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HomeMy WebLinkAboutBPMC Meeting Jan. 24, 2014 2: e £ z KW = reviewed isk Lbyaies , AA oles is limited not nec fo be present AL Seihe ot da ble aan Vole when releked Sry . h Homer - Harvey Ambrose meets dae side. ' DARined S+O_ liwneg HAS reviews general Ais pute. Shing Sech ves Net i ) a hems y < \9 ¥ Budt - aie ha ae ase 50_nat Werhone dl j ¥ad S~ DOS une eae 0 ua don Sik, oalugasee: f YO rhe op guidence. Con prose nthe disc cursed Could be. E 1.2 Bylaws Authority face nernihe Dade 408 cubes now Yor oko, this care aa Parone Ed pagioc ee Seo CEA € HEA on Heese cae , © AD Comm pw 4p sake ao pects exper otien—of——ggthe— “iM pek OW BL agitymer*” SELViCEe aspistent aagieettent L Sie _ —Compinsaines wae BR SO lide _fn_ 2 an fed Meeting Papor due on pat Coe 2) dace Pe LT Oe es eee, ot {O04 art ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY BOARD MEETING BPMC 1/24/14 Roll call from top to bottom ending with Chair Golden Valley Electric Association Homer Electric Association Matanuska Electric Association fenscwnranow ee Municipal Light & Power Chugach Electric Association Roll call from top to bottom ending with Chair Golden Valley Electric Association Homer Electric Association Matanuska Electric Association City of Seward Alaska Energy Authority Municipal Light & Power (Chugach Electric Association Next Meeting: xxxx XXXx XX, XXXX Bradley Lake Project Management Committee Friday, January 24, 2014 @ 10:00 A.M. **PLEASE WRITE LEGIBLY** NAME Syuay , Moee/v2 ORGANIZATION eee Sap | Sate fe KiBK Qiese) _ MRAG (BENT Ce ee ee ee ||) ee Siero ee i Lik (seldatin LEA Havre AB hl o5t=— He OUR ESL. ACA ORIEL UY AY LARD CUAL CLM PKRY PIAEP CLA MA GOYAZON LAA Loew Lteté pV AEA Bs Ls REQ Fell VC OV! VEN 42 Lace td Wi. Lip Eee — “SS= Chu ect, LEC THIBbAT CHUAEACEt Fiate wy: ‘aintin WVU? * a Ae i Mcp ACY 6. D Es 5 | Ae. | | DYN foe ] Gs *L__ (to rs seescl CIVBE |e That Teri Webster AyZA K Commirjec rember ATTENDANCE - BPMC REGULAR MEETING, Jan 24, 2014 @ 10:00 am COMMITTEE MEMBERS | Brad Evans, Chairman Lat Brad Janorschke, Vice Chairman _/ Bryan Carey, Secretary/Treasurer 4 Corey Borgeson _/ Dan Kendall A John Foutz _% Evan Joe Griffith ALTERNATE CEA Burke Wick | HEA _~ Harvey Ambrose AEA / Sara Fisher-Goad GVEA Lynn Thompson MLP Richard Miller SEW Jeff Estes MEA Gary Kuhn Bebin- Clartom _AIDEA | AEA | AIDEAand AEAStaff | AIDEA | AEA SF ce | Webster, Teri Kelli Veech YI Ky eWerfen | Bernie | Low AIDEA and AEA Staff | AIDEA AEA | ./ Kirk Gibson, McDowell Rackner & Gibson PC -/ Brian Bjorkquist, Dept of Law AIDEA and AEA Staff HOMER ELECTRIC ASSOCIATION, INC. STATEMENT REGARDING DISPUTE RESOLUTION PROCEDURES Homer Electric Association, Inc. (“HEA”) as a member of the Bradley Lake Project Management Committee (“BPMC”), has participated in the adoption of certain dispute resolution procedures pursuant to Section 10(b) of the Agreement for the Wheeling of Electric Power and for Related Services (“Services Agreement”) and Section 14 of the Amendment to Agreement for Sale of Transmission Capability (“Transmission Agreement”). The process for identifying disputes to be treated with under the procedures is unclear, and HEA is unsure of the scope of the issues that are intended to be addressed by the BPMC. HEA recognizes the value of attempting to resolve issues informally, and is willing to participate in the dispute resolution process in an effort to minimize unnecessary and counterproductive strife. For the avoidance of doubt, however, by its participation in the dispute resolution process, HEA does not thereby agree that the BPMC has the contractual authority to resolve, or even consider, some or all of the issues identified by the participants in the process, including those set forth in Resolution No. 2013-02, nor does HEA acknowledge that the allegations in the resolution or which may be otherwise identified even give rise to bona fide disputes. HEA reserves the right to have any dispute that may arise in the context of the BPMC dispute process resolved by the appropriate judicial or regulatory authority. STATEMENT OF DISPUTES Services Agreement. Section 10(b) of the Services Agreement limits dispute resolution to matters involving “performance under (the) Agreement.” HEA has identified certain disputes that arise under the specific terms of the Services Agreement and they are as follows: Services Agreement, Section 8 Performance Failures Section 8(a)(i) requires the Dispatcher to “(dispatch) power generation at the Bradley Lake Project in accordance with the requests of the Parties, ... and the applicable operating criteria or guidelines adopted by the Project Management Committee.” The BPMC has adopted Allocation and Scheduling Procedures (Procedures) for the Project as the applicable operating criteria or guidelines. With respect to its obligations under Section 8(a)(i) and the Procedures the Dispatcher has failed to perform as follows: 1. In violation of Sections 5(b), (c), (d), (e), (f), and (g) of the Procedures the Dispatcher routinely utilizes energy from the Project to regulate Fire Island Wind (FIW) output. 2. The Project has spilled water in each of the past two years as a direct result of both action and inaction on the part of the Dispatcher as follows: a. Acting in violation of Section 5(h) of the Procedures, the Dispatcher used the Project to load-follow its own system rather than dispatching the Project to prevent spill and imminent spill conditions. Acting in violation of Section 5(j) of the Procedures, the Dispatcher scheduled its share of Project capacity to load-follow its own system rather than scheduling its share to prevent spill and imminent spill conditions. Further, the Dispatcher failed to mitigate the adverse effects on the Project in scheduling extensive outages in performing maintenance and repairs on its transmission system. In violation of Sections 5(j) of the Procedures the Dispatcher failed to notify Participants of Capacity and Energy to be made available to them at no cost under section 5(h) of the Procedures, as a result of its and other Participants’ inability or refusal to take their fully allocated shares of energy during imminent and actual Spill conditions, thus extending and exacerbating the amount of and the duration of spill and imminent spill. 3. The Dispatcher is violating Section 5(g) of the Procedures by routinely loading Project generation units to levels well in excess of its own share, and failing to provide an accounting proving whether or not it has thereby effectively taken Project Capability belonging to other Participants. 4. The Dispatcher is violating Section 5(g) of the Procedures by routinely loading Project units to levels well in excess of its own share, to the extent that spin carried on Bradley at the time is being used by the Dispatcher to provide real energy, and failing to provide an accounting proving whether or not such loading has effectively taken Project Spin Capability belonging to other Participants, thereby potentially leaving the system deficient in spin. 5. The Dispatcher is violating Section 5(b) of the Procedures by failing to publish the week- ahead, hour by hour schedule of Bradley output. Section 8(a)(iv) of the Services Agreement requires the Dispatcher to “(coordinate) with HEA in order that the Dispatcher and HEA alike will minimize, to the extent reasonably practicable, any potential conflicts between and among (A) HEA’s system operations, (B) Chugach’s system operation, and (C) the dispatch of Project generation and the provision of services to the Wheeling Utilities ...” With respect to its obligations under Section 8(a)(iv) the Dispatcher, in violation of Sections 5(b), (c), (d), (e), (f), and (g) of the Procedures the Dispatcher continuously fails to adhere to the wheeling schedule it provides to HEA. STATEMENT Page 2 Transmission Agreement. Section 14 of the Transmission Agreement provides for dispute resolution of matters “under (the) Agreement.” HEA has identified certain disputes that arise under the specific terms of the Transmission Agreement and they are as follows: Transmission Agreement, Section 3(b) Performance Failures Section 3(b) of the Transmission Agreement provides that HEA shall be compensated for line losses resulting from the flow of Bradley Lake power over the Soldotna Segment and requires the BPMC to determine the amount of line losses and the appropriate amounts and manner of compensation. With respect to their obligations under Section 3(b) of the Transmission Agreement the Purchasers, through the BPMC, have failed to perform as follows: 1. The Purchasers through the BPMC have violated Section 3(b) of the Transmission Agreement by failing to act upon HEA’s request of January, 2012 to review and correct Loss Tables for the Soldotna Segment. 