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HomeMy WebLinkAboutAEA Board Minutes April 11 2023Alaska Energy Authority BOARD MEETING MINUTES Tuesday, April 11, 2023 Anchorage, Alaska 1. CALL TO ORDER ,, ALASKA ENERGY AUTHORITY Chair Pruhs called the meeting of the Alaska Energy Authority to order on April 11, 2023, at 8:30 am. A quorum was established. 2. ROLL CALL BOARD MEMBERS Members present: Chair Dana Pruhs (Public Member); Vice -Chair Bill Kendig (Public Member); Albert Fogle (Public Member); Adam Crum (Commissioner DOR); Julie Sande (Commissioner DCCED); Bill Vivlamore (Public Member); and Randy Eledge (Public Member). 3. AGENDA APPROVAL Chair Pruhs requested to add Item 9. Executive Session to discuss personnel. MOTION: A motion was made by Vice -Chair Kendig to amend the agenda, including Item 9. Executive Session to discuss personnel, and moving Board Comments to Item 10., and Adjournment to Item 11. Motion seconded Mr. Fogle. The motion to amend the agenda passed without objection. MOTION: A motion was made by Vice -Chair Kendig to approve the amended agenda, including Item 9. Executive Session to discuss personnel, and moving Board Comments to Item 10., and Adjournment to Item 11. Motion seconded Mr. Fogle. The motion to approve the amended agenda passed without objection. 4. PRIOR MINUTES — March 1, 2023 MOTION: A motion was made by Vice -Chair Kendig to approve the prior minutes of March 1, 2023. Motion seconded by Mr. Fogle. The motion to approve the minutes of March 1, 2023, passed without objection. S. PUBLIC COMMENTS (2 minutes per person) There were no members of the public online or in -person who requested to comment. 6. NEW BUSINESS REDUCING THE COST OF ENERGY IN ALASKA 813 W Northern Lights Blvd, Anchorage, AK 99503 • Phone: (907) 771-3000 - Fax: (907) 771-3044 • Email: info@akenergyauthority.org A. AEA Cash and Investments Curtis Thayer, Executive Director and Secretary -Treasurer, informed that this item was at the request of Chair Pruhs considering the recent banking situation and issues. Staff contacted Key Bank, who provided a letter containing information regarding the safety of AEA and AIDEA's assets. Mr. Thayer informed that US Bank provided a letter and a presentation regarding bank strength and stability. Mr. Thayer advised that, if requested, he could provide confidential information to the members regarding AEA's funding and rates of return. The $166 million in bonding is in a trust account with US Bank. It is invested in government securities and is protected. It is earning approximately 3% to 5% income. $61 million of AEA's assets are at Key Bank. Mr. Thayer discussed that AEA has over $600 million in funds. Most of those funds rest with the State and are managed by the State. AEA draws upon them, as needed for PCE, grants, or other appropriations from the Legislature. Chair Pruhs asked Commissioner Crum if the Department of Revenue oversees the cash balances of the banks. Commissioner Crum agreed. Chair Pruhs asked if the State Department of Revenue uses Key Bank. Commissioner Crum discussed the State uses a multitude of different banks. He gave the example that Jefferies is utilized to administer and sell the bonds. Commissioner Crum noted that he could provide a listing of the institutions utilized. Chair Pruhs agreed. He asked if Commissioner Crum is comfortable with the current banking situation. Commissioner Crum discussed the turmoil and the self -rescue aspects internationally to ensure that the mid -size banks were sustained. The large banks have regulations that keep them upright. He believes the situation has continued to stabilize. There were no additional questions. 7. OLD BUSINESS A. SSQ Line Update Mr. Thayer requested Bryan Carey, AEA, to present the update and PowerPoint included in the Board's packets. Mr. Thayer provided background information of AEA's purchase of the Sterling to Quartz Creek (SSQ), the bonding for the rebuild, and the coordination with Chugach Electric Association (CEA) for engineering. Mr. Carey explained that there are two lines in the SSQ section. The existing 115 kV has a planned upgrade and is used for Bradley Lake power. The other 69 kV line is out of use and the poles and wires were removed earlier this year. The final closeout report and final inspection remains for that removal. Mr. Carey discussed that the 115 kV line will be upgraded to a 230 kV line, and will be ready to be energized with the rest of the system, allowing additional capacity. The Bradley Lake Management Committee (BPMC) selected CEA to manage the design and procurement for the project. Work is occurring on the project under CEA's direction. The project is phased in order minimize the effects of the temporary loss of access to Bradley energy. The three phases will occur over three years, with a maximum outage of 60 days per year. Chair Pruhs asked if AEA is the direct owner of the