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BPMC Meeting Mon, March 4. 2011 1
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. A; 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” Me 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 BPMC 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: laska Energy Authority, S Page 5 of 5 BPMC Minutes 3/14/2011 OE ALASKA Al EX. /= ENERGY AUTHORITY Alaska Industrial Development and Export Authority 9. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING AGENDA Monday, March 14, 2011 @ 10:00 A.M. (via electronic media at the Alaska Energy Authority’s Board Room 813 West Northern Lights Boulevard, Anchorage, AK) CALL TO ORDER ROLL CALL (for Committee members) PUBLIC ROLL CALL (for all others present) PUBLIC COMMENT AGENDA COMMENTS / MOTION FOR APPROVAL Evans APPROVAL OF MEETING MINUTES: June 3, 2010, September 14, 2010 and December 29, 2010 NEW BUSINESS TA. 7B. We. 7D. 7E. “UF Battle Creek Update Approve FY12 Operating Budget (Action Item) Authorize refund to utilities of FYO9 and FY10 overpaid FERC land use fees (Action Item) Authorize renewal option for audit services from Swalling & Associates (Action Item) FERC Land Use Fees — Update O ferets'S Tego (Kingres) NEXT MEETING DATE ADJOURNMENT Carey MacMillan Gibson 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 REGULAR MEETING MONDAY, MARCH 14, 2011 @ 10:00 A.M. **PLEASE WRITE LEGIBLY** ORGANIZATION Agenda Item No. CITY OF SEWARD MATANUSKA ELEC ASSOC CHUGACH ELEC ASSOC HOMER ELEC ASSOC GOLDEN VAL ELEC ASSOC MUNI LIGHT & POWER ALASKA ENERGY AUTHORITY A=4+ OVER 51% DATE: _D3/lY¥//l BRADLEY PMC VOTING eal Call a | || oe Ill oe oes 01% 14% (PA 30% [EZ 12% FEE 17% 26% | LT [ B= AEA CONCUR With A C = UNANIMOUS D= MAJORITY VOTING METHOD A: Requiring four yeas with 51% of utilities, with no AEA vote: 1) Procedures for scheduling, production and dispatch of project power. 2) Establishment of procedures for use of each purchaser's water allocation (AEA assent required for license requirements). 3) Selection among alternative methods that do not involve AEA for funding required project work. VOTING METHOD B: Requiring 4 yeas with 51% of utilities and AEA concurrence: 1) Arranging operation and maintenance of project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) 3) Establishment of FY estimated annual payment obligation and schedule of each purchaser. 4) Determination of annual project costs after each FY. 5) Evaluation of necessity for and scheduling of required project work. 6) Determination of appropriate amount of insurance. 7) Adoption of additional minimum funding amounts for renewal and contingency reserve fund above that required by bond resolution. 8) Selection among alternate methods that involve AEA for funding required project work. 9) Adoption or amendment of procedural committee rules (except dispute resolution). 10) Adoption of project maintenance schedules. 11) Determination of rules, procedures and accounts necessary to manage project when no bonds outstanding. 12) Evaluation and approval of optional project work and compensation for such work. 13) Application of insurance claims proceeds not governed by bond resolution. 14) Approval of procedures and any individual utility agreements relating to electric power reserves for project. 15) Approval of consultants. YOTING METHOD C: Unanimous vote by all (including AEA) VOTING METHOD D: Majority vote (including AEA) Election of Officers Agenda Item No. CITY OF SEWARD MATANUSKA ELEC ASSOC CHUGACH ELEC ASSOC HOMER ELEC ASSOC GOLDEN VAL ELEC ASSOC MUNI LIGHT & POWER ALASKA ENERGY AUTHORITY A=4+ OVER 51% B = AEA CONCUR With A BRADLEY PMC VOTING 16 WO Fula Budat (dad Utils DATE: of 01% aS ae Et = 4% ZES | -T 30% (EE Ae ae 12% a Lae 17% ey et 26% = fer Pro Z a =a UMWiwr ° ULE C = UNANIMOUS VOTING METHOD A: Requiring four yeas with 51% of utilities, with no AEA vote: 1) Procedures for scheduling, production and dispatch of project power. 2) Establishment of procedures for use of each purchaser's water allocation (AEA assent required for license requirements). 3) Selection among alternative methods that do not involve AEA for funding required project work. VOTING METHOD B: Requiring 4 yeas with 51% of utilities and AEA concurrence: 1) Arranging operation and maintenance of project. 2) Adoption of budget of annual project costs. VOTE(93Q3/BC5272) 3) Establishment of FY estimated annual payment obligation and schedule of each purchaser. 4) Determination of annual project costs after each FY. 5) Evaluation of necessity for and scheduling of required project work. 6) Determination of appropriate amount of insurance. 7) Adoption of additional minimum funding amounts for renewal and contingency reserve fund above that required by bond resolution. 8) Selection among alternate methods that involve AEA for funding required project work. 9) Adoption or amendment of procedural committee rules (except dispute resolution). 10) Adoption of project maintenance schedules. 11) 12) 13) 14) 15) Determination of rules, procedures and accounts necessary to manage project when no bonds outstanding. Evaluation and approval of optional project work and compensation for such work. Application of insurance claims proceeds not governed by bond resolution. Approval of procedures and any individual utility agreements relating to electric power reserves for project. Approval of consultants. VOTING METHOD C: Unanimous vote by all (including AEA) VOTING METHOD D: Majority vote (including AEA) Election of Officers ATTENDANCE — BPMC REGULAR MEETING, December 29, 2010 @ 10:30 AM COMMITTEE MEMBERS ALTERNATE rad Evans, Chairman CEA Burke Wick Le Brad Janorschke, Vice Chairman HEA Harvey Ambrose, oo - Delp L—Bryan Carey, Secretary/Treasurer AEA JamesHemsath— | Brian Newton ns GVEA Kate-Lamalt- “ Da en ol GSE mp L-Boug Hal P — SEW _JeffEstes— Evan “Joe” Griffith MEA Don Zoerb (mike Cunningham, CEA Lkirk Gibson, McDowell Rackner & Latif Kingrey, HEA — OP (UT: Gibson PC 4 ian Bjorkqui "es TR rete. uth, , M d ¥ Biian Bjork ist, Dept. of Law = em AIDEA AEA AIDEA and AEA Staff AIDEA AEA AIDEA and AEA Staff AIDEA_ AEA AIDEA and AEA Staff Lark, May Hewell-Shauna— L-MacMillan, Linda Weems, Shelby Strandberg=dim— (unde bnddaar PT Christel y a TA Bee Ee ee R&M CONSULTANTS, INC. (807) 522-1707, FAX (807) 522-3403, www.rmconsult.com 9101 Vanguard