdgt-amended.xlsSchedule C Utility Contrib BRADLEY LAKE R&C FUND DISBURSEMENTS AND REPAYMENTS SCHEDULE D Description IR&C FUND PROJECTS Replace Runners Replace cable from dam to power house Replace power system stabilizer Replace two RTUs Culvert Repairs Trans Towers Frost Jacking Repairs Replace Plant and SCADA Controls Integrated Power System Stabilizer Vibration Monitoring System Current Year R&C Repayment Adjust for Current Year Budget Less Interest in Fund Applied to Repayment Net Transfer from Revenue Fund [Cumulative Prior Years R&C Repayments Actual TO REPAY at 06/30/08 2,615,592.73 251,092.69 1,789,524.99 2,349,392.56 0.00 46,132.84 0.00 0.00 0.00 0.00 0.00 0.00 7,051,735.81 Actual Disburse 0.00 0.00 157,208.00 10,887.92 11,311.49 24,364.95 34,833.79 0.00 0.00 0.00 0.00 238,606.15 R&C Cumulative Interest (Retained) Applied As Part of Repayment INET DUE TO R&C FUND IR&C FUND CASH FLOW PROJECTION Beginning Investment Balance Disbursements-current year Disbursements-prior year accrued Utilities’ R&C Repayment Current year interest earnings (Accrued R&C Payable at year end Ending Investment Balance PROJECTED NET DUE + ENDING INVESTMENT BALANCE REPAYMENT AMOUNT $1,649,677 X 25% $4,139,810 X 25% I$1,262,248.49 X 25% $238,606.15 X 25% "$235,000 X 25% "$2,618,689 X 25% Actual TO REPAY at 06/30/09 2,615,592.73 251,092.69 1,946,732.99 2,360,280.48 11,311.49 70,497.79 34,833.79 0.00 0.00 0.00 0.00 0.00 7,290,341.96 (3,319,952.55) 2,668,929.59 1,081,805.61 (197,525.87) 0.00 1,322,357.35 124,433.32 0.00 2,331,070.41 5,000,000.00 412,419.38 1,034,952.45 315,562.12 59,651.54 0.00 0.00 1,822,585.49 Projected Disburse 0.00 0.00 0.00 0.00 10,000.00 25,000.00 200,000.00 0.00 0.00 0.00 0.00 0.00 235,000.00 PROJECTED TO REPAY at 06/30/10 2,615,592.73 251,092.69 1,946,732.99 2,360,280.48 21,311.49 95,497.79 234,833.79 0.00 0.00 0.00 0.00 0.00 7,525,341.96 (1,468,916.11) 0.00 216,165.17 (4,833,710.38) 1,438,880.64 2,331,070.41 (235,000.00) (52,576.04) 1,301,459.82 216,165.17 0.00 3,561,119.36 5,000,000.00 1,034,952.45 315,562.12 59,651.54 58,750.00 0.00 1,468,916.11 PROJECTED Disburse 0.00 0.00 0.00 0.00 118,689.00 0.00 100,000.00 1,200,000.00 400,000.00 500,000.00 300,000.00 0.00 2,618 689.00 0.00 PROJECTED TO REPAY at 06/30/11 2,615,592.73 251,092.69 1,946,732.99 2,360,280.48 140,000.49 95,497.79 334,833.79 1,200,000.00 400,000.00 500,000.00 300,000.00 0.00 10, 144,030.96 (1,088,635.91) 0.00 139,007.25 (6,547,279.85) 2,647,122.45 3,561,119.36 (2,600,000.00) 0.00 1,252,750.94 139,007.25 0.00 2,352,877.55 5,000,000.00 0.00 315,562.12 59,651.54 58,750.00 654,672.25 1,088,635.91 5/31/201110:16 AM H:\all\imacmillan\BradleyLake\F Y 11BRADLEY\2011BradleyBdgt-amended.xlsSchedule D R&C Disb & Repay McDowell Rackner & Gibson PC Memorandum To: Bradley Lake Project Management Committee From: Kirk Gibson and Bill Prentice Date: May 13, 2011 Re: | Comments on FERC Notice of Inquiry (“NOT”) Regarding Land Use Fees The members of the Group that the BPMC joined to submit comments in the FERC proceeding regarding FERC’s development of a new methodology for determining hydro project land use fees now represents about one-third of the total federal acreage that will be subject to those fees. We expect this to give the group a very strong voice in the proceeding. With data and pictures supplied by all of the projects in the group, the Group’s FERC counsel has produced a comprehensive land use fee calculation methodology proposal. The proposal was submitted to FERC this month. At this time, there is no estimate available regarding how long the process will take. What follows is a brief summary of the approach taken in crafting this proposal. The Proposal The primary thrust of the Group’s proposal points out that hydro project land is almost always not suitable for agriculture or urban type uses, which makes FERC’s use of unadjusted agricultural land values or urban land values inappropriate. A satellite picture of the Bradley Lake facility site, along with a winter photograph of the project taken at a recent FERC inspection, make a strong case for Bradley Lake’s limited potential land uses. The proposal also points out that lands surrounding a hydro project generally can be, and usually are, used for exactly the same purposes that existed before the project was built, and that the public is only excluded from a small portion of the project lands for safety or security reasons. It