project and is the one going out for contractors. Alaska Energy Authority Page 2 of 13 Mr. Carey explained that AEA is the owner of the SSQ Line. AEA is working with the BPMC, who selected CEA as project manager to procure the contractors for design and engineers. Chair Pruhs asked if CEA is to procure contractors for construction. Mr. Carey indicated that CEA has not yet been requested to procure construction contractors. He noted that CEA is currently upgrading their system and is experienced in upgrades. The BPMC could take the lead on procuring contractors for construction or could select CEA to proceed with construction. Chair Pruhs asked Mr. Thayer for his comments. Mr. Thayer discussed that the BPMC considered a united design for the upgrades to the line. CEA is connected to Quartz Creek north. Additionally, Homer Electric Association (HEA) owns lines from Bradley Junction north. HEA will complete their upgrade design in conjunction with the SSQ Line upgrades. Discussions will occur at the BPMC regarding utilization of a single construction contractor or multiple construction contractors for the line upgrades. Chair Pruhs asked from a public policy standpoint, if the procurement of a construction contractor will be open or if it will be limited to CEA's and HEA's contractor list. Mr. Thayer indicated that the construction will be competitively bid. AEA has not decided if the construction bid will be open to everybody. The focus has been on the collaboration of the design, engineering, and determining the cost of each of the sections. Chair Pruhs requested that the discussion and recommendation regarding opening the construction bid to all contractors is brought before AEA Board prior to the implementation of a decision. Mr. Thayer agreed. Mr. Carey discussed that CEA project manager has proceeded with discussions with the Kenai National Wildlife Refuge (Refuge) regarding land rights, including identifying landowners, easements, and cultural resources. Chair Pruhs inquired if the existing poles will be replaced. Mr. Carey agreed. He explained that the existing poles are approximately 40 years old, and the Refuge has concerns regarding the treated poles. Consideration is that the new poles will be taller and will be made of steel. Mr. Carey indicated that the permit conditions appear to allow for the upgrade of the line without the full NEPA process. Chair Pruhs asked how many permits are needed to begin the upgrade. Mr. Carey did not have the specific information and believes at least 10 permits are necessary to begin. Mr. Fogle asked Mr. Carey for his understanding of the working relationship with the federal partners with the Refuge. Mr. Carey discussed that the working relationship is fine. He believes the Refuge is pleased that the removal of the 69 kV line occurred quickly. There was no damage to vegetation because the removal occurred when snow cover was present. CEA's design engineer and AEA staff continues to meet with the Refuge to discuss permitting issues. It is unknown if the Refuge will take a position regarding NEPA. Mr. Fogle asked Mr. Carey if it is possible that Phase 3 could begin before Phase 2, if all the permits for Phase 2 are not approved at the time, and then return to Phase 2 after Phase 3 is completed. Mr. Carey indicated that is a possibility. Phase 3 also includes a portion of the Refuge area, and the same issues could be present. Mr. Carey discussed that Phase 3 at Cooper Landing has Alaska Energy Authority Page 3 of 13 enormous cultural issues. He noted that the current highway design work is being slowed by the 20 to 30 archaeologists onsite looking for cultural artifacts. Similarly, Phase 3 will need clearance for cultural issues, which could considerably slow the design and construction process. Mr. Carey continued the presentation and noted that work will proceed on the existing right-of- ways while further developments occur with permitting. Phase 1 pole locations have been determined, staked, and drilled for geotechnical information. Continued evaluation will occur during the next month. Mr. Carey reviewed the SSQ Project timeline. Phase 1 procurement begins in October. The poles are a considerable cost of the project. In order to reduce the overall cost of the poles, the poles will be purchased directly by CEA and provided to the contractor. Additionally, the procurement of the poles will assist in maintaining the project timeline. The poles would be purchased before a contractor is selected. Chair Pruhs inquired if the transmission line will be procured directly. Mr. Carey indicated that information has not yet been determined. Chair Pruhs asked if there is a project budget. He commented that it is odd to buy products for the project without knowing the entire cost of the project. Mr. Carey explained that CEA has been upgrading the various sections of the line during the past five years. CEA has