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HomeMy WebLinkAboutAEA Board Meeting Jan 25 2008DEN f=ALASKA.Gq)ENERGY AUTHORITYFXHyAlasiaIndustrialDevelopment MEMORANDUM TO:Board of Directors Alaska Energy Authority , FROM:Sara Fisher-Goad Lt Acting Executive Director DATE:January 25,2008 SUBJECT:Outstanding Board Delegations The Board Chair requested that staff report all outstanding delegations of authority from the Board to AEA staff.Staff has reviewed outstanding Board resolutions,and identified the following as containing a continuing delegation of authority to AEA staff.'A copy of the resolution is attached. e 2003-01 -Appointment of Executive Director -Miller 'The Board has by resolution also appointed the current Deputy Directors,Assistant Secretaries,and Assistant Treasurer.The authority granted by these resolutions is subject to and controlled by the appointed Executive Director. 813 West Northern Lights Boulevard *Anchorage,Alaska 99503-2495 www.aidea.org *907/771-3000 ®FAX 907/771-3044 ®Toll Free (Alaska Only)888/300-8534 ©www.akenergyauthority.org ALASKA ENERGY AUTHORITY RESOLUTION NO.2003-01 RESOLUTION OF THE ALASKA ENERGY AUTHORITY RELATING TO THE APPOINTMENT BY THE AUTHORITY OF AN EXECUTIVE DIRECTOR WHEREAS,the By-Laws of the Alaska Energy Authority (the "Authority”)allow the members of the Authority to appoint an Executive Director of the Authority; WHEREAS,the By-Laws of the Authority further provide that the Executive Director of the Authority is the Secretary-Treasurer of the Authority; WHEREAS,it is in the public interest and in the best interests of the Authority that Ronald W.Miller be appointed Executive Director of the Authority;and WHEREAS,it is in the best interest of the Authority that James A.McMillan be re- appointed to continue his duties as Deputy Director-Credit and Assistant Secretary of the Authority. NOW,THEREFORE,BE IT RESOLVED BY THE ALASKA ENERGY AUTHORITY AS FOLLOWS: Section 1.Effective January 30,2003,Ronald W.Miller is appointed Executive Director and Secretary-Treasurer of the Authority. Section 2.Effective January 30,2003,James A.McMillan is re-appointed to continue his duties as Deputy Director-Credit and Assistant Secretary of the Authority. Section 3.From time to time,as may be required on a temporary basis,when the Executive Director is unavailable,the Executive Director may designate any Assistant Secretary - of the Authority to act on his behalf.The person so designated shall have all the duties and powers of the Executive Director of the Authority during the period the Executive Director is unavailable. Section 4.The Executive Director of the Authority or any Authority staff member designated by him is hereby authorized to sign,on behalf of the Authority,all contracts,deeds and other instruments made by the Authority and related documents. DATED at Anchorage,Alaska,this 30"day of January,2003. Ya ha---- (SEAL)Chair ' ATTEST @-ENERGY AUTHORITYllDENALASKAAlaskaIndustrialDevelopmentandExportAuthority 10. AGENDA Alaska Energy Authority Board of Directors Friday,January 25,2008 following the AIDEA Board Meeting Anchorage,Alaska CALL TO ORDER BOARD OF DIRECTORS ROLL CALL PUBLIC ROLL CALL PUBLIC COMMENTS PRIOR MINUTES -December 7,2007 OLD BUSINESS NEW BUSINESS A.Election of Officers B.Appointment of Acting Executive Director,Resolution No.2008-01 C.AEA By-Law changes,Resolution No.2008-02 DIRECTOR COMMENTS A.Director's Status Report of AEA Programs and Projects B.2008 Meeting Calendar Thu.Feb 14,2008 Thu.Apr 10,2008 Thu.June 12,2008 Thu.Aug 14,2008 Thu.Oct 9,2008 Thu.Dec 11,2008 BOARD COMMENTS ADJOURNMENT 813 West Northern Lights Boulevard «Anchorage,Alaska 99503-2495 www.aidea.org @ 907/771-3000 e FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 ®www.akenergyauthority.org JANUARY SM TWTF 234 6 7 8 13 14 15 16 17 18 20 Q@l)22 23 24 252728293031 FEBRUARY SM TWTFE 1 3 4 5 67 8 10 11 12 13 14 15 17 19 20 21 22 24 35 26 27 28 29 MARCH T W T F 2 3 4 9 10 11 16 17 18 5 6 7 12:13 14 19 20 21 23 24 25 26 27 28 APRIL S M T W T F 5 6 789 11 12 13 14 15 16 19 20 21 22 23 25 27 28 29 30 JUNE SM TWTE 1 2 3 4.5 68910IL1213 15 16 17 18 19 20222324252627 9 10 11 Ss 5 12 19 26 WAONMN7 14 21 28 2008 State Calendar State Holidays: January 1 New Year's Day 21 Martin Luther King,Jr.'s Day February 18 Presidents'Day March 31 Seward's Day May 26 Memorial Day July 4 Independence Day September 1 Labor Day October 17 Alaska Day November 11 Veterans'Day 27 Thanksgiving Day - December 25 Christmas Day _Warrant Distribution (_)Holiday AIDEA and AEA BOARD MEETINGS Jan 25,2008 Feb 14,2008 Aug 14,2008 Apr 10,2008 Oct 9,2008 June 12,2008 Dec 11,2008 www.state.ak.us/admin 14 15 16 17 18 21 22 23 24 25 28 29 30 31 AUGUST 4 5 67 8 11 12 13 14 15 18 19 20 21 22 25 26 27 28 29 SEPTEMBER M T WTF G)2 34589101112 15 16 17 18 19 22 23 29 30 OCTOBER M T WTF 1 2 3 6 7 8 910 13 14 15 16 20 21 22 23 242728293031 NOVEMBER M T W T F 3 4 567 10 (il)12 13 141718192021242526(2728 DECEMBER M T W T F 1 2 3 4 58910a12 15 16 17 18 19 22 23 24@5)26 29 30 31 24 25 26 S 4 1] 7)18 25 Ss 1 8 15 22 29 S 6 13 20 27 Date:JANUARY 25,2008 ALASKA ENERGY AUTHORITY BOARD OF DIRECTORS ROLL CALL December 7,2007 Apt Acting ED By-Law ChangesMinutesResNo2008-01 Res No 2008-02 Yes }No Yes No Yes No Yes No Yes No Dep Comm.Brian Andrews (Anchorage)| John T.Kelsey (Anchorage)WA Comm.Emil Notti (Anchorage)S Comm.Leo Von Scheben (Anchorage)S/ John Winther (Anchorage)JY | \ TOTAL 'le JELSsts JL <t OlLsl° EXECUTIVE SESSION Yes No Yes No Yes No Yes No Yes No Dep Comm.Brian Andrews (Anchorage) John T.Kelsey (Anchorage) Comm.Emil Notti (Anchorage) Comm.Leo Von Scheben (Anchorage) John Winther (Anchorage) TOTAL | *AIOE ALASKAAIE3){=co)ENERGY AUTHORITYAlaskaIndustrialDevelopmentandExportAuthority ALASKA ENERGY AUTHORITY Board of Directors Friday,January 25,2008 MINUTES 1.CALL TO ORDER Commissioner Notti,at the request of the Chair continued as Acting Chair,and called the meeting of the Alaska Energy Authority to order on January 25,2008 at 3:01 p.m.A quorum was established. 2.BOARD ROLL CALL Directors present in Anchorage:Chair John Kelsey (Public Member);Vice Chair John Winther (Public Member);Deputy Commissioner Brian Andrews (Designee for Department of Revenue); Commissioner Emil Notti (Department of Commerce,Community &Economic Development); Commissioner Leo von Scheben (Department of Transportation &Public Facilities). 3.PUBLIC ROLL CALL Staff present in Anchorage:(Sara Fisher-Goad (Acting Executive Director);Chris Anderson (Deputy Director-Credit);Valorie Walker (Deputy Director-Finance);Brenda Fuglestad (Admin Manager);Karsten Rodvik (Project Manager-External Affairs);Mark Schimsheimer (Project Manager);Sherrie M.Siverson (Admin Asst);and Jim Strandberg (Project Manager). Others present:Christine Vecchio (MEA Ratepayers Alliance). 4.PUBLIC COMMENTS Verbatim: Christine Vecchio,MEA Ratepayers Alliance:|wanted to speak to the Board about the REGA Study that is presently going on.My colleague Tim Leach who is the president of the Alliance and | met Wednesday morning with Kevin Harper,who is the consultant working on the Study.|wanted to say how much we,as consumers and people out in the community,appreciate that kind of process.He sat down with us and explained the whole process of what the study would be as far as getting information us as stakeholders,technical people,how the state is inputting at all different levels.|think that one of the things that |was very struck by,as someone from the public,is here is a process that |can come to with my concerns,my ideas,things |see that might be needed,in this particular case the Railbelt energy system,and even if |don't have all the information,|can come as an informed citizen,put out what |do know,and at that moment there Kevin would provide us with information and there would be a genuine exchange.