2. The Purchasers through the BPMC, despite repeated requests from HEA to the Project Dispatcher, have refused to provide the technical calculations underlying the Loss tables for the Soldotna Segment currently in use. 3. The Purchasers through the BPMC have failed to review and update Loss calculations for the Soldotna Segment as required under Section 8(c) of the Procedures. Dated at Kenai, Alaska, this 23 day of January, 2014. Bradley P. Janorschke General Manager STATEMENT Page 3 BPMC Investigation and Discussion Questions O &D Committee January 22, 2014 SQ Line Rights and Obligations: 1. What is HEA’s current valuation of the Soldotna to Quartz Creek (SQ) transmission line? 2. What are the historical costs to maintain the SQ line? 3. As Chugach has been the dispatcher of the SQ line for the BL participants, if the LBA issue is resolved would it make sense that the LBA could have either a foreign utility control or dual control for dispatching the SQ line as long as the procedures are well defined? 4. Would it technically make sense for the SQ line to be defined outside the HEA LBA and still accurately account for losses? 5. Has either foreign utility control or dual control for dispatching transmission assets ever occurred in the Railbelt? 6. Could the SQ line be defined outside the HEA LBA and outside the Chugach LBA simultaneously? 7. Could an LBA be established just for the SQ line operation and assigned to either HEA or Chugach for dispatch purposes? 8. What would the cost be to have HEA dispatch BL power over the SQ line? 9. What HEA distribution loads are connected to the SQ? 10. If HEA dispatched the SQ line would the approximate losses be similar to losses if CEA dispatched the SQ line? 11. Why is ownership and control of the SQ line so important to HEA? 12. If BL participants were to continue to lease or own the SQ line and dispatch for the BL participants could the line losses be well defined for the Sterling (ST) substation. 13. What is the distance from SOL substation to ST substation? 14. What is the distance from the SOL to Quartz Creek (QZ) substation? 15. Under normal operations are much of the losses due to the ST substation over a very short portion of the SOL to QZ 115 kV transmission system? 16. Is the load at the ST substation revenue metered? 17. What is the range of losses for the SOL to ST portion of the transmission line? O&D 1/22/14 Page 1 of 4 18. 19. 20. What is the range of losses over the same SQ transmission line? Since the SQ line is orders of magnitude longer than the SOL to ST line section, would it be more appropriate to measure the line losses attributable to the ST load by comparing metering at SOL and ST substations rather than comparing line losses from the metering between SOL and QZ? Which would be more accurate? Status Quo obligations i, 2. Do BL deliveries need to be defined according to specific transmission line sections? Does ownership of equipment needed for BL deliveries have to be explicitly defined by entity; if so why? Can BL transfers be defined by contract path or must they be explicitly point-to-point? Do BL assets need better definition in the BL agreements? Specifically what? Has the BPMC management responsibility and authority been accepted by HEA and other Railbelt utilities prior to 2014? Do the BL Agreements define a dispute resolutions process? Is there successor facility language in the BL agreements; if so what is the interpretation of such language? Is there a difference in the BL wholesale customers and others in the BL Agreements? Are the Wholesale and other participants treated equally in the BL agreements? If not please explain the differences. Load Balancing Area 1. Does HEA support dynamic dispatching? 2. Is HEA aware of the method of Chugach dispatching of BL power post-2013, whereby Chugach is load following and frequency matching the HEA load? 3. Does Chugach load following and regulation of BL power cause concerns? 4. How does load following affect HEA’s gas dispatching by running under firm scheduling compared to dynamic dispatching? 5. Is HEA in favor of dynamic scheduling of BL power? 6. IF the LBA is defined who would need to agree to it? 7. \f there is a dispute in LBA boundaries? If so, how is it best resolved? O&D 1/22/14 Page 2 of 4 10. ads 12. 13. 14. 15) 16. Would HEA consider the LBA to be defined at SOL substation if the BL participants agreed to resolve technical issues, like upgrading metering, etc. Would HEA agree to the LBA boundary at SOL substation; if so under what circumstances or technical configuration? If the losses on the SQ line are solved, what other barrier would prevent HEA from defining the LBA at SOL substation? What needs to be done to define islanded operation and what are the issues? What are the issues about communications and telemetry of the BL power with regard to LBA’s? Are these communications and telemetry issues financial or technical or both? Is energy accounting and losses solved by defining the LBA boundaries; if not what else is needed? Are VAR rights and obligations an issue of immediate dispute or simply a discussion issue? Should the Diamond Ridge breaker require dual/single/joint operational control? Bradley Agreements Requirements uy 2. Losses Who has jurisdiction of the SQ line from a regulatory perspective? Is the Soldotna or Nikiski generation unit considered the Soldotna 1 unit? Who determines this status? How is this relevant to the BL Agreements? Are the 19 parts of the BL agreement to be read in whole or can anyone pick and choose the parts as they see fit? Can you define custody transfers as part of the BL Agreements; how does this matter? Do you agree with the loss analysis as presented in the PSS/E modeling spreadsheet? Can loss issues or disagreements be resolved by making new loss tables for the SQ line based on an agreed loss analysis? Documentation : 2. Does the BL Power Sales Agreement require revisions to bring it into current practices? Do BL current Operating Procedures require modification or updates? Compensation 1. While operating in an HEA load-following mode, how should losses be accounted for and compensated? O&D 1/22/14 Page 3 of 4 2. Should HEA and Chugach operate in a TLB mode to a BL schedule; if so how would the losses be addressed? 3. Should HEA and Chugach operate to a dynamic BL schedule; if so how would the losses be addressed? 4. How should spill and ponding issues be addressed in either scenario above? 5. How should excess capacity be defined and addressed for equitable compensation? 6. How should spill be defined and addressed in the future for equitable compensation. 