HomeMy WebLinkAboutCooper Valley R.W. Beck-Feasibility Study 1993State of Alaska a o
Alaska Energy Authority
A Public Corporation
Date: September 1, 1993
Subject: Amendment No. 4 to Contract No. 2800631 - R. W. Beck
Copper Valley Intertie Feasibility Study
From: nein An ttca ety
Procurement Manager
R Ges Rook —
VIg dnt. Telephone: 7214 vars
To: William R. Snell Contra ft. 2%O6G3 | Executive Director
The attached amendment is being forwarded to you for signature. Normally we would
have had the Contractor sign the amendment first, but due to the nature of this amendment
we thought it best to send it for your review and signature first.
The Copper Valley Intertie Feasibility Study contract award was the result of an RFP for
which R. W. Beck was the successful proposer. The work under this RFP was two-phase
in nature, with performance of the second phase of the study contingent upon availability
of funds for the balance of the study, prior to completion of the work under phase 1 (see
Contract Appendix B, Statement of Work, Attachment 1). The first phase of the study as
amended, had a total cost of $ 234,947.00. It has now been determined that funds are
available to cover the $ 137,176 cost of phase 2 of the study, as provided for in the
contract.
Attached also for your information, as Attachment 2, is a copy of the Memorandum of
Agreement (MOA) between the Alaska Energy Authority and Copper Valley Electric
Association, Inc. (CVEA). Under the terms of the MOA, CVEA agrees to reimburse the
Energy Authority for the total cost of the R. W. Beck study, up to a total of $ 372,123,
the entire cost of the study, including the cost of this amendment.
If you approve this amendment, please sign both originals.
CONCUR SIGNATURE DATE
Dick Emerman Sf dara, Yl Li ZS
Senior Economist
PO. Box 190869 701 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584
AIDEA 24
J. Hickei, Governor
APPENDIX B ‘ STATEMENT OF SERVICES
The Contractor will conduct Phase 1 of a Copper Valley Intertie Feasibility Study as
outlined in the Request for Proposals issued by the Alaska Energy Authority (AEA-
93-R-005). Specific services to be performed for Phase 1 are identified in the
Contractor’s proposal submitted on January 6, 1993, as reproduced below. The
Contractor and the Contracting Agency intend to amend this agreement to include
Phase 2 of the feasibility study if the Contracting Agency determines that funds are
available for this purpose prior to the conclusion of Phase 1.
TASK A - ELECTRICAL SYSTEM STUDIES
Electric system studies are to be provided by Power Technologies, Inc. (PTI) as a
subcontractor to R. W. Beck and Associates.
Overview
The RFP proposes to interconnect two isolated systems in south-central Alaska
through a 138 kV transmission line between Glennallen and Sutton areas. The
systems involved in this interconnection are:
e the Copper Valley Electric Association (CVEA), which operates the
Glennallen-Valdez 138 kV line and lower voltage electric facilities in the
Glennallen to Valdez areas, and
e the Railbelt system which is a large, multi-utility interconnected network
extending from Fairbanks to the Kenai Peninsula and having transmission
facilities operating at 115 kV, 138 kV and 230 kV.
At one end, the proposed line would connect with existing 138 kV facilities owned
by the Authority at the Pump Station No. 11 Substation near Glennallen. At the
other end, the line will connect with 115 kV facilities owned by Matanuska
Electric Association (MEA) at the O'Neill Substation near Sutton. The ONeill
Substation is on a 16-mile long radial feed from a 115 kV loop between the
Authority's Teeland Substation and Plant 2 belonging to Anchorage Municipal
Light and Power. The Eklutna hydro plant is connected to the Teeland-Plant 2
115 kV loop.
The primary generation resources for the CVEA system are the 2-unit, 12 MW
Solomon Gulch hydroelectric plant near Valdez, 7.3 MW of diesel generation at
Valdez, 7.6 MW of diesel generation at Glennallen, and a 2.8 MW mobile
combustion turbine.
For the Railbelt system, there are numerous combustion turbine units, two
combined cycle plants (mostly natural gas fired), two coal-fired steam units, and
three hydro-electric plants; one being the Authority's 120 MW Bradley Lake
facility. Future major generating resources are planned.
The proposed interconnection will significantly enhance the reliability of the CVEA
system by providing a transmission source from the much stronger railbelt system.
This interconnection will minimize loss of load in the CVEA system for generation
AIDEA 25
Aracnmeny 7.
R. W. Beck and Associates, Inc.
MEMORANDUN oO FROM
+ Mamamndum of Aareamant Fyhihit A 1 rt ®.:. of Alaska
Department of Law
t Ronald A. Garzini care November 9, 1992
Executive Director
Alaska Energy Authority =LE NO
FEL 269-5166
suauecT Sutton-Glennallen Intertie eg ae ST
James F. Klas
Assistant Attorrmey General
Transportation Section, Anchorage
This memorandum is in response to the request of your
office of November 2, 1992 regarding the plan for Copper Valley
Electric Association (CVEA) to advance the Energy Authority costs
for phase 1 of the Sutton-Glennallen Intertie Feasibility Study.
I have researched the proposal and find no law to
prohibit such an arrangement. This appears to be a conditional
gift which the AEA has the power to accept under AS 44.83.080(5).
The AEA furthermore has the power to perform the feasibility
studies under AS 44.83.080(13) and to enter into a Memorandum of
Agreement (MOA) for this study under AS 44.83.080(14).
State funds may not be spent without an appropriation
pursuant to Article IX, section 13 of the state constitution, but
this requirement is being met in this instance through your
Legislative Revised Program Request (RPL) dated October 26, 1992
which if approved will result in an appropriation for the stated
purposes.
However, the AEA and CVEA should understand that absent
specific legislative direction or clear intent, costs are not
ordinarily reimbursable from an appropriation where the costs are
incurred prior to an appropriation being passed. Past attorney
general opinions have noted that only in exceptional circumstances
may grant money be used to reimburse for costs incurred prior to
the date of the legislative appropriation. See, for example, the
attached attorney eabaeal opinions dated August 7, 1985, file No.