|would like to say that |really see this kind of model of collaboration and partnership between public,the so-called experts State level agencies,working hand-in-hand,and the beauty of this particular process with this study is that it is ongoing.That there will be continual input and meeting with the stakeholders.There will be formation of an advisory of people from different levels,horizontally and vertically from the community and government. 813 West Northern Lights Boulevard *Anchorage,Alaska 99503-2495 www.aidea.org *907/771-3000 ®FAX 907/771-3044 ®Toll Free (Alaska Only)888/300-8534 ©www.akenergyauthority.org AEA Board Meeting January 25,2008 Meeting Minutes Page 2 |think,for me,this provides a really dynamic way of coming up,looking at the railbelt situation, taking into as much consideration all the difficult and complex factors and making some decisions for the future for energy. For me as a person living in the community,|know my fellow community people live with the decisions made by decision-makers.For us to feel like there is this opening and a genuine dialogue is to me the crux of a vital and vibrant government.|would like to thank the people working on the study for doing it.|thank the AEA Board for its support for the project and hopefully this model will be used throughout maybe perhaps with other agencies,other projects that come before AEA.This morning walking in,hearing what to me is news that there is the Alaska Energy Authority now possibly being the agency dealing with energy in Alaska that to me provides exciting, creative opportunities for us as a State to work together to find some solutions to |think what are very pressing and complex issues.That is my report at this stage of the study.|plan to really follow through and to provide you with feedback and our experience on our end of the Study. End of Verbatim 5.PRIOR MINUTES -December 7,2007 The December 7,2007 minutes were approved as presented. 6.OLD BUSINESS No old business was presented. 7.NEW BUSINESS 7A.Election of Officers Mr.Bjorkquist said Item7A is not needed.Under the AEA by-laws,Article 2,Section 1,there is no need to elect officers because under the By-Law,the Chair and Vice-Chair of the AIDEA Board automatically become the Chair and Vice-Chair of the AEA Board.Just for clarification,| am assuming that Mr.Kelsey,as Chair,is deferring to you for this meeting and will take over the reins next meeting.Mr.Kelsey affirmed. 7B.Appointment of Acting Executive Director,Resolution No.2008-01 MOTION:Commissioner von Scheben moved to insert Sara Fisher-Goad's name as the Acting Executive Director and approve Resolution No.2008-01.Seconded by Mr.Winther. There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. AEA Board Meeting January 25,2008 Meeting Minutes Page 3 7C:AEA By-Law changes,Resolution No.2008-02 Mr.Bjorkquist said similar to what transpired at the other board meeting earlier today,there is a new set of by-law changes for AEA that deals with one section.Would it be the Board's pleasure to deal with that one section as opposed to going through what we went through earlier in the AIDEA board meeting?The Board affirmed and moved forward to move the Resolution. MOTION:Commissioner von Scheben moved to approve Resolution No.2008-02. Seconded by Mr.Kelsey. Mr.Bjorkquist reviewed the resolution stating:Section 1 is a section to bring the by-laws into compliance with State policy not requiring the publication in a newspaper of notice of public meetings.Section 2 says that the Resolution becomes effective immediately upon passage. There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. 8.DIRECTOR COMMENTS 8A.Mr.Fisher-Goad said the intent for the upcoming meeting is to mimic what is in the AIDEA packet -updates of AEA owned projects,programs,and studies currently undertaken.Because of the lateness of the day,she suggested that we provide overviews of the projects at the board meeting on February 14,2008. 8B.Thenext board meeting is scheduled for February 14,2008. 9.BOARD COMMENTS Commissioner von Scheben proposed doing a third-party intervention at AEA and AIDEA.A third-party intervention is hiring a management consultant to interview staff,send out a questionnaire,and get feedback to the Chairman of the Board regarding the good,the bad,and the ugly of AIDEA and AEA.|would propose that we have staff look into it. To me when an organization goes through management change and/or organizational change, the staff gets very confused and gets a little concerned.The best thing |think could happen isthatweshowfromtheBoardlevelthatweareinterestedinwhattheyhavetosayandathird- party type intervention would be just a way to do that.|think it is good business practice to get feedback from the staff so |would propose that we do something like that because |am sure that they are wondering what's going on and this way it shows that we are concerned. Commissioner von Scheben requested staff bring a proposal back before the Board with regard to a third-party intervention. Deputy Commissioner Andrews said he had some thoughts along the same lines as Commissioner von Scheben.|propose Sara draft a letter for the Board's signature letting the staff know we appreciate their hard work over the last 60-90 days and for hanging in there with us as we work through this process.|would like to send the letter out in a week or so. AEA Board Meeting January 25,2008 Meeting Minutes Page 4 Ms.Fisher-Goad said the staff would appreciate the gesture.We've been trying to hold regular staff meetings to keep people informed.Staff is committed and we're looking forward to working with the Board and the Administration on the effort to further promote energy. 10.ADJOURNMENT There being no objection and no further business of the Board,the meeting was adjourned at 3:17 p.m. Las Lehr bocndSaraFisherGoad,Acting Executive Director/Secretary Alaska Energy Authority ALASKA ENERGY AUTHORITY BOARD OF DIRECTORS December 7,2007 Anchorage,Alaska MEETING MINUTES DRAFT Chairman Notti called the meeting of the Alaska Energy Authority to order on December 7,2007,at 11:06 a.m.A quorum was established. Hearing no objection,Item 7A was taken up at this time. 7.NEW BUSINESS 7A.AEA Financial Statements Mr.David McCambridge,KPMG,reported that the Alaska Energy Authority (AEA)Letter to the Board of Directors identifies KPMG's responsibilities.KPMG issued an unqualified opinion on AEA's Financial Statements.He pointed out that under "Significant Transactions,”AEA received a substantial appropriation from the State of Alaska of $182.7 million for the PCE Endowment Fund.; Under "Accounting Estimates,”AEA has an allowance for bad debts which was $1.2 million at June 30,2007.Reviewing underlying assumptions,KPMG feels that it is reasonable in relationship to the financial statements.There were no disagreements with AEA management and no consultations with other auditors.In addition to the unqualified opinion on the Financial Statements,one of AEA's indentures requires a bond compliance report and KPMG issued an opinion that AEA was in compliance with certain provisions relating to the bonds,as required by the indenture. KPMG issued unqualified opinions on AEA's Federal Financial Assistance Audits.AEA expended approximately $22.5 million dollars in Federal awards last year for a variety of projects.KPMG conducted these audits on behalf of the government and issued unqualified opinions.A significant part of the audit process for AEA is the Federal Single Audit.The audits are available to board members for review.There were no compliance findings. Commissioner von Scheben asked about the $182.7 million appropriation from the State of Alaska for the Power Cost Equalization (PCE)Endowment Fund. Mr.Miller explained that AEA administers the PCE Endowment Fund in conjunction with the Regulatory