7. Should BL be used to load-follow or to maximize participants shares, or to address maintenance issues (like lake level adjustments), and if so how? 8. Are there any other compensation issues? O&D 1/22/14 Page 4 of 4 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING DRAFT SPECIAL MEETING Alaska Energy Authority, Anchorage, Alaska January 24, 2014 1. CALL TO ORDER Dispute Resolution Process Chair Griffith called the special meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:04 a.m. 2. COMMITTEE MEMBERS ROLL CALL Cory Borgeson Golden Valley Electric Association (GVEA) Sara Fisher-Goad Alaska Energy Authority (AEA) Brad Evans Chugach Electric Association (CEA) Joe Griffith Matanuska Electric Association (MEA) Dan Kendall Anchorage Municipal Light & Power (ML&P) John Foutz City of Seward (SEW) Brad Janorschke Homer Electric Association (HEA) 3. STAFF/PUBLIC ROLL CALL Bryan Carey, Kirk Warren, Teri Webster (AEA); Brian Bjorkquist (Department of Law); Kirk Gibson (McDowell Rackner & Gibson PC); Brian Hickey, Lee Thibert, Burke Wick, Mark Johnson, Paul Risse (CEA); Rick Baldwin, Robert Day, Harvey Ambrose, Alan Owens (HEA); David Pease (MEA); Lou Agi, Richard Miller, Jeff Warner, Ken Langford (ML&P); Bernie Smith (Regulatory Commission of Alaska (RCA)); Matt Clarkson, Robin Brena (Brena Bell & Clarkson); Sunny Morrison, Miranda Studstill (Accu-Type Depositions) 4. PUBLIC COMMENT There were no public comments. 5. AGENDA COMMENTS/MOTION FOR APPROVAL The agenda was approved as presented. 6. NEW BUSINESS A. BPMC Counsel addressing legalities of the dispute resolution process Mr. Gibson took the Committee through the BPMC dispute resolution authority, the adoption of the dispute resolution procedures, the resolution of the issues, explanation of AEA's role, an overview of the subjects at issue and how they fit with the power service agreement (PSA) or do not fit with the PSA, and the use of executive session. BPMC Minutes 1/24/14 Page | of 10 Chair Griffith asked if the wish of the body is to invite AEA to participate. Mr. Evans believes AEA should participate in those areas in which they need an invitation. A discussion occurred and it was agreed upon that AEA should be able to be at the table as a member of the Committee. Mr. Gibson stated if the Committee is acting as a whole, AEA is part of the Committee. If there is negotiation with the services agreement or the transmission sharing agreement, AEA is not a party. AEA could offer advice and opinion, but they do not vote. Chair Griffith asked AEA if they accept the invitation to the table. Ms. Fisher-Goad stated AEA accepts the invitation. She believes the role of AEA is to help facilitate where necessary in the process. AEA has rights to ensure the asset owned by AEA is managed appropriately and is serving the public purpose at the highest level. Mr. Bjorkquist noted there are some issues that might arise that.affect the bond resolution in the power sales agreement and when those surface, AEA will step in as appropriate. He believes AEA's position is to help on issues AEA is not a party to. Mr. Janorschke stated he saw the list yesterday of some of the issues the\Operations & Dispatch (O&D) Committee compiled. He noted some of the issues fall within the purview of BPMC and some of them do not. Mr. Janorschke recommended the list of issues will have to be sorted as we move forward. Chair Griffith does not anticipate reviewing that list in huge detail, but it is a factor because the O&D Committee has developed the list. Mr. Evans asked for clarification if AEA can go into executive session without distributing the information publically. Mr. Bjorkquist does not see any problemsito go into executive session with appropriate issues and stated he is available to assist Mr. Gibson as he leads the group in to executive session. B. Homer Electric Association (HEA) presentation of its grievances Chair Griffith noted HEA has provided a written.document of its grievances. Mr. Janorschke requested Mr. Ambrose review the grievances with the Committee. Mr. Ambrose reviewed the document entitled Homer Electric Association, Inc., Statement Regarding Dispute Resolution Procedures, (see attached) Mr. Evans asked if the transmission agreement and services agreement are referring to the same document agreement. Mr. Ambrose advised they are two separate agreements. The services agreement is the agreement for wheeling of electric power and related services. The transmission agreement is the agreement for sale of transmission capability. Mr. Gibson stated when the transmission agreement is referred to, it is really an amendment to the agreement. Mr. Ambrose agreed. Mr. Ambrose noted there is another agreement addressed that is a procedural connection entitled Bradley Lake Hydro Electric Project Allocation and Scheduling Procedures, as revised by the Bradley Lake Project Management Committee on March 3, 1993. Mr. Ambrose believes HEA has stated its grievances clearly and have documented the portions of agreements that apply to the complaint. Mr. Ambrose requested the Committee provide questions or objection regarding HEA's grievances in writing for review. Mr. Ambrose noted he can attempt to BPMC Minutes 1/24/14 Page 2 of 10 answer some questions here, but cannot guarantee the answer will be completely accurate without time to prepare the answer. Mr. Ambrose believes these issues are important and have financial consequences on HEA, as well as other participants, and they need to be resolved. Mr. Borgeson requested clarification regarding reference to the Soldotna segment and is that the same as the Quartz Creek (SQ) Line. Mr. Ambrose noted they are not the same. The Soldotna segment is defined in the transmission agreement or the amendment to the agreement for the sale of transmission capability. The Soldotna segment begins at Bradley Junction and proceeds north to HEA Soldotna substation outside of Soldotna. The Quartz Creek section begins at the same Soldotna substation and travels east to CEA's Quartz Creek Substation. Chair Griffith asked for the mileage of the SQ Line. Mr. Day stated it is 32 miles long. Mr. Janorschke believes the line is longer than 32 miles. Mr. Griffith believes the line is between 30 to 40 miles long. Chair Griffith asked where is Sterling Substation with respect to the Soldotna Substation. Mr. Ambrose stated Sterling Substation is approximately 10 miles east of Soldotna Substation, just north of the highway on Swanson River road. Mr. Gibson reported HEA's document states "the Services Agreement limits dispute resolution to matters involving performance under the Agreement." Mr. Gibson requested clarification from HEA's counsel regarding Section 10(a), discussing the consultation at meetings and the parties shall apprise one another of any planned changes to their systems, including power purchases or sales that might affect the demand for services and for the availability of services under the agreement. Mr. Gibson asked if HEA believes that would be in line with performing under the agreement as to make those comments to the Committee about changes in the HEA system in this case. Mr. Gibson stated this does not have to be addressed at this meeting and it is more of alegal issue. Mr. Gibson believes HEA's review of the words "performance under the agreement" is a little narrow and HEA could broaden that. Mr. Gibson directed HEA's attention to the transmission services agreement under Section 3(b), the operation and line losses, which is in the purview of the Committee, and to Section 5, the duty to operate and maintain, which requires that atall times, HEA will operate, maintain and repair the facilities used to perform.the services provided under and in accordance with the prudent utility practices in a manner consistent with HEA's obligations under this agreement. Mr. Gibson noted "prudent utility practices" is defined in the power sales agreement. Mr. Gibson believes that is broad enough to be included in the scope of this review. Mr. Gibson does not want HEA to limit their disputes, if they have additional disputes. Mr. Ambrose stated he is not an attorney and the word "performance" may have been a poor choice. Mr. Ambrose explained performance is the activities of the parties