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HomeMy WebLinkAboutBPMC Meeting- November 6 ML&P Bldg 1995 2: ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY = ALASKA @m ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 561-8050 FAX 907 /561-8998 July 31, 1995 Brad Thompson, Director Division of Risk Management P.O. Box 110218 Juneau, AK 99811-0218 Re: Revision of Claim for Southcentral Air Accident at Bradley Lake Dear Brad: An internal review of the cost accounting of the Bradley Lake 1993 aircraft accident has identified the need for a revision to the cost report submitted to you in February 1995. We found that certain costs were included in the report in error, and other costs were erroneously excluded. The net impact is a reduction in the claim amount by $20,956.86, from $119,975.44 to $99,018.58. Below is a comparison of the original February cost report to the revised cost report: Original Revised Difference Labor Charges: Larry Wolf - Injured employee 28,813.91 31,763.03 2,949.12 (A) John Zidalis - Injured employee 21,375.65 20,502.80 (872.85) (A) Other Staff 7,908.69 8,667.04 758.35 (A) Ron Krone - Replacement 34,391.37 - (34,391.37) (B) Expenses (travel, legal, etc.) - 847.60 847.60 (C) Indirect Labor and Overhead 27,485.82 37,238.11 9,752.29 (D) $119,975.44 $99,018.58 ($20,956.86) (A) Charges subsequent to 9/30/93 were excluded from original report. Also, the workers compensation credit for February 1993 was excluded. (B) | The cost of the temporary employee hired to perform the work previously performed by the injured employees is not considered an incremental cost due to the accident. The incremental labor costs deemed recoverable from insurance are the wages paid to the injured employees during the time they were unable to work, and the wages paid to other staff for work required because of the accident. (C) Expenses related to the accident were excluded from the original report. (D) Indirect labor and overhead charges subsequent to 7/1/93 were excluded from the original report. Please keep me advised on the status of the claim. The Bradley Lake Project Management Committee is of course eager to receive payment for this loss. Sincerely, Dan Beardsley Contracts Manager 02-B17LH TONY KNOWLES, GOVERNOR DEPARTMENT OF ADMINISTRATION {po pox 10218 JUNEAU, ALASKA 99811-0218 } PHONE: (907) 465-2180 DIVISION OF RISK MANAGEMENT — / FAX: (907 465-3690 INTERNET: Ted_Lehrbach%admin.state.ak.us EGE] l August 25, 1995 AUG 8 9 7995 Dan Beardsley, Contracts Manager Alaska Industrial Development & Export Authority Alaska industrial Development 480 West Tudor and Export Authority Anchorage AK 99503 RE: Status on Southcentral Air Accident at Bradley Lake Our claim number 40-0022194-001 & 40-0022194-002 (Wolf/Zidalis) Dear Dan: In reply to your July 31, 1995 letter updating your expense figures for the Bradley Lake air crash event, | am attaching a copy of my letter to Neil Webster of Professional Adjusters who is handling the claim for Southcentral Air's Insurer. | have discussed the subrogation claims with our Attorney, Kris Knudsen, and have been informed that the claims are not yet settled between Southcentral Air and our employees. The attorneys are still negotiating. We will likely not see any money until all claims are settled. It does not look like that will happen in the near future. Therefore, we will continue to monitor and update the other insurer of our subrogated interests. So far, they have not challenged any of our figures. That will probably change as negotiations get closer to finalization. Thank you for providing the updated figures. Please feel free to call me if you have any further questions regarding the claim. Sincerely, Ad lie Ted Lehrbach Risk Manager HTL/jsg (BEARDSLY.LTR) Enclosure cc: Kris Knudsen, AAG Murlene Wilkes, Harbor Adjustment Services 02-B17LH / TONY KNOWLES, GOVERNOR DEPARTMENT OF ADMINISTRATION P.O. BOX 110218 JUNEAU, ALASKA 99811-0218 PHONE: (907) 465-2180 DIVISION OF RISK MANAGEMENT FAX: (907 465-3690 INTERNET: Ted_Lehrbach%admin.state.ak.us August 25, 1995 Mr. Neil Webster Professional Adjusters 4155 Tudor Center 101 Anchorage AK 99508 RE: Your Insured - Southcentral Air Inc. AIG Aviation Policy No. AV 321-89-29 AEA Bradley Lake Aircrash: 2/20/93 Our Claim Nos. 40-0022194-001 & 40-0022194-002 Dear Neil: This is to update my February 22, 1995 notice to you of our subrogated interests in the above claim. Please see the attached copy of a letter from our client agency, AIDA, which revises their original figures previously sent to you. You will note that there is a net reduction in their claim. Again, this is to remind you that the attached figures are in addition to the statutory worker’ compensation lien which has been previously established. Murlene Wilkes of Harbor Adjustment Services is providing updated figures to you on the lien. Please let me know the current status of our subrogated claims. Thank you for your attention to this matter. Sincerely, Ted Lehrbach Risk Manager HTLijsg (HTL\AIDAHTL2..LTR) Enclosures ne eT Le ET RT BE Rey mene mente cee] cc: _Dan Beardsley, , Contracts Manager (w/o'enclosures) Murlene Wilkes, Harbor Adjustment Services (w/enclosures) Kris Knudsen, AAG (w/enclosures) fr ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY / = ALASKA @@E_ ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 561-8050 FAX 907 /561-8998 November 1, 1995 Norman L. Story BPMC Chairman Homer Electric Association, Inc. 3977 Lake Street Homer, Alaska 99603 Subject: Bradley Agreements Dear Norm: As of this date the status of the Agreement subcommittee’s efforts on the Bradley Agreements are as follows: Bradley Dispatch Agreement - Final Draft Approved* Bradley Transmission O&M - Final Draft Approved* SVS O&M Agreements - Alternative Drafts in Final Review* Bradley Transmission Interconnect Deleted (Covered by existing agreements - CEA and HEA are reviewing operational issues that should resolve concerns raised during negotiations) Norman L. Story November 1, 1995 Page 2 Comments on insurance coverage language and standardized arbitration clauses has prompted additional limited review to determine if all three agreements should be revised or remain as drafted. In addition to the above agreements, amendments will be proposed to the Homer O&M Agreement and the Power Sales Agreement. Drafts of those proposed amendments are under review by the committee members. Drafts of the Dispatch Agreement and Transmission O&M Agreements will be provided to the PMC members at the meeting for their subsequent review. Once the SVS Agreements are completed, copies will be distributed for review along with the proposed amendments. We anticipate final approval of all the Agreements by the PMC at the following meeting. Sincerely; eu /M Daniel W. Beardsley Contracts Manager Alaska Energy Authority ec: C.R. Baldwin, Esquire Don Edwards, Esquire Larry Hittle, Esquire Dennis V. McCrohan, AEA DRAFT COUNTERPART 1 OF 3 BRADLEY LAKE HYDROELECTRIC PROJECT AGREEMENT FOR THE DISPATCH OF ELECTRIC POWER AND FOR RELATED SERVICES ("BRADLEY LAKE DISPATCH AGREEMENT") by and among CHUGACH ELECTRIC ASSOCIATION, INC. and THE ALASKA ENERGY AUTHORITY TABLE OF CONTENTS Section Title Page RGGitals sececscssenswanc soeued oaases pS0ece a coce : seaeae oagenerausenssosseecsseeesneseess 1 Nature Of Agreement woes Term Of Agreement; Related Matters ..............c.eceeeeeeeeeeeeeeeeeees Duties! Of “Mihe: Dispatene rn. ciccceevcwess sesees eenvnecsswemesnsunieesmmaweeennens Annual Planning And Budget.................+. Invoices, Payment & Dispute Resolution ... Miscellaneous Provisions ................eeeeeees Relationship To Services Agreement...............ceseeeeees eae DG TIFITIONS iss s0c canoes enews swannsccwonsi scans s seatast sued cecsSarccSbessucnsccsnesss OMNOORWNH BRADLEY LAKE HYDROELECTRIC PROJECT AGREEMENT FOR THE DISPATCH OF ELECTRIC POWER AND FOR RELATED SERVICES THIS AGREEMENT is entered into on , 1995, by CHUGACH ELECTRIC ASSOCIATION, INC. ("Chugach"), and the STATE OF ALASKA, ALASKA ENERGY AUTHORITY ("Authority"), hereinafter collectively referred to as "Parties.” SECTION 1. RECITALS (a) The Authority owns the Bradley Lake Hydroelectric Project ("Project"), and has sold the output to various utilities ("Purchasers"), including Chugach, under the Power Sales Agreement. (b) | Chugach is designated as the dispatcher of energy from the Project ("Dispatcher"), and as the entity providing wheeling and related services to the other Purchasers under an "Agreement for the Wheeling of Electric Power and for Related Services" (the "Services Agreement"). (c) Chugach is a qualified utility within the meaning of AS 44.83.425(3) and is authorized to operate and maintain a power project acquired or constructed by the Authority and shall perform the services under this Agreement solely as an independent contractor. (d) |The Authority on May 24, 1994, entered into the Bradley Lake Hydroelectric Project Master Maintenance and Operating Agreement with the BPMC for the purpose of establishing contract administration and budgeting procedures for contracting the operation and maintenance of the Project and all related Project facilities and services and the provisions of Exhibit A to that agreement are incorporated in the terms of this Agreement. BRADLEY LAKE DISPATCH AGREEMENT Page 1 SECTION 2. NATURE OF AGREEMENT Chugach will provide all of the Dispatch Services needed to dispatch Project output. This Agreement sets forth the rights and duties of the Parties relating to the provision of Dispatch Services. SECTION 3. TERM OF AGREEMENT; RELATED MATTERS (a) Term. (i) This Agreement will be effective when executed and after it has received approval by the Bradley Lake Project Management Committee ("BPMC"). (ii) This Agreement will remain in effect for the term of the