historical cost estimates for poles and cost of contractors, not including the recent inflationary increases, which will be discussed later in the presentation. Chair Pruhs asked if the permits will be approved when the poles are purchased. Mr. Carey anticipates that the permits for Phase 1 will be obtained before the poles are purchased. Mr. Carey reviewed the timeline showing the completion of Phase 3 in 2028. It is possible the timeline could be improved if the utilities decide that outages could exceed 60 days per year. Discussions have occurred regarding outages of 90 days per year. Conversely, the timeline may be delayed if there is non -availability of equipment needed. The SSQ Project timeline does not include the substation upgrade. He noted that the lead time for the various transformers is upwards of three to four years. Mr. Carey outlined the estimated costs in the presentation that were provided by CEA's historical data. He noted that the information will be revised as new costs are revealed from CEA's current upgrade projects that will be completed in 2025. Mr. Carey highlighted the project risks. The construction schedule competes with other Railbelt projects, and it is necessary to coordinate the timing of the line being down. The Refuge has communicated their preferences, including the option of an underground line, which would add a considerable cost to the project. AEA is not supportive of the option due to the increased expense. The Refuge prefers steel poles. There will be access issues during construction related to wildlife and habitat. Chair Pruhs inquired as to the construction risk that should be discussed with the project risks. These include claims, change orders, and similar issues that occurred at Bradley Lake. Mr. Carey indicated there is always project risk. Ways to mitigate the risk include obtaining the materials, permitting and geotechnical information before construction begins. Most of the area is close to the highway, which improves access issues. Mr. Carey discussed his understanding that CEA's 230 kV upgrade projects have not experienced substantial issues with construction risk. Chair Pruhs Alaska Energy Authority Page 4 of 13 asked if Mr. Carey has information regarding the budget changes CEA experienced with their upgrades. Mr. Carey does not have that information. Chair Pruhs commented on the importance of considering the recent lessons learned from the Bradley Lake project and implementing mitigations for prevention and proper practice. Mr. Thayer agreed, and indicated that the same contractor will not be utilized. Mr. Carey discussed that a fiber communication line will run alongside the cable that will be used for Bradley Lake and will connect to the utilities. There is potential of leasing the unused fiber capability to other entities. Chair Pruhs asked if AEA will own the fiber. Mr. Carey agreed the fiber on that section will be owned by AEA. Chair Pruhs asked what process would be utilized to determine who gets to use the communications fiber. He asked if the utilities would control the fiber or if AEA would control the fiber. He asked if ACS or GO will use the fiber. Mr. Carey believes that ACS or other telecommunication firms would be interested in utilizing the fiber. After the installation process occurs, an agreement would have to be created among the owners of the sections of the line; AEA, CEA, and HEA. Chair Pruhs commented that the fiber communications line is a separate asset. He asked if the bonding funds will be used to install the fiber communication line or if a separate process will be developed. Mr. Thayer indicated that at this juncture, no final decisions have been made regarding the installation of fiber to the poles. The present goal is to install the transmission line and to review the interest and need of fiber at a later point. Mr. Carey reviewed that discussions continue with several agencies to establish a basis of design for Phases 2 and 3, and to progress permitting. Mr. Eledge asked if the 69 kV line has been completely removed. Mr. Carey agreed. He explained that the poles by the road were removed via flatbed trucks and the wire rolled up. The poles further off the road were lifted out by helicopter. All the poles and all the wire has been removed. Mr. Eledge inquired if the use of fiber will assist in locating faults on the line. Mr. Carey understands that CEA is installing fiber because the fiber can coordinate the substations more quickly. The different relays can more quickly determine the location of issues and faults on the line. Mr. Fogle expressed appreciation to Mr. Thayer and Mr. Carey for the presentation. He requested that Mr. Thayer reiterate the benefit to the rate payers of AEA owning the SSQ Line and upgrading to 230 kV transmission. Mr. Thayer explained that the SSQ Line was acquired by AEA, primarily because of the fire that occurred on the peninsula