to the agreement with respect to whether or not those actions are or are not in conformity with the agreement signed. Mr. Gibson noted HEA used the word that was in the agreement and does not want HEA to limit the definition, unless they want to. Mr. Ambrose believes the dispute resolution is limited to disputes that arise with respect to whether or not the various parties have complied with the assigned and agreed to agreement obligations. Mr. Evans commented the O&D Committee is currently addressing the list of issues, questions and subject matter. He recommended letting the O&D Committee complete their evaluation and then come back to the Committee with their report and resolutions. Mr. Evans requested clarification on the dispute because these issues identified sound like operational issues. He believed the highest level dispute was regarding control of the SQ Line and how it was committed to in the services agreement, BPMC Minutes 1/24/14 Page 3 of 10 what happens with the lease agreement, which is not included in this list of grievances, and what the costs are going to be. Mr. Evans stated he is confused about what the purpose of this effort is if the highest level dispute is not being discussed. He believes when that dispute is settled, a lot of these technical issues will evaporate or have a clear solution. Mr. Janorschke stated he was not expecting this Committee to provide comments or extensive feedback. The O&D Committee went through their process and Mr. Janorschke received the list on Wednesday. (attached) He expressed his concern regarding how many of those issues fall within the purview of this Committee and how many do not. Mr. Janorschke wanted to provide HEA's perspective to the Committee and reference specific items within agreements HEA feels support their position. Mr. Janorschke agrees with Mr. Evans regarding the dispute on the SQ Line and there is a disagreement on how that dispute will get resolved because HEA does not believe that dispute falls under the purview of this Committee. Mr. Borgeson stated this frames one of the first disputes of what falls under the purview of this Committee. He believes this Committee was convened originally over. the issues with the SQ Line and the current issues they are bringing rightfully to this Committee should be considered and has broadened the scope of what Mr. Borgeson thought would be part of the dispute. Mr. Kendall commented today's meeting was to collect the grievances. HEA's items were technical in nature. Mr. Kendall stated CEA mentioned other bigger;broader issues that address the services agreements. Mr. Kendall asked if both HEA items and CEA items are to be added to this list for discussion. Mr. Gibson advised if there is a jurisdictional dispute of whether a grievance comes under the purview of the Committee, it may be best.the Committee consider the methods to preserve everyone's rights, so they can be discussed without someone feeling that they are giving up rights or positions. Mr. Gibson recommends the Committee consider executive sessions and/or entering into some kind of Rule 408 compromise for the purpose of these discussions. Mr. Gibson stated it would be best to reach a resolution. Chair Griffith asked Mr»Gibson to.explain Rule408. Mr. Gibson explained Rule 408 is a rule of evidence in the state of Alaska that is,quite broad and allows compromise discussions and settlement discussions to not be used as evidence in,any other proceedings. Mr. Gibson advised his explanation is simplistic and everyone should rely on their attorneys for clarification. Mr. Ambrose commented HEA had the same question as Mr. Evans regarding what is it we are going to be discussing. The question was directed to Chair Griffith and Chair Griffith instructed HEA to add any laments they had. Mr. Ambrose stated that is why the scope has been broadened. Mr. Evans noted there is still a dispute about what the Dispute Resolution Committee can consider. Chair Griffith asked HEA if there is anything else on their list of complaints. Mr. Janorschke stated he does not believe so. Mr. Gibson gave an outline of the BPMC bylaws for a situation where there is a question regarding authority stated in Section 12.2, "The Committee shall first make a finding as to its authority. If the Committee determines that it has the authority to consider the matter, it shall decide the issue on its merits. If the Committee determines that it does not have the authority to consider the matter, the matter will be subject to immediate judicial resolution. If the court determines that the Committee, in fact, had the authority to consider the matter, then the matter will be remanded for Committee action." BPMC Minutes 1/24/14 Page 4 of 10 Mr. Gibson stated it would behoove the Committee to make a determination of authority and that does not have to happen at this meeting, but prior to any actions. Chair Griffith asked Mr. Gibson if a finding could be as simple as saying, "We believe the BPMC has authority to deal with this issue." Mr. Gibson concurred. Chair Griffith agreed with Mr. Evans that the listed HEA laments are O&D Committee issues and if the O&D Committee has made recommendations on any of that list, they would have been operational issues and would have been resolved. Chair Griffith asked Mr. Janorschke if the listed HEA issues were resolved, would HEA no longer have any concerns. Mr. Janorschke believes HEA has had these discussions with the O&D in the past and the issued have not been addressed or resolved, which is why these issues have been elevated to this Committee. Chair Griffith asked if that is a failing of the O&D Committee or is it a Bradley PMC issue. Mr. Day stated he does not want to speak for the Committee, but believes the O&D Committee feels very unsure of interpreting contractual actions that have been brought forth in these issues. Chair Griffith asked if these issues are contractual actions or are they operating procedures. Chair Griffith noted Mr. Day does not have to answer and will defer to HEA's manager. Mr. Borgeson commented this list of issues could go back tothe O&D Committee to be considered and they could provide a formal responses»Mr. Borgeson stated these issues have been brought before this convened Dispute Resolution Committee and recommends considering these items with advice from the O&D and come to a final resolution so the process does not drag on. Chair Griffith noted confusion regarding HEA's title of Statement Regarding Dispute Resolution Procedures. Chair Griffith asked if this document is really.a statement of HEA's disputes. Mr. Janorschke agreed. Chair Griffith asked HEA what is the solution from their viewpoint. Mr. Janorschke believes it goes back to the discussion last week to include the process of providing these issues to this Committee, bringing the supporting back-up material at the appropriate time to the Committee, informing or educating all the voting participants of what HEA feels has not been addressed; hearing any.counter positions, and resulting in a position or decision from this Committee. Chair Griffith stated he sees two issues as HEA has described; the Statement Regarding Dispute Resolution and secondly, the breadth of responsibility of the BPMC to adjudicate the issues that other parties believe are out there beyond what is written in this Statement Regarding Dispute Resolution document. Chair Griffith asked if anyone disagrees with that view. No disagreements were voiced. Chair Griffith asked Mr. Gibson what the procedure is on how the Committee would make a finding and is it simply a motion with a vote of 51% carries. Mr. Gibson requested he consult the bylaws to provide his answer. Chair Griffith believes additional issues are resident in Resolution 2013-02 (Homer Tariff filing), among other documents. Chair Griffith noted Mr. Gibson reviewed the Rule 408 process and he requests