Services Agreement unless, under the terms of the Services Agreement, Chugach is replaced as Dispatcher, in which case it will terminate when Chugach ceases to be the Dispatcher. SECTION 4. DUTIES OF THE DISPATCHER (a) Duties. The Dispatcher's duties shall be as set forth in Section 8(a)(i) of the Services Agreement and any applicable operating criteria or guidelines adopted by the Project Management Committee and set forth as Scope of Dispatch Duties in the Allocation and Scheduling Procedures, or as agreed or amended by the Dispatcher and authorized representatives of the Parties pursuant to Section 8(a) of the Services Agreement. (b) Limitations on Dispatcher's duties. Subject to the limitations on Chugach's duties set forth in Sections 7(b) and (c) of the Services Agreement, Chugach will dispatch the Project's output consistent with Prudent Utility Practice as defined in Section 1(x) of the Power Sales Agreement, for the benefit of the integrated system. This Agreement shall not require Chugach to install or operate on Chugach's system any facilities or equipment that Chugach would not otherwise have installed or operated on that system unless those additional BRADLEY LAKE DISPATCH AGREEMENT Page 2 facilities or equipment are: (1) funded and approved in advance and in writing by the BPMC and (2) not detrimental to Chugach's system or operations. (c) Subcontracting. Chugach may subcontract the dispatch of the Project or Project Related Facilities to the extent authorized in the Annual Budget or with the written approval of the Authority and the BPMC, which shall not be unreasonably withheld. SECTION 5. ANNUAL PLANNING AND BUDGET (a) In accordance with a schedule provided by the Authority, Chugach shall prepare and submit each year to the Authority a draft budget for dispatch services for the following budget year. Such draft budget shall specifically include: (i) Labor and related costs: (A) The personnel costs attributable to performing the duties of Dispatcher (as distinct from personnel cost that Chugach would necessarily incur in operating and maintaining its own system); and (B) The costs of training personnel to perform the duties of Dispatcher, including familiarization with Project facilities and equipment through site visits, training and by other means. (ii) | The cost of computer equipment used for dispatching the Project's output, or, if such hardware and/or software serves multiple purposes, then the portion of such costs fairly allocable to that portion of the hardware and/or software capability that is needed for the purpose of dispatching the Project's output. The Bradley Lake allocation of these costs shall be documented annually. (ili) | All costs reasonably necessary for performance of all duties and obligations set forth in this Agreement. BRADLEY LAKE DISPATCH AGREEMENT Page 3 (b) | The draft budget shall be prepared in a format agreeable to the Authority, and shall be based on a reasonable estimate of all anticipated expenditures for dispatching and maintaining the Project Facility during the budget year. (c) The Authority shall review the draft budget and forward its recommended budget for BPMC approval. (d) | The Dispatcher shall perform its duties in a manner consistent with the BPMC approved Budget, and shall be responsible to perform only the obligations funded by such budget. If the Dispatcher makes a determination during any budget year that it cannot operate within its budget, the Dispatcher shall report such finding to the Authority and shall submit a revised budget for Authority review, and BPMC approval, if necessary. SECTION 6. INVOICES, PAYMENT & DISPUTE RESOLUTION (a) Invoices. Chugach shall submit complete written invoices to the Authority for payment with cost summaries and support documents as reasonably requested by the Authority and BPMC. (b) Payment. The Authority shall expeditiously arrange for payment of all invoices. Cost reimbursement payments from the Authority shall be due in the offices of Chugach by the 15th day of each month. Payment shall be mailed, directly deposited to Chugach, or may be paid in person, to Chugach's main office in Anchorage, Alaska. (c) Dispute Resolution. The Authority shall work with Chugach to promptly resolve any disputed billings. Consistent with the procedures established in Section 10(b) of the Services Agreement, the Parties shall attempt in good faith to settle reasonably any claim or controversy arising out of this Agreement. In addition to the procedures established by Section 10(b) of the Services Agreement, the Parties may unanimously agree to submit any claim or controversy to a mutually-acceptable mediator. The allocation of costs for such BRADLEY LAKE DISPATCH AGREEMENT Page 4 mediation shall be determined by the mediator. The use of such a procedure shall not be construed to affect adversely the rights of any Party under the doctrines of laches, waiver or estoppel. Except as limited by Section 10(b) of the Services Agreement, nothing in this section shall prevent any Party from resorting to judicial procedures. Any judicial action shall be filed in the Superior Court for the State of Alaska at Anchorage. (d) Performance Pending Resolution of Disputes. Pending resolution of any dispute, each Party shall continue to perform its obligations under this Agreement, including but not limited to the Authority's obligation to reimburse Chugach for certain costs under Section 5 of this Agreement. Each Party shall be entitled to seek immediate judicial enforcement of this continued performance obligation notwithstanding the existence of a dispute. Application for such enforcement shall be made to the Superior Court for the State of Alaska in Anchorage. SECTION 7. MISCELLANEOUS PROVISIONS (a) Accounts, Records, and Audits. In keeping records for work performed under this Agreement, Chugach shall utilize the accounting system required of public utilities and licensees by the Federal Energy Regulatory Commission for electric plants. Chugach shall make its relevant records available as required. Chugach shall retain copies of all invoices, payroll records, and other supporting documents sufficient for an audit of all expenditures, for three (3) years following the close of each Fiscal Year. Chugach will furnish the Authority with operating and financial statements related to work performed under this Agreement as may be reasonably requested by the Authority. If receipt of those statements is unreasonably delayed, the Authority may, with its own staff or agents, perform all work necessary to collect the data reasonably necessary, but only at such times and in such a manner as will not unreasonably interfere with Chugach’s operations. (b) Insurance. BRADLEY LAKE DISPATCH AGREEMENT Page 5 ili During the term of this Agreement, Chugach shall purchase and maintain insurance covering injury to person or property suffered by the Authority or a third party, as a result of errors or omissions or operations by Chugach or by its subcontractor(s) which arise both out of and during the course of this Agreement. Chugach shall require all subcontractors providing services directly or indirectly under this Agreement to provide the same insurance as required of Chugach. Coverage shall also provide protection against injuries to all employees of Chugach and the employees of any subcontractor engaged in work under this Agreement. Copies of all required insurance policies shall be furnished to the Authority prior to beginning work under this Agreement. These policies will show evidence of coverage and provide for ninety (90) days notice of written cancellation, non-renewal or material change in the coverage. 2. Chugach shall purchase insurance adequate to cover its operations performed in connection with the work under this Agreement. Specifically, Chugach shall maintain Worker's Compensation Insurance and Comprehensive General Liability Insurance, including Comprehensive General Liability Broad Form Insurance, Automobile Liability Insurance, Owned Aircraft Insurance (where applicable), and Owned Watercraft (where applicable), in amounts acceptable to the Authority and consistent with the Power Sales Agreement. 3. The obligation to obtain and maintain insurance coverage pursuant to this Section shall be subject to the general availability of such coverage under reasonable terms and conditions. If one or more of the required insurance coverages is not available under reasonable terms and conditions, Chugach shall, under the guidance and direction of the BPMC and Division of Risk Management, use its best efforts to obtain substantively equivalent insurance coverage acceptable to the BPMC, the Authority, and the Division of Risk Management. 