Commission of Alaska.The fund is invested by the Department of Revenue and is now over $300 million.The PCE Endowment Fund is used to pay down the cost of electricity in communities of less than 2,000. Mr.Bjorkquist stated that a fixed percentage of earnings (7%)are used annually for the program. AEA Board Meeting December 7,2007 Meeting Minutes -DRAFT Page 2 In response to questions from the Board,Ms.Fisher-Goad added that Alaska Statute allows for 7%of the Fund to be appropriated annually to the program based on a three-year monthly average market value.The PCE Endowment Fund is not a dedicated fund and the legislature has never appropriated beyond the 7%of monthly average market value.The sale of the Four Dam Pool was the significant appropriation to the PCE Endowment Fund beyond the initial constitutional budget reserve appropriation of $100 million. Mr.Kelsey asked if the 7%included inflation.Ms.Fisher-Goad replied that the 7%is based on a three-year monthly average market value which is more aggressive than other endowment funds.The Department of Revenue invests the Fund in a mix of equities. Commissioner von Scheben expressed concern that both Letters to the Board were similar in nature.He noted for the record that the statements:"...there's been no transactions entered into by the Authority during the year that were both significant and unusual,”"...we propose no adjustments to the Authority's accounting records;”and "...there were no disagreements with management on financial accounting”jumped out as a canned phrase;both documents have similar phrases. Mr.McCambridge replied that the Letter is boiler plate,but contains important things the profession has determined the board members should understand about the audit process. Even though they are repetitive and boiler plate,the point is well taken and it is significant. The remainder of the agenda was taken up in order. 3.PUBLIC ROLL CALL Directors present in Anchorage:Commissioner Emil Notti (Chairman/Department of Commerce, Community &Economic Development);Deputy Commissioner Brian Andrews (Designee for Department of Revenue);Commissioner Leo von Scheben (Department of Transportation and Public Facilities);and Mr.John Kelsey (Public Member).Mr.John Winther (Vice-Chair/Public Member)absent. Staff present in Anchorage:Ron Miller (Executive Director);Chris Anderson (Deputy Director- Credit);Brenda Applegate (AIDEA Controller);Sara Fisher-Goad (Deputy Director-Operations); Brenda Fuglestad (Administrative Manager);Mike Harper (Deputy Director-Rural Energy);James Hemsath (Deputy Director-Development);Karl Reiche (Projects Development Manager),Karsten Rodvik (Project Manager-External Affairs);Mark Schimsheimer (Project Manager);Sherrie M. Siverson (Administrative Assistant);James Strandberg (Project Manager);and Valorie Walker (Deputy Director-Finance). Others present:Brian Bjorkquist and Mike Mitchell (Department of Law);Tim Leach (MEA Ratepayers Alliance);Christine Vecchio (MEA Ratepayers Alliance);Charles Kozak and David McCambridge (KPMG). AEA Board Meeting December 7,2007 Meeting Minutes -DRAFT Page 3 4.PUBLIC COMMENTS Verbatim Ms.Christine Vecchio (member of the MEA Ratepayers Alliance):Thank you for the opportunity to comment."I attended the REGA Technical Conference on November 26-27,2007 and was impressed with the caliber,breadth,and scope of the conference.As a ratepayer,|learned a tremendous amount of the complexity of all things that happen when you turn on a light switch.| was impressed by the commitment and interest from the governor,utilities,government agencies, financial institutions,environmental groups,consumer groups,tribal groups.This speaks very clearly to the importance and critical timing happening world-wide and in Alaska. One of the presentations explained a very critical 100-second window in generating electricity and in the first 2-3 seconds you know you have to make the energy work.|likened the REGA Study to that first 100-seconds portion,because what comes out of the study will affect long-term energy needs and implementation for actions that need to be taken.|stress an important aspect of the study that is the big factor which is the on-going public process involving stakeholders input.The consultant Black &Veatch outlined the study process and each critical stage includes stakeholder input.This,|think,is what will make what comes out of the study one of the things that will make ownership possible from the public,not just the technical people,or engineers,or the utilities,but it becomes a public-ownership process,so |am very grateful for that.And,the last thing |would like to say is,|know we have been talking with people in our Valley with other groups that we are linked with in the various conservation communities,groups who are concerned with energy in Alaska,and we feel that we can make the study come out and implement what the findings are because we cannot do "business as usual”any more.People are going to have to step out of their comfort zones and really commit to finding some answers and solutions for not just the Railbelt. This study will be kind of like the back bone of what we decide as a state for our future energy needs.Thank you very much and congratulations to the staff,to everyone who worked on thattechnicalconferenceandiscontinuingtoworkonthestudy.” End Verbatim Commissioner Notti stated energy is an important subject and a priority of his,and this study is an important part of it. 5.PRIOR MINUTES -October 26,2007 The October 26,2007 minutes were approved as presented. 6.OLD BUSINESS Mr.Miller provided an update for the board on the Railbelt Electrical Grid Authority Technical Conference held on November 26-27,2007 at the Sheraton.The two-day conference was well attended with over 160 participants.Governor Palin gave the opening address and a comprehensive agenda and panel of speakers was followed by an extensive roundup session. The roundup session was open to public discussion on topics discussed during the conference. A consultant from Black &Veatch attended and will return to Anchorage for follow up meetings. AEA Board Meeting December 7,2007 Meeting Minutes -DRAFT Page 4 Representatives from the railbelt utilities attended and as a result there will be a meeting of the General Managers next week in Anchorage.One of their discussion topics will be whether the utilities should create some type of unified system operation,generation transmission co-op,or maybe a joint action agency.The REGA conference was a great success due to staff's hard work in bringing it together. 7.NEW BUSINESS Mr.Miller distributed copies of Resolution No.2007-02 appointing James Hemsath,Deputy Director-Development as an Assistant Secretary of the Authority. MOTION:Mr.Kelsey moved to approve Resolution No.2007-02.Seconded by Deputy Commissioner Andrews. Discussions ensued regarding time constraints for this resolution.No time constrains were noted for Resolution No.2007-02. MOTION:Mr.Kelsey moved to table Resolution No.2007-02.Seconded by Deputy Commissioner Andrews.There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. 8.DIRECTOR COMMENTS BA.Director's Status Report of AEA Programs and Projects There were no Director's comments. 8B.NEXT MEETING DATE The next meeting is scheduled for Thursday,February 14,2007. 