366-527-85, and March 24, 1986, file No. 663-86-0412. The
reasoning employed in these AG opinions applies to capital budget
appropriations as well.
Whether CVEA can be reimbursed out of a future state
appropriation would be determined from the language of the
appropriation. Without specific language in the appropriation
making clear the legislative intent to reimburse CVEA out of the
appropriation it hy very probable that the reimbursement to CVEA
would not be allowed. Furthermore, the MOA with CVEA should
AIDEA 26
Page 7 of 17
fim ad @
Ronald A. Garzini
Sutton-Glennallen Intertie
reflect that the $260,000 conditional gift can only be refunded to
CVEA if the appropriation from the legislature clearly reflects
that legislative intent.
JFK: bb
Att
AIDEA 27
Memorandum of Agreement Exhibit A Page 8 of 17
COPPER VALLEY INTERTIE FEASIBILITY STUDY
In November 1992, the Alaska Energy Authority issued a Request for Proposals
("RFP") to perform a Copper Valley Intertie Feasibility Study. The proposed
"Copper Valley Intertie" would consist of a 138 kV electrical transmission line
between Sutton and Glennallen. The sections entitled "Background" and "Scope of
Work" from the RFP are attached.
R.W. Beck & Associates ("Beck") was selected to conduct the study. Beck will be
assisted by Dames & Moore and Power Technologies, Inc. A Notice to Proceed (i.e.
a formal notice to the contractor to begin work) was issued to Beck by the Energy
Authority on February 22, 1993.
AIDEA 28
Memarandum of Agreement Exhibit A Page 9 of 17
AIDEA 29
ASPS AEA-93-R-005
PROPOSED SCOPE OF WORK
BACKGROUND
Copper Valley Electric Association (CVEA) is a member-owned electric
cooperative serving primarily the Alaska communities of Valdez and
Glennallen. In 1991, CVEA energy requirements were approximately 60
million kWh. Roughly 40 million kWh were provided from the Solomon
Gulch hydroelectric project, and the remaining 20 million kWh were supplied
by diesel generation.
Petro Star Valdez Inc. is scheduled to begin operation of a 30,000 barrel-per-
day refinery near Valdez by the end of this year, and has signed an agreement
to purchase all of its power requirements from CVEA for at least five years.
Petro Star’s annual requirement is estimated at 20.8 million kWh. CVEA
estimates that approximately 5 million kWh of this additional requirement can
be supplied by Solomon Gulch while the remainder would be supplied by
additional diesel generation.
Diesel generation requirements contribute significantly to the relatively high
retail rates in the CVEA system. A number of alternatives to diesel
generation have been suggested in the past, including development of
additional hydroelectric resources, end-use conservation, and interconnection
with the Railbelt system.
Regarding interconnection possibilities, a reconnaissance study of a
"Northeast Intertie" was conducted for the Energy Authority by Power
Engineers, Inc. in 1989. The "Northeast Intertie" was envisioned as a 230 kV
line extending from Sutton (near Palmer) to Delta Junction via Glennallen.
The capital cost estimate was $155 million in 1988 dollars. In 1991, the
Energy Authority briefly reviewed a proposal to construct only the Glennallen
to Delta Junction portion at 138 kV. Neither of these alternatives were
judged cost-effective at the time.
The "Northeast Intertie" reconnaissance study indicates that a Sutton-
Glennallen line would be considerably less expensive than a Glennallen-Delta
Junction line. This is supported by a brief engineering review and cost
estimate of a 138 kV Sutton-Glennallen line conducted this year by Power
Engineers at the request of CVEA. Based in part on this review, CVEA
believes that a Sutton-Glennallen intertie, allowing purchase of gas-fired
energy from the Anchorage area, offers promise as a long-term, cost-effective
substitute for diesel generation in the CVEA system.
The Energy Authority has included funds for a feasibility study of a 138 kV
Sutton-Glennallen intertie in its FY 94 capital budget request. The FY 94
capital budget will be considered by the Legislature during the 1993 session
Mamamndum of Acreement Fyhihit A Page 10 of 17
AIDEA 30
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that convenes in January, and appropriations within the FY 94 capital budget
will be effective on July 1, 1993. However, CVEA has expressed its desire
that the study begin as soon as possible, and has expressed its willingness to
advance funds to the Energy Authority sufficient to cover expected study costs
through June 30, 1993. Consequently, this feasibility study will be conducted
in two phases, with Phase 1 including all work through June 30, 1993, and
Phase 2 including all work after June 30, 1993.
This Request for Proposal (RFP) covers the entire feasibility study, both
Phase 1 and Phase 2. Proposers should note the following:
A. Issuance of a contract pursuant to this RFP is contingent on final
execution of a written agreement with CVEA to pay Phase 1 study
costs to the Energy Authority. The CVEA Board of Directors has
voted its approval of this concept and its acceptance of the maximum
allowable amount but, as this RFP is being prepared, a formal
agreement has not yet been executed.
B. The contract will include standard contract termination provisions.
The contractor should be aware that Phase 2 will be initiated only if
additional funds are made available to the Energy Authority either by
the Legislature or by CVEA.
SG If the Legislature appropriates funds for this purpose, CVEA will be
reimbursed for funding it advances to cover Phase 1 costs. If the
Legislature does not appropriate such funds, CVEA will not be
reimbursed.
D. The maximum allowable budget for Phase 1 tasks is $225,000. The
maximum allowable budget for Phase 1 and Phase 2 tasks combined
(i.e., the entire feasibility study) is $325,000.
E. All information pertinent to the scope of work that is in the possession
of CVEA or AEA will be made available to the contractor at the
beginning of the feasibility study.
SCOPE OF WORK
Tasks are presented below for each Phase. Proposals must address the entire
scope of work, including both Phases.