further discussion on that process. Mr. Evans thinks the 0&D Committee believes there are some technical matters the 0&D Committee would have difficulty proposing solutions because the problem stems from contractual interpretations. The contracts that the disputes are residing in are the collection of agreements that everybody negotiated for the Bradley Lake project. Mr. Evans noted there is a dispute about the longevity of those agreements and who has purview over them. He believes these issues are being elevated to an area that was not addressed in the presentation. He does not agree with everything that was said in the BPMC Minutes 1/24/14 Page 5 of 10 presentation, but does not object to the scope of the disagreement being expanded into operational matters. He does not believe the operational matters can be solved unless there are settlements on contractual matters. He believes the most grief is being caused by the transmission service agreement and the impact of the events to that service agreement. He disagrees the events have been transpiring for years because the events just happened 24 days ago. He challenges the notion that these issues have been ongoing for years. Mr. Evans noted if everyone agreed that was the problem, the dispute resolution could begin. However, there is a higher level dispute that the BPMC does not have a role in the transmission services agreement. He noted the word "role" may not be the correct legal term. He framed the dispute as, does the BPMC have a role in settling the problems that have arisen in the transmission services agreement as certain changes have been made in the relationship between the participants. Mr. Evans stated CEA does not believe there has beena deliberative process. He suggested settling the highest level grievance first regarding BPMC's rolein dispute resolution. Mr. Kendall asked a process question of Mr. Gibson for this point in the process if the Committee needs to act on what it is going to review. Mr. Gibson stated it is up to the Committee and what has been adopted are the dispute resolution procedures), Mr. Gibson suggests the\Committee is at number two, identification of all issues. It is fair enough to discuss the issues and then ask for written reports, but there is no legal requirement forthe,process. Once the issues are gathered, a discussion needs to occur describing the basis of the issues. The question as to the purview of the Committee will then be addressed. Mr. Gibson added that the membersiof this Committee are the same people, except for AEA, that are involved in the agreements. The same,people are here and if there is a chance to resolve the contractual and operational.issues, then it should be done here. This is the place to talk about the problems and to see iffanything can be done. Mr. Kendall stated one of the issues is how to resolve the loss tables. He requested Mr. Warner address that issue. The other issues,regarding dispatching do not seem to have a simple answer for discussion. Mr. Kendall asked if these issues should be addressed one at a time at this point. Chair Griffith explained he wants full.understanding and ability to discuss a few other issues before the issues are addressed. MOTION: Mr. Borgeson made a motion to agree these discussions, comments and testimony under this Committee are considered settlement discussions pursuant to Rule 408 and will not be admissible as evidence in any other judicial proceeding or regulatory proceeding, except to the extent they are designated and identified during the deliberative process. Motion seconded by Mr. Evans. Mr. Borgeson advised any discussions this Committee undertakes during the course of its review of the disputes will follow Rule 408. Mr. Janorschke asked if the motion covers the discussions only in executive session or discussions also in open session. Mr. Borgeson stated the motion covers all discussions, open, closed, executive. Mr. Gibson agreed all discussions should be covered by Rule 408, but the Committee might want to consider going into executive session for procedural reasons. BPMC Minutes 1/24/14 Page 6 of 10 Mr. Baldwin stated HEA does not want the issues listed in the Statement Regarding Dispute Resolution Procedures document to be a subject of Rule 408. Mr. Baldwin understands as a prerequisite for going into Superior Court, there needs to be some action or inaction by the Committee first over the matters that the Committee has jurisdiction. Mr. Baldwin requested the fact that issues have been raised and how those issues were resolved would not be a subject of Rule 408. Mr. Baldwin asked if his request made sense. Chair Griffith stated it did not make sense to him, but he will defer to counsel. Mr. Gibson asked Mr. Baldwin to restate his request. Mr. Baldwin gave the example of the line loss issue. HEA has raised as a dispute the existence of a liné loss issue and claim that HEA is not being fairly compensate for line loss. At some point,there might be a resolution by the Committee of that issue and it might be unfavorable toHEA. Atthat point, HEA might chose to go to Superior Court with that issue. If the entire proceeding is subject to Rule 408, then there would be no way to present to the Superior Court that HEA has exhausted its contractual remedies before going into Superior Court. Ifj however, the actual actions of the Committees were not subject to Rule 408, then HEA could prove that it had exhausted its contractual remedies. Mr. Baldwin asked how broad is the Rule 408 exemption and does it.extend just to discussions or does it extend to actiomby the Committee. Mr. Borgeson noted his intent was Rule 408 would relate to discussions and testimony that occurs in this Committee. Findings of the Committee would be published. Chair Griffith believes Committee actions.would be published. Mr. Borgeson said.a statement could be made that these findings are not subject.to Rule 408, Chair Griffith asked if Mr. Gibson concurs. Mr, Gibson agreed and commented the fact that someone raised the dispute and the resolution of that dispute are the issues that can be taken to court, but all:the discussions and negotiations is under Rule 408. Mr. Gibson suggested restating the motion. Mr. Agi asked in the event ofan appealby HEA, how would HEA sustain the reasonableness of the findings without access to the evidence. Mr. Gibson stated the findings would be made in the conclusion and resolution and would not say how they were reached. Mr. Agi would like to say how the findings were reached and if they were supported by adequate evidence. Mr. Borgeson stated he understands there are no admissions in Rule 408 discussions. The statements or positions made in discussion or in resolution cannot be used against the party in a proceeding in another jurisdiction. All testimony and evidence would have to be presented again in a court proceeding. Chair Griffith asked if everyone understood Rule 408. Mr. Brena believes the Committee wants to be careful not to confuse settlement discussions with the deliberative process before the Committee. The Committee's resolution and ultimate vote and the basis for that vote would be reviewable by a court, but settlement discussions and frank conversations do not need to be reviewable by the court. Mr. Brena expressed his concern the Committee is beginning to merge the two concepts, so the deliberative process before the Committee is starting to go behind closed BPMC Minutes 1/24/14 Page 7 of 10 doors. Mr. Brena suggested Mr. Borgeson's motion be focused on settlement discussions. Mr. Brena suggested the formal deliberative process of the Committee's action and the basis for the Committee's action has to be public, so that it can be reviewable by the court. Mr. Evans stated there was a question regarding who is Mr. Brena representing. Chair Griffith noted Mr. Brena is representing all the utilities, except for HEA, SEW, and