9.BOARD COMMENTS At the request of Deputy Commissioner Andrews,Mr.Strandberg gave a brief update on the AK-BC Intertie Advisory Work Group Meeting that was held in Kake on October 29 and 30, 2007. He said there is an active advisory work group and the purpose of that work group is to provide input to the project manager so that AEA can administer the project in a fashion that best reflects the needs of the region.As a part of that process,the work group has met four times. The public meetings were designed so the group could meet with the people from each region. At the Craig meeting,the AK-BC Intertie Feasibility Study was discussed and the advisory group passed a resolution in support of the report.The consensus was that public meetings should be -heldin southern Southeast Alaska to include the people of Kake inasmuch as they are a unique communityin need of an intertie project. Public comment was taken at the end of each agenda item.30-35 people from the Kake region attended and many offered comments.Representatives from a private power group interested AEA Board Meeting December 7,2007 Meeting Minutes -DRAFT Page 5 in developing the Thomas Bay projects spoke and supported the concept of a Petersburg-to- Kake Intertie. As a result of the Kake public meeting,the advisory work group passed a resolution supporting a balanced approach in developing in-state interties;specifically the Petersburg-to-Kake Intertie in conjunction with development of an export intertie into Canada. Deputy Commissioner Andrews asked if the recent closure of mines in British Columbia was going to affect the Four Dam Pool. Mr.Strandberg reported that he received a call from Mr.Rohan Soulsby,British Columbia Transmission Corporation (BCTC),indicating they were cognizant of developments with the Galore Creek Mine.BCTC plans to discuss the impact of the closure on their transmission project with the Ministry.AEA is waiting to hear about the approach they are going to take.The closure may reduce the potential for farge-load support,but there are other reasons for the government to continue with development. Deputy Commissioner Andrews queried Valorie Walker about refinancing opportunities for Bradley Lake Bonds given today's low-interest rate environment. Ms.Walker reported that the majority of the bonds are not callable.She has spoken with a representative from Goldman Sachs and any refinancing would be initiated by the utilities making the payments on the bonds.Bonds were refunded in three separate bond issues in1999-2000.The bonds for the 3°and 4"series are not refundable.The 5"series, approximately $30,000,000,is refundable July 1,2009.Further discussions will ensue as the call date approaches and if it makes economic sense,they will be encouraged to refinance.Ms. Walker said she would follow up by contacting Goldman Sachs next week. Executive Session MOTION:Mr.Kelsey made a motion to go into Executive Session to discuss proposeddraftlegislation.Seconded by Commissioner von Scheben.There being no discussion, the question was called.A roll call vote was taken and the motion passed unanimously. EXECUTIVE SESSION:11:53 am The Board reconvened its regular meeting at 12:32pm Roll call was taken and a quorum was established.Chair Notti advised that the Board had not taken any formal action on the matters discussed while in Executive Session. AEA Board Meeting December 7,2007 Meeting Minutes -DRAFT Page 6 10.ADJOURNMENT There being no objection and no further business of the Board,the meeting was adjourned at 12:35pm. Secretary Alaska Energy Authority ALASKA ENERGY AUTHORITY RESOLUTION NO.2008-01 RESOLUTION OF THE ALASKA ENERGY AUTHORITY RELATING TO THE APPOINTMENT OF AN ACTING EXECUTIVE DIRECTOR WHEREAS,the By-Laws of the Alaska Energy Authority (the "Authority”)allow the members of the Authority to appoint an Executive Director of the Authority; WHEREAS,the By-Laws of the Authority further provide that the Executive Director of the Authority is the Secretary-Treasurer of the Authority;and WHEREAS,the previous Executive Director of the Authority resigned that position effective February 1,2008; WHEREAS,the members of the Authority have determined that it is not appropriate at this time to appoint a new,permanent Executive Director of the Authority;and WHEREAS,it is in the public interest and in the best interests of the Authority that ,be appointed Acting Executive Director of the Authority. NOW,THEREFORE,BE IT RESOLVED BY THE ALASKA ENERGY AUTHORITY AS FOLLOWS: Section 1.Effective as of February 1,2008,,IS appointed Acting Executive Director and Secretary-Treasurer of the Authority.shall continue to hold her/his current appointed position of Deputy Director. Section 2.From time to time,as may be required on a temporary basis,when the Acting Executive Director is unavailable,the Acting Executive Director may designate any Assistant Secretary of the Authority to act on her/his behalf.The person so designated shall have all the duties and powers of the Acting Executive Director of the Authority during the period the Acting Executive Director is unavailable. Section 3.The Acting Executive Director of the Authority or any Authority staff member designated by her/him is hereby authorized to sign,on behalf of the Authority,all contracts,deeds and other instruments made by the Authority,and related documents. Section 4.This Resolution takes effect immediately. DATED at Anchorage,Alaska,this 25"day of January 2008. Chair ATTEST [SEAL] Secretary Appointment of Action Executive Director Resolution No.2008-01 H:\Board of Directors\Resolutions and Memos\2008-01_AEA_Acting_ED_Appt_Resolution.doc Page 2 ALASKA ENERGY AUTHORITY RESOLUTION NO.2008-02 RESOLUTION OF THE ALASKA ENERGY AUTHORITY RELATING TO AMENDING,REVISING AND RESTATING THE BYLAWS OF THE ALASKA ENERGY AUTHORITY,AND RELATED MATTERS WHEREAS,AS 44.83.080 provides,inter alia,that the Authority has the power to make and alter By-laws for its organization and internal management; WHEREAS,the By-laws of the Authority provide that the members of the Authority may amend the By-laws at a regular or special meeting; WHEREAS,the Authority has previously adopted and amended its By-laws,the most recent revision made February 8,2001; WHEREAS,housekeeping changes to bring the By-laws in compliance with current regulations and state policy make it appropriate and necessary or desirable to further amend and revise provisions of the By-laws of the Authority. NOW,THEREFORE,BE IT RESOLVED BY THE ALASKA ENERGY AUTHORITY AS FOLLOWS: Section 1.The Authority amends Article Ill,Section 4 of the By-laws of the Authority to insert "of Meetings.”to the title,insert "Not less than five days before each meeting,the Authority will give public notice of the time,place,and subject of the meeting.”;and delete the remainder of the section,as follows: Section 4.Public Notice of Meetings.Not less than five days before each meeting,the Authority will give public notice of the time,place,and subject of the meeting.[PUBLIC NOTICE OF ALL BOARD MEETINGS SHALL BE GIVEN BY PUBLICATION IN A NEWSPAPER OF GENERAL CIRCULATION OF NOT MORE THAN TWO WEEKS PRIOR TO THE MEETING AND NOT LESS THAN FIVE DAYS PRIOR TO THE MEETING;SAID NOTICE SHALL BE DESIGNED TO GIVE THE PUBLIC NOTICE OF THE MEETING AND OF THE GENERAL TOPICS TO BE DISCUSSED AND CONSIDERED AT THE MEETING,AND SHALL INCLUDE A PROPOSED AGENDA OF THE MEETING_] Section 2.This Resolution shall become effective immediately upon its passage and approval. DATED at Anchorage,Alaska,this 25"day of January,2008. Chair ATTEST [SEAL] Secretary AEA By-Laws Resolution 2008-02 H:\Board of Directors\Board 1-25-08\2008-02_AEA_Bylaws_Resolution-V2.doc Page 2 BYLAWS OF THE ALASKA ENERGY AUTHORITY ARTICLE |-THE AUTHORITY Section 1.Name of Authority.The name of the Authority shall be "Alaska Energy Authority." Section 2.Seal.The seal of the Authority shall be circular in form and mounted upon a metal disc suitableforimpressingthesameuponpaper.About the upper periphery of the seal shall be the name of the Authority,in the center of the seal shall be an outline of the State of Alaska,on the lower periphery shallbethewords(date formed)and immediately above the date shall be the words "corporate seal.” Section 3.Offices of the Authority.The principal office of the Authority shall be located in the MunicipalityofAnchorage,Alaska.The