that disabled the power from Bradley Lake to the northern utilities for four months. The SSQ Line was previously owned by HEA, but it did not serve any of their customers. Mr. Thayer commented on the multiple lawsuits brought forth by the utilities regarding the ownership and rights of the SSQ Line. AEA worked with the utilities and the Board and purchased the SSQ Line for $17 million, which included the removal of the 69 kV line within five years. The removal of the 69 kV line has been completed within two -and -a -half years and within budget. Upon the purchase of the SSQ Line, all the lawsuits were extinguished. Alaska Energy Authority Page 5 of 13 Additionally, there are now multiple utilities who can reply and fix the line if there is an emergency. AEA negotiated with the Refuge to ensure that the right-of-way was large enough to complete an upgrade. Mr. Thayer discussed that the lines in Kenai are constrained and at capacity. No additional power can be moved north. Any plans for expansions to Bradley Lake, or complementary wind, solar, or tidal expansion do not currently have the infrastructure capacity to move the power north. Currently, in the summertime, there is occasional line loss as high as 40%. The SSQ Line serves the western and northern utilities, as well as the 17% of power from Bradley Lake that goes to Fairbanks. The needed upgrade affects the entire Railbelt. The line was built before Bradley Lake was constructed and the original plan was to upgrade the line after Bradley Lake was built. The upgrade never occurred. Mr. Thayer discussed that the upgrade will probably not lower the cost of energy. The upgrade will provide increased reliability, resilience, and the opportunity to move more power from the peninsula. Mr. Thayer explained that the $166 million bonding was structured in a way that did not add cost to the rate payers and did not add burden to the State treasury. Commissioner Sande expressed appreciation for the presentation and for the conversation regarding the fiber and opportunity to provide broadband throughout the state. She highlighted the importance of identifying efficiencies and savings that can be passed to Alaskans. There were no additional questions. 8. DIRECTOR COMMENTS A. IIJA Update i. Grid Resiliency and Innovation Partnerships (GRIP) Update Mr. Thayer reviewed the two submitted GRIP applications included in the packet. AEA partnered with the Railbelt utilities for Topic 1., Railbelt backbone reconstruction, and Topic 2., battery energy storage. The applications were submitted by MEA, as the lead agency, on behalf of the Railbelt utilities and AEA. Mr. Thayer explained that AEA does not qualify to solely apply for the GRIP program, but AEA can partner with the utilities as shown. Mr. Eledge noted that the paperwork within the packet indicates "Draft". Mr. Thayer explained that the applications were in draft form at the time the packets were compiled. The applications have since been submitted by MEA. Mr. Thayer informed that a third GRIP application will be included in the documentation at the next meeting. The application is due May 19, 2023, and is for State funding of two projects. One is Railbelt specific and the other one is for microgrids in rural Alaska. Mr. Thayer reminded members of the initial process of submitting a concept paper for the project that is then either encouraged or discouraged to move forward with the full application. Mr. Thayer informed that less than half of the total concept papers submitted were encouraged to apply. Both of AEA's concept papers were encouraged to apply. Mr. Thayer explained that both projects total approximately half a billion dollars. The total amount of funding that is competitively available for Alaska Energy Authority Page 6 of 13 applications in all 50 states is $10.5 billion. Mr. Thayer hopes the application will be successful to some degree, but he does not believe the application will be successful in the full amount. He explained that the funding has a match requirement and that the $166 million in bonding can be leveraged as a State match. The application process will take 60 to 90 days or longer before a decision is made. AEA will not request federal receipt authority by the Legislature during the application phase. Chair Pruhs inquired as to the process used for decision -making and selection. Mr. Thayer believes there is a specific selection criteria used. However, the selection criteria is not provided to applicants. ii. National Electric Vehicle Infrastructure (NEVI) — Presentation Mr. Thayer requested Josi Hartley, AEA, to review the NEVI presentation and update regarding the $52 million memorandum of understanding (MOU) with the Department of Transportation for the electric vehicle (EV) program in the state. Ms. Hartley indicated that the presentation provides information on the Volkswagen Settlement, the NEVI Program, the Charging