Drive, Anchorage, Alaska 99507 March 8, 2011 R&M No. 1158.19-09 Mr. Bryan Carey, P.E., Project Manager Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, Alaska 99503 RE: _ Bradley Lake Hydroelectric Project Upper Battle Creek Drainage Basin Potential Diversions Additional Drainage Area Studies Dear Mr. Carey: R&M performed a preliminary feasibility study for capturing Upper Battle Creek drainage basin runoff from the watershed areas in the vicinity of the existing Upper Battle Creek Diversion that are not presently captured because of terrain features. The potential for redirecting the runoff from those drainage areas was considered in 1990 by Stone and Webster (S&W) but the potential diversion was not constructed. The potential additional watershed was originally identified on USGS maps by S&W. For the present study, a new topographic map was developed from satellite imagery by our sub-consultant eTerra. The digital information from the new mapping allowed the use of the GeoMapper program to identify potential watershed/sub-watershed areas in the area of interest and diversion locations for the contiguous watershed areas that can potentially be developed. The potential additional watersheds that can potentially be diverted to Bradley Lake are shown on the attached Upper Battle Creek Watershed map. These three watershed areas are defined by terrain features and potential diversions as follows: ¢ Watershed #1 is the area captured by construction of the primary diversion dam (Dam #1). This watershed is approximately 7.59 square miles and includes approximately 3.10 square miles of glacier. e Watershed #2 is the area captured by construction of an additional diversion dam (Dam #2). This watershed is approximately 0.68 square miles and contains no glaciers. e Watershed #3 is the area captured by construction of an open channel ditch conveying the water from Watersheds #2 and #3 to Bradley Lake. This watershed is approximately 0.73 square miles including steep terrain slope potentially shedding water to the collection- aea re ube diversion 030811.doc Mr. Bryan Carey, P.E., Project Manager RE: Upper Battle Creek Diversion Prefeasibility Study March 8, 2011 Page 2 of 3 conveyance ditch but ultimately depends on the exact location of the collection-conveyance ditch. If tunnel conveyance is used from Dam #2 to Dam #1, the area of watershed captured will be about 0.5 square miles. Potential flows that may be diverted from the Upper Battle Creek Watershed and the estimated annual maximum revenue based on $0.065 per kWh are as follows: Revenue, Upper Battle Creek | Energy, kWh| Dollars Per Watershed Area Per Annum Annum Watershed Area #1 54,327,821|$ 3,531,308 Watershed Area #2 2,585,229 | $ 168,040 Watershed Area #3 2,775,319 | $ 180,396 Total Watershed [| 59,688,370 | $ 3,879,744 Conceptual Development The proposed Upper Battle Creek (UBC) diversion would divert glacial melt waters from the UBC watershed(s) to Bradley Lake for use in power generation in the existing Bradley Lake Hydroelectric Project facilities. Upper Battle Creek diversion(s) would generally involve the construction of concrete diversion dams in the range of 20 to 30 ft high and 55 to 75 ft long. Open channel ditch conveyances would be trapezoidal in cross-section. Access roads to the diversion site(s) and along the open channel conveyance will be nominally 12 to 18 feet wide with grades less than 10%. Tunnels would be 10-ft by 10-ft horseshoe cross-section and be unlined except in weak rock areas. Drawings showing possible diversion plans and conveyance profiles are attached for the alternative approaches noted in this letter. Capital Costs of Diversions and Conveyance The capital cost includes Engineering and Construction Costs estimated to develop the structures and water conveyance facilities necessary to divert water from the Upper Battle Creek drainage to Bradley Lake for the three options considered in this study is as follows: ESTIMATED ROM COSTS TO DEVELOP AND DIVERT UPPER BATTLE CREEK WATERSHEDS Base | er [nama PE | DIVERTED CONVEYANCE Cost Costs SUBTOTAL 30% TOTAL pete a Mngt ee Ae 8.97 SQ-MI 2 Dams and Ditch $ 19,130,000 | $ 5,160,000 | $ 24,290,000 | $ 7,287,000 | $ 31,577,000 rat creer [nano asians nes aa 8.77 SQ-MI 2 Dams and Tunnel__| $43,110,000 | $ 8,310,000 | $ 51,420,000 | $ 15,426,000 | $ 66,846,000 Divert Area #1, = 7.59 SQ-MI $37,440,000 | $ 7,570,000 | $ 45,010,000 | $ 13,503,000 | $ 58,513,000 3 S11) Mr. Bryan Carey, P.E., Project Manager RE: Upper Battle Creek Diversion Prefeasibility Study March 8, 2011 Page 3 of 3 Recommendations Based on our prefeasibility study findings we recommend a full Feasibility Study with preliminary design and geotechnical/geologic field data gathering be performed to more specifically assess the potential diversion(s) for construction. Also, during the upcoming summer season, a number of photo-identifiable points on the ground need to have elevation and coordinates established to allow verifying the control used in the southerly portion of the topographic information generated from satellite data; this is due to the lack of known survey control points from the Bradley Lake original survey net that could be identified through satellite data only. Ground locations using high order GPS by a surveyor would provide the necessary information to verify the topographic electronic data base and developed image(s). The development of the proposed diversion(s) is a major undertaking and a thorough feasibility study should be conducted to confirm the initial proposed conceptual development for the diversion. This development of an Upper Battle Creek diversion will require a FERC License Amendment and associated supplementary environmental impact statement. The necessary up-front studies including the previously mentioned detailed feasibility report, environmental reconnaissance studies, in- stream flow studies, topographic and ground surveys and geotechnical reconnaissance studies should be performed or at least started within this coming summer season. Please contact me at your convenience with any questions on the above. Our completed detailed report is being finalized and will be forwarded shortly Sincerely, R&M CONSULTANTS, INC. John Magee, P.E. Project Manager Attachments 13 S Plotted 3/8/2011 12:21 PM by Nicholas Straka 2: \project\1158.19 Bradley Lake