A. Electrical system studies
Phase 1. All work under this task is to be accomplished during Phase
1. Perform load flow, dynamic stability, and transient stability analysis
sufficient to determine transmission design at a feasibility level,
including compensation and other requirements, using Power
Technologies, Inc. PSS/E program. Task definition is as follows:
Wlamnenadum af A aeaamant Dvhihit A Pace 11 of 17
AIDEA 31
I. The load flow, dynamic stability, and transient stability analysis
shall be sufficient to allow recommendation as to any
compensation in the interconnected system. The following shall
be addressed: first swing stability, voltage collapse and
regulation.
2 Projected load information shall be used for the studies. The
contractor shall perform the load flow studies for the system
under normal and abnormal conditions.
3. The contractor shall propose alternatives to correct any system
instability.
4. All computer runs shall be accompanied with graphical results
and written interpretations.
BE The Energy Authority has the transmission and generation data
base for the Railbelt system and for the Glennallen-Valdez system in PSS/E format. This will be provided to the contractor
at the beginning of the feasibility study.
Phase 2. No additional work.
Route selection
Phase ]. The contractor will be required to examine and compare at
least one route that generally follows the Glenn Highway corridor,
using the “Northeast Intertie" reconnaissance study "suggested route"
as a starting point, and one route that stays well away from the road
corridor. One such route away from the road follows Boulder Creek,
and also appears as an option in the reconnaissance study (i.e. the
proposed "NEICR route").
As noted below in the task labeled "Public Comment Process," public
meetings in Palmer, Glennallen, and points in between will be held at
the beginning of Phase 1 in cooperation with the affected utilities
(Copper Valley Electric Association and Matanuska Electric
Association). Both route alternatives, near the road and away from
the road, will be reviewed and refined during the winter, including
flyover of both routes and limited ground review of accessible portions.
Initial environmental impact comparisons will also be conducted at this
time. Another set of public meetings will follow the winter review to
share information and discuss results.
The result of Phase 1 will be an orderly compilation of information
developed on the identified route alternatives. Such information will
include, but not necessarily be limited to, mapping, preliminary cost
Mamarndium of Acreement Fyhihit A Page 12 of 17
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comparisons for construction and maintenance, reliability,
environmental impact, and public comment.
Phase _2. After June 30, two primary route alternatives will be
identified in consultation with the Energy Authority, and will be
further reviewed and refined including flyover and ground review as
appropriate. Thus both summer and winter conditions will be
accounted for in the route selection, feasibility design, and
environmental analysis. Public meetings will again follow the Phase 2
summer review.
The result of Phase 2 will be the selection of a preferred route for
purposes of feasibility analysis. This selection will be made in
consultation with the Energy Authority, and will be based on estimates
of construction cost, operations and maintenance cost, reliability,
environmental impact, public acceptability, and any other relevant
considerations.
Cc. Feasibility design and cost estimate
Phase 1. Prepare preliminary design and cost estimates (construction
and O&M) for route alternatives consistent with route selection information requirements. This will include typical structures
proposed for identified route segments. Include consideration of
meteorological conditions.
Complete feasibility design for project components common to all
route alternatives, such as substation modifications.
Provide estimated project development and construction schedule.
Phase 2. Prepare final feasibility level design and cost estimates
(construction and O&M) for the selected route. Provide supporting
documentation for feasibility design, including terrain unit maps and
typical foundations and structures for route segments. Provide
supporting documentation for construction cost estimate, including unit costs and quantities. Develop O&M cost estimate by cost
category, such as inspection, routine maintenance, and repair and
replacement.
Provide estimated cash flow schedule for project development and
construction.
D. Environmental studies
Phase 1. Review environmental information regarding the alternative
route corridors already available in published reports. Schedule and
AIDEA 32
Memorandum of Agreement Exhibit A Page 13 of 17
AIDEA 33
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ace
conduct a meeting with resource agencies at an early date to solicit
information and concerns.
Initiate intertie assessment in the following areas:
land ownership status
land use impact
air quality impact
water quality impact
fish and wildlife impact
terrestrial impact
recreation resource value
visual impact
safety PHN AARYNS The "safety" assessment (item 9 above) must include consideration of
EMF issues. Because EMF has proven in the past to be an important
issue for public acceptability of this intertie, care should be taken to
prepare and present clear and convincing analysis on the magnitude of
such fields at varying distances from the transmission line, how these
field strengths compare with transmission lines of higher and lower
voltage, and with other electrical facilities and equipment. A summary
of present research status on EMF, and regulations regarding EMF
around the country and the world, must also be included.
The contractor must be prepared to interact with the public on all of
the environmental issues listed above at the public meetings scheduled
throughout the study.
Phase 2. Complete the tasks described in Phase 1.
Load forecast
Phase 1. Prepare a 20-year load forecast for the CVEA service
territory, including Low, Medium, and High scenarios.
The foundation of the load forecast will be an economic forecast with
particular attention to the future prospects for major employers or
power consumers. At a minimum, the economic forecast must
consider the following:
1. Alyeska pipeline terminal
a. scenarios for future pipeline shutdown due to
diminishing oil flow.
b. probability of purchasing power from CVEA for
selected loads (e.g. "house" loads or other loads).
Memarandum of Agreement Exhibit A Page 14 of 17
2. Oil refining
a. Petro Star refinery — prospects for future expansion or
risk of future closure.
b. prospects for a second refinery in Valdez.
Cc. prospects for future cogeneration/self-generation.
3: Possibility of federal project such as the "HF Active Auroral
Research Program" (HAARP) being developed and purchasing
power from CVEA.
4. Trans-Alaska gas pipeline terminal —- update on prospects and
probable impact on CVEA load.
The load forecast for each year must be disaggregated into two
categories, summer and winter. The summer period will be defined as
the time during which spill energy is presently available from the
Solomon Gulch hydro project.
At the outset of this task, the contractor shall review the most recent
Power Requirements Study produced by CVEA and discuss it with its
authors. Any significant discrepancies between the load forecast
produced by the contractor under this task and the most recent Power
Requirements Study produced by CVEA shall be explained in the text
of the contractor’s study.