Authority may have such other offices as the Board may designate or as thebusinessoftheAuthoritymayrequirefromtimetotime. Section 4.Fiscal Year.The fiscal year of the Authority shall be the same as the fiscal year of the State of Alaska. ARTICLE Il -BOARD OF DIRECTORS AND OFFICERS Section 1.Board Members.Repealed 8/12/93 Resolution 1993-06.The members of the -board of directors of the Alaska Industrial Development and Export Authority (AIDEA)recognize the provisions of Chapter 18,SLA 1993 establishing them as members of the board of directors of the Alaska EnergyAuthority(AEA)and accept office as the board of directors of AEA.The chair and vice chair of AIDEA shall serve as chair and vice chair of the board of directors of AEA. Section 2.Oath and Disclosure.Each director before entering upon his/her duties shall take and subscribe to an oath to perform the duties of his/her office faithfully,impartially and justly to the best of his/her ability. A record of the oath shall be filed in the Office of the Governor.Each director is required to file a disclosure statement with the Alaska Public Offices Commission. Section 3.Chairman.The Chairman of the Board shall preside at all meetings of the Board.Except as otherwise authorized by resolution of the Board,the Chairman and the Executive Director shall submit such recommendations and information to the Board as they may consider proper concerning the business,affairs,and policies of the Authority. Section 4 Vice Chairman.The Vice Chairman of the Board shall perform the duties of the Chairman in the absence or incapacity of the Chairman. |Section 5.Executive Director-Secretary-Treasurer.(a)The Board shall appoint an Executive Director. The Executive Director shall be the Secretary-Treasurer of the Authority.The Executive Director shall, subject to review by the members of the Authority,in general supervise and control the business and affairs of the Authority,and shall perform all duties incident of the office of Executive Director and such other duties as the members of the Authority may prescribe from time to time. (b)As Secretary,the Executive Director shall: 1.Keep the records of the Authority: 2.Keep a record of the proceedings of the Authority in a journal of proceedings to be kept for such purposes; 3.Act as Secretary of the meetings of the Authority and record all votes; H:\Board of Directors\Board 1-25-08\AEA Bylaws-V2.docHABeard-of Directors\Board 4 4.Provide that all meetings of the Authority are electronically recorded; 5.Provide for the standardization of all applications,forms,books and records of the Authority; 6.Keep in safe custody the seal of the Authority and shall have power to affix the seal to all contracts and instruments authorized to be executed by the Authority;and 7.Perform all other duties incident to his or her office. (c)As Treasurer,the Executive Director is authorized to: Have the care and custody of all funds of the Authority; Deposit Authority funds in such banks as he or she may select; Invest corporate funds as directed by statute; Disburse monies for all Authority expenses and obligations;and Have annual audits made of the books of account of the Authority.aAPon>(d)As Treasurer,the Executive Director is directed to: 1.Keep regular books of accounts of all financial transactions of the Authority,recording receipts and expenditures. 2 Render such reports and accounting as required by the Board. (e)The Board,by a majority vote at a regularly called or specially called Board meeting,may by resolution assign to some other person all or part of the above enumerated duties of the Executive Director and Secretary-Treasurer of the Board,or authorize the Executive Director to delegate all or part of the above enumerated duties to some other person or persons,and may give said person or persons, an appropriate title including that of_a Deputy Director,Assistant Secretary,or Assistant Secretary- Treasurer. Section 6.Contracts.Repealed 1/8/01 Resolution 2001-01. Section 7.Loans.Repealed 1/8/01 Resolution 2001-01. Section 8.Checks.Repealed 1/8/01 Resolution 2001-01. Section 9.Deposits.Repealed 1/8/01 Resolution 2001-01. Section 10.Additional Duties.The officers of the Authority shall perform such other duties and functions as may from time to time be required by the Board or the By-Laws or policies and procedures of the Authority. Section 11.Election or Appointment.Repealed 8/12/93 Resolution 1993-06. Section 12.Vacancies.When the office of the Secretary-Treasurer of the Board and Executive Director of the Authority becomes vacant the Board shall appoint a successor as provided in Section 5 of this Article. Section 13.Additional Personnel.Repealed 1/8/01 Resolution 2001-01. Section 14.Selection of Management Personnel.Repealed 8/12/93 Resolution 1993-06. Section 15.Conflicts of Interest. If any board member,employee,consultant,advisor,counsel or other agent of the Authority or the Alaska Industrial Development and Export Authority shall be a party to a lease or contract under consideration by the Authority,or shall have a direct ownership or equity or debt interest or other financial interest in a firm,partnership,corporation or association which is a proposed party to a lease or contract |H:\Board of Directors\Board 1-25-08\AEA Bylaws-V2.docH:\Beard-o 4 ocPage 2 of under consideration by the Authority,he or she shall so state in writing to the Authority at the time of initial consideration of the proposed lease or contract and shall thereafter take no part in the Authority's consideration of the lease or contract. Section 16.Legal Indemnification. a.This section applies to all officers,directors,and employees with respect to claims arising out of acts or events occurring during and in the course of employment or service with the Authority b.If the Executive Director,with the advice of the Attorney General,determines that an employee did not engage in conduct beyond the scope of the employee's authority or in conduct which constituted willful misconduct or gross negligence in the performance of the employee's duties,the Authority shall provide for the legal defense of the employee in any civil legal action brought against the employee as a result of the performance of the employee's duties.Any determination with respect to the conduct of the Executive Director or a board member shall be made by the board of Directors. c.An employee must request the legal defense services available under this section in writing within five (5)working days of service on the employee of a summons and complaint.The date of the request shall be the date of postmark if mailed or the date of delivery if conveyed by some other means.The request must be made to the Executive Director or,in the event the Executive Director or a board member requests such services,to the Board of Directors.Failure to submit a written request within the required five working days relieves the Authority of any obligation under this section. The Authority shall have the right to select the attorney who represents an employee. e.Attorneys provided by the Authority will only undertake to defend an employee and will not assert any counterclaims or cross claims on the employee's behalf without the prior written approval of the Authority.af.Except as otherwise provided herein,the Authority will pay any judgment rendered against an employee if it has provided legal services to the employee pursuant to this section. g.If a court of competent jurisdiction determines that the employee acted beyond the scope of the employee's authority or with willful misconduct or gross negligence,then the Authority shall have no liability to indemnify the employee for any judgment entered against the employee.In such case,any judgment entered against the employee will be borne by the employee. h.An employee