and Fueling Infrastructure (CFI) Program, and recent and planned community outreach. Ms. Hartley reviewed that AEA was designated as the lead administrator of the Volkswagen environmental mitigation trust funds in 2018. Since then, AEA's EV related activities have grown exponentially. The Alaska Electric Vehicle Working Group was established and AEA developed its EV Mission Statement to lead the effort to minimize barriers to EV adoption in Alaska. The initial VW settlement work was to establish a DC fast -charging corridor between the Kenai Peninsula and Healy. Six sites are open and available for public use. Three sites remain under construction due to supply chain issues and are expected to be completed within the next three months. AEA is working to obligate the remaining VW funds of $125,000 to Southeast Alaska for a Level Two community charging project. Chair Pruhs asked Ms. Hartley for the information that shows the cost that each site is charging to utilize the station. He wants to compare the cost of an EV charging site to the cost of filling up a tank of gas at a fuel station. Mr. Thayer indicated there is an app for that information. Chair Pruhs commented that he does not have an EV and does not have the app. Mr. Fogle agreed that information is useful and wanted by the general public. Ms. Hartley explained that the cost comparison question is one that is prevalent during outreach presentations. Staff has slides related to the information. She explained that there are many variables to determining the cost. Level III fast charging is much more expensive than Level II charging, that typically occurs at the owner's home. The location of the charging station is another factor that contributes to the cost of the charge. Mr. Thayer agreed to provide the cost comparison information to members at the next Board meeting. Mr. Eledge requested that the usage information and the number of charges per site is included with the rate comparison information. Ms. Hartley agreed. Ms. Hartley discussed the graph in the presentation showing EV ownership in Alaska. Since the Alaska Energy Authority Page 7 of 13 development of the EV plan in July of 2022, the number of registered EV vehicles has increased about 20% from 2,100 to 2,500. This increase is higher than AEA's projected rate. Chair Pruhs asked for the number of registered cars during the same time period. Ms. Hartley believes that the state has approximately 500,000 vehicle registrations per year. The EV penetration is less than .5%. Chair Pruhs asked how Alaska's urban trend compares with the urban trends of the Lower 48. Ms. Hartley did not have that information. Ms. Hartley showed the graph illustrating the geographic distribution of EV ownership in Alaska. Approximately half of the registered EVs are within the Anchorage area. The other area of high penetration is Southeast Alaska, due to its favorable conditions. Ms. Hartley provided background information on the NEVI Program and its establishment by the Bipartisan Infrastructure Law (BIL) in 2021. The intent of the national program is to install 500,000 EV fast charging stations nationwide throughout the life of the program. The program also aims to address primary barriers to EV adoption, including range anxiety. The formula -funded program is apportioned to states to deploy charging infrastructure along designated alternative fuel corridors (AFC) and to establish a coast -to -coast interconnected network to facilitate data collection, access, and reliability. The total amount of national funding is $5 billion, of which, Alaska Department of Transportation and Public Facilities (DOT&PF) anticipates receipt of $52 million over the next five years that will be administered by AEA. The State of Alaska EV Infrastructure Implementation Plan (The Plan) was submitted and approved by the Federal Highway Administration. The Plan will be submitted for approval annually. Ms. Hartley explained that Alaska has one AFC that must be fully built out before additional infrastructure can be installed on other public roads. The requirements for the AFC buildout include that the stations must be located no more than 50 miles apart, no more than one driving mile from the AFC, and the infrastructure must be DC fast -charging with a minimum of four connector ports. Additionally, the Program is a Title 23 Program and must comply with the Justice 40 requirements. Chair Pruhs inquired as to the total amount of funding spent to -date on the EV Program plus the amount of funding the State is anticipated to spend on the Program over the next five years. Mr. Thayer indicated that the total is approximately $54 million. Chair Pruhs asked for the expected number of EVs in five years. Mr. Thayer indicated that currently, the Ford dealership has a backorder of 600 EV pickups. This expectation is that EV ownership will continue to increase as the availability of