Phase 2. No additional work.
F. Economic evaluation of alternatives
Phase 1. Conduct an economic feasibility assessment of the intertie,
comparing the present value of system costs under the intertie scenario
with the present value of system costs under the primary alternatives.
The intertie scenario will include, but not necessarily be limited to,
consideration of the following:
1. capital and O&M cost of the intertie;
2. cost to provide gas-fired energy in the Cook Inlet area for sale
to CVEA;
< capital cost of providing diesel generation back-up, based on a
plan for acquiring and/or deploying diesel generators in the
event the intertie is constructed;
AIDEA 34
Memorandum of Agreement Exhibit A Page 15 of 17
ig @
ato ,
4. O&M cost associated with back-up diese] generation, with
specific attention to the extent of labor savings anticipated from
the intertie.
The diesel scenario will include, but not necessarily be limited to,
consideration of the following:
1. capital and O&M cost of diesel generation, based on a plan for
acquiring and deploying diesel generators in the event the
intertie is not constructed;
ies fuel cost of diesel generation.
At least one scenario will be constructed for comparative assessment
that includes the proposed Allison Lake hydroelectric project and end-
use conservation programs. Background on these alternatives is
available in the Allison Lake Reconnaissance Study, issued by the Energy Authority in September 1992.
Parameters of the economic analysis such as fuel price forecasts,
discount rate, and time frame will be developed by the contractor in
consultation with the Energy Authority. Price forecasts for natural gas
and diesel fuel will require consultation with area utilities as well.
Phase 2. A final cost estimate for the intertie will not be available until
Phase 2. Most of the economic analysis should be completed during
Phase 1, with Phase 2 reserved for final revisions to cost estimates or
additional sensitivity analysis.
G. Public comment process
Phase 1. As described under the category of "route selection," public
meetings will be held in Palmer, Glennallen, and points in between at
two different times during Phase 1: at the beginning of the study
process to inform people that the feasibility study is underway and to
solicit their concerns, and near the end of Phase 1 to report on study
findings and continue the public dialogue. CVEA and AEA will be
represented at these meetings, as will Matanuska Electric Association
as appropriate. The contractor will be required to prepare
presentation materials and will have a prominent role in the meetings.
Phase 2. A third set of public meetings will be held in Palmer,
Glennallen, and points in between near the end of Phase 2, again to
report on study findings and to accept public input. If the process is
successful, a public consensus will begin to emerge on acceptable
routing and environmental mitigation.
H. Report preparation and study schedule
AIDEA 35
Mamarandum of Aareement Rxhihit A Page 16 of 17
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Phase_1. A Phase 1 report will be required that presents all
information acquired and analysis conducted during the Phase 1 effort.
Twenty-five copies and one camera-ready copy of the Phase 1 report
will be delivered to the Energy Authority.
Phase 2. If the study proceeds to Phase 2, fifty copies and one camera-
ready copy of a draft report presenting all aspects of the study will be
delivered to the Energy Authority. After a 30-day comment period,
the contractor will consult with the Energy Authority on necessary
revisions to the draft, and produce a final report (seventy-five copies
and one camera-ready copy).
While the schedule for Phase 2 will depend on how much additional
work is needed after Phase 1, assume for planning purposes that the
draft report must be complete by October 1, 1993, and the final report
must be complete by December 1, 1993.
AIDEA 36
Memorandum of Agreement Exhibit A Page 17 of 17
@ R.W. BECK @
AND ASSOCTATES, INC
Fourth and Blanchard Building, Suire 600 # 2101 Fourth Avenue Searle, Washington 96121-2375 » USA
Telephone (206) 441-7500 m Fax (206) 441-4962
‘Tslew 4000402 BECKSEA
WS-1559-HA1-AJ July 21, 1993
Mr. Clayton Hurless
General Manager
Copper Valley Electric Association, Inc.
P.O, Box 45
Clennallen, Alaska 99588-0045
Copper Valley Tutertic Peusility Study
Estimated Costs to Completion of Study
Dear Clayton:
Tt was a pleasure to mcet with you, Mike, Robert and Dick yesterday to discuss the economic analysis component in particular and the overall status in general of the Intertie Study. As the Intertie Study has progressed, it has become apparent that certain tasks relaled to routing and design issues have expanded in scope primarily to accommodate the questions and concerns brought to our attention during the public comment meetings and through
discussions with CVEA and other local utility personnel. The original apportionment of tasks into Phase 1 and Phase 2 has also been changed somewhat due to the higher degree of attention paid to certain details of the preliminary design earlier in the process than originally anticipated.
CVEA and the Alaska Energy Authority have also requested that we not provide a draft report
at the end of Phase 1: Further, CVEA has indicated that it would like to proceed with completion of the full study as originally defined for Phase 1 and Phase 2 in the scope of services provided with our technical proposal to the Authority dated January 5, 1993. The full study is also to be expanded to address the additional services described later in: this letter.
Based on the foregoing, we have prepared an adjusted cost estimate to complete the full Intertie Study. This revised cost estimate will be sufficient to complete all of the original scope of services, with the exception of a report at the conclusion of Phase 1, plus all of the additional services identified herein. In total, the cost to complete the Intertie Study is $372,100.
A breakdown of this estimate into major components is shown in Attachment 1. We will not undertake any additional tasks, beyond those described in this letter, that would increase the total cost of the Intertie Study without prior written authorization of CVEA and the Authority.
The schedule to complete the Intertie Study will be the same as agreed to for Phase 2 of the original study. Key milestones in the original schedule are submittal of a draft report at the end of September 1993, another set of public information meetings in mid-October
1993 and submittal of the final report on November 30, 1993. We understand the desire of CVEA to accelerate the completion of the Intertie Study but feel that it will be difficult to do so particularly because of the need to assure an accurate cost estimate for the Interlie. The necessary time to complete the Intertie Study is also dependent on the public comment process.