HEP\Task 09 Battle Creek Diversion Pre—Feasibility\Acad\_Civil\Acad\Battle Creek Watershed.dwg oe? NY 70000051 AN,000°TS00St och peARUN. Wo.) TT/OT/TO vo peuud dew iosoL ‘M000 6ro0ST ‘1 000° 8ro05T M0OT9RIOS! YESOM MOOD CreOST mw 4 Ne 4133S L gee HOMER ELECTRIC ASSOCIATION | eee : eS PRE-FEASIBILITY STUDY R&M CONSULTANTS, INC. F UPPER BATILE CREEK ENGINEERING SURVEYING EARTH SCIENCES MATERIAL TESTING A POTENTIAL WATERSHED 9101 Vanguard Drive Anchorage, Alaska 99507 ADDITION Noli oaves|-snevon aren 907 522 1707 voice e 907 522 3404 fax 2 \robet\N9819 Baer Lake HOP 09 Bette Ce Cran Pre-Feasy\Aced\_ Col Aco\!1589. Deyn 0 Conan ey Prottes 2/26/2011 &12 PM by Sodet Ais EXISTING DIVERSION DAM DITCH QUTFALL INTO VALLEY Battle Creek Diversion Ditch PROFILE LAKE ELEV. 1346" LAKE ELEV. 1261" 4 100400 2 ag 8500 t 95300 | | | Area 2 Diversion Ditch PROFILE Station 5400 10400 15700 20700 25700 2 \yrohet\N9819 Bray ate HOP\Fh OF Bete Cnt Diwan Pre-Feaiy\Aemt\_Col\Ace\)I8.8. Dyn _Oh Concept ey wo 24213, | EXISTING GRADE = seth 3 Irintsven crave | a Protieé 2/26/2011 5:17 PM by Sodet Ai APPENDIX G Tunnel Conveyance Concept Drawings 2 \wome\VI8819 baey Lite HOP\Tam 08 Bate Crank Dern Pro-Fanabthy\Aeed\ CM \Aent\188 18 Dein Concpt Potted 2/26/2011 4:59 PM by Sodot Ais TUNNEL, #1 DIVERSION DAM A TUNNEL #1 DIVERSION DAM C P TUNNEL #1 DITCH ) TUNNEL #1 DIVERSION DAM B - EXISTING DIVERSION Daw 1 biter EXISTING] GRADE | 150 FT BUFFER el 2 PROFILE Tunn rene meviene BIBL PEY\MST Vy Funny Wena 9 mE HO HL\ADH Hm Keone 4: Bi\O 2 rev 10905 4a Ra 9055 1102/80/2 PenIed ae APPENDIX H Alternative Tunnel Conveyance Concept Drawings 2 Apo \IS819 Bregay Late HEP\Tant 9 Bate Crest DrsonPre-Feebiy\Aend\_Co\Aced\ 1818 Despn og Plotiee 2/26/2011 4:38 PM by Sedat Ak ¢ oss 023 LACCESS ROAD ) EXISTING DIVERSION DAM yy DITCH LEADING TO TUNNEL #1 [us Tunnel 1 PROFILE bed WORZONAL GUPHE SCALE Station 5900 04005400 0s00 15400 = EXISTING GRADE EXISTING GRADE FINISHED GRADE oo 3 Toto Stoo "0 2550030 "35800" 40r00 454 "3080055" ‘60: 65¢00" 70r00" 7500-80. 20300 25200 3020035200 40x00 457000, $5700 60700 65700 7020075; 80700 85; 0 sesaese8 B8g8888s98223 5500 90 APPENDIX | Access Road Concept Drawings 2 \Wropet\I9819 Brosey Late HP\Tant OF Bete Creat Dr Pre-Fennby\heed\ CM \Aend\ 88 8 Dei oy Proties 2/25/2011 4:57 PM by Sodot Ai Poreyeyy ACCESS ROAD PROFILE Station 30;00 33300 40400 a entire evant 00, a ea tgest ia! beste | Pe sey 1338 © Seae ] a it _PFinisrep cape NX EXISTING) GRADE Eee Bt Tate 190 Bradley Lake Project Management Committee Meeting Monday, March 14, 2011 Agenda Item: 7B MOTION: Move that the Bradley Lake Project Management Committee approve the fiscal year 2012 Operating and Capital budget as presented. Move: Papdits Second: & Powshon OVERVIEW OF BUDGET CHANGES BETWEEN FY11 AND FY12 FY11 Utility Contributions DECREASES Decrease in Non R&C Capital - See A1 for detail Decrease in debt service in part due to Series 5 refunding Decrease in projected arbitrage transfer Decrease in Operating Reserve transfer due to decreased operating budget, primarily reduced FERC Land Use Fee Schedule B 540-FERC Land Use Fee Other Net Operations Decreases TOTAL DECREASES INCREASES Schedule A Increase in R&C Fund Repayment TOTAL INCREASES OTHER CHANGES Schedule A Grant revenue for Battle Creek feasibility Grant expense for Battle Creek feasibility NET OTHER CHANGES FY12 Utility Contributions 17,357,417 74,971 441,000 172,400 20,000 160,750 317,377 1,779 1,188,277 34,438 34,438 500,000 (600,000) 0 16,203,578 16,203,578 0 BRADLEY LAKE HYDROELECTRIC PROJECT ‘Schedule A FY2009 Fv2010 FY2011 ACTUALS ACTUALS BUOGET REVENUES, EXPENSES & CHANGES IN SURPLUS Z REVENUES UTILITY CONTRIBUTIONS. 16,596,797 17,270,100 17,387,417 (1,183,839) INTEREST INCOME 1,717,303 1,780,630 1,667,963 74,872 OTHER MISC INCOME: 1,000 700 ° o STATE OF ALASKA BATTLE CREEK FEASIBILITY GRANT ° ° ° 500,000 o o 0 o 18,315,100 49,051,430 19,025,380 (678 867) EXPENSES OPERATIONS 4,123,107 3,747,849 4,514,345 (319,156) RENEWALS/REPLACEMENTS (R&C FUND REPAYMENTS) 1,425,893 1,648,712 1,088,636 1,123,074 34,438 NON R&C FUND CAPITAL PURCHASES-SEE A1 166,573 689,454 802,000 361,000} (441,000) GRANT FUNDED PORTION OF BATTLE CREEK FEASIBILITY J ° ° 500,000 500,000 ‘TRANSFER TO (FROM) OPERATING RESERVE 5,000 66,000 97,250 (63,500) (160,750) DEBT SERVICE (net of Capital Reserve Reductions) 12,288,950 12,402,072 12,273,180 12,100,750 | (172,400) ARBITRAGE TRANSFER 325,577 216,349 250,000 (20,000) 0 oO o 18,315,100 18,770,436 (578 868) CURRENT YEAR SURPLUS (DEFICIT) BEGINNING SURPLUS (DEFICIT) ENDING SURPLUS (DEFICIT) 8 2 BALANCE SHEET ASSETS: REVENUE FUND 1,851,848 2,149,673 0 OPERATING FUND 447,324 972,947 ° RECEIVABLE FROM UTILITIES ° ° ° OTHER RECEIVABLES 15,077 0 ° PREPAID EXPENSES 8 & ABILITIES 260,757 1,414,919 0 PREPAID UTILITY CONTRIBUTION ° o ° PAYABLE TO UTILITIES ° R&C REPAYMENT ° OTHER INFORMATION OPERATING RESERVE * 734,406 805,402 902,652 MONTHLY CONTRIBUTIONS 1,383,066 1,439,175 1,446,451 * Required to be 20% of budgeted operating expense 9/10/20113:01 PMH:\all\imacmillan\Bradiey_ake\FY 12Bradley\2012BradleyBdgt-original3.xisSchedule A-Budget Summary ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT ‘Schedule A-1 Y; FY2070 zor Franz acTuALs AGTUALS BUDGET ‘Al, PURCHASES NOT FUNDED BY R&C FUND Culvert Rep | 3 Ambulance Truck, Mower Attach, g Machine: eo Fire Water Control Vaive Replacement tt ¢ Protection R st — J Talcon Fare ae ee “Truck & Plow Attachment Lc 2 reliet valve RV-3~"_ aie) gin canstormes Sos Recbaeine 2 eoaey SoS Excavator w/ mower attachment Vehicle Ut Exciter Stablity Study ‘emergency source of power Is needed to provide backup power in case of future wouble ith the normal facilities power. This will provide cost savings for replacement power and ‘due to frozen pip Po ‘snow machines to enhance safe travel to the dam and gate house areas. Allows 100,000 perators and contractors to travel to the dam in a sheltered environment which will increase : safety in case of breakdown. Also, alows transport of equipment, parts, and tools to perform [Replace F urniture/Lockers/Appliances in Crew O poe aoe a a ri o He HEAL LT UT ee SN ee er tended mle ee eT ed Cae BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B Page 1 of 4 31-Dec-10 | FY2010 FY2010 FY2011 FY2011 FY2012 BUDGET ACTUAL VARIANCE || BUDGET ACTUAL BUDGET SUMMARY (A) HEA Annual