4. If, after utilizing its best efforts, Chugach is unable to obtain the required insurance coverage under reasonable terms and conditions, BRADLEY LAKE DISPATCH AGREEMENT Page 6 as reasonably determined by Chugach, Chugach shall request a waiver of the relevant insurance requirement. The request shall outline steps taken by Chugach to obtain such insurance and shall disclose quotations received for coverage. To the extent the waiver will not materially affect the safe and prudent operation of the Project, the Authority and BPMC, after consulting with the Division of Risk Management, will not unreasonably withhold approval of the requested waiver. Failure to furnish satisfactory evidence of insurance or failure to maintain the policy without complying with this subsection shall result in a material breach of this Agreement. (c) Indemnity. The Authority, to the extent permitted by applicable law and subject to the availability of funds, and Chugach (as “Indemnitor’) agrees to and shall indemnify and defend the other, its officers, employees, and agents (as “Indemnitee”) for tort liability for all claims for damages and injuries of any character or nature whatsoever arising from the sole negligence of the Indemnitor, including its officers, employees or agents in relation to performance under this Agreement. indemnitor agrees to assume the defense thereof and to pay all expenses (including attorney’s fees) connected herewith. For purposes of this section, “sole negligence” shall include acts or omissions of the Indemnitor, its officers, employees, or agents, or any combination thereof, and situations where such acts or omissions, in combination with the negligence of third parties combines to cause injury or damage to persons or property. It shall not include situations where the acts or omissions of the Indemnitor, its officers, employees, or agents combines with the negligence of Indemnitee to cause such injury, which situations shall be governed by the provisions of the subsection below relating to concurrent negligence. Each Party agrees that liability (including costs of defense and attorney’s fees) for claims arising from the concurrent negligence of both Parties shall be apportioned according to the respective percentage of fault attributable to each Party as determined by agreement or by the trier of fact. BRADLEY LAKE DISPATCH AGREEMENT Page 7 (d) Amendments. Any amendment or modification to this Agreement must be in writing and signed by Chugach and the Authority and approved by the BPMC. (e) Conduct_in Accord with Applicable Law. Chugach and the Authority agree that at all times during the term of this Agreement, they shall conduct themselves in accord with all applicable laws and permits, and they will undertake no action contrary to such laws or permits. The laws of the State of Alaska shall govern this interpretation and application of this Agreement and the actions of the Parties hereunder. (f) Prudent Utility Practices. For the purposes of this Agreement, Prudent Utility Practices shall have the meaning provided in Section 1(x) of the Power Sales Agreement. (g) Contract Hours and Safety Standards. This Agreement and all subcontracts are subject to all applicable provisions of state and federal law concerning work hours and safety standards. (h) Equal Employment Opportunity. This Agreement and_ all subcontracts are subject to all applicable provisions of state and federal law concerning Equal Employment Opportunity. (i) Exclusivity of Agreement. All terms and provisions agreed to between the Authority and Chugach will be incorporated into this Agreement setting forth the full intent of the Parties, except as provided in Sections 7(p) and 8 below. (j) Notice and Communication. Any notice of demand involving a claim of default, breach of this Agreement, or notice of a dispute shall be sent to the appropriate Party by registered or certified mail. Notice to the Authority shall be addressed to: the Executive Director, Alaska Energy Authority, 480 West Tudor Road, Anchorage, Alaska 99503-6690. BRADLEY LAKE DISPATCH AGREEMENT Page 8 (k) Section Headings. The section headings this Agreement are for convenience only, and do not purport to, and shall not be deemed to, define, limit or extend the scope or intent of the section to which they pertain. (I) Severability. In the event that any provision of this Agreement shall be finally adjudicated by a court of competent jurisdiction to be invalid or unenforceable, the remainder of the Agreement shall be unaffected by such adjudication and all the remaining provisions of the Agreement shall remain in full force and effect as if such provision so adjudicated to be invalid had not been included herein. (m) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors, legal representatives or assigns of Chugach and the Authority. However, Chugach may not assign this Agreement or any part thereof without the written consent of the Authority and the BPMC, which consent shall not unreasonably be withheld. If the Authority discontinues its current legal existence, or at the election of the BPMC or the Authority, the Authority's obligations under this Agreement will automatically be assigned to the BPMC, without the need for consent by Chugach, unless the rights, powers and duties of the Authority are transferred to a successor entity with substantially the same expertise within the meaning of Prudent Utility Practices, powers and duties as the Authority. (n) Waiver Not Continuing. Any waiver at any time by any Party to this Agreement of its rights with respect to any default of the other Party hereto, or with respect to any other matter arising in connection with this Agreement, shall not be considered a waiver with respect to any subsequent default, right or matter. Any delay short of the statutory period of limitations in asserting or enforcing any right shall not be deemed a waiver of such right. (0) Third Party Beneficiaries. The BPMC, as representative of the Purchasers, is a third party beneficiary of this Agreement, with the legal right to enforce the provisions hereof. In any action by the BPMC for damages, Chugach shall have the right to assert against the BPMC any defense which it could have asserted against the Authority. The raising of any such defense by BRADLEY LAKE DISPATCH AGREEMENT Page 9 Chugach shall not affect any right of a purchaser or the BPMC under the Master Operating Agreement or Power Sales Agreement. The Parties expressly do not intend to create any obligation or liability, or promise any performance to, any third party (including without limitation any individual or entity supplied with electric power by either Party or by any third party.) The Parties have not created for any third party other than signatories to the Power Sales Agreement any right to enforce this Agreement. (p) Other Agreements. This Agreement supercedes the Bradley Lake Hydroelectric Project Agreement for the Dispatch of Electric Power and for Related Services dated February 19, 1992, between the Authority and Chugach. This Agreement does not modify, alter, or amend any other contract or agreement that now exists or that may in the future exist between the Parties. The Parties intend that this Agreement should be interpreted in a manner compatible with other contracts and agreements associated with the Project. SECTION 8. RELATIONSHIP TO SERVICES AGREEMENT To the extent that the terms of the Services Agreement are incorporated by specific reference into this Agreement, such specific terms shall be binding on the Authority, without regard to whether the Authority is also signatory to the Services Agreement. SECTION 9. DEFINITIONS (a) Agreement. This Agreement governing dispatch of Project output. (b) Alaska Energy Authority or Authority. For the purposes of this Agreement, Alaska Energy Authority or Authority, shall have the meaning provided in Section 1(f) of the Power Sales Agreement. (c) Bradley Lake Energy. Electric energy, expressed in kilowatt hours (kwh), generated at the Bradley Lake Hydroelectric Project for a Purchaser in a manner consistent with the Power Sales Agreement and the applicable criteria, procedures, and guidelines adopted by the Project Management Committee. As BRADLEY LAKE DISPATCH AGREEMENT Page 10 used in this Agreement, Bradley Lake Energy does not include energy produced by generators other than those located at the Bradley Lake Hydroelectric Project, regardless of whether energy or capacity from such other generators is or may be sold to a Purchaser pursuant to provisions of the Power Sales Agreement relating to reserves for the Project. (d) BPMC_or Bradley Project_Management Committee. For the purposes of this Agreement, BPMC or Bradley Project Management Committee, shall have the meaning provided in Section 1(e) of the Bradley Lake Hydroelectric Project Master Maintenance and Operating Agreement. (e) Dispatcher. Dispatcher shall mean Chugach Electric Association, Inc., or, as the context requires, the employee(s) of Chugach who perform or supervise the performance of those employees that dispatch Project output pursuant to this Agreement. (f) Dispatch Services. Those duties with respect to the Project that Chugach performs under this Agreement. (g) Party. Either Chugach or the Alaska Energy Authority. (h) Power Sales Agreement. For the purposes of this Agreement, Power Sales Agreement, shall have the meaning provided in Section 1(j) of the Bradley Lake Hydroelectric Project Master Maintenance and Operating Agreement. (i) Project. For the purposes of this Agreement, Project, shall have the meaning provided in Section 1(v) of the Power Sales Agreement. (j) Purchaser. For the purposes of this Agreement, Purchaser, shall have the meaning provided in Section 1(y) of the Power Sales Agreement. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the day and year first above written. BRADLEY LAKE DISPATCH AGREEMENT Page 11 CHUGACH ELECTRIC ASSOCIATION, INC. By: Its: STATE OF ALASKA, ALASKA ENERGY AUTHORITY By: Its: BRADLEY LAKE DISPATCH AGREEMENT Page 12 DRAFT BRADLEY LAKE HYDROELECTRIC PROJECT TRANSMISSION FACILITIES MAINTENANCE AGREEMENT BETWEEN ALASKA ENERGY AUTHORITY AND HOMER ELECTRIC ASSOCIATION, INC. Section ODNDOARWN TABLE OF CONTENTS Title Page DG TIITIONS ais « ccsiaterwis sereteine sleoretsres arastotare secant ooptoteros a slTeIeiss S bisiie S sisiossiials sistoieja s sleime Effective! Date and) Termination) .... 