AIDEA 37
Page 1 of 4 Mamarandum of Acreement Fxhibit B
We will submit portions of the draft report to CVEA and the Authority in rough draft form
prior to formal submittal in the Intertie Study Draft Report for comment and review. We will
also conduct periodic telephone discussions as needed to apprise CVEA and Authority personnel
of progress. ,
Additional Services
Certain additional services have been requested or are expected to be needed to
complete the Intertie Study at this time. We recently established a separate account to track
these costs, although for the most part, they could all be considered as expansions of the
originally defined tasks. Some of these tasks have been completed to date and others have not
been started yet pending authorization from the Authority and CVEA. The costs to complete
all of these additional services is included in the total cost estimate mentioned above.
Additional Services Completed to Date
: Attendance at the Technical Review Meeting (TRM) July 6, 1993, by two design
engineers and the project manager from R.W. Beck. Includes preparation effort,
coordination, and the development of a meeting transcription which is in
progress.
. Revised display boards and base maps for second set of public micctings to
incorporate route and title modifications afler June 14 mecting with CVEA and
the Authority. Provided additional copies for public meeting handouts.
s Provided an EMF write-up for handout and additional computation for local
distribution lines, prior to the second set of public meetings. Provided additional
support for preparation of public meetings and held additional meetings.
. Researched the availability of a meteorologist, schedule and cost, and explored the
options for a meteorological study and ways to accelerate schedule. Drafted a
letter with recommendation to CVEA.
. Obtained large scale aerial photography and tax maps from Mat-Su Borough to
verify land status in Sutton.
. Obtained full set small scale aerial, color infrared stereo photography for the
corridor.
Additional Services To Be Provided Afler Authorization
. Complete transcription of the proceedings of the TRM, distribule for comments,
and summarize comments.
a Recompute design values, edit the Basis of Design, formulate design criteria for
additional structure options following the TRM.
5 Resize the transmission line components for new criteria and additional structure
types following the TRM.
2 Develop cost estimating bases, requests for material quotes for alternative
AIDEA 38
Afamamn dum af A craamant Fvhihit R Page Z O14
Mr. Clayton Hurless -3- July 21, 1993
structure types, and redo the same for the Xframe alternative which had already been developed. =
Develop unit costs for each loading zoneand applicable alternative structure type, comparing costs and selecting the least cost alternative for each line section.
Provide extra effort to fine tune clearing and construction costs with clearing contractor, helicopter contractor, and line construction contractor, with 1-2 day working session in Anchorage that CVEA and the Authority could participate in. We feel this would substantially aid in determining the least cost options for the Intertie.
Select preliminary least cost conductor alternative, solicit early quotations for conductor material. Conduct discussions with PEI on this matter.
At this time we have carefully estimaled the costs to complete the study and can provide more detailed information if needed. Unfortunately, I was unable to discuss scope and budgeting issues with Dames & Moore today to determine what impacts if any the slight change in direction of the Intertie Study will have on their scope and budget requirements. I believe that we should be able to complete the environmental review as anticipated with the original budget amount, however. :
If you should have any questions or require additional information please call either me at (206) 727-4418 or Paul Dorvel at (206) 727-4632. We appreciate the opportunity to
be of service to CVEA and look forward to successful completion of the Intertie Study.
JLH:
attachment
Very truly yours,
R. W. BECK AND ASSOCIATES
John L. He¥erling
Executive Engineer
CS Paul Dorvel
Dick Emerman
Memarandum of Acreement Exhibit B
AIDEA 39
Page 3 of 4
21-Jul-93
Attachment 1
Copper Valley Intertie Feasibility Study
Estimated Cost to Complete Study
Task
Support of System Studies
Route Selection
Design, Cost Estimate and Schedule
Support of Environmental Review
Load Forecast
Economic Analysis
Public Comment
Report
Project Management
Dames & Moore - Environmental Review
PTI - System Studies
Total
(1) - Includes Phase 1 and Phase 2.
(2) - Costs through June 30, 1993.
Mamarandum Af Aareement
Original Castto Cost to
Amount
Over
(Under)
Original
Estimated
Total
Budgct(1_ Date(2)_ Complet__ Cost Budget
$2,742
34,761
31,926
10,646
19,166
35,563
17,857
35,177
15349
101897
9776
$1,027
28,604
22,162
5,084
14,774
15,902
16,225
1,080
10,339
51,872
30,856
$1,715 $2,742 so 8623 37,227 2,466 35540 57,702 25,776 6102 11,186 540 4392 19,166 0 19,661 35,563 0 5500 21,725 3868 32,500 33,580 (1,597) 8,940 19,279 3,930 50,025 101,897 0 1,200 32,056__2,280
$334,860 $197,925 $174,198 $372,123 $37,263
Rvhihit R
AIDEA 40
Pave 4 of 4
MEMORANDUM OF AGREEMENT...
REGARDING THE COMPLETION OF THE FEASIBILITY STUDY OF A 138 KV LINE
FROM O’NEILL SUBSTATION NEAR SUTTON, ALASKA, TO PUMP STATION ELEVEN
SUBSTATION NEAR GLENNALLEN, ALASKA (SGL, FORMERLY KNOWN AS OPS-11
LINE)
THIS MEMORANDUM OF AGREEMENT dated the bo” of August, 1993, by and between the ALASKA ENERGY AUTHORITY (AEA) and corse VALLEY ELECTRIC ASSOCIATION, INC. (CVEA).
WITNESSETH:
A. AEA and CVEA have been working together to develop an economically feasible plan
which would reduce CVEA’s dependency on expensive diesel generated power and which
would provide CVEA the opportunity to begin the process of reducing its high retail rates
for electric service to its member/owners.
B. AEA and CVEA have studied a number of different projects, such as raising the
Solomon Gulch dam and spillway to provide increased water storage in Solomon Gulch
Reservoir, tapping Allison Lake to provide supplemental generation and water storage
for the Solomon Gulch Project, developing Silver Lake, and others. Each of these
projects could provide an increment of additional energy, but none promises to eliminate
the necessity of diesel generation in the future.