Operations & Maintenance 1,968,817 1,664,558 304,259 2,181,514 771,354 2,262,776 (B) CEA Dispatch and Substation/SVC Maintenance 80,000 166,910 (86,910) 119,327 63,471 120,000 (C) Other O&M and Maintenance Projects 735,242 847,720 (112,478)| 918,540 451,210 626,223 {D) Insurance Costs 644,203 570,411 73,792 615,340 546,626 617,090 (E) Regulatory Costs 329,900 235,071 94,829 413,674 12,443 303,500 (H) Contingencies 0 1,150 (1,150) 0 0 0 3,758,162 3,485,820 272,342 4,248,395 1,845,104 is 3,929,589 (F) Administrative Costs 265,950 262,029 3,921 265,950 266,017 265,600 4,024,112 276,263 4,514,345 2,111,121 4,195,189 (G) BUDGET ADJUST ESTIMATE 0 0 0 0 [asia ae] 3/10/2011 3:03 PM H:\allmacmillan\BradleyLake\FY 12Bradley\2012BradleyBdgt-original3.xisSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B (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 (A) HEA O&M Contract FERC 542 - Maintenance of Structures {A) HEA O&M Contract {C) Replace Haylon w/ FM-200 in Oil Separator RM Page 2 of 4 FERC 539 - Misc. Hydraulic Power Generation Expenses FERC 541 - Maintenance Supervision & Engineering ({C) Architect Review (09) - Structure Maintenance (11 0 0 FERC 543 - Maintenance of Reservoirs, Dams & Waterways 34-Dec-10 FY2010 FY2010 FY2011 FY2014 FY2012 BUDGET ACTUAL VARIANCE | | BUDGET ACTUAL BUDGET FERC 535 - Operation Supervision & Engineering (A) HEA O&M Contract 237,941 217,377 20,564 250,283 106,729 262,888 (C) HEA Perform Exciter Stability Study 40,000 15,552 24,448 0 0 0 (C) HEA Digitize & Control Project Drawings ° 0 0 277,941 232,929 45,012 250,285, 706,728] [__ 262.888 FERC 537 - Hydraulic Expenses (A) HEA O8M Contract 75,698 71,844 3,854 92,619 43,756 111,118 (C) Battle Creek Feasibility Study 0 0 2,205 92,619 45,961 | 111,118 FERC 538 - Electric Expenses (A) HEA O&M Contract 193,733 164,044 201,203 91,951 208,194 (C) HEA Clean Generators #1 & #2 0 50,000 oO 243,733 164,044 113,641 30,000 420,059 370,370 427,785 0 0 20,000 90,000 90,000 90,000 30,000 28,746 30,000 540,059 489,116 567,785 65,000 380,000 (315,000) 380,000 65,000 380,000 (315.000) 380,000 126,000 73,039 120,000 160,067 (40,067, 120,000 160,067 (40,067 137,379 137,379 153,928 0 0 (aaa) 3/10/2011 3:03 PM H:\almacmillan\BradleyLake\FY 1 2Bradley\2012BradieyBdgt-original3.xisSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE B Page 3 of 4 314-Dec-10 FY2010 FY2010 FY2011 FY2011 FY2012 BUDGET ACTUAL = VARIANCE BUDGET ACTUAL BUDGET (A) HEA O&M Contract 27,095 31,217 (4,122) 77,498 24,960 12,688 (C) Battle Creek Feasibility Study ° 0 0 0 101,104 0 (C) Power Tunnel Maintenance 0 0 0 15,000 0 60,000 (C) Repairs. Cleaning & Inspections 90,000 17,665 72,335 0 ° 42,000 (C) North Fork Comm Equipment Replacement 0 0 oO 5,000 0 0 (c) ° ° o 0 0 0 bo 117,095 48,882 | 68.213] [97.498 126,064 114,688 FERC 544 - Maintenance of Electric Plant (A) HEA O&M Contract 296,763 264,320 32,443 359,824 88,287 398,205 (C) Maint. Study (09)-Replace Control Room Console( 0 0 o 10,000 0 0 ares a 32,443 369,824 88,287 398, FERC 545 - Maintenance of Misc. Hydraulic Plant (A) HEA O&M Contract 110,000 105,243 4,757 148,909 34,855 128,761 (C) Transfer Switch for PT Gatehouse 0 0 0 5,000 0 0 (C) Fish Water Design & Middle Fork Equip. Shack | 55,000 14,150 40,850 20,000 o 30,000 765,000 119,393, 45.607 | ~ 173,909 34,855 | [ 158,761 | FERC 556 - System Control & Load Dispatching (A) HEA O&M Contract 51,237 41,363 9,874 63,444 8,056 65,012 (A) HEA-Power House PCs & Develop Electronic Ops| 20,000 11,721 8,279 15,000 437 10,500 (C) SCS Snow Measurement 9,000 10,481 (1,481) 9,270 7,500 10,500 {C) UAA Seismic monitoring and reporting 56,500 56,500 0 56,500 11,431 56,500 (C) USGS Streamguaging 219,642 219,500 142 232,670 0 244,500 (C) State of Alaska Permits 100 100 0 100 100 100 356,479 339,665 16.814] [376,984 27,524 387,112 FERC 562 - Station Expenses (B) CEA SVC/Substation Maintenance Contract 80,000 166,910 (86,910) 119,327 63,471 120,000 (C) Daves Creek SVC Cooling System 0 15,026 15,026) 0 151,222 ° 80,000 781,936 107,936, 119, 214,693 FERC 571 - Maintenance of Overhead Lines (A) HEA Overhead Line Maintenance 302,650 177,767 124,883 313,610 44,682 317,708 {C) Barre Creek Feasibility Study 0 0 130 302,650 177,767 124,863 313,610 44,812 10/2011 3:03 PM H:\allmacmillan\BradleyLake\FY 12Bradley\2012BradleyBdgt-original3.xisSchedule B-Budget Detail BRADLEY LAKE OPERATIONS & MAINTENANCE SCHEDULE 8 314-Dec-10 FY2010 FY2010 FY2011 FY2011 FY2012 BUDGET ACTUAL = VARIANCE BUDGET ACTUAL BUDGET (H) Contingencies 0 1,150 | 1,150 0 0 0 a ———11.150)} SS FERC 920 - Administrative Expense (F) AEA Admin Fee 200,000 200,000 ° 200,000 200,000 200,000 AEA Administrative Costs 200,000 200,000 0 200,000 200,000 200,000 PMC Costs (F) Sradley Lake Audit fees 15,950 12,750 3,200 15,950 14,000 15,400 (F) Bradley Lake PMC Legal 25,000 26,509 (1,509) 25,000 31,541 25,000 (F) Bradley Lake Arbitrage Report 5,000 5,175 (175) 5,000 5,720 5,200 (F) Bradley Lake Trustee fees 20,000 17,595 2,405 20,000 14,756 20,000 (F) PMC Costs 65,950 62,029 3,921 65,950 66,017 65,600 Bond Refunding Costs Reimburseabie costs at Refunding Costs 0 0 0 0 0 [) TOTAL FERC 920 265,950 262,029 3,921 265,950 266,017 265,600 FERC Insurance Premiums 872,565 516,193 56,372 542,003 521,065 542,003 (D) Homer Electric Insurance 56,638 50,330 6,308 58,337 25,561 60,087 (D) Risk Assessment 15,000 3,888 14,442 15,000 0 15,000 644,203 370,411 73,792 | [___ 615,340 546,626 617,090 nee FERCFERC administrative fees 229,900 186,766 43,134 202,674 0 205,500 {&) FERC Part 12 Inspection 0 0 0 75,000 0 27,000 {E) Contractual Engineer - FERC license issues 100,000 48,305 51,695 136,000 12,443 71,000 (c) 0 0 0 0 (C) Battle Creek Feasibiity Study 0 0 0 0 29,592 0 413,674 42,035 | 303,500 4024112 3,747,849! 6 4,514,345 117,121 | [__4,195,189 | TOTAL BRADLEY LAKE BUDGET 3/10/2011 3:03 PM Page 4 of 4 H:\alNmacmillan\BradleyLake\FY 12Bradley\2012BradleyBdgt-original3.xisSchedule B-Budget Detail BRADLEY LAKE MONTHLY UTILITY CONTRIBUTION SCHEDULE C ACTUAL BUDGET PERCENT FY2010 FY2011 FY2012 POWER P! R SHARE TOTAL TOTAL INCREASE CHUGACH ELECTRIC 30.4% 5,164,692 5,276,652 (350,760) MUNICIPALITY OF ANCHORAGE 25.9% 4,400,184 4,495,572 (298,848) AEG&T-HEA 12.0% 2,038,692 2,082,888 (138,456) AEG&T-MEA 13.8% 2,344,500 2,395,320 (159,228) GOLDEN VALLEY ELECTRIC 16.9% 2,871,156 2,933,400 (195,000) CITY OF SEWARD 1.0% 169,896 (11,544) Rounding 700.0% 16,989,106 ACTUAL BUDGET FY2010 FY2011 PERCENT MONTHLY MONTHLY FY2012 POWER PURCHASER SHARE AVERAGE AVERAGE INCREASE CHUGACH ELECTRIC 30.4% 430,391 439,721 (29,230) MUNICIPALITY OF ANCHORAGE 25.9% 366,682 374,631 (24,904) AEG&T-HEA 12.0% 169,891 173,574 (11,538) AEG&T-MEA 13.8% 195,375 199,610 (13,269) GOLDEN VALLEY ELECTRIC 16.9% 239,263 244,450 (16,250) CITY OF SEWARD 14,158 (962) 3/10/20113:04 PM H.