was noted that FERC frequently includes license conditions that enhance public use of project lands, such as access roads, campgrounds, boat launch ramps, etc. provided at project expense. Such conditions actually enhance the management objectives of the federal agencies responsible for project lands. Bradley Lake Project Management Committee NOI Comments Memorandum Page 2 of 2 Finding a suitable land-value index for the FERC to use as a base for its fee calculations has proved to be difficult. The proposal recommends taking the National Agriculture Statistical Service (NASS) estimates of land values for each project’s lands and reducing them by 40 percent would be a fair valuation methodology. The NASS numbers are the only readily available statistics available nationally. Fortunately, this meets one of FERC’s primary requirements for any proposed new methodology, i.e., that the inputs be readily available from public sources. The NASS data has the added advantage of being updated periodically. The NASS also breaks their data out by county, which provides a better approximation of the value of each project’s lands. As you will recall, the FERC methodology that the original group successfully challenged had used Anchorage land values for Bradley Lake lands. The use of county specific data allows a more accurate description of the possible uses of hydro project lands and typography. The proposed methodology yields more reasonable estimates of Bradley’s land values and, therefore, land use fees. In order to meet a FERC requirement, that any proposed methodology yield “final” results, the proposal offers only a limited opportunity to challenge, at the projects expense, a valuation that looks to be an outlier (e.g., a project that is much higher than similar projects). This provision for challenges also appears to be reasonable and should not pose any undue risk to the Bradley Lake Project. In order to keep the appraisal independent there are standards proposed for those doing the appraisal work, and since it is at the project’s expense, the process will be economical for the government, which should be attractive to FERC. The final piece of the proposal is to adopt a single “encumbrance factor” of 30 percent for transmission and non-transmission land uses. The encumbrance factor is designed to reflect the reduced potential usage of transmission rights of way. The Group has maintained that most transmission rights-of-way can be used in a similar fashion as adjacent lands, and even if they do require some restrictions on use, such as the need to keep trees trimmed, the land use is generally not substantially altered. Group Costs The Bradley Lake Project’s share of the group’s fees will total about $4,200, of which $1,460 has already been invoiced. While the total is twice the original estimate, we feel that Bradley Lake has received good value for this modest expenditure. By participating in the larger group, BPMC has been able to leverage its participation in the FERC NOI process and, hopefully, keep the federal land use fees lower than they would have been without the group’s efforts. Bradley Lake Project Management Committee NOI Comments Memorandum Page 3 of 3 Summary Our analysis of the Group’s proposal and the results it yields shows us that it provides reasonable and fair results for the Bradley Lake Project; certainly far more reasonable results than the method struck down by the DC Circuit Court earlier this year. Please let us know if you have any questions or concerns. We will keep you informed as this matter progresses. Bradley Lake BPMC Meeting — June 8, 2011 Operators Report Current Status: Lake Level is currently 1102 ft and coming up. Water inflow projection is poor (300,000 MWh). Excitation System Replacement Project — Exciter equipment and design was finalized with Basler. Basler is currently manufacturing the new equipment and delivery is expected in late July. Continuing plant interface design work with EPS. Rescheduled Unit Maintenance Outages to October due to delay in new Excitation equipment delivery. Unit 1 Outage: Oct 3-17", Unit 2 Outage: Oct 18-Nov 1. Telephone System Switch Replacement — ACS performed site survey. Purchased new phone system equipment, installed and working (new DID numbers). Disconnected service to Ultra-phone Radio Telephone. Removed equipment. Network Upgrades — Pulled new network cables and