GC; AEA and CVEA entered into a Memorandum of Agreement (MOA) (Exhibit A) on
January 6, 1993, which provided for conducting a feasibility study of the 138 kv SGL
(formerly known as the OPS-11 line). In accordance with its terms, AEA contracted
with R.W. Beck & Associates of Seattle, Washington, to prepare Phase 1 of the study.
R.W. Beck also provided AEA with a proposal to complete the study if directed to do
so by AEA and CVEA. The MOA dated January 6, 1993, is hereby rescinded, is void
as to its terms and conditions, and is superseded by this agreement.
D. The proposed 138 kv line between Sutton and Glennallen, being evaluated by the
feasibility study covered by the initial MOA and that is subject of this Memorandum of
Agreement, is a scaled down version of the Sutton-Glennallen portion of the Northeast
Intertie Project that was studied by AEA in the late 1980’s. Consequently, the
reconnaissance study requirement for the proposed 138 kv SGL has been satisfied by the
completion of the 1989 Northeast Intertie Study.
E. Section 10 of Chapter 18, SLA 1993 eliminates the power of AEA to conduct feasibility
studies. However, Section 34 of Chapter 18 includes transitional language that allows
AEA to complete a feasibility study in progress on the effective date of the Act.
F. Section 4 of Chapter 19, SLA 1993 appropriates $35,000,000 to the Department of
Community and Regional Affairs (DCRA) for payment as a loan for the design and
construction of the 138 kv SGL. The appropriation is contingent upon the completion
of a feasibility study and finance plan satisfactory to DCRA as set out in former
AS 44.83.181.
AIDEA 41
ATACHKMEUT 2
Memorandum of Agreement
AEA and CVEA
Page 2
Gs
NOW,
1.1
Lez,
1:3
Phase 1 of the original feasibility study is essentially complete, and AEA and CVEA
have discussed the completion of the study with R.W. Beck & Associates. As a result
of those discussions, R.W. Beck has provided AEA and CVEA with a current status
report of the study, an accounting of funds expended to date, a proposal outlining an
expanded scope of work to be performed by Beck, and additional funds required for the
completion of the study. The above reports and proposal are set out in a letter from
R.W. Beck dated July 21, 1993, signed by John Heberling and identified as R.W. Beck
document WS-1559-HA1-AJ, attached as Exhibit B.
CVEA prefers the feasibility study to be completed as soon as possible and asked AEA
for an estimate of the cost of completion including any cost that has been incurred to
date. In response, AEA, in consultation with R.W. Beck and CVEA, has estimated a
total of $472,123 will be required to fund the completed study. $372,123 of the above
amount is for those tasks assigned to R.W. Beck in accordance with Exhibit B. The
remaining $100,000 is available for costs incurred by AEA, preparation of a plan of
finance, and obtainment of an independent cost estimate. It is agreed by the parties to
this agreement that there is some question as to whether or not AEA will prepare the
plan of finance and whether or not an independent cost estimate will be required. It is
agreed that the two items referenced in the preceding sentence will be negotiated in good
faith by the parties to this agreement at the appropriate time.
The Board of Directors of CVEA has reviewed the project status and the R.W. Beck
proposal for completion of the study and has approved the same in accordance with the
modified scope of work as set out in Exhibit B. CVEA requests that AEA or its
successor within DCRA continue to administer the feasibility project in accordance with
the terms of this agreement.
THEREFORE, the parties agree as follows:
ARTICLE I
OBLIGATIONS OF THE ALASKA ENERGY AUTHORITY (AEA)
AEA will conduct the work covered by this agreement in a timely manner and will keep
CVEA fully informed on the status of contracts required to complete the work.
AEA will submit invoices to CVEA on a monthly basis for reimbursement of costs
covered by this agreement. At the conclusion of work covered by this agreement, AEA
will refund to CVEA any funds remaining from CVEA’s initial advance payment.
Upon issuance of a finding by DCRA that the feasibility study and finance plan are
satisfactory in accordance with Section 4(d), Chapter 19, SLA 1993, AEA or its
successor within DCRA will use its best efforts to assist CVEA in the preparation of the
necessary loan applications to secure, in the most expeditious manner possible, the
$35,000,000, 50-year, zero-interest loan and other supplemental financing required for
the SGL Line in accordance with the relevant provisions of Chapters 18 and 19,
SLA 1993.
AIDEA 42
@ @ Memorandum of Agreement
AEA and CVEA
Page 3
1.4
251
2:2
2:3
Sok
3:2
Any change in the scope of work covered under this agreement that entails a change in
cost shall be approved in writing between the parties to this agreement prior to any
approval being forwarded to a contractor, who is performing work covered under this
agreement, to proceed with work.
ARTICLE I
OBLIGATIONS OF COPPER VALLEY ELECTRIC ASSOCIATION, INC.(CVEA)
CVEA will advance funds not to exceed $472,123 to AEA to conduct the work described
and scheduled in Exhibit A to occur before November 30, 1993. CVEA shall pay such
funds within two weeks of receipt of monthly invoices from AEA. The above $472,123
is inclusive of any payments made by CVEA as of the date of this agreement.
CVEA will participate with AEA and others in the public involvement meetings and will
assist in other activities such as land holder and agency right-of-way discussions.
CVEA will cooperate with AEA in all ways to assure that the work is completed in a
timely fashion and consistent with AEA statutory requirements.
ARTICLE II
GENERAL PROVISIONS
This Memorandum of Agreement will be effective when approved by an authorized
person of each organization.
Subsequent to the effective date of this Memorandum of Agreement, should any provision
contained herein be determined to be unlawful or unenforceable, all other provisions shall
remain in effect as if the unlawful or unenforceable provision were not in the agreement.
IN WITNESS WHEREOF, the Alaska Energy Authority and Copper Valley Electric Association
have caused this Memorandum of Agreement to be executed the day and year first above
written.