\all\imacmillan\BradleyLake\FY 12Bradley\2012BradleyBdgt-original3.xisSchedule C Utility Contrib BRADLEY LAKE R&C FUND DISBURSEMENTS AND REPAYMENTS. 2,615,592.73 251,092.69 1,946,732.99 2,360,280.48 11,311.49 70,497.73 34,833.79 0.00 0.00 0.00 0.00 0.00 216,165.17 ue) 1,034,952.45 | 315,562.12 59,651.54 3/10/20113:04 PM Haii\imacmilian\Bradieylake\FY 12Bradiey\2012BradieyBdgt-original3 xisSchedule D R&C Disb & Repay BRADLEY LAKE BUDGET PROJECTED CASH FLOW BY FUND SCHEDULE G Rey Fund O&M Fund Debt Fund Qp Reserve R&C Cap Reserve Total FY¥2011 Budget Revenues 17,357,417 - 17,357,417 Interest 1,639,857 240,000 1,879,857 Transfer back interest - = Transfers to O&M (4,514,345) 4,514,345 : - Transfers to Debt Service (12,273,150) 12,273,150 - Payback of R&C Fund (1,252,751) 1,432,546 179,795 2010 Payables : (972,947) - (972,947) 2011 O&M Requisitions (4,514,345) (4,514,345) 2011 Capital Requistions (802,000) 802,000 fe S Renewals/Replacements (802,000) - (1,989,415) - (2,791,415) To Excess Earnings fund (250,000) (250,000) Payment of Prior Year Deficit - = Debt Payments (12,273,150) (12,273,150) Increase Op Reserve (97,250) 97,250 - 6/30/2011 Projected Balance 1,957,651 - - 902,652 2,660,835 12,834,000 18,355,138 * FY2012 Budget - Revenues 16,203,578 - 16,203,578 Interest 1,502,935 240,000 1,742,935 Transfer back interest - - Transfers to O&M (4,195,189) 4,195,189 < = Transfers to Debt Service (12,100,750) 12,100,750 - Payback of R&C Fund (883,074) 883,074 - O&M Requisitions (4,195,189) (4,195,189) Capital Requistions (361,000) 361,000 - - - Renewals/Replacements (361,000) - (1,400,000) - (1,761,000) To Excess Eamings fund (230,000) (230,000) Payment of Prior Year Deficit - - Debt Payments (12,100,750) (12,100,750) Decrease Op Reserve 63,500 (63,500) - 6/30/2012 Projected Balance 1,957,651 = - 839,152 2,383,909 12, 000 18,014,712 Assumption: should be 20.00% For purpose of budget cash flows, July 01 debt service projected 20.00% is assumed to be disbursed on June 30 3/10/20113:04 PM H:\all\macmillan\BradleyLake\FY 12Bradley\2012BradleyBdgt-original3.xisSchedule G-Cash balances BRADLEY LAKE BUDGET PROJECTED INTEREST INCOME TOTAL i a a4 oot Nowt Decstt Fobrz Marz a2 gona ADS SET ELT MONS RRA HM EOS Ae ASC BAF SRT — RGSS RASA — Se Senn iPUif] "8205700 1,380.208.00 1380,298.00 — 1,380,208.00 © 1,350,29800 1,350.28.00 1,360.288.00 1,360,286.00 1,380298.00 1,380298.00 © 1,390,208.00 1,380,208.00 1,350,020 ADs INTEREST af 1.742.934.04 —950,00000 106,00 100.00 100.00 100.00 100.00 791,994.84 100.90 100.90 1100.00 100.00 100,00 JTO ACCRUAL BASIS Hal 2.00 000 Olabureements Price your acerved expenses 0.00 2.00 0.00 000 2.00 0.00 000 eco 0.00 000 000 0.00 0.00 8M Expenses (195.18R.0)—(H41ASLED)—(ASE.ZELI)— ATA.) IEADA.OT) 4143480) ST. SSAC) ROZASA.BC) RAAB) KIA) «OMA (44K.1088) SRSA.) RAC Fund Otsbursement-Sch 0 (400,900.00) 00 © @e0.900.00 © @ec,000.09) 00,000.09) 400,000.00) ono ry 000 00 00 2.90 © 00,000.09) ‘Deet Service Payment (12,100,750.00) 2.00 0.20 000 0.00 809 © 610,375.00) 200 ooo 00 000 2.00 0.90 {,490,375.00) ASSUME DEBT service SOHA Capa (61,000.09) 0.00 220 200 7s;900.0 (4,000.00) xe 00 (@ooc.0q © —@.000.0) © S0.0000) {0,000.00 (80,000.00) e00 Ercess Eamings Transfer (@0,000.00, (230,000.09) 000 000 00 (Omer AdquammentEqual Sch G 200 Adjust te Actual Ending Balance yore 2. 2 2, 006.63 23, 7268.27 57_27.505.088.87 zu37 Interest tacome Projection Estimated Accrves interest ‘TO4SSR1O 122,901.81 AZT.NSRAZ EA T4B24 1M ERBT = 40 7O739 131.462 TATSOST §—«140,55820 —IS,CTOAZ 180,008.19 185.17437 109,188.30 Adjust to Actual Recaved OK TP SCH 0.00 2005225.00 3710/20113:04 PM HAalNmacmillan\BradieyLake\FY 12Bradiey\2012Bradiey8dgt-original3.xdsSchedule |-interest Inc Bradley Lake Project Management Committee Meeting Monday, March 14, 2011 prt Agenda Item: 7C MOTION: Move that the Bradley Lake Project Management Committee approve refund of the excess FERC land use fee paid in FY09 and FY10,to the participating utilities. a Qa fceeive Q Move: jan orsch IL@ Second: Hatf BRADLEY LAKE FERC LAND USE FEE REFUND BY UTILITY POWER PURCHASER CHUGACH ELECTRIC MUNICIPALITY OF ANCHORAGE AEG&T-HEA AEG&T-MEA GOLDEN VALLEY ELECTRIC CITY OF SEWARD Rounding FERC PAID FY09 FY09 EXPENSE FY10 EXPENSE FY11 EXPENSE DUE FROM FERC FY11 FERC EXPENSE REVERSE FY10 FERC ACCRUAL FY09 AND FY10 DUE TO UTILITIES DUE FROM FERC REFUND REFUND PERCENT FY2009 FY2010 SHARE TOTAL TOTAL TOTAL 30.4% 95,917.23 96,482.49 192,399.72 25.9% 81,718.95 82,200.54 163,919.49 12.0% 37,862.04 38,085.17 75,947.21 13.8% 43,541.40 43,797.99 87,339.39 16.9% 53,322.41 53,636.65 106,959.05 1.0% 3,155.17 3,173.77 6,328.94 0.00 100.0% 315,517.20 317,376.60 632,893.80 PAID EXPENSED ADJ EXP 378,140.60 (62,623.40) 378,140.60 (315,517.20) (62,623.40) 380,000.00 (317,376.60) (62,623.40) 0.00 62,623.40 190,270.40 758,140.60 (570,270.40) 62,623.40 380,000.00 (632,893.80) 190,270.40 0.00 3/7/20111:33 PM H:\all\Imacmillan\BradleyLake\FY 11BRADLEY\FERC Land Use Fee Refund-FY09 and FY10.xlsxSchedule C Utility Contrib BRADLEY LAKE FERC LAND USE FEE REFUND BY UTILITY POWER PURCHASER CHUGACH ELECTRIC MUNICIPALITY OF ANCHORAGE AEG&T-HEA AEG&T-MEA GOLDEN VALLEY ELECTRIC CITY OF SEWARD Rounding FERC PAID FY09 FY09 EXPENSE FY10 EXPENSE FY11 EXPENSE DUE FROM FERC FY11 FERC EXPENSE REVERSE FY10 FERC ACCRUAL FY09 AND FY10 DUE TO UTILITIES DUE FROM FERC PERCENT SHARE 30.4% 25.9% 12.0% 13.8% 16.9% 1.0% 100.0% PAID 378,140.60 (62,623.40) (62,623.40) (62,623.40) 190,270.40 REFUND FY2009 TOTAL 95,917.23 81,718.95 37,862.04 43,541.40 53,322.41 3,155.17 315,517.20 REFUND FY2010 TOTAL 96,482.49 82,200.54 38,085.17 43,797.99 53,636.65 3,173.77 317,376.60 EXPENSED 378,140.60 380,000.00 0.00 TOTAL 192,399.72 163,919.49 75,947.21 87,339.39 106,959.05 6,328.94 0.00 632,893.80 ADJ EXP (315,517.20) (317,376.60) 62,623.40 758,140.60 (570,270.40) 62,623.40 380,000.00 (632,893.80) 190,270.40 0.00 3/7/20111:33 PM H:\all\imacmillan\BradleyLake\FY 11BRADLEY\FERC