shall not be indemnified for any judgment or award of punitive damages. i.lf a court judgment is entered in an employee's favor and the losing plaintiff appeals,the Authority shall continue to defend throughout the appeal process.If a judgment is entered against the employee in the trial!court and the Authority is obligated to indemnify against such judgment under this section,the Authority may determine whether an appeal on behalf of the employee is in its best interest.If such a determination is made,the Authority will continue to provide representation for the employee throughout the appeal.If the Authority determines that an appeal would not be in its best interest,the Authority will have no obligation to provide representation for the employee on appeal. ARTICLE Ill -BOARD MEETINGS Section 1.Annual Board Meeting.Repealed 2/28/95 Resolution 1995-01. Section 2.Reqular Board Meetings.The Board shall hold regular meetings at such times and places as may be established by resolution of the Board,but in the absence of such designation then at a place and on a date as fixed by the Chairman.The members of the Board shall have at least five days prior notice of regular meetings;designation of date,time,and place of meeting at the previous regular meeting constitutes sufficient notice to members of the Board.If the members not present have signed a Waiver of Notice and Consent,then any and all business may be transacted even though notice of the meeting is not provided to Board members. |H:\Board of Directors\Board 1-25-08\AEA Bylaws-V2.docH:\Beard-o 4 s.desPage3of |Section 3.Special Board Meetings.Special meetings may be called upon request of the Chairman or upon the request of any two members of the Board for the purpose of transacting any business designated in the call.The call for a special meeting may be wired,faxed or mailed to the business or home address of the members of the Board at least 48 hours prior to the date of such special meeting. Reasonable notice shall be provided to the public for any speciat meeting.At such special meeting no business shall be considered other than as designated in the call,but if the members not present have signed a Waiver of Notice and Consent to Meeting,a quorum otherwise being present,any and all business may be transacted at such special meeting. Section 4.Public Notice of Meetings.Not less than five days before each meeting,the Authority will give Section 5.Board Information.For each Board of Directors'meeting,the Executive Director and staff shall prepare a packet of information including an agenda,action items,informational items,resolutions,and other information pertinent to the meeting. Section 6.Executive Sessions.Executive sessions may be held in accordance with the procedures and with respect to the expected subjects as set forth in,and in accordance with,AS 44 62.310. Section 7.Quorum.The powers of the authority are vested in the Directors,and three Directors of the Authority constitute a quorum.Action may be taken and motions and resolutions adopted by the Authority at any meeting by the affirmative vote of at least three Directors.A vacancy in the Directorship of the Authority does not impair the right of a quorum to exercise all the powers and perform all the duties of the Authority. Section 8.Order of Business.Repealed 1/8/01 Resolution 2001-01. Section 9.Voting.Each member of the Board shall have the right to cast one vote on any question voted upon during any meeting.Only those members present,or those persons duly appointed to attend in their absence,may vote. The voting on all questions coming before the Board shall be by roll call,and the "yeas"and "nays"shall be entered upon the minutes of such meeting providing any dissenting votes are cast.Otherwise resolutions may be shown as unanimous. ARTICLE IV-AMENDMENTS Section 1.Amendments to By-Laws.The By-Laws of the Authority shall be amended only with the approval of at least three of the members of the Board at a regular or special Board meeting,but no such amendment shall be adopted at a special Board meeting unless all Board members are present or have been given at least 48 hours written or wired notice thereof,as required by Article Ill,and a copy of the amendment(s)has been previously given to all of the members of the Board of the Authority. AMENDMENTS Alaska Power Authority By-Laws,original 1978. Resolution 1981-6 of the Alaska Power Authority Board of Directors. Resolution 1993-06 of the Alaska Energy Authority. Resolution 1995-01 of the Alaska Energy Authority. Resolution 2001-01 of the Alaska Energy Authority Resolution 2008-02 of the Alaska Energy AuthorityOahWwnN>|H:\Board of Directors\Board 1-25-08\AEA Bylaws-V2.docH-\Board-o 4 <-ENERGY AUTHORITYSXAlaskaindustrialDevelopmentWeAleExportAuthority Revised December 3,2007 Project Fact Sheet:ALASKA-BC INTERTIE STUDY CURRENT STATUS:A meeting of the work group,Canadian BCTC officials and other regional stakeholders was held on October 29-30,2007 in Kake,Alaska.At the meeting,the Work Group passed a resolution recommending that remaining funds be allocated between coordination and meetings with BCTC on the potential Export Intertie,and accomplishing all design,permitting and right of way securement for the Petersburg to Kake Intertie.The Office of Management and Budget determined that this would require a re-appropriation of the remaining funds.This is under consideration by OMB. DESCRIPTION:The legislature appropriated $3.2 Million to the Alaska Energy Authority (AEA)to analyze and confirm the feasibility of a transmission line that would: e Through construction of a 67-mile electrical transmission intertie,connect two parts of the 4-Dam Pool service area,and the two major Southeast hydro electric power plants in the Ketchikan- Wrangell-Petersburg region.The completion of this intertie would allow Lake Tyee unused capacity to power Ketchikan,which is presently short of power. e Connect the 4-Dam Pool transmission system into the Canadian grid,and thus gain access to power markets either in Canada or US Pacific Northwest.As a part of the study,the construction of a transmission backbone would entice private or local government entities to develop a number of hydro power projects that could produce as much as 100 MW of power for use in southern SE Alaska or be exported. PARTICIPANTS:AEA hired Hatch Energy to determine project feasibility.The Company has completed its work and the final feasibility report has been published.It is available online at http://www.akenergyauthority.org/AKBCProjectPage.html.Of the $3.2M funding,AEA will have expended approximately $511,000 as of September 30,2007. ECONOMIC/SOCIAL EFFECTS:The draft final report supports the Swan-Tyee Intertie and the Kake Petersburg Interties as being economically feasible,and indicates the export intertie link shows economic promise,but cannot be definitively determined at this time. BACKGROUND:This study has an advisory committee and steering committee to assist AEA in properadministrationoffunds.'The committees have participated actively in the formulation of the consultant scope of work,selection of the consultant.The feasibility study has been reviewed and approved by the work group. All advisory meetings have been advertised as public meetings and have been well attended by all work group members as well as interested members of the public and legislative staff people.Detailed meeting minutes are published and are available on the AEA web page dedicated to this study. 1 Membership of the committees are on the AEA AKBC Intertie study web page under "participants.”The Committees consist of a mix of utility representatives and local government representatives designed to reflect a cross section of stakeholders. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org @ 907/771-3000 e FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org Fact Sheet:Alaska-BC Intertie Study Page 2 The British Columbian government recently announced it will construct a robust transmission line to a point close to the Alaskan border near Tyee Lake.This makes interconnection into the BC grid a technical possibility. The Advisory Group earlier recommended that additional work be accomplished on the study to include the following: Discussion of the study with the Governor's office and key legislators,to seek administration buy in to long term commerce between Alaska and British Columbia.(This is being accomplished by the Southeast Conference and other SE interests.AEA is not involved) Continued coordination by the AEA project manager with Canadian power utility officials on status of British Columbia plans for transmission line construction near the Alaska border. Further definition work,including conceptual design and cost estimates for the Thomas Bay projects,and transmission line routes.In particular,the group recommended review of transmission line costs for the Kake transmission line,which likely can be constructed along a public road right of way,with reduced costs of construction. Since last report,two new members have been added to the Advisory Work Group,Kake City Manager Delbert Kadake,and Kake Mayor Heinrick Kadake. The next advisory work group meeting will be held in Kake,Alaska on October 29-30,2007.Mr.Rohan Soulsby of the British Columbia Transmission Corporation will be attending.He will discuss the status of the key Canadian transmission line project,as well as the status of the Petersburg to Kake Intertie project. [=ALASKAGENERGYAUTHORITYmeeeAlaskaIndustrialDevelopmentandExportAuthority Revised December 3,2007 Project Fact Sheet:ALASKAINTERTIE CURRENT STATUS:Ongoing monitoring of the operation,financial management,and maintenance activities through participation in the Intertie Operating Committee. The operational problems with the 25 mile Teeland to Douglas intertie segment have been resolved with the removal of a large Osprey bird nest. DESCRIPTION:The Alaska Intertie transmission line is a 170-mile long,345kV transmission line between Willow and Healy that is owned by AEA.It is presently operated at 138 KV. PURPOSE:The purpose of the Alaska Intertie is to interconnect Golden Valley Electric Association,the regulated utility that serves areas north of the Alaska Range with south central Alaska Utilities.This intertie effectively creates an interconnected network for the Alaska Railbelt.This intertie is presently being used to convey "economy energy,”produced by Chugach Electric and Municipal Light and Power and purchased by GVEA.The intertie also allows resources north and south of the range to be shared to improve reliability.Notably,the GVEA storage battery,as well as GVEA generation resources,can and have been used to send emergency power southward to minimize catastrophic network wide outages.The operation of this intertie materially improves overall system reliability.Operating in an interconnected network where reliability and power quality are a shared responsibility is thought to be beneficial to all railbelt electrical customers. SOURCE OF FUNDS:The Intertie was built in the mid-1980s with State of Alaska appropriations totaling $124 million.Currently,there is no debt associated with this asset. PARTICIPANTS:The operation of the Intertie is governed by the Alaska Intertie Agreement entered into in 1985 and amended in 1991.The parties to this agreement are AEA (formerly Alaska Power Authority),Municipal Light &Power,Chugach Electric Association Inc.,Alaska Municipal Utilities System,Golden Valley Electric Association,Inc.,and the Alaska Electric Generation and Transmission Cooperative (AEG&T is comprised of Matanuska Electric Association and Homer Electric Association). 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.didea.org @ 907/771-3000 e FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org Project Fact Sheet Alaska Intertie Page 2 ECONOMIC/SOCIAL EFFECTS:In 1981,a study demonstrated a positive feasibility of the line and recommended construction of an intertie to allow exchange of economy energy and the sharing of reserve generation capacity between the Anchorage and Fairbanks load centers.It was estimated that the benefits from the project would be approximately $17 million per year. BACKGROUND:Agreement structure:The intertie is a part of an interconnected network, operated cooperatively with participating utilities that own and operate their own transmission and generation assets.Agreements have been developed over a span of 30 years to govern the cooperative management,operation of the connected network at large.AEA has agreements with participating utilities that assure the Alaska Intertie operates with prudent maintenance and operation by utilities.ML&P is the intertie operator,while MEA and GVEA provide maintenanceandoperationsservices'. Rates and cost recovery:AEA serves as financial administrator,providing basic accounting services to establish a cost-based wheeling rate that is trued up each year.AEA collects payments from Intertie users and pays expenses,including reimbursement of costs incurred by the two operators of the line,ML&P and GVEA,and the three maintenance contractors,MEA, CEA,and GVEA.At the end of each year AEA trues up the project account and either sends out refunds or collects the shortfall from the utilities so that users of the line pay only for the actual cost each year of Intertie operation.There is limited ability to recover debt service that is spread over a time period greater than one year;therefore,debt financing has not been used to date. AGREEMENT HISTORY:Chugach Electric Association (CEA),Municipal Light and Power (ML&P),Alaska Electrical Generation and Transmission (AEG&T),and Golden Valley Electric Association (GVEA)are interconnected to the intertie and can move power on the Intertie under the terms of the Alaska Intertie Agreement (Agreement).The interconnected system of utilities, tied together with the Intertie is collectively termed the "Railbelt Energy System.” Both functional operation of the transmission line as well as arrangements for the collection of and expenditure of Annual Operations and Maintenance funds are a part of the Agreement. The Agreement assigns operational responsibility and specifies a governance structure that consists of representatives of participating utilities and AEA.There are a number of other agreements that assign maintenance responsibility. The Agreement specifies,through interconnection terms and conditions,how utilities are allowed access to the Intertie.Each utility is required to maintain a certain level of spinning reserve to preserve the reliability of electrical supply throughout the network and to cooperatively manage the power flows on the transmission line. 