AEA. Chair Griffith asked if Mr. Gibson has any remarks regarding Mr. Brena's advice. Mr. Gibson commented the Committee needs to ensure the deliberative process is not confused with the settlement process. Chair Griffith asked if the motion on the floors needs to be altered regarding implementing Rule 408. Mr. Gibson does not believe the motion needs to,be altered, Chair Griffith asked if he was correct in understanding the Rule 408 process does not preclude this body from coming to some set of conclusions, finding facts, and ordering ansaction, then if a party disagrees with the action, the party can then go to Superior Court. Mr. Gibson noted the challenge is in the deliberative process. The motion stands with no objection, Mr. Kendall requested the issues before the Committee be listed. Chair Griffith noted the issues before the Committee include, 1) the Statement Regarding Dispute Resolution Procedures brought forth by HEA, 2) whether or not this process is within the purview of the BPMC, and 3) whether or not this issue goes back to a tariff filing which is before the RCA, brought forth by Mr. Evans. Mr. Evans clarified there is a grey issue regarding the tariff and costs which has been briefly discussed. Mr, Evans believes the BPMC clearly has jurisdiction in administrating and resolving issues within the collection of agreements takento move the project forward. Mr. Evans recommended resolving the larger dispute of whether BPMC has a role and jurisdiction in this dispute process. This has to be decided»before the other issues can be addressed. With regard to the loss tables, Mr. Evans stated.a technical solution cannot solve a contractual problem. Mr. Borgeson suggested all the issues be presented first and then the decision can be made whether or not the BPMC has jurisdiction over the issues. Mr. Borgeson thought the O&D Committee was going to present their issues next on the agenda. After that presentation, Mr. Borgeson wants to ensure GVEA's dispute is included in what the O&D has brought forward. Mr. Borgeson stated GVEA has a dispute over the appropriate compensation to pay HEA for use of the SQ Line or any other lines the Bradley power crosses. Mr. Borgeson requested the Committee address that issue. Chair Griffith asked if compensation is one of the topics that should be before the O&D Committee or is it an issue the members around the table have to discuss. Mr. Borgeson noted compensation is addressed as number one on the list; how should losses be accounted for and compensated. Mr. Borgeson believes the issue is more than just losses and includes the amount of compensation due for the use of SQ Line and any other lines. BPMC Minutes 1/24/14 Page 8 of 10 Mr. Kendall requested clarification on the tariff filing because HEA has other transmission lines that are not directly related to the BPMC contracts. Mr. Kendall requested using a different definition for the issue, other than tariff filing, from CEA's presentation because it is becoming an operational question, rather than a tariff question. Chair Griffith commented that was a good point, but the crux of the current dispute goes back to a letter that four of the members of the BPMC submitted on the 7th of January identifying several things that had to happen and a tariff filing by HEA that brought forth the amount charged for the line and line losses. Chair Griffith does not know how to separate those and believes compensation is probably the bottom line issue to address in determining the right amount to charge. He noted HEA had never articulated the charge amount outside of the filing and the filing indicated an amount which was 10 or 11 times more than what Has been paid in the last 25 years. Mr. Evans responded to Mr. Kendall and explained HEA is certainly right to file a tariff for the use of their transmission system in the normal practice of business, but the dispute refers to how that tariff filing applies to the Bradley Lake energy and the agreements and commitments that were everlasting for the projects. The dispute is whether or not those commitments that were originally made are still in place because another contract expired. Chair Griffith requested Mr. Evans articulate the three dispute issues as he understands them. Mr. Evans stated one issue is the impact to the transmission services agreement (TSA) as it was prior to the expiration of other contracts. There is.a control issue overthe SQ Line, as far as the duties and responsibilities that are embedded in the TSA. Mr. Evans stated he does know if there any other issues on the capacity sharing side. The rate or compensation issue was created because another contract expired and how does that impact the commitments made under the three-plus agreements of Bradley Lake. Mr. Gibson asked if operational issues would be included in the list of 3 issues. Mr. Evans noted the TSA drives what happens to these issues. Mr. Gibson requested clarification of the 3 issues. Mr. Evans said the impact to the TSA and control of the SQ Line may be one in the same issue or there could be a way to separate those and compensation is another issue. Chair Griffith requested the disputing parties prepare a point-of-view paper, no more than seven pages in length, presenting the arguments regarding the issues and be provided by the close of business on February 4th, 2014. The papers will be.discussed at the next meeting on February 7th, 2014. Chair Griffith advised he is sending the operational questions back to the O&D Committee for their position and not from members of this group. Mr. Kendall commented those issues need to be kept on this Committee's list because those issues will come back to this Committee. Mr. Evans believes it is fair for the O&D Committee to respond by saying they cannot provide a technical solution because contractual guidance has not-been given. Chair Griffith agreed. Ms. Fisher-Goad agreed and suggested the O&D Committee specifically state what guidance they need that is limiting their ability to provide the answers in order for the BPMC to clearly address the guidance request. Chair Griffith agreed and noted he will provide those comments to the O&D Committee. Chair Griffith listed the issues as follows; 1) jurisdiction of the BPMC, 2) impact of the expiration of the lease on the Bradley Lake services agreement, and 3) appropriate compensation for the use of the SQ Line. Chair Griffith asked Mr. Kendall if he had other issues to include. Mr. Kendall stated HEA's Statement Regarding Dispute Resolution Procedures can remain on the list, even though they are more technical in nature. BPMC Minutes 1/24/14 Page 9 of 10 Mr. Janorschke asked if these three issues are pretty much the same issues before the Regulatory Commission. Chair Griffith stated the issues are probably the same. Mr. Janorschke asked if the expectation is to come back and summarize what has already been presented before the Regulatory Commission. Chair Griffith agreed that is a fair assessment, but it has to be completed in no more than seven pages. Mr. Janorschke suggested the issue wording to include the cost of wheeling Bradley energy across the HEA system, rather than focusing strictly on the SQ Line. Chair Griffith requested HEA address that issue in their paper. Gc. O&D Committee analysis and findings Tabled until the next meeting. D. Come to a resolution regarding concerns presented by HEA None presented. 7. MEMBERS COMMENTS The next meeting was scheduled for Friday, February 7th, 2014, at 10:00 a.m, 8. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 11:58 a.m. BY: Joe Griffith, Chair Attest: Sara Fisher-Goad Alaska Energy Authority, Secretary BPMC Minutes 1/24/14 Page 10 of 10 HOMER ELECTRIC ASSOCIATION, INC. STATEMENT REGARDING DISPUTE RESOLUTION PROCEDURES Homer Electric Association, Inc. (“HEA”) as a member of the Bradley Lake Project Management Committee (“BPMC”), has participated in the adoption of certain dispute resolution procedures pursuant to Section 10(b) of the Agreement for the Wheeling of Electric Power and for Related Services (“Services Agreement”) and Section 14 of the Amendment to Agreement for Sale of Transmission Capability (“Transmission Agreement”). The process for identifying disputes to be treated with under the procedures is unclear, and HEA is unsure of the scope of the issues that are intended to be addressed by the BPMC. HEA recognizes the value of attempting to resolve issues informally, and is willing to participate in the dispute resolution process in an effort to minimize unnecessary and counterproductive strife. For the avoidance of doubt, however, by its participation in the dispute resolution process, HEA does not thereby agree that the BPMC has the contractual authority to resolve, or even consider, some or all of the issues identified by the participants in the process, including those set forth in Resolution No. 2013-02, nor does HEA acknowledge that the allegations in the resolution or which may be otherwise identified even give rise to bona fide disputes. HEA reserves the right to have any dispute that may arise in the context of the BPMC dispute process resolved by the appropriate judicial or regulatory authority. STATEMENT OF DISPUTES Services Agreement. Section 10(b) of the Services Agreement limits dispute resolution to matters involving “performance under (the) Agreement.” HEA has identified certain disputes that arise under the specific terms of the Services Agreement and they are as follows: Services Agreement, Section 8 Performance Failures Section 8(a)(i) requires the Dispatcher to (dispatch) power generation at the Bradley Lake Project in accordance with the requests of the Parties, ... and the applicable operating criteria or guidelines adopted by the Project Management Committee.” The BPMC has adopted Allocation and Scheduling Procedures (Procedures) for the Project as the applicable operating criteria or guidelines. With respect to its obligations under Section 8(a)(i) and the Procedures the Dispatcher has failed to perform as follows: 1. In violation of Sections 5(b), (c), (d), (e), (f), and (g) of the Procedures the Dispatcher routinely utilizes energy from the Project to regulate Fire Island Wind (FIW) output. 2. The Project has spilled water in each of the past two years as a direct result of both action and inaction on the part of the Dispatcher as follows: Acting in violation of Section 5(h) of the Procedures, the Dispatcher used the Project to load-follow its own system rather than dispatching the Project to prevent spill and imminent spill conditions. . Acting in violation of Section 5(j) of the Procedures, the Dispatcher scheduled its share of Project capacity to load-follow its own system rather than scheduling its share to prevent spill and imminent spill conditions. Further, the Dispatcher failed to mitigate the adverse effects on the Project in scheduling extensive outages in performing maintenance and repairs on its transmission system. In violation of Sections 5(j) of the Procedures the Dispatcher failed to notify Participants of Capacity and Energy to be made available to them at no cost under section 5(h) of the Procedures, as a result of its and other Participants’ inability or refusal to take their fully allocated shares of energy during imminent and actual Spill conditions, thus extending and exacerbating the amount of and the duration of spill and imminent spill. 3. The Dispatcher is violating Section 5(g) of the Procedures by routinely loading Project generation units to levels well in excess of its own share, and failing to provide an accounting proving whether or not it has thereby effectively taken Project Capability belonging to other Participants. 4. The Dispatcher is violating Section 5(g) of the Procedures by routinely loading Project units to levels well in excess of its own share, to the extent that spin carried on Bradley at the time is being used by the Dispatcher to provide real energy, and failing to provide an accounting proving whether or not such loading has effectively taken Project Spin Capability belonging to other Participants, thereby potentially leaving the system deficient in spin. 5. The Dispatcher is violating Section 5(b) of the Procedures by failing to publish the week- ahead, hour by hour schedule of Bradley output. Section 8(a)(iv) of the Services Agreement requires the Dispatcher to “(coordinate) with HEA in order that the Dispatcher and HEA alike will minimize, to the extent reasonably practicable, any potential conflicts between and among (A) HEA’s system operations, (B) Chugach’s system operation, and (C) the dispatch of Project generation and the provision of services to the Wheeling Utilities ...” With respect to its obligations under Section 8(a)(iv) the Dispatcher, in violation of Sections 5(b), (c), (d), (e), (f), and (g) of the Procedures the Dispatcher continuously fails to adhere to the wheeling schedule it provides to HEA. STATEMENT Page 2 Transmission Agreement. Section 14 of the Transmission Agreement provides for dispute resolution of matters “under (the) Agreement.” HEA has identified certain disputes that arise under the specific terms of the Transmission Agreement and they are as follows: Transmission Agreement, Section 3(b) Performance Failures Section 3(b) of the Transmission Agreement provides that HEA shall be compensated for line losses resulting from the flow of Bradley Lake power over the Soldotna Segment and requires the BPMC to determine the amount of line losses and the appropriate amounts and manner of compensation. With respect to their obligations under Section 3(b) of the Transmission Agreement the Purchasers, through the BPMC, have failed to perform as follows: 1. The Purchasers through the BPMC have violated Section 3(b) of the Transmission Agreement by failing to act upon HEA’s request of January, 2012 to review and correct Loss Tables for the Soldotna Segment. 2. The Purchasers through the BPMC, despite repeated requests from HEA to the Project Dispatcher, have refused to provide the technical calculations underlying the Loss tables for the Soldotna Segment currently in use. 3. The Purchasers through the BPMC have failed to review and update Loss calculations for the Soldotna Segment as required under Section 8(c) of the Procedures. Dated at Kenai, Alaska, this 23 day of January, 2014. Bradley P. Janorschke General Manager STATEMENT Page 3 BPMC Investigation and Discussion Questions O &D Committee January 22, 2014 SQ Line Rights and Obligations: 1 2: 10. IE 12. 13; 14. uk 16. 17, What is HEA’s current valuation of the Soldotna to Quartz Creek (SQ) transmission line? What are the historical costs to maintain the SQ line? As Chugach has been the dispatcher of the SQ line for the BL participants, if the LBA issue is resolved would it make sense that the LBA could have either a foreign utility control or dual control for dispatching the SQ line as long as the procedures are well defined? Would it technically make sense for the SQ line to be defined outside the HEA LBA and still accurately account for losses? Has either foreign utility control or dual control for dispatching transmission assets ever occurred in the Railbelt? Could the SQ line be defined outside the HEA LBA and outside the Chugach LBA simultaneously? Could an LBA be established just for the SQ line operation and assigned to either HEA or Chugach for dispatch purposes? What would the cost be to have HEA dispatch BL power over the SQ line? What HEA distribution loads are connected to the SQ? If HEA dispatched the SQ line would the approximate losses be similar to losses if CEA dispatched the SQ line? Why is ownership and control of the SQ line so important to HEA? If BL participants were to continue to lease or own the SQ line and dispatch for the BL participants could the line losses be well defined for the Sterling (ST) substation. What is the distance from SOL substation to ST substation? What is the distance from the SOL to Quartz Creek (QZ) substation? Under normal operations are much of the losses due to the ST substation over a very short portion of the SOL to QZ 115 kV transmission system? Is the load at the ST substation revenue metered? What is the range of losses for the SOL to ST portion of the transmission line? O&D 1/22/14 Page 1of 4 18. 