Land Use Fee Refund-FY09 and FY10.xlsxSchedule C Utility Contrib FEDERAL ENERGY REGULATORY COMMISSION WASHINGTON, D.C. 20426 Office of the Executive Director February 7, 2011 Charles R. Sensiba Van Ness Feldman, P.C. 1050 Thomas Jefferson Street, N.W. Seventh Floor Washington, DC 20007 RE: City of Seattle, Washington, Project Nos. 553, 2144, and 2705, and Bradley Lake Project Management Committee, Project No. 8221; Appeal of 2009 Federal Land Use Annual Charges Bill Dear Mr. Sensiba: This letter is in response to the City of Seattle and Bradley Lake Project Management Committee’s (Appellants) appeal filed with the Commission on May 15, 2009. In its appeal, the Appellants raised several issues that were being considered by the U. S. Circuit Court for the District of Columbia. On January 4, 2011, the court reached a decision! regarding the issues raised by the Appellants in its appeal. Consistent with the court’s decision, I am reducing the applicable charges assessed to the Appellants in FY 2009 to the amount previously charged in FY 2008 pursuant to Rulemaking Docket No. RM08-6-000. Moreover, the Commission will issue prospectively U.S. Federal Lands Charges for Fiscal Years 2010 and 2011 at the same FY 2008 rates by June 30, 2011. The difference resulting from the reduction of the FY 2009 charges will be used to offset the amounts owed from the FY 2010 and 2011 charges. I anticipate that this will result in a refund of $820,885.77 due to the City of Seattle and $190,270.40 due to the Bradley Lake Project Management Committee on behalf of the Alaska Energy Authority. If you have any questions, please contact either Anton Porter at (202) 502-8728 (via e- mail at anton.porter@ferc.gov) or W. Doug Foster at (202) 502-6118 (via e-mail at doug. foster@ferc.gov). Respectfully, CBhleh nude Charles H. Schneider Chief Financial Officer Federal Energy Regulatory Commission ' City of Idaho Falls, Idaho, et al. v. FERC, D.C, Cir. No. 09-1120. ce: Sam Kalen John H. Clements Van Ness Feldman, P.C. 1050 Thomas Jefferson Street, N.W. Seventh Floor Washington, DC 20007 Kirk H. Gibson Ater Wynne LLP 1331 NW Lovejoy Street Suite 900 Portland, OR 97209 Engel Lee Director, Utilities Section Seattle City Attorney’s Office City Hall 600 Fourth Avenue Fourth Floor P.O. Box 94769 Seattle, WA 98124 Bradley Lake Project Management Committee Meeting Monday, March 14, 2011 Agenda Item: 7D MOTION: Move that the Bradley Lake Project Management Committee approve a one year renewal of the contract with Swalling and Associates for audit services and also approve 2.5% audit fee increase per 2010 CPI index for Anchorage. Move: orsch L2— Second: NOur pwr . 0 CHUGA Si: POWERING ALASKA’S FUTURE February 11, 2008 Swalling & Associates PC 3201 C Street, Suite 405 Anchorage, Alaska 99503 Dear Sir or Madam, The Bradley Lake Project Management Committee (the committee) is requesting proposals for audit services and issuance of special-purpose financial reports on the Bradley Lake Hydroelectric Project (the Project) operating and revenue funds for a three (3) year term, with an option to renew for 2 additional years beginning June 30, 2008. Enclosed please find the description of the Project and the specification for submitting a proposal. The Bradley Lake Project Management Committee’s Finance Committee will be evaluating the submittals and making a recommendation to the Management Committee with an eye towards having the engagement in place by May 1, 2008. We look forward to your participation in this process. Very Truly Yours. Chugach Flectric Association, Inc 560) Electron Drive, P.O. Box 196300, Anchorage, Alaska 99519-6300 © (907} 563-7494 Fax {907} 5620027 © (800) 478-7494 weaw.chugachelectric.com © info@chugacheleciric.com If awarded the engagement, we will maintain in force at all times and will supply evidence upon request: professional liability insurance, workers’ compensation insurance, and general liability insurance (proof of insurance enclosed) Professional Fees Like other professional accounting firms, our fees are directly related to the time spent by our shareholders, managers, and staff to perform the applicable services. We have found that controlling fees and rendering outstanding service are not inconsistent objectives. In our efforts to be effective with our fees, we coordinate our efforts with your personnel to reduce our time requirements without impairing the quality of our services. The following fee estimates were determined dependent upon receiving assistance from your personnel consistent with recent audits. We anticipate this assistance to include preparation of schedules requested, drafting the financial statements, obtaining required documentation during the audit and researching accounting matters, The fees assume all accounting records and the special-purpose financial statements conform to the accounting requirements of the Project’s Operating and Revenue funds. p Special-Purpose Financial Statement Audit Fees Year ended June 30, 2008 $12,750 * Year ended June 30, 2009 $12,750 Year ended June 30, 2010 $14,000 Additional two years to be adjusted from preceding year by an applicable cost index, subject to further adjustment for changes in conditions as described below, if any. As customary with a change in auditor, the fees are contingent upon access to the prior auditors’ workpapers for purposes of reliance on their audit for opening balances. The fees are based upon the activities of the Project through June 30, 2007, and assume there are no significant changes in those activities and related accounting matters during the years being audited. Our fees are also subject to revision for changes in scope of the engagement, changes in auditing standards, changes in the accounting policies and procedures of the Project, changes in recordkeeping of the Project and other conditions that would be outside the control of the auditor. If significant changes have occurred or subsequently occur, we _ will discuss the appropriate adjustment in fees with you prior to commencement of additional services that may be necessary. We do not expect significant out-of-pocket or similar costs such as mileage, reproduction, typing, etc. However, we will bill you for out-of-pocket costs as incurred. Our invoices may be rendered as frequently as monthly as work progresses and are payable upon