awaiting network switch installation. Dam Safety and Surveillance Monitoring Plan (DSSMP) — Final Draft was completed by R&M Consultants and Hatch and the DSSMP was sent to AEA for review. AEA sent the DSSMP to FERC for review. The first report using the new DSSMR documentation was completed and sent to FERC. Completed DOT Air Shipping training. Bradley Lake to Bradley Junction ROW Clearing — Clearing work from Bradley Junction to Mile 8 completed. Inspected clearing areas. A couple of areas need a little more clearing. Also noted some other areas between Bradley Lake and Sheep Creek that will need clearing soon. Found power line to Lower Bradley River Communications Hut is hanging low and contacting a tree. Document Control — Conversion of Manuals to electronic storage continues. CEA replaced the CEA metering recorders at Bradley Lake. Metering upgrades are needed Charged Gate Hydraulic System nitrogen accumulators in the Power Tunnel Gate House. Installed new gas monitoring system in PT Gate House. Installed public boat dock and repaired hinge on the boat dock. Electronic Log Book and Reports — Work continues with ML&P on software development and configuration. Document Control — Conversion of Manuals to electronic storage continues. HDR continues work at Battle Creek. Penstock Gate Testing was done 6" Diversion inspections scheduled for June 13th. Gage Testing with USGS in early June. FERC Part 12 Inspection is scheduled for July 12""-14"" Potential visit to Bradley by Murkowski (Date TBD) Bradley Lake Project Manager’ - -* Committee Meeting Page 1 of 1 Home Go Back [Public] : ‘ 7 Public Notices Online Public Notice Bradley Lake Project Management State of Alaska Committee Meeting Submitted by: smhowell/08 Date Submitted: 05/20/2011 02:25 PM Date Modified: Submission Mode: direct Approve Prior To Post: n/a Approved By: n/a Approval Date: n/a Attachments: No files attached Bradley Lake Project Management Committee Meeting Category: Public Notices Department: Commerce Community & Economic Development Publish Date: 05/20/2011 Location: Anchorage Event/Deadline Date: 06/08/2011 10:00 AM Coastal District: N/A Body of Notice: ALASKA ENERGY AUTHORITY Regular Meeting Public Notice Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a regular meeting on Wednesday, June 8, 2011 at 10:00 a.m. For additional information contact Brad Evans, Chairman. This meeting will be conducted by electronic media pursuant to AS 44.62.310 at the following location: Alaska Energy Authority Boardroom, 813 West Northern Lights Boulevard, Anchorage, Alaska. For those unable to attend in person, a teleconference line has been set up: dial 1-800-315-6338 and enter code 3074#. The public is invited to attend. The State of Alaska (AEA) complies with Title II of the Americans with Disabilities Act of 1990. Disabled persons requiring special modifications to participate should contact AEA staff at (907) 771- 3000 to make arrangements. Revision History: 05/20/2011 02:25:55 PM by smhowell/08/State/Alaska/US $$WebClient [Anon] Home Page Notices by: Department | Category | Publish Date http://notes3.state.ak.us/pn/pubnotic.nsf/cc52605f7c 156e7a8925672a0060a9 1b/35f3cbae2.... 5/20/2011 Bradley Lake Project Management Committee Meeting ALASKA ENERGY AUTHORITY Regular Meeting Public Notice Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a regular meeting on Wednesday, June 8, 2011 at 10:00 a.m. For additional information contact Brad Evans, Chairman. This meeting will be conducted by electronic media pursuant to AS 44.62.310 at the following location: Alaska Energy Authority Boardroom, 813 West Northern Lights Boulevard, Anchorage, Alaska. For those unable to attend in person, a teleconference line has been set up: dial 1-800-315-6338 and enter code 3074#. The public is invited to attend. The State of Alaska (AEA) complies with Title ll of the Americans with Disabilities Act of 1990. Disabled persons requiring special modifications to participate should contact AEA staff at (907) 771-3000 to make arrangements. Attachments, History, Details Attachments Details None Department: Revision History Category: Created 5/20/2011 6:25:55 AM by smhowell Sub-Category: Modified 5/20/2011 2:25:55 PM by smhowell Location(s): Project/Regulation #: Publish Date: Archive Date: Events/Deadlines: Commerce, Community and Economic Development Public Notices Anchorage 5/20/2011 6/9/2011 6/8/2011 2:00am