charging infrastructure is built out and the range anxiety is lessened. Chair Pruhs commented that the current capital subsidy at $54 million equates to $21,000 per EV. This amount decreases as the number of EVs increases. Mr. Thayer indicated that the subsidy including the operating costs is higher because EVs do not pay a fuel tax. Mr. Fogle asked for the mileage range for a fully charged EV. Ms. Hartley indicated that the range varies depending on the vehicle, the age of the vehicle, the battery technology, and wintertime or summertime. The top range is approximately400 miles, and the lower range is closer to 150 miles. Mr. Fogle asked for a cost analysis that includes the range of EVs. Alaska Energy Authority Page 8 of 13 Chair Pruhs requested additional information and inquired if the private entity will maintain the infrastructure after the initial grant funding is provided. Mr. Thayer explained the program follows parameters of 80/20 match. The private sector must provide a 20% match and will own the infrastructure after five years. The grant agreement includes information regarding warranty and maintenance for those five years only. Mr. Thayer commented that he believes the current technology will be obsolete in five years due to the rapid changes in technology. Ms. Hartley reviewed the phased approach to the implementation process. Phase 1 builds out the AFC between Anchorage and Fairbanks. Phase 2 builds out the remainder of the Highway and Marine Highway Systems. It is anticipated that Phases 1 and 2 will utilize most of the NEVI funds available. As funding allows, Phases 3 and 4 install charging stations in rural hub communities and urban and destination locations. Ms. Hartley believes that Phases 3 and 4 will likely utilize funding through competitive applications of different programs, outside of the NEVI formula funding. Chair Pruhs asked if the Legislature must appropriate funding for the 80/20 match. Mr. Thayer explained that the 20% match will be provided by the private sector. The Legislature provides the federal receipt authority through the DOT budget. AEA has an MOU with DOT for the funds, less DOT's overhead. Chair Pruhs inquired as to AEA's overhead. Mr. Thayer indicated AEA's overhead is low. Ms. Hartley identified the 14 potential priority site locations for the AFC areas. There is one area of 80 miles between Denali State Park and Cantwell that was granted a discretionary exception from the 50-mile requirement, due to lack of infrastructure. The eligibility for funding is open to a wide range of applicants, including public, private, non-profit, Tribal, and utilities. Eligible projects must be directly related to EV charging, publicly available, and include an experienced charging network provider. The current site host Request for Application (RFA) has been released for the available $15 million. Ms. Hartley reviewed the RFA timeline that will close on May 151n The tentative site selection will occur on May 241h. Ms. Hartley discussed the scoring elements of the applications. There were no additional questions. Ms. Hartley discussed that separate and distinct from the NEVI Program is the CFI Program, which was also established through the BIL with federal funding of $2.5 billion. The CFI Program is held under competitive solicitations. The FY22/23 program funding amounts are up to $700 million, with $350 million in the Community Program category and $350 million in the Corridor Program category. The intent is to deploy publicly accessible infrastructure for EV charging and alternative fueling such as hydrogen, natural gas, and propane fueling infrastructure in communities and along AFCs. Applications are due on May 301h. AEA's focus for this round is within the Community Program category. Ms. Hartley reviewed the CFI Community Grant Program parameters and focus area categories. Ms. Hartley reviewed the past events of community outreach and the planned public engagement efforts and events as listed in the presentation. Mr. Thayer commented that the EV team consists of Ms. Hartley. He noted there are a few individuals on Audrey Alstrom's team who provide assistance, but have other primary duties. Alaska Energy Authority Page 9 of 13 Mr. Eledge expressed appreciation for the diligent work and information presented. He inquired as to the effects of the additional load on the power grid. He requested that information is gathered regarding the times the charging will occur to mitigate any issues from the additional load due to charging. Mr. Fogle thanked Ms. Hartley for the presentation. He asked if AEA is keeping AKEVWG informed regarding this program and other happenings. Ms. Hartley agreed. She noted that engagement is increasing and there is heightened interest in EVs, including the corridor buildout. There were no additional questions. B. FY24 Budget Update i. CASR Report Mr. Thayer discussed that AEA has a larger