0.00. esccciees sctmies rises sselesies setae stots Previous Contracts and Agreements ............:.ceceeeeeeeeeececeeeeeeeeees Maintenance of Transmission Facilities Emergency Expemdltures acc sspmsres ssieetae « straceoe smteenere s arertes sa isoioes Extraordinary Maintenance and Equipment Replacement.... FROCOLEVER, FGOrGin WTWel FAMREEE eceice vseccnas secences wanes seniss rommwns - Insurance and: Liability sestarssectessessceccectercecesecccescmeereemiccc'esccicmc sins Authorized | Representative aiscsc acces cerncas sores « sewielse seraeies emotions stelee eamta Indemnity) -scc2 sewcsmes onstmscneemas Force Majeure .......... Dispute Resolution ... PAIMOMGMONIES 3 sccctetciercericiets ctactcts sclnclets setersisies eee Seereite ea Conduct in Accordance with Applicable Law Prudent Utility iPtaCtiC@ iy. .scccccs senses tommenecemeee sseeeesem 6 Contract Hours and Safety Standards ..................c.0.sesececeseeceeeoe Equal Employment Oppontuniby nice: seciscue essere + seteteies steric s sree eotstenres se Exclusivity of Contract «.:.sceccsas. INOLICOS i ec cercinescscrneec secen sere Section Headings................ SOVELaDINITY sce cs cece cs cmos som Successors and Assigns .... WAIN OF Sitalcemreine cpa tititen corte sat sais Third) Panty; Bemeticianies) a: crake ssacenssmecane sconces teacce tees resises dese cie EXHIBIT "A" ONE LINE DIAGRAM EXHIBIT "B" PROJECT TRANSMISSION FACILITIES DESCRIPTION EXHIBIT “C” INSURANCE BRADLEY LAKE HYDROELECTRIC PROJECT TRANSMISSION FACILITIES MAINTENANCE AGREEMENT BETWEEN ALASKA ENERGY AUTHORITY AND HOMER ELECTRIC ASSOCIATION, INC. This agreement (hereinafter referred to as Agreement), is made and entered into this day of , 1995, by and between ALASKA ENERGY AUTHORITY, a public corporation of the State of Alaska, hereinafter “Authority”, and HOMER ELECTRIC ASSOCIATION, INC., an electric cooperative corporation of the State of Alaska, hereinafter “HEA”. WITNESSETH WHEREAS, the Authority has constructed Project Transmission Facilities in order to interconnect the Bradley Lake Hydroelectric Project with railbelt utilities. WHEREAS, the Authority is the owner of the Bradley Lake Hydroelectric Project, including the Project Transmission Facilities between the substation at the Bradley Lake Power House and Bradley Junction; WHEREAS, the Authority, with the approval of the BPMC, contracts with qualified utilities (as defined by AS 44.83.425(3)) for the operation and maintenance of the Bradley Lake Hydroelectric Project, the operation and Transmission Facilities Maintenance Agreement Page 1 maintenance of the Power Transmission Facilities between the substation at the Bradley Lake Power House and Bradley Junction and for the Dispatch of Power from the Project; WHEREAS, the Authority has presently contracted the Operation and Maintenance of the Bradley Lake Hydroelectric Project with HEA under the Bradley O&M Agreement; WHEREAS, the Authority is, concurrently with this Agreement, formally contracting with HEA under the Bradley Lake Hydroelectric Project Transmission Interconnect Agreement for Project Transmission Facilities and HEA’s transmission facilities; WHEREAS, the Authority desires to contract for the maintenance of the Project Transmission Facilities; WHEREAS, HEA is a qualified utility and a signatory to the Power Sales Agreement, and WHEREAS, HEA owns, operates and maintains transmission facilities on the Kenai Peninsula and the HEA is willing to maintain a defined portion of the Project Transmission Facilities; NOW THEREFORE, IN CONSIDERATION of the mutual covenants herein contained the Parties hereto agree as follows: Transmission Facilities Maintenance Agreement Page 2 SECTION 1__ DEFINITIONS For the purposes of this Agreement, the following definitions and abbreviations apply: A. "Agreement" means this Agreement. B. “Annual Project Budget” means the budget for the Project and Project Related Facilities as adopted or in effect for a particular Fiscal Year, and as amended or supplemented from time to time pursuant to the applicable provisions of the Power Sales Agreement. Cc. "Authority" means the Alaska Energy Authority, an agency of the State of Alaska. Dy “Bradley O&M Agreement” means the Operation & Maintenance Agreement For Bradley Lake Hydroelectric Project by and between the Authority and HEA dated February 11, 1994. Fs "BPMC” means the Bradley Lake Project Management Committee as established under the December 8, 1987, Power Sales Agreement and operating under the Bylaws adopted on October 19, 1988. Ee "Contract Dispatcher" means the Authority’s Contractor responsible for the daily scheduling and remote monitoring and controlling of the voltage, frequency, and real and reactive power flow through the Bradley Lake Hydroelectric Project. Transmission Facilities Maintenance Agreement Page 3 “Fiscal Year” means that twelve (12) month period defined in the Power Sales Agreement, Section 1(r). “Master Operating Agreement” means the Bradley Lake Hydroelectric Project Master Maintenance and Operating Agreement dated May 24, 1994, by and among the Authority and the BPMC. "Party" or "Parties" means the signatories to this Agreement. "Power" means electric energy or electric capacity, or both, except where the context requires a distinction, in which case electric energy is expressed in kilowatt hours, and electric capacity is expressed in kilowatts. “Power Sales Agreement” means the Bradley Lake Power Sales Agreement, dated December 8, 1987, among the Authority; the Municipality of Anchorage (d.b.a. Municipal Light and Power (ML&P)); the City of Seward (d.b.a. Seward Electric System (SES)); the Chugach Electric Association, Inc. (Chugach); the Golden Valley Electric Association, Inc. (GVEA); the Alaska Electric Generation and Transmission Cooperative, Inc. (AEG&T), the Matanuska Electric Association, Inc. (MEA); and the Homer Electric Association, Inc. (HEA). “Project" means the Bradley Lake power generation facility and the associated transmission and substation facilities described in Exhibit C to the Power Sales Agreement. Transmission Facilities Maintenance Agreement Page 4 “Project Transmission Facilities” mean the transmission facilities and equipment owned by the Authority interconnecting the Fritz Creek and Soldotna transmission lines owned by the HEA with the Bradley Lake Hydroelectric generation plant owned by the Authority. Project Transmission Facilities include the 115 kV switching station at Bradley Junction and approximately 20 miles of two parallel, single circuit, 115 kV transmission lines from the overhead line attachment point on the dead end structure adjacent to the transformer at the Bradley Lake Power Plant and are described by Exhibits A and B. “Prudent Utility Practice” for the purposes of this Agreement, will have the meaning provided in Section 1(x) of the Power Sales Agreement. "Purchaser" will have the meaning given to that term by the Power Sales Agreement, Section 1(y). SECTION 2__ EFFECTIVE DATE AND TERMINATION A. Effective Date. This Agreement will become effective on the date set forth above and will continue in effect until terminated as provided for in Section 2B. of this Section. Transmission Facilities Maintenance Agreement Page 5 Bs Termination. Either Party may terminate this Agreement by: ae Delivering written notice to the other Party at least 6 months prior to the end of the Fiscal Year, or 2s Delivering written notice to the other Party of a material breach of the Agreement by the other party; and if the other Party fails to rectify the material breach within 90 days after receiving notice of the breach, by giving notice of termination to the other Party, or 3s Delivering written notice to the other Party as provided in Section 5.B.3. All liabilities accruing under this Agreement prior to its termination will be and are hereby preserved until satisfied. SECTION 3 PREVIOUS CONTRACTS AND AGREEMENTS This Agreement is subject to the terms of the Master Operating Agreement between the Authority and the BPMC. Nothing in this Agreement is intended to alter the rights and obligations of the Authority and the Purchaser(s) under the Power Sales Agreement. In the event the terms of this Agreement and the Power Sales Agreement or Master Operating Agreement are found to be in conflict, the terms of the Power Sales Agreement will have first priority with the Master Operating Agreement having second priority. Transmission Facilities Maintenance Agreement Page 6 SECTION 4__MAINTENANCE OF TRANSMISSION FACILITIES A. General Responsibilities. HEA will maintain the Project Transmission Facilities consistent with the guidelines set by the manufacturer, unless otherwise directed by the Authority, and consistent with Prudent Utility Practice, National Electric Safety Code and other applicable codes, federal and state laws, regulations, requirements and standards. Specific Responsibility for Maintaining the Project Transmission Facilities. HEA will: ile Coordinate all maintenance schedules and provide maintenance schedules, budgets and records in accordance with the provisions of this Agreement; as directed by the Authority; 2. Develop written maintenance procedures, maintenance training, and preventive maintenance programs; So: Conduct scheduled inspections required by the annual maintenance plan agreed upon by the Parties under Section 5 of this Agreement and issue an inspection report of findings and recommendations to the Authority within 20 working days of completing all inspections; Transmission Facilities Maintenance Agreement Page 7 Cc: Except as provided in Section 7, modify Authority equipment only upon Authority approval prior to any changes being made, and provide notification and description of all changes HEA has made to Project Transmission Facilities. Within 45 days after alteration or replacement, HEA will provide to the Authority “as built” mylar drawings showing all alterations or replacements to Project Transmission Facilities; Make available for inspection by the Authority's or BPMC’s representative, upon reasonable notice, all maintenance records maintained in conjunction with or related to this agreement; Subject to the provisions of 4 B. 4 above, upon discovery or notification and as soon as reasonably possible, take all actions reasonably necessary to protect equipment, personnel, and the general public from hazards, which arise from equipment failure (e.g., electrical faults, vandalism, and mechanical failure); repair and report damaged facilities, and notify the Authority as soon as reasonably possible after each equipment failure or repair; Responsibility of Project Transmission Facilities Owner. In accordance with the provisions of 5.B, the Authority will coordinate and submit for adoption in accordance with the Power Sales Agreement, an Annual Project Budget sufficient to satisfy the Project Transmission Facilities maintenance costs budgeted and approved in advance by the BPMC. Transmission Facilities Maintenance Agreement Page 8 2 The Authority will pay HEA for the costs of labor, materials, supplies, equipment, training and administration, incurred in performing its responsibilities hereunder, as provided in Sections 6, 7 and 8 of this Agreement; D: Prior Authorization. Except in emergencies as provided in Section 7 or as approved under the annual maintenance plan and budget, HEA will secure written authorization from the Authority to make alterations or replacements to Project Transmission Facilities. SECTION 5 MAINTENANCE PLAN, SCHEDULE AND BUDGETS A. Maintenance Plan and Schedule Requirements. 