19. 20. What is the range of losses over the same SQ transmission line? Since the SQ line is orders of magnitude longer than the SOL to ST line section, would it be more appropriate to measure the line losses attributable to the ST load by comparing metering at SOL and ST substations rather than comparing line losses from the metering between SOL and QZ? Which would be more accurate? Status Quo obligations a, 2. Do BL deliveries need to be defined according to specific transmission line sections? Does ownership of equipment needed for BL deliveries have to be explicitly defined by entity; if so why? Can BL transfers be defined by contract path or must they be explicitly point-to-point? Do BL assets need better definition in the BL agreements? Specifically what? Has the BPMC management responsibility and authority been accepted by HEA and other Railbelt utilities prior to 2014? Do the BL Agreements define a dispute resolutions process? Is there successor facility language in the BL agreements; if so what is the interpretation of such language? Is there a difference in the BL wholesale customers and others in the BL Agreements? Are the Wholesale and other participants treated equally in the BL agreements? If not please explain the differences. Load Balancing Area 1. Does HEA support dynamic dispatching? 2. Is HEA aware of the method of Chugach dispatching of BL power post-2013, whereby Chugach is load following and frequency matching the HEA load? 3. Does Chugach load following and regulation of BL power cause concerns? 4. How does load following affect HEA’s gas dispatching by running under firm scheduling compared to dynamic dispatching? 5. Is HEA in favor of dynamic scheduling of BL power? 6. IF the LBA is defined who would need to agree to it? 7. \f there is a dispute in LBA boundaries? If so, how is it best resolved? O&D 1/22/14 Page 2 of 4 10. a1 12. a3. 14. aS: 16. Would HEA consider the LBA to be defined at SOL substation if the BL participants agreed to resolve technical issues, like upgrading metering, etc. Would HEA agree to the LBA boundary at SOL substation; if so under what circumstances or technical configuration? If the losses on the SQ line are solved, what other barrier would prevent HEA from defining the LBA at SOL substation? What needs to be done to define islanded operation and what are the issues? What are the issues about communications and telemetry of the BL power with regard to LBA’s? Are these communications and telemetry issues financial or technical or both? Is energy accounting and losses solved by defining the LBA boundaries; if not what else is needed? Are VAR rights and obligations an issue of immediate dispute or simply a discussion issue? Should the Diamond Ridge breaker require dual/single/joint operational control? Bradley Agreements Requirements 1. Who has jurisdiction of the SQ line from a regulatory perspective? 2. Is the Soldotna or Nikiski generation unit considered the Soldotna 1 unit? Who determines this status? How is this relevant to the BL Agreements? 3. Are the 19 parts of the BL agreement to be read in whole or can anyone pick and choose the parts as they see fit? 4. Can you define custody transfers as part of the BL Agreements; how does this matter? Losses 1. Do you agree with the loss analysis as presented in the PSS/E modeling spreadsheet? 2. Can loss issues or disagreements be resolved by making new loss tables for the SQ line based on an agreed loss analysis? Documentation 1. Does the BL Power Sales Agreement require revisions to bring it into current practices? 2. Do Bl current Operating Procedures require modification or updates? Compensation i, While operating in an HEA load-following mode, how should losses be accounted for and compensated? O&D 1/22/14 Page 3 of 4 2. Should HEA and Chugach operate in a TLB mode to a BL schedule; if so how would the losses be addressed? 3. Should HEA and Chugach operate to a dynamic BL schedule; if so how would the losses be addressed? 4. How should spill and ponding issues be addressed in either scenario above? 5. How should excess capacity be defined and addressed for equitable compensation? 6. How should spill be defined and addressed in the future for equitable compensation. 7. Should BL be used to load-follow or to maximize participants shares, or to address maintenance issues (like lake level adjustments), and if so how? 8. Are there any other compensation issues? O&D 1/22/14 Page 40f 4 Representative Brad Evans Chairman Brad Janorschke Vice Chairman Sara Fisher-Goad Secretary/Treasurer Cory Borgeson “Da R en. deN\ James Posey John Foutz Evan “Joe” Griffith Kirk Gibson Revised Date: BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE List of Representatives Alternate Burke Wick Harvey Ambrose Bryan Carey Lynn Thompson Richard Miller Jeff Estes Gary Kuhn 11/15/2013 Utility Chugach Electric Association 5601 Electron Drive Anchorage, Alaska 99518 Connie Owens ph: 762-4747 Brad_Evans@chugachelectric.com Burke_Wick@chugachelectric.com Homer Electric Association 3977 Lake Street Homer, Alaska 99603 Phone: 907- 283-2312 bjanorschke@homerelectric.com hambrose@homerelectric.com Alaska Energy Authority 813 West Northern Light Blvd Anchorage, Alaska 99503 Teri Webster Ph: 771-3074 sfishergoad@aidea.org bcarey@aidea.or Golden Valley Electric Association P.O. Box 71249 Fairbanks, Alaska 99707-1249 Susan Redlin Ph: 907-458-5721 cborgeson@gvea.com lthompson@gvea.com Anchorage Municipal Light & Power 1200 E. First Avenue Anchorage, Alaska 99501 Linda Davidovic Ph: 263-5201 PoseyJM@muni.org MillerRE@muni.org City of Seward P.O. Box 167 (234 Fourth Avenue) Seward, Alaska 99664 Phone: 224-4071 Fax: 224-4085 jfoutz@cityofseward.net jestes@cityofseward.net Matanuska Electric Association P.O. Box 2929 (163 Industrial Way) Palmer, Alaska 99645-2929 Dawn Baham Ph: 907-761-9285 joe.griffith@matanuska.com gary.kuhn@matanuska.com McDowell Rackner & Gibson PC 419 SW 11th Street, Suite 400 Portland, Oregon 97205 Ph:(503) 290-3626 Fax:(503) 595-3928 Kirk@med-law.com 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 DATE: BRADLEY PMC VOTING YES NO ABS YES NO ABS YES NO ABS om Ea Er 14% (ERS) 30% FESR eR a PARES 12% I fi 17% 2] 26% [| Ty EET era] A=4+ OVER 51% 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 11) Determination of rules, procedures and payment obligation and schedule of each accounts necessary to manage project when purchaser. no bonds outstanding. 4) Determination of annual project costs after 12) Evaluation and approval of optional project each FY. work and compensation for such work. 5) Evaluation of necessity for and scheduling of 13) Application of insurance claims proceeds not required project work. governed by bond resolution 6) Determination of appropriate amount of 14) Approval of procedures and any individual insurance. utility agreements relating to electric power reserves for project. 7) Adoption of additional minimum funding amounts for renewal and contingency reserve 15) Approval of consultants. fund above that required by bond resolution. VOTING METHOD C: 8) Selection among alternate methods that involve AEA for funding required project Unanimous vote by all (including AEA) work. Pas ee eRe VOTING METHOD D: Majority vote (including AEA) 9) Adoption or amendment cf procedural committee rules (except dispute resolution) 10) Adoption of project maintenance schedules Election of Officers