capital budget than half of the Departments in the State, with $174 million pending in Juneau, and the possibility of an additional $20 million. He discussed the $166 million in bonding, the NEVI of $52 million, and the normal budget that includes PCE of approximately $40 million. The Capital Appropriation Status Report (CASR) within the packet includes an additional $202 million in designated project funds. Each year, Mr. Thayer is required to travel to Juneau to meet with Senators, Representatives, and staff to review the CASR. The funds are restricted and can only be used for the designated purposes. Mr. Thayer reported that there is currently $27 million in UGF Unobligated funds and some of that funding may be returned to the State. He gave the example of the $1.7 million draw for the COVID relief for utilities that was returned to the State. Mr. Thayer noted that the Legislature had no questions for him when the CASR was reviewed. Chair Pruhs asked if a project is underbudget, if the remaining funds return to the general fund. Mr. Thayer explained that typically, the funds are returned to the general fund and are reappropriated by the Legislature. However, there are specific items, like the Renewable Energy Fund, that any remaining monies go back into the Renewable Energy Fund. Chair Pruhs asked for additional information on how cost overruns are handled. Mr. Thayer discussed the process and options if a project goes over budget. There have been a few projects placed on hold due to the economics of the project. There were no additional questions. C. Governor's State Energy Security Task Force Mr. Thayer discussed Governor's Administrative Order 345 creating the Alaska Energy Task Force. It will be headed by the Lieutenant Governor and the Vice -Chairs are Mr. Thayer and Gwen Holdmann, LIAR The date for the first meeting has not yet been established. The Task Force is to return an energy plan report to the Governor by October. Additional work will occur to develop the energy plan into the energy policy for the State. AEA will contribute significant internal resources to support the Task Force. Alaska Energy Authority Page 10 of 13 Mr. Thayer discussed that the Task Force will consolidate information to develop an energy profile on the state, including generation, transmission, distribution, and storage capabilities in the different regions. Regulations and statutes will be reviewed to determine what changes are necessary to create a successful energy plan. Mr. Thayer noted that the Governor's overarching goal is the cost of power at $0.10 cents per kWh. Vice -Chair Kendig commented that the $0.10 cents per kWh is the cost to the consumer. He understands that the cost of generation is a focus. He asked if there is focus on determining ways to reduce the cost of transmission. Mr. Thayer agreed that will be part of the studies. Discussion occurred regarding the varying cost structure and debt structure of the utilities. Mr. Eledge requested more information on the additional workload that staff will undertake for the Task Force. Mr. Thayer explained that initially, when AEA had an $80 million request in Juneau, AEA received the ability to hire five new staff, consisting of two project managers, one grants coordinator, one procurement staff, and one accounting staff. Since then, however, the request in Juneau has doubled to more $160 million. Mr. Thayer discussed his conversations with legislators for AEA to hire the five new approved staff and then go back to the Governor's Office to discuss what additional personnel is needed. Mr. Thayer noted that staff is carrying extra work, especially himself, Jennifer Bertolini, Ms. Alstrom, and Tim Sandstrom. There were no additional questions. A brief at -ease was taken. D. Rural Update Mr. Thayer indicated that the Rural Update from Rebecca Garrett, AEA, is included in the packet. It provides information on training, and the projects within the Rural Power System Upgrades (RPSU) and Bulk Fuel Upgrades (BFU). E. Denali Commission Update Mr. Thayer discussed the Denali Commission Update included in the packet. The total amount of funding for active awards is $39 million. The total remaining funding is $20 million and recent applications for approximately $4 million have been assigned. F. Power Project Loan (PPF) Update Mr. Thayer discussed the PPF Update included in the packet. There are 18 loans outstanding and no delinquencies. There is one application that should close soon, two pending applications, and a possible third application to review. G. Renewable Energy Fund (REF) Program Update Mr. Thayer discussed that the REF is in Round XV. AEA recommended 27 projects for approval by Alaska Energy Authority Page 11 of 13 the Renewable Energy Fund Advisory Committee (REFAC) last week. The 27 projects, totaling $25.5 million, were approved unanimously by the REFAC. Request for funding appropriation was