1 HEA will develop annually a plan and schedule for maintenance of the Project Transmission Facilities. This plan and schedule will be used for planning and tracking maintenance activities and as the basis for budget submittals to the Authority. Zs The plan and schedule will run from July first to June thirtieth of each Fiscal Year. Transmission Facilities Maintenance Agreement Page 9 B. Annual Transmission Facilities Budget. After the effective date of this Agreement, and in accordance with schedules provided by the Authority, HEA will prepare and submit each year to the Authority and the BPMC a draft Annual Transmission Budget for the following Fiscal Year as provided in Section 5 D. The draft Annual Transmission Facilities Budget will be based upon prudent estimates and anticipated operation and maintenance requirements and expenditures, and reflect appropriate accounting and budgetary principles for utilities. The draft budget will be prepared in a format and schedule provided to the Authority by the BPMC. HEA will perform its duties in a manner consistent with the Annual Transmission Facilities Budget except as provided in Sections 7 and 8 below. If HEA makes a determination during any Fiscal Year that it cannot perform its obligations under this Agreement without an increase in the expenditures authorized under Annual Project Budget, HEA will report such finding to the Authority and the BPMC and will submit a revised budget for the Authority's and the BPMC's review and approval. In the event the revised budget is not adopted by the BPMC and the Authority, or in the event the Authority, pursuant to Section 13(e) does not authorize and agree to fund such expenditures, and HEA determines that it cannot perform its Transmission Facilities Maintenance Agreement Page 10 D: obligations under this Agreement, HEA may terminate this Agreement upon 90 days written notice to the Authority. Three Year Major Maintenance and Improvements Plan and Budget. Annually HEA will prepare and submit a three year plan and budget for proposed major maintenance and improvements, (e.g., major equipment replacement) and other projects deemed by HEA to be required to insure continued safe and economical operation of the Project Transmission Facilities that are not included in that Fiscal Year’s proposed annual maintenance plan or require more than one year to complete. The three year plan will be revised annually and submitted together with the proposed annual maintenance plan. Budget and Plan Submittal. HEA will submit the annual maintenance plan, schedule and budget, and the three year plan and budget to the Authority no later than November 1 for the next Fiscal Year. The plans, schedules and budgets may be modified through negotiations between HEA and the Authority. SECTION 6 PAYMENT A. The ordinary costs of performing under this Agreement will be initially paid by HEA. Transmission Facilities Maintenance Agreement Page 11 HEA will prepare an invoice identifying the actual and reasonable costs incurred in a format mutually agreeable to the Authority and HEA. The invoice will be furnished to the Authority by the fifteenth (15) of the month following the month in which the costs are incurred. All such invoices will be subject to audit and approval by the Authority, such approval will not be unreasonably be withheld. Subject to the availability of funds, the Authority will reimburse HEA for all costs reasonably incurred and properly invoiced and approved under this Agreement. Any amounts owed by the Authority to HEA will be paid by the Authority within thirty (30) days of receipt of an appropriate invoice from HEA. Any amounts not paid within thirty (30) days will accrue simple interest at the legal rate of interest at the time payment was due, and will continue until paid by the Authority. Billing Disputes The Authority will authorize payment for the full amount of HEA charges pending the resolution of any cost dispute, except for those costs expressly disapproved in writing prior to the costs being incurred. Within 90 days after HEA submits a disputed invoice costs charge, the Authority will notify HEA in writing of the amount in dispute and the basis for the dispute. If the Parties cannot settle the dispute informally, or by agreement through the BPMC either Party may file an action in the Alaska Superior Court for the Third Judicial District to obtain a decision resolving such dispute and to obtain any other remedy permitted by law. Pending Transmission Facilities Maintenance Agreement Page 12 final resolution of any such dispute the Parties will continue to perform under this Agreement. SECTION 7 EMERGENCY EXPENDITURES A. An emergency is an unforeseen circumstance or the resulting state that requires immediate action to protect or preserve the Project Transmission Facilities, personnel, or public health and safety. B; HEA will take such actions as it reasonably believes are necessary in an emergency. If, in the reasonable judgment of HEA, the emergency requires HEA to incur costs prior to obtaining written approval from the Authority, HEA will notify the Authority and the BPMC within 72 hours after discovery of the emergency. SECTION 8 EXTRAORDINARY MAINTENANCE AND EQUIPMENT REPLACEMENT When HEA learns of an equipment failure or other contingency which, in HEA's judgment, necessitates incurring an extraordinary maintenance and equipment replacement cost, HEA will promptly notify the Authority of the circumstances. Except as provided in Section 7, HEA will obtain the Authority's written approval prior to incurring an extraordinary maintenance and equipment replacement cost. Except in emergency circumstances HEA will incur no extraordinary maintenance and equipment replacement cost for which the approval of the Authority has been requested and expressly denied in writing. Transmission Facilities Maintenance Agreement Page 13 SECTION 9 ACCOUNTS, RECORDS AND AUDITS Accounts, Records, and Audits. In keeping records for work performed under this Agreement, HEA will utilize the accounting system required of public utilities and licensees by the Federal Energy Regulatory Commission for electric plants. HEA will make its records available as required. HEA will retain copies of all invoices, payroll records, and other supporting documents sufficient for an audit of all expenditures, for three (3) years following the close of each Fiscal Year. HEA will furnish the Authority with operating and financial statements related to work performed under this Agreement as may be reasonably requested by the Authority. If receipt of those statements is unreasonably delayed, the Authority may, with its own staff or agents, perform all work necessary to collect the data reasonably necessary, but only at such times and in such a manner as will not unreasonably interfere with HEA’s operation of the Transmission Facilities. SECTION 10 INSURANCE AND LIABILITY During the term of this Agreement, HEA will purchase and maintain insurance covering injury to person or property suffered by the Authority or a third party, as a result of errors or omissions or operations by HEA or by its subcontractor(s) which arise both out of and during the course of Transmission Facilities Maintenance Agreement Page 14 this Agreement. HEA will require all subcontractors providing services directly or indirectly under this Agreement to provide the insurance as required by Exhibit C. Coverage will also provide protection against injuries to all employees of HEA and the employees of any subcontractor engaged in work under this Agreement. Copies of all required insurance policies will be furnished to the Authority prior to beginning work under this Agreement. These policies will show evidence of coverage and provide for ninety (90) days notice of written cancellation, non-renewal or material change in the coverage. HEA will purchase insurance adequate to cover its operations performed in connection with the work under this Agreement. Specifically, HEA will maintain Worker’s Compensation Insurance and Comprehensive General Liability Insurance, including Comprehensive General Liability Broad Form Insurance, Automobile Liability Insurance, Owned Aircraft Insurance (where applicable), and Owned Watercraft Insurance (where applicable), in amounts acceptable to the Authority and consistent with the Power Sales Agreement. The State of Alaska, the Authority and the BPMC will be named as additional insureds under the coverages required by this Agreement. The obligation to obtain and maintain