'AEA has transmitted a letter to the participating utilities of its intent to terminate the present Alaska Intertie Agreement under the termination clause of the agreement,which provides for a 4 year notice of termination. I=ALASKAeqENERGYAUTHORITY ; **Alaska Industrial DevelopmentandExportAuthority Revised December 3,2007 Project Fact Sheet:MEA TRANSMISSION LINE BYPASS CURRENT STATUS:The third project meeting has been held.ML&P is forming an advisory work group,with AEA assistance.A meeting is to be scheduled with MEA to discuss ways to minimize impacts to the MEA system,and to coordinate utility actions.It is expected that this project will be a part of discussions in overall Railbelt comprehensive planning. DESCRIPTION:The legislature appropriated $20.3M to AEA in 2002,to upgrade and extend the Anchorage to Fairbanks power transmission intertie ("Alaska Intertie”)to the Teeland substation on Knik- Goose Bay Road in the Matanuska-Susitna Borough.The project is an integral part of the Alaska Intertie and will replace approximately 25 miles of an existing transmission line operated at 138kV,owned byMEA'. PURPOSE:Construction of this bypass line will parallel the existing MEA owned line,and allow the present MEA owned intertie link,20 miles of which is insulated at 115kV and operated at 138kV,to return to MEA control and service.Continued use of this 20-mile portion of the 25-mile MEA asset by certain Railbelt utilities until January 1,2014 has been provided for through an RCA order. PARTICIPANTS:AEA is contracting with Municipal Light and Power under a cooperative agreement to accomplish the transmission line project.AEA will own the new line,and it will become part of the AlaskaIntertieProject. ECONOMIC/SOCIAL EFFECTS:This new line will be an addition to the existing 170 mile Alaska Intertie. With AEA ownership and access,the existing agreements with MEA for use of MEA transmission lines which are complex will no longer be needed.It is expected that intertie operations will be simplified,and MEA will gain the full use of its assets it previously had devoted to intertie operation. BACKGROUND:In 2002,the legistature appropriated $20.3 million dollars to the Alaska Energy Authority to upgrade and extend the Anchorage to Fairbanks power transmission intertie.The intertie stretches from Willow to Healy River;adjacent to Healy Unit One and Healy Clean Coal Project.This will upgrade and extend the line from the Teeland Substation on Knik-Goose Bay Road to the Douglas substation. The construction of this bypass line will parallel the existing MEA owned line currently being used to transmit power to the North.Having this work done by ML&P was the result of a collaborative effort between AEA and the Intertie participant utilities who decided this was the most efficient way to get this line constructed.The project has been approved by the Intertie Operating Committee. 'MEA has terminated a use agreement with AEA that previously allowed use of 20 miles of the existing line in conjunction with the Alaska Intertie.Certain Railbelt utilities are authorized to continue to use this 20 miles through January 1,2014,solely under an RCA order.An agreement between MEA and AEA authorizes perpetual use of the remaining 5 miles of existing line,until it is no longer needed as part oftheAlaskaIntertie.However,as MEA's transmission needs grow,AEA is guaranteed a total of 40MW. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 e FAX 907/771-3044 e Toil Free (Alaska Only)888/300-8534 «www.akenergyauthority.org {=ALASKA€a)ENERGY AUTHORITYveAlaskaIndustrialDevelopmentandExportAuthority Revised December 3,2007 Project Fact Sheet:RAILBELT ELECTRICAL GRID AUTHORITY STUDY CURRENT STATUS:Black and Veatch has been selected as the REGA contractor.The technical conference was held on November 26"and 27".B&V project manager isscheduledtobeinAnchorageonDecember13".He will be meeting with the reliability committee,RCA,and the Chugach/ML&P merger consultant.AEA project manager is assembling final list of advisory work group,for approval by the AEA executive director.The 1OC has agreed to coordinate the collection of data for the REGA study.The Merger blue ribbon committee has approved Navigant to share its data with our REGA consultant.First advisory work group meeting to be held in early January to consider the range of Grid Management scenarios B&V will use in its analysis. DESCRIPTION:This study will identify a range of grid authority concepts that could be integrated into future Railbelt Electrical Grid operations.The authority could be formed as a voluntary organization to dispatch power and manage the grid assets,or it could be more encompassing to include responsibility for planning and acquiring new generation.AEA will analyze the range of grid authority options to first establish whether it is of benefit for the Railbelt ratepayer,and then recommend what form it should take. As a part of the project AEA will conduct a technical conference to educate stakeholders on the current condition of the Railbelt Electrical Grid. AEA has received proposals from 5 companies to consider the range of grid authority concepts and make recommendations on which approach is best.For the range of Grid Authority concepts considered feasible,AEA will require the Consultant to provide an implementation plan that describes the utilities', RCA's and AEA's required actions,and provide a schedule and critical path analysis. AEA expects to have a consultant under contract by early to mid November.It is expected this consultant will be present at the technical conference,both to collect data from Railbelt Grid operators,but also to participate and advise stakeholders on lower 48 best practices.The technical conference is scheduled for November 26-27,2007 at the Anchorage Sheraton Hotel. A recent petition by MEA to the Regulatory Commission of Alaska called for the creation of a regional Generation and Transmission Cooperative as a means to implement a collective process to secure new generation sources for the Railbelt.This matter is currently being considered by the RCA. SOURCE OF FUNDS:This study is funded by a legislative appropriation of $800,000 to analyze theRailbeltElectricalGridAuthorityConcept.' 1 The legislation reads as follows: (i)Any balance remaining in the Railbelt energy fund (AS 37.05.520)and interest earnings of the fund,after the appropriations made in (a)-(h)of this section and not to exceed $800,000,is appropriated to the Department of Commerce,Community,and Economic Development,Alaska Energy Authority,for the study of the Railbelt Electrical Grid Authority,an independent system operator,to manage and dispatch electric power on the Railbelt grid. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 e FAX 907/771-3044 @ Toil Free (Alaska Only)888/300-8534 «www.akenergyauthority.org [=ALASKAENERGYAUTHORITYaxedakeAlaskaIndustrialDevelopmentandExportAuthority Reviewed December 3,2007 Project Fact Sheet:SWAN-TYEE INTERTIE CONSTRUCTION COMPLETION CURRENT STATUS:AEA has held Initial discussions with the Grantee,the Four Dam Pool Power Agency.Executive Director Dave Carlson has provided cost estimate and schedule information for AEA consideration. DESCRIPTION:This project will complete the construction of the 69-mile Swan-Tyee Intertie between the Swan Lake hydro-electric power plant and the Tyee Lake hydro-electric power plant,and when energized will allow the communities of Petersburg,Wrangell,and Ketchikan to be electrically interconnected. PURPOSE:This project will allow power that is produced in the Four Dam Pool transmission network to be scheduled and economically dispatched.Initially,it is expected that excess water energy available at Lake Tyee generation capacity and energy will be used to offset an energy shortage in the Ketchikan area.In a longer range capacity,the intertie can be used to convey power for export through an export intertie that is being considered into British Columbia. PARTICIPANTS:AEA is granting these funds as a "grant named recipient”to the Four Dam Pool Power Agency. ECONOMIC/SOCIAL EFFECTS:The project is expected to allow the region to produce its power solely from hydro-electric generation,avoiding a looming shortage in Ketchikan that could have required Ketchikan Public Utilities to operate expensive and polluting diesel generation. BACKGROUND:This project was partially funded in 2005.The Four Dam Pool Power Agency cleared the Right-of-Way and purchased and installed tower foundations,but were forced to stop construction when funds were expended.The region was able to secure an appropriation of $46.8 M for completion of the project. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 #FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org