presentation. Our base audit fees do not include special services not normally contemplated in an audit of financial statements such as consulting, special meetings with management, accounting assistance, research, and other special services. We will discuss the estimated amount of fees for additional services you may request before commencing work. Our standard hourly fees are generally based upon the level of professional staff, time involved, other factors such as the complexity of an issue, plus out-of-pocket expenses, if any. Our 2008 rates vary depending on the nature of the services and the level of personnel utilized as follows: ¢ Shareholders & Senior Managers $235 — $250 ¢ Managers $135 - $170 ¢ Professional staff (seniors/staff) $ 85 -$150 ¢ Other staff (admin/paraprofessional) $ 50—$ 80 Information About Our Fees We are sensitive to concerns regarding professional fees for accounting services. We want our clients to receive the maximum value for our professional services and to perceive that our fees are reasonable and fair. In working to provide you with such value, we find there are certain circumstances that can cause us to perform work in excess of that contemplated by our fee estimate. Following are some of the more common reasons. Changing Laws and Regulations There are many governmental and rule-making boards that regularly add or change their requirements. Although we attempt to plan our work to anticipate the requirements that will affect our engagement, there are times when this is not possible. We will discuss these situations with you at the earliest possible time in order to make the necessary adjustments and amendments in our engagement. Incorrect Accounting Methods or Errors in Your Records We base our fee estimates on the expectation that client accounting records are in order so that our work can be completed using our standard testing and auditing procedures. However, should we find errors, incomplete records, or the application of incorrect accounting methods, we will have to perform additional work to make the corrections and reflect these changes in the financial statements. Failure to Prepare for the Engagement In an effort to minimize your fees, we assign responsibility for the preparation of schedules and documents needed for the engagement. We also discuss matters such as availability of your key personnel, deadlines, and work space. If your personnel are unable, for whatever reasons, to provide these materials as previously agreed to, it might substantially increase the work we must do to complete the engagement within the scheduled time. Starting and Stopping Our Work If we must withdraw our staff because of the condition of your records, or the failure to provide agreed upon materials within the established timeline for the engagement, we will not be able to perform our work in a timely, efficient manner, as established by our engagement plan, This will result in additional fees as we must reschedule our personnel and incur additional start-up costs. Audit Methodology The methodologies we utilize are designed to combine the attributes of cost effectiveness and quality control. We tailor our approach to the specific entity. During our initial audit procedures, we focus on understanding the systems and controls used for financial accounting and reporting. Based upon this understanding, we will determine an audit approach based on Web Address for below: http://www.bls.gov/ro9/cpianch.htm Table A. Anchorage CPI-U semi-annual and annual percent changes (not seasonally adjusted) [eyes eO0s aia ic| ae 2006 6 | 2007, ec ee 2008 Le [tye 2009) ic e010 Fhe. | _ Month A “[el=lelelals>elsl=lalel = In the second half of 2010, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) 194.038, up 0.4 percent. The CPI-W increased 1.1 percent over the year. loll < The first half of 2011 Consumer Price Index for Anchorage is scheduled to be released on August 18th, 2011, at 10:00 a.m. (PST). Technical Note FY10 Audit Fee 14,000.00 CPI Increase 1.025 Increased FY11 Audit Fee 14,350.00 TE McDowell Rackner & G i bson PC Direct ae ogee kirk@mcd-law.com @eeee Memorandum To: Bradley Lake Project Management Committee From: Kirk H. Gibson and Bill Prentice Date: March 1, 2011 Re: FERC Land Use Fees As we previously advised you, the DC Circuit Court of Appeals ruled in favor of the group that BPMC joined with several other utilities to protest the FERC’s implementation of a new fee calculation methodology (resulting in a significant increase in land use fees for the Bradley Lake Hydroelectric Project). In response to the DC Circuit's order, FERC has issued a Notice of Intent (NOI) where FERC is asking for input on how best to develop a method to determine hydro-project land use fees. This is a very positive development for a couple of reasons. First of all, FERC is taking a more open and collaborative approach to developing a new methodology. The Group’s earlier expectation had been that FERC would just issue a Notice of Proposed Rulemaking and adopt the USFS/BLM methodology it initially proposed, but would be more careful about following the proper procedures. The approach that FERC has taken this time, by issuing an NOI before issuing a Notice of Proposed Rulemaking, will, hopefully, allow us a chance to help shape FERC’s methodology proposal in the early stages of its development and before any steps are taken to formally adopt a new methodology. Another benefit is that this process will take some time. Importantly, until it is finished with the full rulemaking process, FERC will be calculating the annual fees according to the 2008 fee schedule. Every year that passes without a new methodology in place means substantial savings for the BPMC. And if the final methodology results in fees that are lower than with the USFS/BLM methodology, the BPMC will reap the benefits for many years to come. A chart setting out the savings to date is included with this memo. Given the importance of this issue and the efficiencies of being part of a larger group of affected projects, the BPMC should consider continuing its participation in the Group that formed for the law suit. We have raised concerns about how the Group intends to fund the Phone: 503.595.3922 » Fax: 503.595.3928 » www.mcd-law.com 419 SW 11" Avenue, Suite 400 « Portland, Oregon 97205 March 1, 2011 next phase. As