insurance coverage pursuant to this Section will be subject to the general availability of such coverage under reasonable terms and conditions. If one or more of the required insurance coverages is not available under reasonable terms and conditions, HEA will, under the guidance and direction of the BPMC and Division of Risk Management, use its best efforts to obtain substantively equivalent Transmission Facilities Maintenance Agreement Page 15 insurance coverage acceptable to the BPMC, the Authority, and the Division of Risk Management. If, after utilizing its best efforts, HEA is unable to obtain the required insurance coverage under reasonable terms and conditions, as reasonably determined by HEA, HEA will request a waiver of the relevant insurance requirement. The request will outline steps taken by HEA to obtain such insurance and will disclose quotations received for coverage. To the extent the waiver will not materially affect the safe and prudent operation of the Project, the Authority and BPMC, after consulting with the Division of Risk Management, will not unreasonably withhold approval of the requested waiver. Failure to furnish satisfactory evidence of insurance or failure to maintain the policy without complying with this subsection will result in a material breach of this Agreement. SECTION 11 AUTHORIZED REPRESENTATIVE The Parties will each designate one representative to carry out the provisions of this Agreement. Within 30 days after execution of this Agreement, each Party will notify the other Party in writing of its designated representative. Either Party may change its representative at any time and will promptly provide written notice of such change to the other Party. Transmission Facilities Maintenance Agreement Page 16 SECTION 12 _ INDEMNITY The Authority, to the extent permitted by applicable law and subject to the availability of funds, and HEA (as “Indemnitor”) agrees to and will indemnify and defend the other, its officers, employees, and agents (as “Indemnitee”) for tort liability for all claims for damages and injuries of any character or nature whatsoever arising from the sole negligence of the Indemnitor, including its officers, employees or agents in relation to performance under this Agreement. Indemnitor agrees to assume the defense thereof and to pay all expenses (including attorney’s fees) connected herewith. For purposes of this section, “sole negligence” will include acts or omissions of the Indemnitor, its officers, employees, or agents, or any combination thereof, and situations where such acts or omissions, in combination with the negligence of third parties combines to cause injury or damage to persons or property. It will not include situations where the acts or omissions of the Indemnitor, its officers, employees, or agents combines with the negligence of Indemnitee to cause such injury, which situations will be governed by the provisions of the subsection below relating to concurrent negligence. Each party agrees that liability (including costs of defense and attorney’s fees) for claims arising from the concurrent negligence of both Parties will be apportioned according to the respective percentage of fault attributable to each Party as determined by agreement or by the trier of fact. SECTION 13. FORCE MAJEURE A. No Party to the Agreement will be liable to the other Party for, or be considered to be in breach of or default under this Agreement on account Transmission Facilities Maintenance Agreement Page 17 of, any delay in performance or any delay or failure to deliver, receive or accept delivery of energy due to any of the following events: 1: Any cause or condition beyond such Party's reasonable control which such Party is unable to overcome by the exercise of reasonable diligence (including but not limited to: fire, flood, earthquake, volcanic activity, wind, drought and other acts of the elements; court order and act of civil, military or governmental authority; strike, lockout and other labor dispute excluding those disputes wrongfully caused by HEA; riot, insurrection, sabotage and war; breakdown of or damage to facilities or equipment; electrical disturbance originating in or transmitted through such Party's electric system or any electric system with which such Party's system is interconnected; and, any act or omission of any person or entity other than such Party, or Party's contractors or suppliers of any tier or anyone acting on behalf of such Party; or 2. Any action taken by such Party which is reasonably necessary or prudent to protect the operation, performance, integrity, reliability or stability of the Project or of such Party's electric system or any electric system with which such Party's electric system is interconnected, whether such actions occur automatically or manually. In the event of any delay excused under this section, the time for performance thereby delayed will be extended by a period of time reasonably necessary to compensate for such delay. No cost adjustment will be allowed, only time extensions as appropriate. Nothing contained in Transmission Facilities Maintenance Agreement Page 18 this paragraph will require any Party to settle any strike, lockout or other labor dispute. Each Party will give the other Party prompt written notice of any delay which the Party giving notice considers to be an excusable delay of its performance. SECTION 14 __ DISPUTE RESOLUTION Pending resolution of a disputed matter, the Parties will continue performance of their respective obligations pursuant to this Agreement. If the Parties cannot reach timely mutual agreement on any matter in the administration of this Agreement, HEA will, to the extent necessary for its continued performance, make a determination of such matter without prejudice to the rights of the other Parties. Such determination will not constitute a waiver of any other remedy belonging to either Party. SECTION 15 —/ AMENDMENTS Any amendment or modification to this Agreement must be in writing and signed by HEA and the Authority and approved by the BPMC. SECTION 16 CONDUCT IN ACCORD WITH APPLICABLE LAW HEA and the Authority agree that at all times during the term of this Agreement, they will conduct themselves in accord with all applicable laws and permits, and Transmission Facilities Maintenance Agreement Page 19 they will undertake no action contrary to such laws or permits. The laws of the State of Alaska will govern the interpretation and application of this Agreement and the actions of the-Parties. SECTION 17 PRUDENT UTILITY PRACTICE HEA agrees to maintain and operate the Project Facilities in conformance with Prudent Utility Practice. SECTION 18 _CONTRACT HOURS AND SAFETY STANDARDS The Parties to this Agreement and any subcontractor contracting for any part of the work under this Agreement are subject to all applicable provisions of state and federal law concerning work hours and safety standards. SECTION 19 EQUAL EMPLOYMENT OPPORTUNITY The Parties to this Agreement and any subcontractor contracting for any part of the work under this Agreement are subject to all applicable provisions of state and federal law concerning Equal Employment Opportunity. Transmission Facilities Maintenance Agreement Page 20 SECTION 20 EXCLUSIVITY OF CONTRACT All terms and provisions agreed to between the Authority and HEA concerning maintenance and operation of the Project Transmission Facilities are incorporated into this Agreement setting forth the full intent of the Parties. SECTION 21 __ NOTICES Any notice of demand involving a claim of default, breach of this Agreement, or notice of a dispute will be sent to the appropriate party by registered or certified mail. Notice to the Authority will be addressed to: the Executive Director, Alaska Energy Authority, 480 West Tudor Road, Anchorage, Alaska 99503- 6690; and to General Manager, Homer Electric Association, Inc., P.O. Box 169, Homer, Alaska 99603. The foregoing designations of the name or address to which notices or demands are to be directed may be changed at any time by written notice given by one Party to the other Party. Any notice or request not otherwise provided for in this Agreement will be given in such manner as the Parties agree. SECTION 22 SECTION HEADINGS The section headings of this Agreement are for convenience only, and do not purport to, and will not be deemed to, define, limit or extend the scope or intent of the section to which they pertain. Transmission Facilities Maintenance Agreement Page 21 SECTION 23 _ SEVERABILITY In the event that any provision of this Agreement will be finally adjudicated by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement will be unaffected by such adjudication and all the remaining provisions of this Agreement will remain in full force and effect as if such provision so adjudicated to be invalid had not been included herein. SECTION 24 SUCCESSORS AND ASSIGNS This Agreement will be binding upon and inure to the benefit of the successors, legal representatives, or assigns of HEA and the Authority. However, HEA may not assign this Agreement or any part hereof without the written consent of the Authority and the BPMC. At the election of the BPMC or the Authority, or if the Authority discontinues its current legal existence, its obligations under this Agreement will be automatically assigned to the BPMC, without the need for consent by HEA, unless the rights, powers and duties of the Authority are transferred to a successor entity with substantially the same expertise within the meaning of Prudent Utility Practice, powers and duties as the Authority. SECTION 25 WAIVER NOT CONTINUING Any waiver at any time by a Party of its rights with respect to any default of the other Party hereto, or with respect to any other matter arising in connection with this Agreement, will not be considered a waiver with respect to any subsequent Transmission Facilities Maintenance Agreement Page 22 default, right or matter. Any delay short of the statutory period of limitations in asserting or enforcing any right will not be deemed a waiver of such right. SECTION 26 THIRD PARTY BENEFICIARIES The BPMC, as representative of the Power Sales Agreement Purchasers, is a third party beneficiary of this Agreement, with the legal right to enforce the provisions hereof. In any action by the BPMC for damages, HEA will have the right to assert against the BPMC any defense which it could have asserted against the Authority. The raising of any such defense by HEA will not affect any right of a Purchaser or the BPMC under the Master Operating Agreement or Power Sales Agreement. The Parties expressly do not intend to create any obligation or liability, or promise any performance to, any third party (including without limitation any individual or entity supplied with electric power by either Party or by any third party.) The Parties have not created for any third party other than signatories to the Power Sales Agreement any right to enforce this Agreement. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their authorized officers or representatives and their corporate seals to be hereunto affixed as of the day and year first above written. DATED this day of , 1995, at Anchorage, Alaska. ALASKA ENERGY AUTHORITY By: Its: Transmission Facilities Maintenance Agreement Page 23 DATED this day of Alaska. , 1995, at Homer, HOMER ELECTRIC ASSOCIATION, INC. By: Its: STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) The foregoing Agreement was acknowledged before me this day of , 1995, by , the of the Alaska Energy Authority, an Alaska corporation, on behalf of the corporation. Notary Public in and for Alaska My commission expires: Transmission Facilities Maintenance Agreement Page 24 STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) The foregoing Agreement was acknowledged before me this day of , 1995, by , the of the Homer Electric Association, Inc., an Alaska corporation, on behalf of the corporation. Notary Public in and for Alaska My commission expires: Transmission Facilities Maintenance Agreement Page 25 EXHIBIT A BRADLEY LAKE HYDROELECTRIC PROJECT ONE LINE DIAGRAM EXHIBIT B BRADLEY LAKE HYDROELECTRIC PROJECT PROJECT TRANSMISSION FACILITIES DESCRIPTION EXHIBIT C INSURANCE ils Contractor to purchase/maintain insurance for duration of agreement, plus one year following final payment. 2 Specified limits are minimum levels. If the policy contains higher limits, contracting agency is entitled to coverage of higher limits. 3: Certificate of insurance must be furnished to contracting agency. . Must provide for 30-day prior notice to the contracting agency of cancellation, reduction in liability. . Failure to furnish constitutes material breach and grounds for termination. Types of Insurance Worker's Compensation: Contractor responsible for subcontractors. Coverage must include statutory coverage for states where employees are engaging in work and employer's liability protection not less than $100,000 per person, $100,000 per occurrence. Where applicable, coverage for all federal acts must also be included. Comprehensive of Commercial General Liability Insurance: Covers all operations of contractor providing insurance for bodily injury and property damage liability including coverage for: e Premises and Operations ° Products and Completed Operations ° Broad Form Damage; and ° Personal Liability Comprehensive Policy: Minimum combined single limit of liability is $300,000 per occurrence, $300,000 aggregate for bodily injury, property damage and personal injury. Commercial Policy: Minimum limits of liability are $300,000 per occurrence (combined single limit) for bodily injury and property damage, $300,000 per occurrence for personal injury, $300,000 aggregate for products-completed operations, and $300,000 general aggregate. Comprehensive Automobile Liability Insurance: Covers all owned, hired, and non-owned vehicles with coverage limits not less than $100,000 per occurrence bodily injury and $50,000 property damage. Professional Liability Insurance: Covers all negligent errors, omissions which the contractor, subcontractor or their employees make in the performance of the agreement which results in financial loss to the contracting agency. Minimum Limits: Combined Single Limit Contract Amount Occurrence and Annual Aggregate Under $100,000 $100,000 $100,000 to $499,999 $250,000 $500,000 to $999,999 $500,000 $1,000,000 and up NEGOTIABLE Contracting agency reserves right to implement an Owner Controlled Insurance Program with option of obtaining Professional Liability Insurance, contractor isn't required to carry Professional Liability Insurance. EXHIBIT C Page 2 of 2 YK KKK IIIA K KKK KKK KOK KKK KKK KKK KKK KKK AK AK KK KKK KKK KK KKK KOK KKK KOK KOK x P.01 x x TRANSACTION REPORT x x aaa JUL-13-95 THU 12:00 = x x , x x BROADCAST ? x x iv x x DATE START RECEIVER TX TIME PAGES TYPE NOTE i Mt DP x x X x JUL-13 11:31 2635204 37" 1 SEND ( M) OK 038 x x 11:32 5626994 eile 1 SEND ( M) OK Fi 038k x 11:32 19072242621 26" 1 SEND (M) OK y, 038 x x 11:33 19074515633 28" 1 SEND (M) OK / 038 x X 11:34 19077459368 26" 1 SEND (M) OK / 038 x k 11:59 15032260079 44" 1 SEND (M) OK 038 k X SS oa X x f X x TOTAL 3M a PAGES: 6 x x X XXL IAAL ARATE IAEA IR IAAT AAAI } i 7 Alaska Industrial Development & Export Authority 480 West Tudo Road, Anchorage, Alaska 99503-6690 ri FAX J owe: _orniss Number of pages including covor sheet: To: 263.5204 Tom Stahr, ML&P Brenda J. Fugicstad 562.6994 Eugene Bjornstad, CBA 1.907.224.2621 Dave Calvert, City of Seward 1.907.451.5633 Mike Kelly, GVEA 1.907.745-9368 Wayne Carmony, MEA 1.503.226.0079 Ron Saxton, AWHD&S Phone: 907.561.8050 Fax phone: Fax phone: 907.561.8998 cc; Alaska Industrial Development & Export Authority 480 West Tudor Road, Anchorage, Alaska 99503-6690 FAX To: 263.5204 Tom Stahr, ML&P 562.6994 Eugene Bjornstad, CEA 1.907.224.2621 Dave Calvert, City of Seward 1.907.451.5633 Mike Kelly, GVEA 1.907.745-9368 Wayne Carmony, MEA 1.503.226.0079 Ron Saxton, AWHD&S Fax phone: CC: REMARKS: PLEASE NOTE: The Bradley Lake Project Management Committee meeting schedule for July 17, 1995, at 10:00 a.m. has & Urgent For your review been postponed. A date has yet to be determined. When a firm date has been set notification will be sent. Thank you. Norm Story Chairman, BPMC Date: 07/13/95 Number of pages including cover sheet: From: Brenda J. Fuglestad Phone: 907.561.8050 Fax phone: 907.561.8998 OO Reply ASAP 0 +Please comment Alaska Industrial Anchorage, Alaska 99503-6690 Development & Export Authority FAX Date: 07/13/95 Number of pages including cover sheet: 2 Marian Izzo Brenda J. Fuglestad Phone: Phone: 907.561.8050 Fax phone: 907.561.8998 Fax phone: CC: REMARKS: OO +Urgent 0 +For your review OO Reply ASAP (_ =Please comment How does this sound? Brenda r ALASKA INDUSTRIAL DEVELOPMENT =_ AND EXPORT AUTHORITY f= ALASKA @@E_ =ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 561-8050 FAX 907 /561-8998 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING AGENDA Monday, July 17, 1995 - 10:00 a.m. Anchorage Municipal Light & Power Commission Room - 1200 East 1st Avenue I CALL TO ORDER Story 2. ROLL CALL 3. PUBLIC COMMENT 4. AGENDA COMMENTS Ss. APPROVAL OF MEETING MINUTES - June 15, 1995 6. BUDGET SUBCOMMITTEE REPORT Lovas me OPERATION AND DISPATCH SUBCOMMITTEE REPORT Sieczkowski 8. OLD BUSINESS A. Spinning Reserves Update Lovas B. Agreements Update Beardsley 9. NEW BUSINESS A. Approval of Legal Expenses & other Expenses Bjornstad 10. COMMITTEE COMMENTS A. Next Meeting Date Story 11. ADJOURNMENT h:all\eva\bradley\agenda vel” BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING MINUTES \ Alaska Industrial Development and Export Authority 4} 480 West Tudor Road Anchorage, Alaska Thursday, June 15, 1995 10:00 a.m. i CALL TO ORDER Chairman Norm Story called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:07 a.m. to conduct the business of the Management Committee. The following members were present: 2. ROLL CALL Alaska Energy Authority Stan Sieczkowski, Designated Alternate Representative City of Seward Dave Calvert, Designated Representative Homer Electric Association Norm Story, Designated Representative Matanuska Electric Association ene Carmony, Designated Representative e Municipal Light & Power Hank Wikels’ Gp?) Designated Alternate Representative Chugach Electric Association Eugene Bjornstad, Designated Representative Golden Valley Electric Association Brad Evans, Designated Alternate Representative Others Present: Brenda J. Fuglestad, AEA Ron Saxton, Ater, Wynne, Hewitt, Dodson & Skerritt Myles Yerkes, Homer Electric Association Mary Ann Pease, Anchorage Municipal Light & Power John Cooley, Chugach Electric Association Bob Hufman, AEG&T Jim Hall, Matanuska Electric Association Brian Hickey, Chugach Electric Association June Finkbiner, Municipal Light & Power Joe Griffith, Chugach Electric Association 3. PUBLIC COMMENT There was no public comment. 4. AGENDA COMMENTS There were no changes or additions to the agenda. as APPROVAL OF MEETING MINUTES: April 13, 1995 The Committee stated that there were two errors in the April 13, 1995, meeting minutes. Page 4, Item 9A, third sentence: the word "policy" was inadvertently left out after "spinning reserve..." Page 7, Item 11, second paragraph reads "...interaction with the governor...", should read "...interaction of the governor..." Chairman Story stated the minutes would reflect these changes. MOTION: Mr. Bjornstad moved to approve the April 13, 1995, minutes as amended. Seconded by Mr. Calvert. A voice vote was taken, and the motion passed unanimously. 