ALASKA ENERGY AUTHORITY COPPER VALLEY ELECTRIC
ASSOCIATION, INC.
(nat Lith Bt Palio
AIDEA 43
Memorandum of Agreement
AEA and CVEA
Page 4
STATE OF ALASKA )
) ss.
THIRD JUDICIAL DISTRICT )
A
The foregoing Memorandum of Agreement was acknowledged before me this & ill day
of , 1993, by Ronald Garzini, Executive Director of the ALASKA
ENERGY AUTHORITY, on behalf of the Authority.
lista lige ae
Notary Public/in and for the State of Alaska
My commission expires: NL FL9 7
STATE OF ALASKA )
) ss.
THIRD JUDICIAL DISTRICT )
The foregoing Memorandum of Agreement was acknowledged before me this 2 7 day
of : ple , 1993, by CLAYTON HURLESS, General Manager of COPPER
V. TRIC ASSOCIATION, on behalf of said corporation.
Notary Public in and for the State of Alaska
My commission expires: |e etre |
AIDEA 44
MEMORANDUM OF AGREEMENT
REGARDING THE FEASIBILITY STUDY OF A 138 KV TRANSMISSION LINE FROM O'NEILL SUBSTATION NEAR SUTTON, ALASKA, TO PUMP STATION - ELEVEN SUBSTATION NEAR GLENNALLEN, ALASKA (OPS-11 LINE). wu
pee ta. THIS MEMORANDUM OF AGREEMENT dated the 7 of __Jauue , 1994, by and between the ALASKA ENERGY AUTHORITY (AEA) and COPPER VALLEY ELECTRIC ASSOCIATION, INC. (CVEA).
WITNESSETH:
A. The primary mission of AEA is to facilitate the development of energy systems that will
satisfy the requirements of Alaska consumers at the lowest cost over the long run;
B. CVEA owns and operates an electric utility system serving the Copper Basin and Valdez
areas of Alaska and is engaged in the business of providing electric service to
approximately 8,000 Alaskan residents;
Cc; AEA has constructed a significant number of generation and transmission facilities in
Alaska;
D. AEA and CVEA have been working together to find an economically feasible method to
reduce CVEA’s dependency on expensive diesel generated power and to provide CVEA
the opportunity to begin the process of reducing its high retail rates;
E. AEA and CVEA have studied a number of different projects, such as raising the
Solomon Gulch dam and spillway to provide increased water storage in Solomon
Reservoir, tapping Allison Lake to provide supplemental generation and water supply for
the Solomon Gulch project, and developing Silver Lake. Each of these projects would
provide an increment of additional energy, but none promises to eliminate the necessity
of diesel generation in the future.
F. In 1989, AEA issued a reconnaissance study for the “Northeast Intertie," a proposed
230 kv transmission line from Sutton to Glennallen, then north to the Fairbanks area;
G. The proposed 138 kv line between Sutton and Glennallen, to be evaluated in the
feasibility study that is the subject of this Memorandum of Agreement, is a scaled down
version of the Sutton-Glennallen portion of the Northeast Intertie. Consequently, AEA’s
reconnaissance study requirements for the proposed 138 kv line between Sutton and
Glennallen (the "OPS-11" line) have been satisfied by completion of the 1989 Northeast
Intertie study;
AIDEA 45
an ee Beene nemo nen Evhihit A Page 1 of 17
Memorandum of Agreement
AEA and CVEA
Page 2 of 4
H.
NOW,
ri
12
1.3
For the OPS-11 line, the next step in AEA’s project review process is a feasibility study
conforming to AEA’s statutory requirements;
AEA has included $500,000 in its FY 94 capital budget request to conduct a feasibility
study, plan of finance, and independent cost estimate for the OPS-11 line. If this request
is ultimately approved by the Governor and the Legislature, the funds will not be
available for expenditure until July 1, 1993;
CVEA prefers that the project evaluation process begin as soon as possible and asked
AEA to estimate the amount that would be spent on the required feasibility study prior
to July 1, 1993, if funding were available now. In response, AEA estimated that
$260,000 would be spent prior to July 1, 1993, and an additional $165,000 would be
spent after July 1, 1993, to complete the feasibility study and also the plan of finance and
independent cost estimate (see Exhibit A). The parties anticipate that all tasks in
Exhibit A will be complete by December 31, 1993, provided timely provision of
adequate funds.
THEREFORE, the parties agree as follows:
ARTICLE I -
OBLIGATIONS OF THE ALASKA ENERGY AUTHORITY (AEA)
AEA will continue to support a request in the FY 94 capital budget of not less than
$425,000 to fund the feasibility study, plan of finance, and independent cost estimate for
the OPS-11 line. Further, AEA will support the use of a portion of this request to
reimburse CVEA for all funds advanced to AEA for the OPS-11 feasibility study under
the terms of this Memorandum of Agreement.
If the Legislature specifically appropriates funds to reimburse CVEA for funds CVEA
advances to AEA for the OPS-11 feasibility study from the date of this agreement
through June 30, 1993, CVEA will be reimbursed in accordance with the appropriation.
If the Legislature does not specifically appropriate funds to reimburse CVEA for such
feasibility study costs, CVEA will not be reimbursed. The parties are cognizant of and
have read the Alaska Department of Law memorandum (Exhibit B) indicating that
legislative intent to refund these costs to CVEA must be clearly expressed in the
appropriation in order for reimbursement to occur.
AEA will conduct the work covered by this agreement in a timely manner and will keep
CVEA informed on the status of contracts required to complete the work.
AIDEA 46
Mamarandum of Aareement Ryhihit A Page 2 of 17
Memorandum of Agreement
AEA and CVEA
Page 3 of 4
1.4
15
1.6
AEA will submit invoices to CVEA on a monthly basis for reimbursement of costs
covered by this agreement. At the conclusion of work covered by this agreement, AEA
will refund to CVEA any funds remaining from CVEA’s initial advance payment.