you will recall, the BPMC has paid approximately 10% of every bill invoiced to the Group to date. We believed that it was time for the larger utilities (e.g. PacifiCorp, Puget Sound Energy, etc.) to pay a greater share of the legal costs. We raised this issue at a Group call on February 25" and the other members were amenable to developing a new methodology to share the fees for participating in the NOI process. The budget for this effort was estimated to be approximately $50,000, which would translate to about $5,000 for the BPMC’s share if the sharing mechanism stayed the same. Either of the alternative legal fee sharing methodologies under discussion should result in the BPMC paying about $2,000 less than that for this stage of the effort. The current members of the Group are being encouraged to solicit the participation of other projects, which will also reduce each member's share of the fees. FERC NOI Process Initial comments are due 60 days after the NOI is published in the Federal Register, which occurred on February 28". FERC has asked that comments submitted address the following five major objectives identified in FERC's NOI: (1) uniform applicability; (2) low administrative cost; (3) no individual, case-by-case review (basically, they just want to put readily available data into a formula and turn out an invoice); (4) calculates an annual fee based on the fair market value (FMV) of the federal lands; and (5) avoids increasing prices to consumers. We feel that the primary issue will be developing a reasonable methodology for the determination of the FMV of the federal lands. The land around, and under, hydro projects is not well suited to most urban, agricultural, or forestry uses. That was a significant problem with the Forest Service/BLM methodology that FERC tried to adopt, and the Group successfully challenged. That methodology valued the hydro project lands on the basis of uses that are not practical for such lands. One alternative that has been proposed is to develop an “encumbrance factor” or some other adjustment to the Forest Service/BLM methodology. An approach to this and several other issues needs to be developed and comments drafted in a relatively short time, which is another advantage of being part of the Group and being able to pool resources. Once this process has been completed, the FERC will then issue a Notice of Proposed Rulemaking to formally adopt a new methodology Conclusion We recommend continued participation in the group because FERC’s methodology will very likely be in place for many years to come. Bradley Lake BPMC Meeting — March 14", 2011 Operators Report Current Status: Lake Level is currently 112&ft and lowering. Units have been operating well. Safety - Completed 2010 with one first aid event and no recordable injuries. Soldotna to Quartz Creek Line Outage - Islanded Mode and some brief single unit operation during Line Maintenance Work in January and February. Units operated without problems. Soldotna to Bradley Line Outage —Single unit operation during Line Maintenance Work 2/28 thru 3/3/11. Scheduled short duration outage on Unit 2 to complete some annual maintenance items. Over Excitation Trips occurred on Unit 2 during normal unit shutdown due to a failed latch coil on 4M2 Master Control relay which resulted in the Generator Field Breaker remaining closed during shutdown until being tripped open by relay action. The latch coil was replaced and the unit has operated properly since. Performed PMs on plant equipment in the Power House, Maintenance Building, and other project areas. Cleaned and re-organized areas of the Maintenance Shop. Potable Water Well Pump stopped pumping on 1/18/11. First appeared to be frozen pipes due to really cold temps. Found the well pump was bad. Removed pump from well and found the piping to the pump was badly corroded and had a large amount of holes. Replaced piping and pump. The well pump is now pumping better than it has in many years. Repaired PT Gatehouse Sump Pump. Inspected accessible areas of the dam area buildings and features, no abnormalities were found. Repaired Control Room SCADA RTU-15 due to failed card. RTU 2 (CEA SCADA) started having problems with one of the analog IO cards in December, worked on several times with CEA and the card was replaced in January. Power Tunnel Gate House UPS — PT Gate House UPS has become unreliable and was alarming during minor power changes. The UPS will be replaced with a completely redundant system to improve reliability. We replaced the control card on the existing UPS to try to prevent a failure until the UPS can be replaced. Received the new equipment for the new redundant UPS system in January. Received new inverter on 1/28/11. The inverter was damaged in shipment and we are working with the vendor and UPS for repairs. Currently, we are waiting for the manufacturer to complete repairs. Repairs and adjustments were made to overhead roll-up doors in the Maintenance Shop/Warehouse, Power House, and Cold Storage Building. Door drives on 2 doors required replacement. Springs were checked and adjusted due to resolve safety issues. Excitation System Replacement w/ Integrated PSS — Received formal bid proposals. The successful bidder is Basler Electric. Purchased new Excitation Systems and currently completing design and installation engineering. New systems will be installed during outage. Telephone System Switch Replacement — Working with ACS to configure options for new system to reduce future telephone charges and needs. Asset Management System Project — Continuing work with vendor on configuration for implementation. Completed Administrator Training and preparing database for import. Equipment Storage Shed — Working with design engineer on layout and design. Waiting for thaw conditions to make geotechnical excavations. Plant Log Book Application -Working with ML&P and local vendor to develop and configure Electronic Plant Log Book. Configuration Meeting and site visit was conducted on March 7-8 to begin configuration. Good progress was made. Dam Safety and Surveillance Monitoring Plan (DSSMP) — We have been working with R&M Consultants and Hatch to complete the final draft. The document is expected to be completed by next week. Document Control — Conversion of Manuals to electronic storage continues. Completed FY2012 O&M budget preparations.