6. BUDGET SUBCOMMITTEE REPORT Chairman Story informed the Committee that a memorandum was_ sent - appointing Mary Ann Pease as Chairgar of the Budget Subcommittee. Wson Ms. Pease briefed the Committee stating that the year-end audit report dated June 30, 1995, has been finalized by Parisena, aad Stromburg? The report was forwarded to the Budget Subcommittee members. There are two issues that were identified in the management letter that need to be addressed by the Project Management Committee. The first issue is the workmen's compensation receivable: due to the lack of information from the Alaska Industrial Development and Export Authority ("AIDEA") and the inability to provide the financial justification the auditors felt that Bradley Lake has a potential receivable of apx. $35,000.00, that—has-— never—been—booked. AIDEA is continuing to research th#S* issue, but it is the Budget Subcommittee's recommendation that Bradley Lake be credited for the workmen's compensation receivable until AIDEA can prove otherwise. The second issue is the allocated charges: the auditors question the allocation of insurance and dedicated circuit service fees that AIDEA passes on to the utilities. This issue is not major, but the Budget Subcommittee will keep this in mind and review the circuit maintenance methodology and present the findings to the PMC. ak Ms. Pease also stated that the audit report summarizes the operating surplus and reserve currently carried on the project. For FY94 the ending surplus was $1,226,000. According to Elaine McCambridge of AIDEA the projected for FY95 is $1,524,000. The FY96 budget allocates $1,169,000 to reduce the surplus to only $355,000 for FY96. bri é—surphs—dow 2 S —easonable—tevel The Bradley Lake Budget Subcommittee recommends that the managers accept the Parisena aaa, Stromburg -=Compeny report for FY94. = Compmvy It is also the Bradley Lake Budget Subcommittee’s recommendation that we. sé Parisena, ase Strombur: ‘the FY95 report which should be underway in August 1995, andl Qo. be used As addressed at the April 13 meeting by Tom Lovas, the Budget Subcommittee is requesting an audit of the following items: i Review and verification of power dispatch charges from Chugach. 2. Review and verification of charges from Homer as currently contained at AIDEA. 3; The final accounting treatment and insurance adjustments for the airplane accident at Bradley lake. The Subcommittee has reviewed the scope of work for the audit and is requesting PMC approval for the audit to be accomplished by Pete Raskins. On May 16 there was a meeting of several of the utilities to address the accounting and potential APUC treatment of Bradley Lake payments. The participants currently pay a flat amount based on the budget, the cost is then recovered through COPA. Several of the utilities were at this discussion and at the current time no one seemed interested in pursuing a change in the methodology of energy values. It is the Subcommittee's recommendation that this issue be addressed by the financial and regulatory members of the participating utilities if future action is necessary. Ts IPERATION AND DISPATCH SUBCOMMITTEE REPORT Mr. Sieczkowski stated that the O&D Subcommittee met on April 14. The a three year extension which will be reviewed on a year by year basis. The purpose cf=tes is to ultimately come up with reliable watermionitoring as well as a reduction in pdf fishwater A releases. Shay Scud Subcommittee anticipates having the technical standards completely reviewed , pme by the next meeting. The Subcommittee also reviewedy (per the instructions offtey r tbs PMCS diacuere and a the extension of the fishwater studies ps —sequésted= This study’ tr _, ttt The construction funds Zef=Beedey—is- currently under review. An list and a report of the funds should be developed for the next PMC meeting. A Mr. Hickey stated that operations have been normal short of the error and allocation that was discovered in April. Mr. Evans stated that there was a five year study done that was due to FERC which was phase one of the fish study. He asked whether this report has been submitted and if a copy is available. Mr. Sieczkowski stated that the initial study period was five pyears_ nd , is due to be terminated December 31, 1995. This is the last, Gear sthéheieor wal—be- Jeekedeat after which a final report will be submitted to FERC. He stated that he earlier discussed a three year extension DP to the initial study period of five years. Mr. Evans stated that there was a difference in what Mr. Sieczkowski was saying and what has been done for the first five years. He stated that it is not an extension of the first five years, but basically a new study because the first report satisfied the FERC requirement. 4 ob dies Mr. Sieczkowski stated that the cost of the, extension is $39,000 for thé ' Northern Environmental Services and $38,000 4s” USGS per year leokargca=e Roe th <pessisle three-year extension. This Giksmecen will be evaluated on a year by year basis. 2 Wneatzen Mr. Evans asked about the magnitude of the, adjustm nt. pum Mr. Hickey stated that Chugach determines it would be, 36,000 megawatt hours With a total Tor-the_peojeot-of 50,000 megawatt bouni-yo2 Me fregects Mr. Evans stated that this is three times the normal level that is reallocated undery&e Cypecrmnenf, Mr. Hickey stated that this is a significant reallocation which altered the operating procedures. Mr. Yerkes stated that revenue meter testing was completed at the end of May wm AARWH 7 : on the meters. The first barge load of equipment and spare parts have arrived and are currently being catalogued and checked. A _ significant number of minor capital projects need civil and structural engineering services. He stated that an RFP was let to obtain these services and they are currently being evaluated. It is anticipated that small term engineering services will be on contract within the next 30 days. Mr. Yerkes sented tha Don Stead is the new project manager for Homer Electric Association and should be arriving on pe. June 19, 1995. Mr. Stead will be assuming the project duties. He also stated that Stan Sieczkowski along with the Federal Energy Regulatory Commission will be arriving the week of June 19 for a project inspection. Mr. Yerkes stated that they also have an RFP out for consulting services to help with the redesign and improvement of the existing fishwater control system at the project. Tem Mr. Evans asked if the g@gr meter was a required inspection. Mr. Yerkes replied that it was a simple annual review. They were put on the test for meter testing and they found no discrepancies. It was a coordination between Homer Electric Association and Chugach Electric Association. Mr. Evans asked if this inspection is required annually. Mr. Yerkes stated that it is required annually. He stated that Chugach is basically responsible for the inspection because they use the meters for revenue metering for the project. 8. OLD BUSINESS A. Spinning Reserve Update Mr. Cooley stated that the Reliability Criteria Committee sent out a draft report to all the committee members to review. After the committee _pesmeeers. reviews the report! Will be sent to the IOC and the General Managers for their action. B. Status Update of Agreements Mr. Saxton stated that the agreements are slowly making progress. The Power Sales Agreement, the Chugach Services Agreement and the Homer Transmission Agreement were signed, but a number of other agreements were left unsigned so they could be worked out at a later date. Some of the unsigned agreements include the Chugach Dispatch Agreement and various Substation and Interconnection Agreements. In all instances the PMC has the right to approve these agreements. Mr. Saxton stated that direction from the PMC is needed to make these agreement negotiations a high priority. Lo. hy Chairman Story stated that this item should be a yep priority. Hearing no objections there was a consensus to make this item a priority issue. Mr. Saxton stated that he would coordinate with the various parties to set up a meeting time. 9. NEW BUSINESS A. Approval of Legal Expen her_Expen MOTION: Mr. Bjornstad moved to approve the Audit Report for 1994 prepared by Parisena and Stromburg =&—€emmpany. Seconded by Mr. Calvert. A voice vote was taken, and the motion passed unanimously. MOTION: Mr. Bjornstad moved to have an audit accomplished by Pete Raskins for the review and verification of the power dispatch charges from Chugach Electric Association:’) review om~ and verification of charges from Homer Electric Association; ) oc, and final accounting treatment and insurance adjustments for the airplane accident at Bradley Lake. Seconded by Mr. Evans. A voice vote was taken, and the motion’ passed unanimously. ow Mr. Bjornstad ‘that three invoices have been received from Ater, Wynne, Hewitt, Dodson & Skerritt. April 1995 services in the amount of $2,639.71. March 1995 services in the amount of $4,316.67. October 1994 services in the amount of $3,724.05. The total amount to be approved is $10,680.43. MOTION: Mr. Bjornstad moved to approve payment of the above-mentioned legal expenses in the amount of $10,680.43. Seconded by Mr. Evans. A voice vote was taken, and the motion passed unanimously. 10. COMMITTEE COMMENTS Mr. Yerkes stated that Stone and Webster Engineering Corporation was retained to review the governor instability problems at Bradley Lake. CGS ame 5 a product_within the next 30 days for the O&D Committee. Tsreuld toe avaiable Chairman Story stated that the next meeting date would be scheduled for July 17, 1995, 10:00 a.m. at the Municipal Light & Power offices. 12. ADJOURNMENT There being no further business of the Committee and hearing no objections, Chairman Story adjourned the meeting at 10:38 a.m. BY: Norm Story, Chairman ATTEST: Dennis V. McCrohan, Secretary