If the work provided for in this Memorandum of Agreement concludes that the OPS-11
line is feasible and is the best long-term economic solution to providing an adequate and
reasonably priced source of power to CVEA, AEA shall use its best efforts to obtain
adequate funding for construction of the project.
On completion of the feasibility study, plan of finance, and independent cost estimate,
AEA will enter into good faith negotiations with CVEA to determine the most cost- and
time-efficient method for project construction consistent with State procurement law.
ARTICLE I
OBLIGATIONS OF COPPER VALLEY ELECTRIC ASSOCIATION, INC. (CVEA)
zal
ee
Ze)
Sok
Sez
CVEA will advance funds not to exceed $260,000 to AEA to conduct the work described
and scheduled in Exhibit A to occur before July 1, 1993. CVEA shall pay such funds
within two weeks of receipt of monthly invoices from AEA and will make an advance
payment of $20,000 to AEA upon execution of this agreement.
CVEA will participate with AEA and others in the public involvement meetings and will
assist in other activities such as land holder and agency right-of-way discussions.
CVEA will cooperate with AEA in all ways to assure that the work is completed in a
timely fashion and consistent with AEA statutory requirements.
ARTICLE
GENERAL PROVISIONS
This Memorandum of Agreement will be effective when approved by each organization's
Board of Directors and the Resolution effecting such approval has been transmitted to the
other party. Such resolutions will become a part of this agreement and shall be attached
hereto.
Subsequent to the effective date of this Memorandum of Agreement, should any provision
contained herein be determined to be unlawful or unenforceable, all other provisions shall
remain in effect as if the unlawful or unenforceable provision were not in the agreement.
AIDEA 47
Memorandum of Acreement Exhibit A Page 3 of 17
Memorandum of Agreement
AEA and CVEA
Page 4 of 4
IN WITNESS WHEREOF, the Alaska Energy Authority and Copper Valley Electric Association
have caused this Memorandum of Agreement to be executed the day and year first above
written.
ALASKA ENERGY AUTHORITY COPPER VALLEY ELECTRIC
ASSOCIATION, INC.
STATE OF ALASKA )
THIRD JUDICIAL DISTRICT )
e foregoing Memorandum of Agreement was acknowledged before me this May
of , 19923 '¢ RONALD GARZINI, Executive Director of the ALASKA
ENERGY A’ ‘ORITY, on behalf of the Authority.
Notary Public in afd for the State of Alaska
My commission expires: Def Dher(2, 19%3
STATE OF ALASKA )
) ss.
THIRD JUDICIAL DISTRICT )
cA The foregoing Memorandum of Agreement was acknowledged before me this /7 - day
of Aletember _, 1992, by CLAYTON HURLESS, General Manager of COPPER
VALLEY ELECTRIC ASSOCIATION, INC., on behalf of said corporation.
Nowny Public in and for the ae of. eam i]
My commission expires: arg 5
AIDEA 48
Memarandum of Agreement Exhibit A Page 4 of 17
COPPER VALLEY ELECTRIC ASSOCIATION, INC.
RESOLUTION 92-28
AEA/CVEA MEMORANDUM OF AGREEMENT
OPS-11 INTERTIE LINE
WHEREAS, the Copper Valley Electric Association Board of
Directors has identified the need for rate relief for its
membership, and alternatives have been studied to fulfill this
need; and
WHEREAS, the Board of Directors has identified the most
reasonable solution is to become interconnected to the Railbelt
System; and
WHEREAS, Copper Valley Electric Association has begun
preliminary studies of an intertie line from O'Neill Substation to
Pump Station 11 Substation, the purpose of which is to connect
CVEA's system to the Railbelt system; and
WHEREAS, the Alaska Energy Authority has indicated
studies cannot continue until the next fiscal year when funds are
appropriated; and
WHEREAS, the Board of Directors has identified the need
to continue the studies in a timely manner; now, therefore
BE IT RESOLVED, that Copper Valley Electric Association
and the Alaska Energy Authority enter into a Memorandum of
Agreement which allows for Copper Valley Electric Association to
forward funds in the amount of $260,000 to the Alaska Energy
Authority to continue preliminary studies of the OPS-11 line; and
BE IT FURTHER RESOLVED, the Board of Directors approves
the Memorandum of Agreement and authorizes the General Manager to
execute the document on behalf of Copper Valley Electric
Association.
Approved and signed this 16th day of December, 1992, in Glennallen,
Alaska.
ill | ee
Secretary (attest)
Robert E. Sunder, President
(seal)
AIDEA 49
Memorandum of Acreement Exhibit A Page 5 of 17
EXHIBIT A
October 20, 1992
Cost estimate for Copper Valley Intertie Feasibility Study
Note: It is assumed that both the "Northern Suggested Route" (near the road) and
the "NEICR" route up Boulder Creek (or a comparable route away from the road)
will be reviewed, refined, and compared in the feasibility study. Also assumed that
the study begins in mid-January.
Public meetings would be held at the start. Both route alternatives would be
reviewed and refined in the winter, including flyovers of both routes and limited
ground review of accessible portions. Preliminary environmental impact
comparisons would be conducted. Another set of public meetings would follow to
share information and discuss results.
After June 30, any remaining route alternatives would again be reviewed and
refined, including flyover and ground review as appropriate. Thus both summer and
winter conditions will be accounted for in the route selection, feasibility design, and
environmental analysis. Public meetings would again follow the summer review.
Before 6/30 After6/30 Total
Electrical system studies _ $30,000 $30,000
Route selection 25,000 15,000 40,000
Feasibility design 25,000 5,000 30,000
Cost estimate 20,000 20,000
Environmental studies 60,000 40,000 100,000
Load forecast 25,000 25,000
Economic evaluation of alternatives 40,000 10,000 50,000
Plan of finance 25,000 25,000
Independent cost estimate 25,000 25,000
Public comment process 20,000 10,000 30,000
AEA costs 35,000 15,000 = 50,000
TOTAL $260,000 $165,000 $425,000
AIDEA 50
Mamarandum af Aareement Fvhihit A Page 6 of 17