submitted to the Legislature last Friday. Mr. Thayer indicated that Round XVI is expected to begin later this year, with a tentative submittal deadline to the Legislature by the beginning of January 2024. H. Update on Trip to Unalaska and Project Mr. Thayer discussed the trip that he and staff took to Unalaska regarding the geothermal project. Staff met with the City, the Native Corporation, and the processors. Mr. Thayer provided background information that Unalaska is not connected by an energy grid. The processors produce their own power, which is a concern. The City applied to the REF for a wind project and received partial funding last year. Mr. Thayer explained the ongoing processes the geothermal project is undertaking to review the resources and the economics of the project, including the available federal tax credits from the Infrastructure Reduction Act. Mr. Eledge asked if there are previous studies on the Makushin Geothermal Project. Mr. Thayer agreed, and discussed the historical background of the project in the 1980's. The well was proven up in 1983, and the project sat dormant for 40 years. There were no additional questions. I. Legislative Update Mr. Thayer discussed the legislative update information. The Senate Finance Committee introduced SB 98, which would transfer the management of the PCE endowment from the Department of Revenue to the Permanent Fund. No changes will be made to the program or to the funding. The Governor introduced SB 125 and HB 154, which would create a State financing entity for renewable energy efficiency and storage projects. This was reintroduced from last year. The bill includes AEA's role to technically review the projects and allows a fiscal note to add one staff member. Mr. Thayer has been requested to travel to Juneau to testify and meet with the Legislature regarding this bill. Alaska Housing Finance Corporation will be the lead agency on the bill and AEA will provide the technical assistance. Mr. Thayer discussed HB 62, which was the 10-year extension for the PCE program. He reported that the Senate Finance Committee decided to remove the expiration date from the PCE program. It will now be an ongoing program. Mr. Thayer noted that Senate Finance complimented AEA on the management of the program. Mr. Thayer discussed that AEA has hired a third -party to evaluate the program and the current projects. The results of that report, including the updated amount of diesel the program saves each year, should be completed at the end of the month. J. Cook Inlet Gas Supply — Included in the packet K. Community Outreach — Included in the packet L. Articles of Interest - Included in the packet Alaska Energy Authority Page 12of13 Mr. Thayer discussed that staff emailed the Board and invited members to participate in the Governor's upcoming Alaska Sustainable Energy Conference. Mr. Thayer noted that he will be moderating a panel. He requested members to review the agenda and inform staff what day or days they would like to attend. Mr. Thayer commented that he provides a weekly update to members regarding AEA's ongoing tasks. He asked if that level of information is helpful. There was agreement by the members that the level of information is helpful. M. Next Regularly Scheduled AEA Board Meeting Wednesday, May 24, 2023 Mr. Thayer indicated that the date of May 24 conflicts with the Alaska Sustainable Energy Conference, as well as other conflicts with members. He requested members discuss alternatives regarding the date or location. Chair Pruhs agreed that the members will be polled regarding the next meeting date. Currently, both the May and June AEA meetings are scheduled to occur in Anchorage. MOTION: A motion was made by Vice -Chair Kendig to enter into executive session to discuss personnel matters. Motion seconded by Mr. Fogle. The motion is in accordance with the Open Meetings Act. A roll call vote was taken and the motion to enter into Executive Session passed unanimously, with Commissioner Crum away for the moment. 9. EXECUTIVE SESSION: 10:43 am. Personnel Matters The Board reconvened its regular meeting at 11:37 am. Chair Pruhs advised that the Board did not take any action on matters discussed while in Executive Session. The session was limited to discussion of matters directly protected from public disclosure by the Open Meetings Act. 10. BOARD COMMENTS Mr. Eledge expressed appreciation for the information presented in today's meeting. Chair Pruhs thanked Mr. Thayer and staff for their diligent efforts and for their recent travels to Dutch Harbor. He noted that additional discussion will occur offline regarding timing and location of the next meeting for both AEA and AIDEA. 11. ADJOURNMENT;+�1,11�ft►l��ff There being no further business of the Board, the AEA meeting' ourneclof 1. � (��m. 'GORPOR4p, Co SEAL . Curtis W. Thayer, Executive Director / Secretary Alaska Energy Authority Page 13 of 13